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Mario Polèse
Five Principles of Urban Economics « Back to Story

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Amazing, i like the title topik about five principle urban economic, i think, the paper especialy in europe city, i have question how about principle urban economic in perpective islam or yahudi.
I am impressed from your journal. Recently In started studying Urban Economics for my Masters Degree in Real Estate. I found your articles very helpful and interesting. Thank you.
Since we all profit by respecting the rights of our citizens, why are there not more special laws, official policies and regulations that apply to them in the urban economic area?

For example, should commercial zoning variances have the same protection for members of society vs commercial entities.

In the United States, zoning variances are granted when development of the real property has significant hardship. In this case, the property determines value, not land use.

In my mind, if a business needs help to overcome property hardship or is under-capitalized, then it should forget any new adventures and refocus on its producing assets which do not need additional capital input. Non-commercial property owners who have low or modest income maybe be unable to take on the extra financial burden so assistance in the form of zoning relief may be warranted.

Pardon my rambling, but I would appreciate your comments. Thank you.
Professor Pugliese's comments are valid and interesting. I have an objection however to one of his points about the decline of Montreal, Quebec.It is not just a question of building two airports separated by forty miles. Quebec's government has been oppressing the use of the English language by multiple restrictions on recruitment to its English language school systems, and other spiteful and petty measures. Some half-million English speakers, most of them highly educated, preponderantly Protestant and Jewish, have found a good reason to live elsewhere than Quebec over the past forty years. I liken Quebec's language laws to Louis XIV's suppression of Protestantism in France. The long-term effects of getting rid of entrepreneurial classes and religions are disastrous for innovation and growth, because these assets are cultural, embedded in how families educate their children.
Pat, below, makes unnecessarily disparaging remarks about Silicon Valley. Several essential ingredients have been present in the region, a top university - Stanford - a great source of intellectual talent from across the globe and the entrepreneurial culture found in the venture capital /Investor/incubator mindset of the area.
A must read for those interested in helping to direct the future of their cities or communities.
Mario,
Learn to use bolding and bullet points to make your articles easier to read.
In rule #3, you mentioned not only transporation times, but their costs, which have grown high in many cities, whether you drive OR take light rail. It makes you wonder about some of the consequences of congestion charging...
EPís comments below go straight to the heart of the matter. People and their unique culture make a city economically viable or, conversely, will guarantee a cityís decline. There are always other less important factors of course but any city is merely lines drawn on a map, the dirt was always there and will always remain once the city shrinks back into obscurity. Detroit enjoyed Great Lakes bulk transportation allowing access to iron ore deposits in northern Michigan with coal readily available as an early energy source. People took advantage of those specific conditions and built a thriving city specializing in heavy industry. What changed? The lakes are still there and energy isnít scarce. But the human culture did change - in fact, it devolved into a civilization killing toxicity over the years.

Automobiles continue to be manufactured daily, both within the United States and overseas, specialization in a declining industry wasnít the reason for Detroitís death spiral. Did the Japanese automakers deliberately kill Detroit, cruelly and without remorse? Utter nonsense. Detroiters killed their incredible industrial base and post WWII economic dominance in automotive manufacturing. Greed, shortsighted business/union policies, equally shortsighted regional politics and human stupidity were the cultural attributes which murdered their vaunted industrial dominance and long term prosperity. And the automotive manufacturing corridor stretching from Toledo, Pontiac, through Flint and on into Saginaw and Bay City also died a premature death, same toxic human culture, same economic result. Will Detroit devolve back into the small trading outpost it once was? And who would care if it does?

There is no city of Silicon Valley, itís merely a famous nickname for communities situated along San Francisco Bayís southern and southwestern extremities. There are no extensive deposits of silicon in this region and no specific historical conditions which led to the rise of software and computer hardware industries here. This geographic area was formerly known for growing prunes. But then the same mysterious causative factors can be applied to Austin, Texas, a burgeoning computer-industry rival to California. People and people alone made the difference in developing these regional industries, not transportation, not geographic positioning and certainly not local government.

Climate and opportunity drew Americans west in the late 70ís and 80ís, many from the Mid-West, Detroit included. Today, Asia and Europe supply many of the young, well-educated employees in Silicon Valleyís and Austinís computer firms, while not forgetting Massachusetts with its entirely different climate, history and previous industrial focus.

Economics is, by definition, sociology with an underpinning of human behavior models strongly influenced by mathematics. At times, economists forget they are merely sociologists studying human behavior and begin to emulate physical scientists. Pity that because an honest appraisal and critical analysis of human culture is whatís needed most today.
The author must have had some funny figures on hand, or he does not mind assigning "Scandinavian roots" to Germans.

