Bangalore, not Buffalo, is primed for economic success in the 21st century.

The annoying Ed Glaeser on cities

Four years after he caused a stir by saying that politicians had squandered billions in an effort to bribe the citizens of Buffalo to stay here, the world’s most celebrated urban economist still thinks it’s a stupid idea to subsidize construction projects in Buffalo. He does not, however, think that it’s a dumb idea to invest in people. We must, he writes in his new book, “free ourselves from our tendency to see cities as their buildings, and remember that the real city is made of flesh, not concrete.”

Ed Glaeser’s new book for non-economists is Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier and Happier. Glaeser, a Chicago-trained professor of economics at Harvard, compiles a whole lot of his technical research in a math-free, fresh, alternately annoying and uplifting celebration of what really works when cities really work well.

Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier and Happier

by Edward Glaeser

Penguin Press HC, 2011 | 352 pages

It’s all about people and ideas, because cities are fundamentally about economic innovation. Glaeser doesn’t care about buildings except to the extent that the bring people together. Why? Because people who are close to one another share ideas, and ideas have always been the source of economic growth. The magic of cities comes down to one word: proximity. When skilled people are close together, everybody gets happier, and everybody gets richer.

So as the broken old industrial cities of the Rust Belt get their economic councils amidst a new round of Washington-created economic uncertainty, Glaeser’s book is timely. And much of what he has to report is truly insightful, if not uniquely his.

Take the issue of the “business culture” of a city. The Berkeley political scientist Annalee Saxenian wrote a book 17 years ago called Regional Advantage that explained why businesses in the “city” of Silicon Valley grew to dominate the information technology universe while the formerly world-beating innovators of Boston’s Route 128 area faded. It wasn’t that the San Francisco Bay area’s weather beats the heck out of Boston’s: It’s that the social structures of the two places are radically different. In Boston, companies worked in isolation, and even the new ones tended to replicate the old social order. In California, nobody worked in isolation. Everybody talked. Smart people in California jump from job to job, while back east, insiders tended to stay inside. Networks of producers and innovators form and re-form in Palo Alto, and the communication thing is always happening. Steve Jobs and Steve Wozniak’s Apple thrived in an environment where suppliers and customers expanded together by “promoting reciprocal innovation.” In Boston, folks didn’t job-hop, companies didn’t interconnect, and ideas didn’t leak out of the office into a local scene where engineers, marketers, designers, and risk-takers hung out together.

Ed Glaeser’s telling of the Silicon Valley story confirms Saxenian’s. In only three pages, with interesting stories about idiosyncratic personalities like Nobel Prize-winning racist asshole William Shockley, Glaeser traces the genealogy of Silicon Valley. A robber baron founded Stanford University at the same time John D. Rockefeller founded the University of Chicago, but Stanford was, from its inception, all about technology and practicality, not about lofty speculation. Generations of Stanford engineering faculty and students stuck around the same neighborhood even when they fought with one another, and one of them had the bright idea to create an industrial park right next to school. The companies these Stanford alums founded right in the neighborhood tell the story: Intel, Cisco, Sun Microsystems, Hewlett-Packard, Apple, Yahoo, Google.

Yet Silicon Valley isn’t a traditional city—which is the invention this book spends 260 pages celebrating. You can’t really walk around Silicon Valley. There’s no public transit to speak of. It’s all about the car there. The essential feature of city living—physical proximity—remains the key ingredient of that region’s success. Glaeser suggests that Silicon Valley’s Achilles heel is that its people aren’t physically close enough.

Glaeser addresses the new international hotspots of innovation, and notes that Bangalore is going to have a much more likely trajectory of success than Mumbai, because Mumbai’s zoning rules prevent skyscrapers. Glaeser likes the policies of the Chinese, who have figured out that maximizing density means maximizing efficiency and also connectivity and face-to-face interaction.

As for the Rust Belt, one sighs that Glaeser is a lousy historian and incapable of any clarity about the impact of court cases, politics, or the insane subsidies that come with municipal boundaries. Much of the thinking in Glaeser’s chapter on Rust Belt cities, especially the part about Detroit, rests on work he did in his 1999 scholarly article “The Death of Distance”—an analysis of how deindustrialization of old manufacturing cities was inevitable when the technology of transportation made their locations irrelevant. Other dynamics were going on in American cities at the time—specifically, the politics of race and the business of the real-estate industry in doing its absolute best to drive new construction of housing stock in municipalities that the real-estate industry could control, in coordination with the road-building industry, by controlling municipal politics. Glaeser seems to think that the processes of change in American cities of the northern United States were all about industrial economics and misguided liberal mayors. Also, Glaeser’s 1999 about the “death of distance” presupposed cheap energy and endless technological innovation. Wells College professor Kent Klitgaard, who is co-author of an eagerly-awaited forthcoming book called Energy and the Wealth of Nations, has a succinct statement of Glaeser’s limitations on his website: “Anyone who believes that an economy can grow exponentially inside a finite planet is either a madman or an economist.”

But the rest of it, Glaeser gets compellingly right, and the Rust Belt should sit up and collectively listen to this kid. “Urban reinvention is made possible by the traditional urban virtues that were to be found in nineteenth-century Detroit: educated workers, small entrepreneurs, and a creative interplay among different industries,” he writes. “Late twentieth-century Detroit was dominated by a single industry that employed hundreds of thousands of less-skilled workers in three vast vertically integrated firms. What a toxic mixture!”

Glaeser likes some Rust Belt strategies better than others. The “shrinking to greatness” or land-banking now underway in Detroit, Youngstown, and Germany’s Leipzig makes sense to him. He criticizes “the edifice complex.” Old industrial towns have to “return to their roots as places of small-scale entrepreneurship and commerce,” so apart from investing in education and maintaining core public services with moderate taxes and regulation, governments should neither try to do much more, and should most especially not expect a new big box will do the trick. “Not every city will come back, but human creativity is strong, especially when reinforced by urban density.”

The great value of this book is that the author is so irrepressively positive in bringing forth such a vast volume of carefully considered information. What urbanophiles needed was a darling of the intellectual Right to step up and get urban economics some new respect, because the Left has long been identified with being pro-city. Ed Glaeser puts his fame and his cleverness and his energy behind the prospect that the density and diversity of cities is fun, green, efficient, and smart. This is good, and he has—with some limitations—a lot to teach. Buffalo should listen up.

Cities are indeed the best ecological solution for humanity.

Bruce Fisher is visiting professor of economics and finance at Buffalo State College, where he directs the Center for Economic and Policy Studies.