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Cities and the Wealth of Nations: Principles of Economic Life
In this eye-opening work of economic theory, Jane Jacobs argues that it is cities—not nations—that are the drivers of wealth. Challenging centuries of economic orthodoxy, in Cities and the Wealth of Nations the beloved author contends that healthy cities are constantly evolving to replace imported goods with locally-produced alternatives, spurring a cycle of vibrant economic growth. Intelligently argued and drawing on examples from around the world and across the ages, here Jacobs radically changes the way we view our cities—and our entire economy.
257 pages, Mass Market Paperback
First published March 12, 1984
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About the author
Jane Jacobs
69 books702 followersJane Jacobs, OC, O.Ont (May 4, 1916 – April 25, 2006) was an American-born Canadian writer and activist with primary interest in communities and urban planning and decay. She is best known for The Death and Life of Great American Cities (1961), a powerful critique of the urban renewal policies of the 1950s in the United States. The book has been credited with reaching beyond planning issues to influence the spirit of the times.
Along with her well-known printed works, Jacobs is equally well-known for organizing grassroots efforts to block urban-renewal projects that would have destroyed local neighborhoods. She was instrumental in the eventual cancellation of the Lower Manhattan Expressway, and after moving to Canada in 1968, equally influential in canceling the Spadina Expressway and the associated network of highways under construction.
Along with her well-known printed works, Jacobs is equally well-known for organizing grassroots efforts to block urban-renewal projects that would have destroyed local neighborhoods. She was instrumental in the eventual cancellation of the Lower Manhattan Expressway, and after moving to Canada in 1968, equally influential in canceling the Spadina Expressway and the associated network of highways under construction.
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Displaying 1 - 30 of 52 reviews
May 6, 2010
I haven't read this book in almost ten years, but I love Jane Jacobs. She's one of my heroes. However, I'm not sure where I stand with this book. Economically, I get the sense that she's right, but I don't know any 'serious' economist who has taken up her challenge. On the other hand, this should be a bible for libertarians, and if there's one (current) ideology I despise, it's libertarianism, especially fiscal libertarianism.
Jacobs roughly argues that the problem with economics is that it focuses on nations, when economics should focus on cities. She claims that wealth production is fully dependent on cities, and that innovation is a fundamental aspect of growing cities, and that innovation allows for wealth production. She claims that innovation and it's organic ramifications are oppositional to agrarian rural living. There's a lot I want to write about, including the connections between this book and Guns Germs and Steel , but this is it for now... I have to go to work.
Jacobs roughly argues that the problem with economics is that it focuses on nations, when economics should focus on cities. She claims that wealth production is fully dependent on cities, and that innovation is a fundamental aspect of growing cities, and that innovation allows for wealth production. She claims that innovation and it's organic ramifications are oppositional to agrarian rural living. There's a lot I want to write about, including the connections between this book and Guns Germs and Steel , but this is it for now... I have to go to work.
September 11, 2011
The first I heard of Jane Jacobs was in 1986, while I was working as a user test analyst at the Insurance Corporation of B.C. I had coffee one day with a coworker who, it turned out, had a degree in economics. We got talking about economic issues and he mentioned Jane Jacobs.
"She's really good," he said. "Cities and the Wealth of Nations. You should read that."
I picked up a copy of the Vintage paperback, read it, and loved it. I admired everything about it: the simple, practical, and persuasive way she developed her points; her lack of attachment to any theoretical school or point of view; her fearlessness in junking whole continents of sacred-cow economic theory; her passionate interest in the subject she was writing about, in this case, the economies of cities and how these are the real agents behind the purely artificial construct we call national economies; her admiration for human ingenuity; her brevity; and her exemplary writing style. She was and is everything I think a writer of nonfiction should be.
In chapter 1, "Fool's Paradise", 25 pages long, she demolishes all of economic theory, at least in its efforts to explain the twin phenomena of inflation and unemployment. In simple, insightful, nonrancorous prose she demonstrates the embarrassing failure of the most revered economistsfrom Adam Smith to Karl Marx to John Maynard Keynes to Milton Friedmanto account for these unwanted conditions, especially when, as in the 1970s, they happen simultaneously (I remember terms like "stagflation" and "slumpcession" being coined during the Ford administration to describe the economic malaise gripping the U.S. at that time).
Having demolished the previous explanations for inflation and unemployment, she goes on to propose her own. The pith of it is that, first, there is no such thing as a "national economy". The U.S. economy, for example, is actually an agglomeration of many different economies, and different parts of the country are in vastly different economic condition, and earn their living in vastly different ways. The real, organic generator of human wealth is the city, and vital cities undergo bursts of wealth-generation through one basic process: the replacement of imports. This means that a citynot a countrystops importing certain goods and services, and replaces these with things that are made (or done) locally. Money or goods that formerly left the city to buy imports now stays within it, creating jobs, buildings, and new businesseswealth.
