The horizon is not so far as we can see, but as far as we can imagine

Review of “The Economy of Cities” by Jane Jacobs

jane-jacobsI read this book in the early nineties, along with its companion, Cities and the Wealth of Nations. It struck me then as profoundly important and still does today–perhaps more important than The Death and Life of Great American Cities, the book for which Jacobs is better known and which has become seminal for much of modern urban planning.

Jacobs was an autodidact, and quite willing to challenge the status quo thinking based on her own investigation and research, and The Economy of Cities is perhaps the most striking example of this, with Jacobs starting the book by saying that agriculture was created in cities, not in the country.

Jacobs definition of a “city” is as follows:

A settlement where much new work is added to older work and this new work multiplies and diversifies a city’s division of labor OR a settlement where this process has happened in the past.

If a lot of new work is being created, a settlement is a city. If work is not being added, it is not a city–though there are cities which had this process in the past, in which it has largely stopped. Appropriately, Jacobs, publishing in 1969, spends a lot of time discussing how this process had stopped in Detroit, the results of which are now clear to see.

Jacobs observes that the countries with the most advanced cities have the most advanced agriculture, and that the productivity of agriculture, in modern times and those times about which we know, lags behind the productivity of cities. She uses Denmark as an example, which had backwards agriculture until Copenhagen began developing due to trade with London, and replacing imports by making those imports in London.

Likewise, refrigeration was developed in cities, factories started in cities and moved to the countryside, electricity started in cities, and on and on. Industries: Work, is created by cities and when it is codified enough to be vertically integrated within a single organization, it is then moved to the countryside.

Given this is the case for new work today, and in recorded history, Jacobs asks: Why do we assume it was not true for the invention of agriculture?

Archeologists in Jacobs time didn’t agree, and they don’t agree today, but I’m not sure they were right. A lot hinges on that definition: Settlements where a lot of new work is being added.

Still, there is some archeological evidence: As my friend Stirling Newberry once pointed out, the vast walls of stone age settlements, for example, make no sense as defensive measures. They cover too wide an area for stone age settlements to actually man them. But if you’re breeding crops, they make perfect sense: You need your new species to be protected from windblown seeds.

Still, whether Jacobs is right about agriculture in specific is less important than that she is right about what cities are today and on the historical record: Places in which new work is created.

But not all cities, not forever. Like Detroit. A city starts by exporting something and importing what it needs. It then replaces those imports by making them itself. Jacobs gives many examples, from medieval Europe to Los Angeles after the war.  As it replaces imports, it creates new work along with a vast ecosystem of suppliers of services and products. It also frees up money to buy new imports, which, in turn, it can then replace.

Because new work generates out of old work, the more work you have in a settlement, the more likely it is for new work to arise. New work doesn’t arise on the entirety of an old business, though, it arises on part of it. So the bra was the invention of a dressmaker who shut down her dress making business to concentrate on bras, which she had previously made one at a time and given to customers who bought dresses.

A startup business needs suppliers: It needs sources for everything it doesn’t make itself. When Ford, famous for the assembly line, made cars successfully, he did it by buying all the parts from other Detroit businesses and just putting them together. Only later did Ford start making everything internally. (One of Ford’s suppliers were the Dodge Brothers.)

A new business can’t do everything that business requires: accountancy, sales, making every machine for manufacturing. So a city with a wide variety of work makes it possible to add new work. Cities which produce the most new work (but not the most efficient) are cities like Detroit before the success of the auto industry–full of small businesses, none of which dominate the city.

If one industry or company becomes too successful, they make a city efficient and the small suppliers die off. As examples, Jacob gives Manchester (the heart of early British textile manufacturing), Detroit, and Rochester, NY. In all three cases, a successful mono-business strangled the prerequisites for new businesses to arise. In the case of Rochester, Kodak was extraordinarily vindictive in stopping anyone from leaving the company and starting a new one.

As an aside for the modern reader, this leads to one of the reasons for Silicon Valley. Famous for its startups, often created by people who just left another company, Silicon Valley exists because California law makes non-competes illegal. If you want to be “the next Silicon Valley” and you allow non-competes, it isn’t going to happen.