Similarly, I would be interested to hear how air-conditioning has affected the growth of cities in, say, India ever since Mr Carrier came up with his invention that, incidentally, is over 100 years old.
"The Scandinavian roots of its population are undoubtedly a factor." As a commenter wrote, "carefully phrased".

Why does the article leave out the quality of human capital, the values that drive the population, the work ethic, the industriousness and determination and education of the people? Baltimore declined as crime drove the educated class away from the city and is still preventing industrious, educated people from relocating there - the housing costs are very modest. But when you think of the crime and having to drive everywhere to avoid crime, you think twice about moving to Baltimore.

This article skirts the key issue: the quality of the people. You can attract good people with creative ideas, personal resources, and entrepreneurial instincts, or drive them away. A crime-ridden city drives the good away and succors the bad. A discussion I had with a police representative in Baltimore told me that the stop and frisk policy was abandoned due to pressure from the population most affected by it. Well, Baltimore's leadership has no guts.

And that's why so many people pay the price to live in a safe city like New York.

This article is mysteriously silent on the quality of a city's people and the policies that attract the people who will build the city and contribute to its life, culture, and prosperity. Baltimore's leadership has for decades followed policies that has driven those people away.
An excellent article. I suggest 4 specific items within the public policy framework that appear to be important. Three are high quality public services for transportation, education and public safety--the three public services that continually rank as highest priorities for citizen choice in location. In addition to facilitate creation of new smaller businesses, some of which will grow large, the regulatory structure (zoning, codes, licensing, etc) needs to be able to respond in a timely manner. Many Canadian cities have over 300 different land use categories in zoning and virtually every minor land use change requires a re-zoning process complete with public hearings. The attitude that the council should control every land use and take its time doing it does not promote economic growth.
Race, custom, language.
"Things we know and things we don't." Insightful essay and author's five principles deserve consideration by any thinkers/policy designers grappling with 21st century social transformations.
Gilbert W. Chapman March 18, 2013 at 5:55 AM
One of the most forceful essays I have ever read.

As one who lived in New England for 55 years, I couldn't help but wonder if cities like New London, CT, Springfield, MA and Providence, R.I. (among others) will face the same destiny as Detroit, Michigan.

However, I would have emphasized two factors more strongly ~

First, more emphasis on political corruption. The cities mentioned above have been rotten (police, political hacks, etc.) through and through for decades.

Second, on brain drains. With the advent of air conditioning (mentioned in the essay) another phenomena occurred ~ Many of the long term older residents of those cities left for Florida and the Southwest, and took their wisdom with them.

Regardless of those two very minor (debatable) oversights, this piece should be published in every newspaper in the United States.

Please keep up the good work, Professor; and thank you.
The author omits the major cause of Montreal's decline, which had nothing to do with the location of its airport. Montreal decline because it drove out much of it's English speaking population in the 1970's and beyond. It also drove away much of the immigrants coming to Canada because of it's mandatory imposition of French and "French (read Quebec)culture". The best and the brightest of these moved to Ontario or like me to the US.

Often the government can really screw things up.
The article makes some good points but also omits other key considerations and is factually inaccurate at times. Birmingham UK is not and has never been the major steel production centre in the UK - that honour probably goes to Sheffield in England with other major centres in the NE of England, S Wales and E Scotland. Birmingham was built on engineering innovation. It made things and was known as 'the city of a thousand trades in the 19th century. It's decline has more to do with the points made by the author under his 4th principle. The article also ignores the effect of political centralisation on city dominance. London & Paris are prime examples of this and their size has more to do with their role as seats of Government for many centuries than their location. People congregate where the power is. This point may be less obvious in the more decentralised federal structures of modern nations like the USA and Canada but it very clear if you live in Western Europe. Even in the USA I understand that Washington DC has grown strongly in recent times, which may reflect its key political role more than any other factor.
This article is strikingly interesting and important for everyone's future. It seems to tell it like it is without any political connotations or bias...thus leaving that up to the reader's own knowledge. Like it all.
Zubedit -- "creatives in Germany" sounds a bit like an oxymoron to me. I highly doubt we'll be looking at Leipzig as an economic leader in 10-20 years...
Although Leipzig's size and importance may have decreased over the past 50 years, the city is now THE upcoming area for young creatives in Germany, a hipster friend of mine told me...
Very carefully phrased, about the "Scandinavian roots". A city whose population contains a large fraction of people who are members of a demographic that has a pattern of high educational achievement around the world will probably see that pattern replicated.
Great article! But why is it not clickable on the front page at City-Journal.com?

This is especially interesting to me as a resident of MalmŲ, Sweden, a very well-connected city with thriving entrepreneurship coupled with extreme segregation, high immigration, unemployment and crime.