Classical economic theory, which holds that inflation and unemployment are reciprocal, that if one is high the other must be low, is wrong. Jacobs holds that the two of them have always in fact appeared together, and that they are symptoms of economic decline. She gives the example of Ethiopia as a country that, in the centuries before Christ, had been a vital, wealthy empire, but now is a poor. Aside from subsistence agriculture, there is very little work there (high unemployment), and even though prices for most things are very low by our standards, they have slipped out of reach of most of the population (high inflation).
I became a kind of Jacobsian. I read all of her other bookseach one is excellent. If you start by reading the first, The Death and Life of Great American Cities, you can follow the progress of her thinking from book to book: how her interests gradually spread from the question of how and why slums appeared in American cities to, finally, how the world economy functions with respect to the environment.
She was an example of a brilliant and nonacademic thinker. She held no teaching post and had no university degree. To me, fussy, picky, and critical as I am, she is one of the very few writers whose work, in its entirety, I truly admire.
"She's really good," he said. "Cities and the Wealth of Nations. You should read that."
I picked up a copy of the Vintage paperback, read it, and loved it. I admired everything about it: the simple, practical, and persuasive way she developed her points; her lack of attachment to any theoretical school or point of view; her fearlessness in junking whole continents of sacred-cow economic theory; her passionate interest in the subject she was writing about, in this case, the economies of cities and how these are the real agents behind the purely artificial construct we call national economies; her admiration for human ingenuity; her brevity; and her exemplary writing style. She was and is everything I think a writer of nonfiction should be.
In chapter 1, "Fool's Paradise", 25 pages long, she demolishes all of economic theory, at least in its efforts to explain the twin phenomena of inflation and unemployment. In simple, insightful, nonrancorous prose she demonstrates the embarrassing failure of the most revered economistsfrom Adam Smith to Karl Marx to John Maynard Keynes to Milton Friedmanto account for these unwanted conditions, especially when, as in the 1970s, they happen simultaneously (I remember terms like "stagflation" and "slumpcession" being coined during the Ford administration to describe the economic malaise gripping the U.S. at that time).
Having demolished the previous explanations for inflation and unemployment, she goes on to propose her own. The pith of it is that, first, there is no such thing as a "national economy". The U.S. economy, for example, is actually an agglomeration of many different economies, and different parts of the country are in vastly different economic condition, and earn their living in vastly different ways. The real, organic generator of human wealth is the city, and vital cities undergo bursts of wealth-generation through one basic process: the replacement of imports. This means that a citynot a countrystops importing certain goods and services, and replaces these with things that are made (or done) locally. Money or goods that formerly left the city to buy imports now stays within it, creating jobs, buildings, and new businesseswealth.
Classical economic theory, which holds that inflation and unemployment are reciprocal, that if one is high the other must be low, is wrong. Jacobs holds that the two of them have always in fact appeared together, and that they are symptoms of economic decline. She gives the example of Ethiopia as a country that, in the centuries before Christ, had been a vital, wealthy empire, but now is a poor. Aside from subsistence agriculture, there is very little work there (high unemployment), and even though prices for most things are very low by our standards, they have slipped out of reach of most of the population (high inflation).
I became a kind of Jacobsian. I read all of her other bookseach one is excellent. If you start by reading the first, The Death and Life of Great American Cities, you can follow the progress of her thinking from book to book: how her interests gradually spread from the question of how and why slums appeared in American cities to, finally, how the world economy functions with respect to the environment.
She was an example of a brilliant and nonacademic thinker. She held no teaching post and had no university degree. To me, fussy, picky, and critical as I am, she is one of the very few writers whose work, in its entirety, I truly admire.
November 8, 2016
This is an unbelievably important book for anyone critical of current economic practice. Jacobs gives a counter-intuitive but absolutely compelling argument as to why the great cities of the world are falling into decline. And that is that they are subjected to a common currency. Jacobs' arguments are lucid, comprehendible, reasonable, and fly in the face of just about every economic truism that the corporate media throws at its readers and viewers. A must read for anyone seriously interested in economic and social structures, their rise and fall.
June 14, 2009
It took me a while to get through this book because it is a serious and direct explanation of economic processes at work in the world. It is well written, but a bit dry simply because of the nature of the topic (obviously I'm not an economist). However, there are some very important implications to the theory that Jane Jacobs describes, one of which being the terrible damage that our past and current politicians are doing to the economy out of ignorance. I'm not an economist, so I don't know what the current responses to Ms. Jacobs theory are, but to me it seems to be very clearly relevant and important to society. If I could, I would make this book required reading for all politicians before they can make any decisions in office.
May 12, 2008
This book's now a little dated, but its core ideas -- that wealth is largely created by innovation in cities (well, metropolitan areas in the current terminology) and that certain types of subsidy policies can decrease overall economic utility -- may have been expressed first or most clearly here.
September 9, 2021
Meta-view of economic development and degradation over millenia. Important book - placing where we are in the US (and the world) at this moment in time. Highly recommend.