Which comes to the more basic point that people have to be able to start new businesses. Where they can’t, for whatever reasons (water carrying slaves in Rome are one example Jacobs uses), new work can’t be created. This strikes at the heart of questions of credit, of centrally planned economies vs. decentralized ones, at the massive loss of regional banks in the United States (large banks are worthless for starting new local businesses, as a rule), and so on. Jacobs has a long section on credit for new businesses, using as one of her examples, the tech boom in Boston after WWII, which was in large part the result of a single bank starting up which wound up specializing in funding such businesses.

This summary can’t really do justice to the book, and it’s worth your time to read. Jacobs, in this book, says she felt that the US was just beginning to slow down, which proved prescient; and in her next book, Cities and the Wealth of Natons, she declared it had happened. The archeologists may disagree with Jacobs about agriculture, but the economic macro-data is clear: The earliest you can see the US slowdown is about 1968, when she would have been writing the book, and by 1980, when her next book came out, it was clear.

Although Jacobs was writing before the internet, and before just-in-time shipping and near global supply networks, her book is interesting to read in light of these developments. Her conditions for new work creation and why cities are required, make it possible to ask: “Can those conditions now be met without living in a city?”

The answer would seem to be, “If I can order all the parts and services I need from anywhere in the world, why not?”

But…but, the fact is that the center of world manufacturing is now in a few cities in China. For example, the foremost electronics manufacturing center is Shenzen, and if you want anything made it can be made there, because, well, all the suppliers are there.

So, while the internet and global (fast) supply chains seem to suggest that perhaps cities are not as necessary as they once were, a few cities still seem to be the places where most of the new work is happening for particular industries.

This book really does need to be read along with Cities and the Wealth of Natons, it’s really part one of a longer book, which sets up the macro-circumstances under which cities can keep the necessary conditions for growth. They also deal, in detail, with the effect cities have on non-city areas. That book I will review at a later date.

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Marine Le Pen and the Problem of Nationalist Politics in Europe


Castro’s Legacy


  1. Tony Wikrent

    Thank you for an excellent review, and for introducing me to Jacobs.

    One of most stupid things I’ve heard recently is some people, such as Bonddad, declaring “those jobs are never coming back.” By what law of the universe? In fact, if we’re going to solve global climate change, almost ALL production HAS to come back to the US, and other countries, because maritime shipping, which uses massive diesel engines for propulsion, is one of the major contributing causes. And forget “economies of scale.” With the production technology that has been developed in the past quarter century, such as nano-drones and 3-d printing, a lot of products can be produced in smaller production runs in smaller facilities located within 400 to 500 miles or less of final purchase.

  2. V. Arnold

    Hmm, Jacobs doesn’t seem to include politics in her POV. Politics and greed were the leading causes of off-shoring our biggest employers, IMO.
    I agree with TW (above) re: 3D printing. It is revolutionizing manufacturing: Space X is 3D printing it’s Falcon 9 rocket motors as just one example.
    However, with robotics and other technologies; I can’t see manufacturing ever being the employer it once was.

  3. Lisa

    Tony Wikrent
    “One of most stupid things I’ve heard recently is some people, such as Bonddad, declaring “those jobs are never coming back.” By what law of the universe? ”

    Dead right offshoring industries that you can undertake youself within your own country only works becaise of:
    (a) Cheap transport
    (b) Avoidance of tax.

    (b) is the most important ion all this. Look in most manufacturing labour cost is nearly always a small minority of the costs.. But by offshoring you can use offset pricing and move your profits into tax shelters.

    There have been several studes into this and on a pure cost level offshoring never adds up. The small reduction you get in direct labour costs nearly always gets eaten up by indirect admin and transport costs…but the tax benefits…..

    If the world ever got its act together (sigh) and brought in common tax laws and ended the shelters then localised manufacturing would whiz back.