Read
August 4, 2012This is a must read for our current economic situation. Written in 1984 with solutions for today. This book discusses how to put cities back at the center of economies and get local control to work.
June 21, 2013
Essential reading for any armchair economist (aren't we all) and lays the groundwork for the modern, borderless economy that we have today. Short and pithy.
January 23, 2021
The central thesis here is that cities should be looked at as the main drivers of economic activity, and so looking at macroeconomics through the lens of nations is not only backwards but actively harmful, and frankly, she makes a very compelling case. I was already inclined to favor more localized/diversified economies, and it was nice to get facts, figures, and anecdotes to support that belief.
I'd be remiss if I didn't mention a massive blindspot that Jacobs has when it comes to the development of the Northern states' economies vs the Southern states' economies in the US. She repeatedly wonders why manufacturing and export-replacing didn't take off in Southern cities, and it's like... the majority of the labor pool was enslaved? Maybe start there? It's a bit insane to me that slavery isn't mentioned once when she's discussing antebellum economies in the South, but boomers gonna boomer I guess. However, US economies, and particularly Southern economies, are a small sliver of the book, so it doesn't distract that much from the overall point.
One of the biggest takeaways is that individual city-states are more natural economic institutions, and while I'm sympathetic she herself admits that the odds of the US or any other nation deliberately breaking apart in such a way are essentially nil. So the upshot is find more policies that support robust, diverse, localized economies, and get more money into the hands of more people (vs corporate/national concentration), because those people know what their community needs most. In the short term that, to me, means more employee-owned coops and the various democratic institutions you need to support that endeavor.
I'd be remiss if I didn't mention a massive blindspot that Jacobs has when it comes to the development of the Northern states' economies vs the Southern states' economies in the US. She repeatedly wonders why manufacturing and export-replacing didn't take off in Southern cities, and it's like... the majority of the labor pool was enslaved? Maybe start there? It's a bit insane to me that slavery isn't mentioned once when she's discussing antebellum economies in the South, but boomers gonna boomer I guess. However, US economies, and particularly Southern economies, are a small sliver of the book, so it doesn't distract that much from the overall point.
One of the biggest takeaways is that individual city-states are more natural economic institutions, and while I'm sympathetic she herself admits that the odds of the US or any other nation deliberately breaking apart in such a way are essentially nil. So the upshot is find more policies that support robust, diverse, localized economies, and get more money into the hands of more people (vs corporate/national concentration), because those people know what their community needs most. In the short term that, to me, means more employee-owned coops and the various democratic institutions you need to support that endeavor.
August 11, 2020
One of the best books on economic developement!
April 23, 2019
Jacobs writes for mass appeal. The language is mostly simple and she prefers to tell stories rather than analyze statistics or raw data. She does occasionally slide into economics jargon revealing an astute mind that is familiar with the topic. However, after reading and then re-reading this book, I have more problems with her arguments than with plain dry economic theory.
People can relate to stories better than they relate to policy or theory. Readers / students want concrete examples. Jacobs tells many stories. She frequently returns to Pickens County, Georgia and Shinohata, Japan. She tells the stories of many other places as well; but the whole book is about how Pickens County is economically depressed whereas Shinohata, also originally rural and isolated, is thriving. Her use of stories makes for easy reading and mass appeal for those readers who can slog through her first chapter bashing established economic theory.
Her first chapter assaults established macroeconomic theory. With a few sweeping brushes she wipes away Keynesian ideas of governments injecting cash into economies when necessary, Monetarists cutting taxes for the rich, and Marxists regulating everything into a perfect morass of bureaucracy. The problem is Keynes, Freidman, and Marx are not dead in a literary sense. Many economists continue to believe in them. Each major political party lines up behind one of them.
Having prepared the reader to dismiss macroeconomics, she leads readers on a winding theory that cities (and their hinterlands) are the economic engines of any economy. This is barely a step above Adam Smith who said the wealth of nations was in the people. She has identified flourishing city-states throughout history as evidence of her argument. Her argument is that innovation is based on cities reducing imports. In effect, cities replace imports with their own manufacturing. The obvious problem is where to consider the beginning and end points. Should every city have a pillow factory and prevent other pillows entering the market? Automobiles? Theater chains? Theater production companies? She does devote a chapter to wrestling with the ideas of tariffs and external trade. The simple conclusion is: competition is good.
Much of the book focuses on what governments are doing to promote their economies is bad. Interest rates, subsidies, tariffs, anything and everything is bad. Government should stay out of economics according to Jacobs. This extreme libertarian view does not jump out on every page. No, it is couched in terms of concern for poor Perkins County and almighty Singapore. These are stories of failure and success. But the ultimate message is to deregulate, remove tariffs, build tariffs, put people to work, leave them alone, there is no simple solution.
The last chapter is Jacobs' chance to offer a solution. Most readers will be championing the city-state solution; but what is next? How can Pickens County remove poverty? How can they become an import-replacing city? It boils down to wealthy public benefactors. Some rich people will grace worthy entrepreneurs with financing such as in Boston. Otherwise, economics is a moot study and there is nothing governments can or should do.
The first and last chapters alienated me from Jacobs. Those chapters leave me bitter at the options and the conflicting simplicity of her own arguments. Ultimately, I feel she paints with a brush far too wide to be reputable or usable.
People can relate to stories better than they relate to policy or theory. Readers / students want concrete examples. Jacobs tells many stories. She frequently returns to Pickens County, Georgia and Shinohata, Japan. She tells the stories of many other places as well; but the whole book is about how Pickens County is economically depressed whereas Shinohata, also originally rural and isolated, is thriving. Her use of stories makes for easy reading and mass appeal for those readers who can slog through her first chapter bashing established economic theory.
Her first chapter assaults established macroeconomic theory. With a few sweeping brushes she wipes away Keynesian ideas of governments injecting cash into economies when necessary, Monetarists cutting taxes for the rich, and Marxists regulating everything into a perfect morass of bureaucracy. The problem is Keynes, Freidman, and Marx are not dead in a literary sense. Many economists continue to believe in them. Each major political party lines up behind one of them.
Having prepared the reader to dismiss macroeconomics, she leads readers on a winding theory that cities (and their hinterlands) are the economic engines of any economy. This is barely a step above Adam Smith who said the wealth of nations was in the people. She has identified flourishing city-states throughout history as evidence of her argument. Her argument is that innovation is based on cities reducing imports. In effect, cities replace imports with their own manufacturing. The obvious problem is where to consider the beginning and end points. Should every city have a pillow factory and prevent other pillows entering the market? Automobiles? Theater chains? Theater production companies? She does devote a chapter to wrestling with the ideas of tariffs and external trade. The simple conclusion is: competition is good.
Much of the book focuses on what governments are doing to promote their economies is bad. Interest rates, subsidies, tariffs, anything and everything is bad. Government should stay out of economics according to Jacobs. This extreme libertarian view does not jump out on every page. No, it is couched in terms of concern for poor Perkins County and almighty Singapore. These are stories of failure and success. But the ultimate message is to deregulate, remove tariffs, build tariffs, put people to work, leave them alone, there is no simple solution.
The last chapter is Jacobs' chance to offer a solution. Most readers will be championing the city-state solution; but what is next? How can Pickens County remove poverty? How can they become an import-replacing city? It boils down to wealthy public benefactors. Some rich people will grace worthy entrepreneurs with financing such as in Boston. Otherwise, economics is a moot study and there is nothing governments can or should do.
The first and last chapters alienated me from Jacobs. Those chapters leave me bitter at the options and the conflicting simplicity of her own arguments. Ultimately, I feel she paints with a brush far too wide to be reputable or usable.
April 29, 2024
Jane Jacobs is well known for her revolutionary ideas about city planning, but her later books on economics might be even more groundbreaking. Nonetheless, to this day, they remain relatively ignored by popular economists. It is a shame, because many of the topics she discusses in 'Cities and the Wealth of Nations' seem to fill large gaps that exist in modern macroeconomic theory.
The Death and Life of Great American Cities and The Economy of Cities are both prerequisite to this book, as they lay the theoretical foundation for her ideas. They make many assumptions - such as the importance for diversity in a city (not just in ethnicity), the primacy of cities in development, and the influence of cyclical processes (import-replacing, innovation) on the economy of a city - that are crucial to understanding the ideas presented in 'Cities and the Wealth of Nations'.
As for the content of the book: each idea taken alone can be somewhat mundane and underwhelming, but altogether they are absolutely mind-boggling. The implications are vast and deserve serious analysis by economists and others alike. The theories are largely based on anecdotal evidence taken from both historic and modern economies. She takes extraordinary cases such as the rapid growth of East-Asian cities in the 20th century, and explains them using her theories. She then proceeds to make predictions about the future of our economies (which is quite unsettling), and prescribes what we should do to avoid this grave future. While her prescriptions are quite radical, they make sense in the context of her hypothesis. The only remaining step to confirm her theories, is for economists to test them more rigorously with data and further modern examples.
I sincerely hope that this book starts to receive the attention it deserves, because otherwise, our nations are in trouble. I don't tend to get emotional when reading theory-based non-fiction, but I did at the end of this book. It is troubling to read her ideas about the inevitable fate of our nations, and then to realize that relatively few people are aware of it. To this day, our governments are pursuing methods that have been proven to fail, such as foreign "aid", attracting transplant work, and the subsidization of backwards regions. But I tend to remain optimistic, in believing that her theories will eventually gain traction, in some form or another, because they are based on solid, real-world evidence.