    In fact if Saudi Arabia hadn’t decide to kill the oil markets (and thus kill itself*) the $100+ a barrel oil costs were starting to kill offshoring already by pushing up transport costs.

    There was a second dimension to all this, neo-liberal political ideology, taking a leaf out of Hitler’s book, was determined to destroy manufacturing in those countries that sighed up to it. US, UK, Canada, Australia, New Zealand and al the rest. For the same reason, manufacturing means lots of technically trained workers. As Hitler said his ‘New Europe’ was going to end manufacturing in Germany’s empire ‘because it encouraged communists and intellectuals and hence political opposition’.

    Never forget one of the architects of it, Milton Freidman in his TV series and his love of Hong Kong in the 70s…his perfect society as he saw it. No democracy, no freedom, endless poverty, short lives 10 people to a couple of rooms with a tiny rich elite. Neo-liberalism was never about econmics, that was the ‘cover’ for a horrible political ands social ideology.

    *And there is a story all in itself the US agreed, heck urged Saudi Arabia to do it to hammer Iran and especially Russia, despite the fact that SA’s real target was the endlessly loss making US oil fracking industry….Oops.

  4. edwin

    @V Arnold

    To some extent Jane Jacob’s books hang together. Each one builds off the last. She does talk about politics, but that is not the focus of her work. It has been decades since I have read her work, but from what i remember:

    She is saying that it does not matter the type of government – cities work a certain way: import – replacement – export – repeat. Governments that make any point in the chain difficult make city work difficult. Governments that make this process easy will encourage economic growth. It does not matter the government system in a certain sense other than noting some systems (US capitalism, communism for example) have values that are predisposed to oppose some elements in that chain.

    If you are looking for politics she talks about the fundamental problems with communism – Marx did not understand what an economic unit is, and assumed that an economic unit is an arbitrary line on a map – a country. Jane Jacobs is saying that an economic unit is not arbitrary and is not a line but denoted by a fuzzy region with the city as its heart. Los Angeles for example draws people from a very large area cutting across the US/Mexican border. Los Angeles as an economic engine drives a region that includes two, or perhaps even more countries. The discussion on Marx, if I remember correctly is just a paragraph or two – an observation that comes out of her work on cities.

    She talks a lot about the morality of work in a later book Systems of Survival. This book deals with the morality of work – what are the moral values that make cities work.

    This impacts heavily into politics. It provides a good basis for understanding why Communism failed and why US capitalism is failing. It provides an understanding of why so much of the 3rd world is going to remain 3rd world. While theft by the first world occurs, it is not the theft that results in the poverty – it is a symptom not a cause. Economically the important chain that is the engine of cities is broken. The moral underpinnings of government impeded the formation and growth of cities. Morally, the values held do not facilitate city work and do not facilitate good government.

    Again, though, cities is the focus of her life’s work, not politics. Systems of Survival is a fascinating tangent discussing the moral values that make cities work. Perhaps the most striking idea in this book is that the morality of work is absolute, and that there are two of them along with two different types of work – Government and Business or Taking and Trading. This is not the same as saying morality is absolute. She isn’t saying that at all.

    If you want politics to some extent you are looking at the wrong author – that is not her focus though what politics must include to make economic success comes through quite clearly.

  5. V. Arnold

    November 25, 2016

    Thank you for your very considered response.
    It’s not so much that I’m “looking” for politics; but rather, I see politics in the mix today, very much at every turn of commerce; both internally and internationally.
    Seems very much a monkey wrench in the works…
    If I understand your read of Jacobs; she would agree that politics can screw up the works.
    Cheers Edwin.

  6. edwin

    V. Arnold

    Both screw up, and help make it happen. She sees a very clear role for government intervention into the market place. For example, see Ian Walsh’s comments on Silicon Valley vs Detroit.

  7. Ian Welsh

    Systems of Survival and “Cities and the Economy of Nations” and “Dark Age Ahead” all deal with politics, they just don’t so explicitly. But Jacobean economics has a lot to say about exchange rates, about the size of countries, about how cities should be run, about the morality of government and the morality of business. There’s a ton of politics, it’s just usually not labeled politics.