The Death and Life of Great American Cities and The Economy of Cities are both prerequisite to this book, as they lay the theoretical foundation for her ideas. They make many assumptions - such as the importance for diversity in a city (not just in ethnicity), the primacy of cities in development, and the influence of cyclical processes (import-replacing, innovation) on the economy of a city - that are crucial to understanding the ideas presented in 'Cities and the Wealth of Nations'.
As for the content of the book: each idea taken alone can be somewhat mundane and underwhelming, but altogether they are absolutely mind-boggling. The implications are vast and deserve serious analysis by economists and others alike. The theories are largely based on anecdotal evidence taken from both historic and modern economies. She takes extraordinary cases such as the rapid growth of East-Asian cities in the 20th century, and explains them using her theories. She then proceeds to make predictions about the future of our economies (which is quite unsettling), and prescribes what we should do to avoid this grave future. While her prescriptions are quite radical, they make sense in the context of her hypothesis. The only remaining step to confirm her theories, is for economists to test them more rigorously with data and further modern examples.
I sincerely hope that this book starts to receive the attention it deserves, because otherwise, our nations are in trouble. I don't tend to get emotional when reading theory-based non-fiction, but I did at the end of this book. It is troubling to read her ideas about the inevitable fate of our nations, and then to realize that relatively few people are aware of it. To this day, our governments are pursuing methods that have been proven to fail, such as foreign "aid", attracting transplant work, and the subsidization of backwards regions. But I tend to remain optimistic, in believing that her theories will eventually gain traction, in some form or another, because they are based on solid, real-world evidence.
May 20, 2013
The idea that cities are the main economic unit is intriguing and argued well. I cannot critique the argument though as I know so little about econmics. Still, it made sense for the most part. The organization in the book is usually good though I was at times annoyed by her sentence structure.
The book is rather dated (what will become of those Soviets?) but sounds remarkably fresh in the context of the "buy local" movment. This book and Jacobs' ideas should be adopted by those who are dedicated to getting people to purchase from local producers. It makes sense because not only do the profits from Wal-mart stores (or Starbucks for that matter) not stay in the local economy (they go to Arkansas or Seattle) they also stifle local stores and producers. The stifling of local stores is obvious but if you look around in a Wal-mart you'll start to notice that very few items are from your local area. Which makes sense for the stores, they buy in bulk from national producers, not local ones. When you start to think of cities and not states or countries as the primary economic unit, you realize how bad that is. Even if Wal-mart were to buy US made products, that would do little for the small producers in Rochester.
Jacobs would probably point out that even if the producer in Rochester were to make a better product than a producer in Phoenix, for the same price, Wal-mart would probably go with the Phoenix producer if they were larger; so Rochester would continue to stagnate. Everybody else in the country would be fine with that until the same thing happened to their own city's producers, or God forbid, Wal-mart selected suppliers in China. (What would that be like?) The US based example seems like a wash when you look at the economy on a national level; it starts to look disastrous when you look at city economies like Jacobs would have us do. Maybe if the economy weren't currently in the toilet I would be a little more skeptical, but given the current situation and nearly endless string of recessions, I'm inclined to buy Jacobs' vision. So, buy local.
The book is rather dated (what will become of those Soviets?) but sounds remarkably fresh in the context of the "buy local" movment. This book and Jacobs' ideas should be adopted by those who are dedicated to getting people to purchase from local producers. It makes sense because not only do the profits from Wal-mart stores (or Starbucks for that matter) not stay in the local economy (they go to Arkansas or Seattle) they also stifle local stores and producers. The stifling of local stores is obvious but if you look around in a Wal-mart you'll start to notice that very few items are from your local area. Which makes sense for the stores, they buy in bulk from national producers, not local ones. When you start to think of cities and not states or countries as the primary economic unit, you realize how bad that is. Even if Wal-mart were to buy US made products, that would do little for the small producers in Rochester.
Jacobs would probably point out that even if the producer in Rochester were to make a better product than a producer in Phoenix, for the same price, Wal-mart would probably go with the Phoenix producer if they were larger; so Rochester would continue to stagnate. Everybody else in the country would be fine with that until the same thing happened to their own city's producers, or God forbid, Wal-mart selected suppliers in China. (What would that be like?) The US based example seems like a wash when you look at the economy on a national level; it starts to look disastrous when you look at city economies like Jacobs would have us do. Maybe if the economy weren't currently in the toilet I would be a little more skeptical, but given the current situation and nearly endless string of recessions, I'm inclined to buy Jacobs' vision. So, buy local.
June 2, 2008
The idea that cities are the main economic unit is intriguing and argued well. I cannot critique the argument though as I know so little about econmics. Still, it made sense for the most part. The organization in the book is usually good though I was at times annoyed by her sentence structure.
The book is rather dated (what will become of those Soviets?) but sounds remarkably fresh in the context of the "buy local" movment. This book and Jacobs' ideas should be adopted by those who are dedicated to getting people to purchase from local producers. It makes sense because not only do the profits from Wal-mart stores (or Starbucks for that matter) not stay in the local economy (they go to Arkansas or Seattle) they also stifle local stores and producers. The stifling of local stores is obvious but if you look around in a Wal-mart you'll start to notice that very few items are from your local area. Which makes sense for the stores, they buy in bulk from national producers, not local ones. When you start to think of cities and not states or countries as the primary economic unit, you realize how bad that is. Even if Wal-mart were to buy US made products, that would do little for the small producers in Rochester.
Jacobs would probably point out that even if the producer in Rochester were to make a better product than a producer in Phoenix, for the same price, Wal-mart would probably go with the Phoenix producer if they were larger; so Rochester would continue to stagnate. Everybody else in the country would be fine with that until the same thing happened to their own city's producers, or God forbid, Wal-mart selected suppliers in China. (What would that be like?) The US based example seems like a wash when you look at the economy on a national level; it starts to look disastrous when you look at city economies like Jacobs would have us do. Maybe if the economy weren't currently in the toilet I would be a little more skeptical, but given the current situation and nearly endless string of recessions, I'm inclined to buy Jacobs' vision. So, buy local.
The book is rather dated (what will become of those Soviets?) but sounds remarkably fresh in the context of the "buy local" movment. This book and Jacobs' ideas should be adopted by those who are dedicated to getting people to purchase from local producers. It makes sense because not only do the profits from Wal-mart stores (or Starbucks for that matter) not stay in the local economy (they go to Arkansas or Seattle) they also stifle local stores and producers. The stifling of local stores is obvious but if you look around in a Wal-mart you'll start to notice that very few items are from your local area. Which makes sense for the stores, they buy in bulk from national producers, not local ones. When you start to think of cities and not states or countries as the primary economic unit, you realize how bad that is. Even if Wal-mart were to buy US made products, that would do little for the small producers in Rochester.
Jacobs would probably point out that even if the producer in Rochester were to make a better product than a producer in Phoenix, for the same price, Wal-mart would probably go with the Phoenix producer if they were larger; so Rochester would continue to stagnate. Everybody else in the country would be fine with that until the same thing happened to their own city's producers, or God forbid, Wal-mart selected suppliers in China. (What would that be like?) The US based example seems like a wash when you look at the economy on a national level; it starts to look disastrous when you look at city economies like Jacobs would have us do. Maybe if the economy weren't currently in the toilet I would be a little more skeptical, but given the current situation and nearly endless string of recessions, I'm inclined to buy Jacobs' vision. So, buy local.
December 30, 2009
Please read this book.
This came recommended to me by the president of my company. Jacobs realigns our thinking about economics when we focus on states and national economy. It was written about 20 years ago, before the fall of the Berlin Wall, before USSR became Russia + some other countries, before Yugoslavia broke up, before the EU, before NAFTA. Before globalization. I think she would have had some fun things to say about that, because economics moved in exactly the opposite direction that she says we need to focus.
Focus on urban area economics. Make sure cities are import-replacing. This means that if you see that your city is importing everything (food, clothing, tools, etc), then all of the money you earn is going somewhere else...to an import-replacing city. Our country is turning into a failing economy because we're exporting manufacturing work and replacing all of those jobs with service jobs. All of the service jobs are providing services that require goods that are not made here.
I think anyone concerned with buying local should use this in their arsenal. It's a great case for locavores, and those who are proud of the local farms and manufacturers. We need to stop focusing on why GM is leaving and start small companies in our own cities that help people within our cities first, and then people in other cities (this is how you make money...taking it from other regions). San Francisco is doing it. NYC is doing it. They both weathered the recession quite well.
This came recommended to me by the president of my company. Jacobs realigns our thinking about economics when we focus on states and national economy. It was written about 20 years ago, before the fall of the Berlin Wall, before USSR became Russia + some other countries, before Yugoslavia broke up, before the EU, before NAFTA. Before globalization. I think she would have had some fun things to say about that, because economics moved in exactly the opposite direction that she says we need to focus.
Focus on urban area economics. Make sure cities are import-replacing. This means that if you see that your city is importing everything (food, clothing, tools, etc), then all of the money you earn is going somewhere else...to an import-replacing city. Our country is turning into a failing economy because we're exporting manufacturing work and replacing all of those jobs with service jobs. All of the service jobs are providing services that require goods that are not made here.
I think anyone concerned with buying local should use this in their arsenal. It's a great case for locavores, and those who are proud of the local farms and manufacturers. We need to stop focusing on why GM is leaving and start small companies in our own cities that help people within our cities first, and then people in other cities (this is how you make money...taking it from other regions). San Francisco is doing it. NYC is doing it. They both weathered the recession quite well.
August 14, 2016
Much more literary (and literate) than most books in the economics genre. Its distinguishing detail is its concentration on the economics of cities in lieu of nations.