  8. Jack Remington

    For the last decade I’ve come to believe that Jane Jacobs is probably the most underrated and sensible economist of her time. Why is that? What does she bring that others don’t?
    Thank you for your article.

  9. different clue

    @Tony Wikrent,

    Thank you for noting that International Free Trade itself is a major cause of global warming.
    I read once an article on Reddit ( impossible to find on that hoarder’s heaven of mixed trash and treasure) claiming that one Container Supership emits as much carbon as ” 700 million cars”. The article didn’t say what size cars or anything else about the cars so . . . being very conservative . . . I will take away from that article that one Container Supership emits as much carbon as 100 million cars. So retiring 10 of these ships from service is like taking One Billion Cars off the road.
    If we could shrink trade enough to retire 20 of these ships, that would be like taking Two Billion Cars off the road.

    Naturally the Free Trade Traitors will object. Their objections will have to be crushed and smashed and pressed flat before we can make any progress on rolling back the tide of Free Trade.

    I will now be really provocative and poke some people with a sharp stick by saying:
    There is nothing wrong with Free Trade Supporters that can’t be fixed with a few million rounds of 50 caliber machine gun fire and a few thousand pits, trenches and bulldozers.

  10. Peter


    Your statement about maritime shipping may not be accurate, some research suggests that it may produce a net global cooling effect. These ship sized diesels produce huge amounts of NOx which is a pollutant in cities but is also a strong global coolant gas due to its reactions with methane.

    The US has reduced our CO2 emissions by offshoring production and adopting fracked natgas to replace coal and while one is just a transfer of CO2 production the other is producing real reductions.

  11. MojaveWolf

    This has gone on my (admittedly quite long) to-be-read list. Most of my non-fiction book reading time these days goes to environmental or nature writing, but this strikes me as worth the effort. Thanks!

  12. EmilianoZ

    I havent read Jane Jacobs but maybe it all boils down to having a diverse group of people who can exchange ideas and cross-fertilize each other. It works for individuals and civilizations too. Isolated civilizations are often pretty retarded.

    I think Jared Diamond cited this factor as one of the reasons why Europe eventually overtook China. China had become like one vast monoculture, like a giant corporation that had grown too big for its own good. By contrast, Europe was still like a patchwork of small and medium corporations competing with each other. Maybe it’s not a coincidence that China’s most distinctive philosophies, Confucianism and Taoism, were born at a time when China was deeply divided. That division degenerated into the Warring States period. So, everything has a price. The trade-off for remaining divided is war. Europe knows that well too. But now that Europe is united by the EU and peaceful, creativity seems to be suffering. The high level of unemployment especially for the young in the southern countries including France is a sure sign of sclerosis.

    I think we’re also a pretty diverse group of people exchanging ideas here in Ian Welsh’s commentariat. I’m often surprised at the span of political views represented here, ranging from hard left to hard right. Maybe it has to do with Ian’s unique personality. I’ve certainly learned a lot from the commenters here.

  13. Ian Welsh

    It’s diversity of a sort. China had periods like the European one which produced the industrial revolution: warring states, for example, put them well over a thousand years ahead of Europe. Multiple states in close proximity, in competition, unable to overcome each other is what is required. They must not be too large (for reasons Jacobs goes into in her next book).

  14. Some Guy

    It’s an interesting point you raise Ian, about modern day shipping reducing some of the benefits of being in a city. I remember Jacobs giving the example of setting up some sort of moderately technical business and contrasting how easy it would be to gather everything you needed in New York vs. doing it in some rural area.

    I think it’s true that this specific task would be much easier to do in a rural area than it used to be (although still much harder than in a city), but the other aspect is that it is not just the goods you need in the city, but also the relationships with suppliers, FIRE industry types, etc.

    Still, as the rural areas empty out and the population concentrates into the largest cities I do wonder what is driving this in particular at this juncture, when it some ways it seems like there are more reasons than ever not to move to to the city (rising differential in cost of living, greater ease of getting all the benefits of a global economy in a non big city setting).