A few highlights:
Apart from the direct practical advantages of improvisation, the practice itself fosters a state of mind essential to all economic development, no matter what stage development has reached at the time. The practice of improvising, in itself, fosters delight in pulling it off successfully and, most important, faith in the idea that if one improvisation doesn't work out, another likely can be found that will. Intervention, practical problem-solving, improvisation and innovation are all part and parcel of one another. (p. 150)
and
Analogically, the common thermostat works beautifully at its own corrective task of registering changes in temperature and triggering the appropriate corrections, but it is futile to wish that it would govern the speed of a rotary mill because that is the task we want done; however, a different feedback control does exactly that. In short, feedback controls are built right into the systems they correct, and the corrections they trigger are not discretionary. - (p. 159)
If it didn't have the influence it merited that is attributable to economics' wholesale failure as a science, not the ideas this book imparts.
A few highlights:
Apart from the direct practical advantages of improvisation, the practice itself fosters a state of mind essential to all economic development, no matter what stage development has reached at the time. The practice of improvising, in itself, fosters delight in pulling it off successfully and, most important, faith in the idea that if one improvisation doesn't work out, another likely can be found that will. Intervention, practical problem-solving, improvisation and innovation are all part and parcel of one another. (p. 150)
and
Analogically, the common thermostat works beautifully at its own corrective task of registering changes in temperature and triggering the appropriate corrections, but it is futile to wish that it would govern the speed of a rotary mill because that is the task we want done; however, a different feedback control does exactly that. In short, feedback controls are built right into the systems they correct, and the corrections they trigger are not discretionary. - (p. 159)
If it didn't have the influence it merited that is attributable to economics' wholesale failure as a science, not the ideas this book imparts.
January 3, 2008
It's Jane Jacobs--what else do I need to say! Okay, so everyone may not love Jacobs as much as I do, so I'll explain. Jacobs continues on the tradition of her previous books (Death and Life of Great American Cities, the Economy of Cities) and examines wealth, poverty, and ingenuity. The basic premise of the book is that cities are the fundamental economic unit, not nations as economists from Adam Smith on have assumed. This assumption may seem trivial unless you understand how varying jurisdictions raise tax revenue and use tarriffs. In changing this assumption Jacobs makes a case for why some cities are successful and why others are not--in short, successful cities are import-replacing. While the book doesn't exhaust all the topics covered (like analogies between natural ecosystems and economic systems) Jacobs does write about this relationship 15 years later in the the Nature of Economies. By itself, Cities and the Wealth of Nations may seem confusing, but taken as a chapter in the series Jacobs completed in her lifetime it makes a great amount of sense. Unfortunately, Jacobs ideas have been ignored, and economic systems have continued to drain cities of vitality by pouring ridiculous subsidies into the hinterland.
September 1, 2016
"Today the Soviet Union and the United States each predicts and anticipates the economic decline of the other. Neither will be disappointed."
—
This book starts with the question “Why is stagflation (the concurrent rising of both prices and unemployment) even a thing?” and goes through history to first explain why previous economic theories failed to account for it, and then why previous attempts to fix it have failed to alleviate it, and finally examines the causes of how it comes about in the first place.
In the process, Jacobs lays bare the entire root system of the economy of the trading world examining in detail examples as disparate as the Roman empire, the current Pacific Rim, ancient China, modern Urugay, and of course the US and Russia.
Without setting out to justify or refute a particular ideological position, this book is able to dispassionately evaluate the economic ramifications of things like military spending, welfare and subsidies, national currencies, and international loans.
tl;dr: This book is really good and you should read it.
—
This book starts with the question “Why is stagflation (the concurrent rising of both prices and unemployment) even a thing?” and goes through history to first explain why previous economic theories failed to account for it, and then why previous attempts to fix it have failed to alleviate it, and finally examines the causes of how it comes about in the first place.
In the process, Jacobs lays bare the entire root system of the economy of the trading world examining in detail examples as disparate as the Roman empire, the current Pacific Rim, ancient China, modern Urugay, and of course the US and Russia.
Without setting out to justify or refute a particular ideological position, this book is able to dispassionately evaluate the economic ramifications of things like military spending, welfare and subsidies, national currencies, and international loans.
tl;dr: This book is really good and you should read it.
February 16, 2013
Intelligent, insightful, and speaking almost orthogonally to the concerns of orthodox macroeconomics, this book articulates what we could well call the 'Jacobs Hypothesis:' that the basic units of macroeconomic life are the areas of economic vitality found in cities, that macroeconomic interactions are best described as trade networks between cities, rather than nations, and, as a political corollary to this hypothesis, that the Westphalian state is at best a hanger-on to, and more generally a parasite on this economic vibrancy. This is a hypothesis badly in need of empirical testing, both because of its compelling but almost maddeningly non-technical articulation, and because of the vital importance in determining its validity. The passage of nearly three decades since its publication should aid in this endeavor.
I would certainly recommend this book as an engaging, thought-provoking read, even suspending judgment on its thesis.
I would certainly recommend this book as an engaging, thought-provoking read, even suspending judgment on its thesis.