    I think of the city I grew up in. If it didn’t already exist from a long time ago, nobody would create it – everything in it would be created in the nearest big city instead. And indeed, growing up, I remember watching as the population counts on the ‘you are now entering’ signs of the once empty suburbs around the nearest big city rapidly mushroomed past my home town in size.

    I wonder if the replacement of the single earner family with the two income family could be an unrecognized driver of this. If only one person needs a job, then the family can go wherever, but if 2 people needs job in unrelated fields, then it becomes much less likely that they can both be found readily in a smaller center?

    Or maybe it is the unseen hand of energy scarcity contracting us back into concentrated areas where getting around and getting things done is much less energy intensive?

    Or maybe it is just the continuation of the ongoing long drawn out process of agriculture becoming more efficient?

    Anyway, if anyone doubted the primacy of the role of cities in the economy when Jacobs wrote her book decades ago, they should be convinced by now.

  15. different clue


    I am confused by your theory that NOXs ability to react with methane makes them a strongly cooling gas. By themselves, NOXs are strongly warming. So is methane. If a NOX reacts with a methane to produce a non-warming product, that is merely zeroing out the NOXs ability to cause still more warming than otherwise, as well as zeroing out the methane’s ability to cause still more warming than otherwise. But even if “NOX cancelling methane” cross-cancels the warming potential of both, it doesn’t create any active cooling. It merely passively fails to create yet more warming. And the even greater amounts of CO2 sitting up there keep on trapping trapping trapping heat regardless.

    Or am I missing something? If so, could you explain what I am missing?

    The US-based OverClass hasn’t reduced America’s CO2 emissions by relocating our industry and its emissions to China. The US-based OverClass has inCREASED those emissions by shipping our industry to China. The reason for that is that a unit of physical production in China causes the release of more CO2 than what that same unit of physical production used to cause here in America when it was done more efficiently here in America. I remember several years ago reading an article by a Professor Economy ( probably an anglicization of Economides)
    in either Foreign Policy or Foreign Affairs website. The article pointed out how much more carbon intensive every unit of production is in China then what it used to be in America. I have never been able to find that article again in web searches.

  16. different clue

    Different subject:

    A couple of threads ago somebody wrote that “nobody cares what Naked Capitalism thinks. Naked Capitalism is an ink stain of the blotter pad of the Internet.” All I could think at the time was that . . . I! care what Naked Capitalism thinks. Now, I may be just some old nobody, which means that my caring is like nobody caring. Still, Naked Capitalism is one of my favorite ink stains on the blotter pad of the Internet, along with Sic Semper Tyrannis and Ian Welsh and others visited every couple, few or few-couple days.

    But now, beHOLD! Naked Capitalism has received the Neo Nixon Enemies List 2.0 Seal of Approval! It has been “named” as a “source” of “Russian propaganda”! Here is the link to an article about that.

    There. See? SOMEbody sure cares about what Naked Capitalism thinks.

  17. Ian Welsh

    Naked Capitalism is a pretty high volume site. As such, they are moderately influential, as such websites go. However, they haven’t been talking about Jane Jacobs, which is awful, just awful.

  18. MojaveWolf

    Speaking of NC, they linked to an interview the other day which produced this gem:
    RC: It has always threatened us. But the solution is proper economic policy and unions, not blog posts about non-Trump subjects.

    CA: Do people know how to implement proper economic policy and successfully build unions? If not, why is the job of the writer not to figure out how this is done and then tell people how they can do it?

    At this point, Mr. Cooper ceased to reply.

    The morning after our interview, we received a message from Mr. Cooper in reply to our suggestion that writers should try to produce work that helps people to do the things that he wishes people would do:

    “[Producing writing like that is] worth doing (and I do it) but I think you’re misunderstanding the demographic profile of the average newspaper reader. 95% of journalism is infotainment for the upper middle class.”

    Well, ladies and gentlemen, there you have it. The entire op/ed mill is a stupefaction racket. The sole difference between The National Enquirer and Politico is the average reader’s income bracket.