July 5, 2007
Jane Jacobs loves cities. In The Death and Life of Great American Cities, written in the Sixties, she blasted urban-redesign efforts that were based on the assumption that people actually didn't like cities and would prefer to live in the country -- millions of city-dwellers to the contrary. In "Cities and the Wealth of Nations", she argues that the misunderstanding of what makes cities great extends to a national level. She says that macroeconomists have misunderstood for centuries that all the energy and economic development in a country come from its cities. It's powerfully argued and beautifully presented. Conversations in subsequent days, however, have suggested that the economics is rather questionable.
April 20, 2009
Jacobs challenges the paradigm of the nation as the most appropriate unit of organization for economies, and promotes that of the city or city region.
A compelling case for city-states as a primary basis for economic life. Her arguments about 'transactions of decline' (Chapter 12) and the idea of an 'esthetics of drift' (Chapter 14) especially resonated with me.
Maybe Obama--instead mythologizing the importance of being one nation--should be advocating for a continent of multiple sovereignties that make up a network of vigorous inter-city trade--promoting economic development defined as 'a process of continually improvising in a context that makes injecting improvisations into everyday life feasible.'
A compelling case for city-states as a primary basis for economic life. Her arguments about 'transactions of decline' (Chapter 12) and the idea of an 'esthetics of drift' (Chapter 14) especially resonated with me.
Maybe Obama--instead mythologizing the importance of being one nation--should be advocating for a continent of multiple sovereignties that make up a network of vigorous inter-city trade--promoting economic development defined as 'a process of continually improvising in a context that makes injecting improvisations into everyday life feasible.'
November 3, 2008
This is a paradigm expanding book. Jane Jacobs has brought together insightful observation and research, history, and economics together which recommend theories of economy for nations, regions, and cities. She provides numerous examples of what works, and what doesn't, in various efforts of economic development. This book shatters many other theories of economics in a very convincing way. It also shatters our notion of what nations should and shouldn't be.
For anyone with even a remote interest in economics, this book is a must-read.
For anyone with even a remote interest in economics, this book is a must-read.
July 30, 2016
This is a well written, engaging, though occasionally dry book. It is worth reading because of the unique perspective it gives in relation to nations, cities, economic output, and trade. Jacobs is undoubtedly the greatest prophet for cities. I am not entirely convinced by her argument, but at least it is original.
My only real complaint is that her prescription for economic stagnation is politically impossible, something she acknowledges. It gives the book a feeling of unending pessimism; our destruction is ingrained by the very world we inhabit.
My only real complaint is that her prescription for economic stagnation is politically impossible, something she acknowledges. It gives the book a feeling of unending pessimism; our destruction is ingrained by the very world we inhabit.
December 20, 2007
Basically makes the argument that cities, not states and nations, are the main economic engine.
Not sure how Jacobs' work is regarded outside of "Death and Life of Great American Cities," and I'm also not informed enough to comment on them with any credibility.
Still, I love the way her books make me think about cities. Her enthusiasm for cities, even in writing on economics, is really great.
Not sure how Jacobs' work is regarded outside of "Death and Life of Great American Cities," and I'm also not informed enough to comment on them with any credibility.
Still, I love the way her books make me think about cities. Her enthusiasm for cities, even in writing on economics, is really great.
October 15, 2013
This book really shook up my conception of economies which seemed a good thing considering how ineffectual mainstream economic theories have show themselves as of late. I tended to agree with Jacobs' argument that cities, not nations, are center of economic life and the key to understanding economics. She argued the case well and didn't offer easy solutions to the complex problems she described. I'd be interested to see her theory put to how in depth economic study.
October 14, 2007
An interesting and compelling defence of cities as the necessary (and only) level of economy and society. Published in 1984, some of the book's examples (the USSR, a New York City in what seems to be an irrevocable downward spiral...), but many of its theories not only apply, but are quite convincing.
October 21, 2010
Jacobs argues that the success of homegrown industries and the failure of top-down macroeconomic policies is due to the personality of the city. A city must have the will to grow and not simply to import the goods and satellite industries of another power center. The growth of these cities are responsible for the economic position of the nation. Another argument that gives a planner pause.
May 18, 2013
It was pretty dry, written in an economist's vocabulary, with the basic premise that the only economic unit that functioned well was a city-region, a city with it's surrounding industry and agriculture. She thought that nations were too large for the chaotic improvisation of capitalism to function. And forget about planned economies.
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September 24, 2025that a lot of the core principles still hold up (and still seem like very pertinent and biting criticisms of a lot of current affairs) is…scary. jane jacobs’s writing is so well thought out and reasoned that i was very inclined to take a lot of what she said as the truth,, i would like to continue to read books in the area to see how (if) any developments have been made.
April 19, 2011
An extremely interesting thesis. Her arguments carry a lot of weight, and the examples she uses provide ample support for her theories. A worthwhile read for anyone interested in regional economic development.
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