    Well, this book review (and sounds like even moreso this book) as well as this site do a lot to educate people as to what proper economic policy should be (as does NC), so thanks for providing useful info as opposed to “infotainment” in the form of “Trump bad!” articles.

  19. Tom

    Fidel Castro just died. He was 90 years old.

  20. V. Arnold

    different clue
    November 26, 2016

    Twas I who wrote that about NC (ink stain on the blotter, etc., etc..).
    The only reason they were included in that travesty of red baiting is because NC features John Helmer of Dances with Bears blog.
    Smith and Lambert (less so Lambert) censor posting in a very narrow range of permissive opinions; unlike our very gracious host here Ian Welsh.
    I stand by my statement and you are free to bash away.
    I happen to like freedom of speech…

  21. Jonathan

    I actually had to read Jacobs as part of my City Planning coursework. Didn’t think much of her then. Probably think less of her now. The reason is simple. Jacobs confuses cause and effect. She touts all the things that were invented or produced in cities. But cities didn’t produce them–those activities produced the city. Get an employer who can produce good-paying jobs and the cities will sprout up around that venture as if by magic.

    There’s a body of thought that believes if you produce an environment conducive to entrepreneurial activity, the jobs will come. There are thousand of empty industrial parks growing weeds waiting for this to happen throughout the land. There are industrial development strategies that actually work but the city planning crowd has never even considered them. (sigh)

  22. Hvd


    You make the Jacobs point. Industrial parks are by their nature separate from the city. As she explains you need proximity to everything the density of a city offers. From residences to production. Eliminate any of these and you limit the city effect.

  23. Peter


    You may be confusing nitrogen oxides NOx with nitrous oxide N2O, aka laughing gas, which is a greenhouse gas. The NOx from marine diesels would have to counteract the CO2 produced by these engines by reacting with methane a much stronger greenhouse gas. There is no way to measure this effect only calculate the possibility.

    You may be correct about Chinese power generation producing more CO2 to make these offshored products but CO2 emissions are estimated by country so we appear to be producing less. We are using less coal but more coal is being shipped to China so those emissions are also being offshored.

  24. Hugh

    There seems to be a circularity in vibrant, productive cities are vibrant and productive.

    I take the view that the polis/society is what is important. The economy simply serves its needs and in some ways reflects it. An equitable society will have an equitable economy. A feudal society will have a feudal economy. So political forms are not just important. They are defining.

    The political environment in which a city exists is likewise important. Is it a city-state or a city which exists in a nation-state or an empire? Each of these place limits on how the city can develop. How, for example, can we separate the development of early Rome as a city from its development as a city/nation state, when most of its strength and resiliency derived from its class of yeoman farmers?

    As for Naked Capitalism, it is one of the better sites on the web, but it is weak in its intellectual depth and rigor. This has particularly shown up in some areas like its coverage of Russia and its dictator Putin, its support and defense of Bernie Sanders, and its unquestioning acceptance of all things MMT (Modern Monetary Theory).

  25. Josh

    Ian, after you review the next book, I’d be interested in reading your thoughts on how Jacobs thoughts & prescriptions differ from Import Substitution Industrialization, especially as practiced in South America. I know her ideas about currency are one major difference, the failure to re-direct investment to the cities may be another, lack of diversification in the distribution of capitalmay be a third, but I’d like to read your thoughts.

  26. Ian Welsh

    I don’t think I know enough about how South America did import substitution. It worked in various places (Japan, Korea), but it has to be done in particular ways. Basically, however, neo-liberal dogma is set up to make it difficult to protectionist boost thru the Industrial revolution. Those with a special relationships with a hegemonic power can do it, those who are allowed to do it can, those who are big enough to force the issue can do it. Even China (big enough to force the issue) might not have been able to if American elites didn’t make their crooked deal with them.

    What nations need is the access to developed markets & the ability to put up stiff tariffs and so on and/or a currency not dominated by resources or dominated by non-trade currency flows. If rural areas are too strong it’s a huge problem.

    Basically, any idiot can make a city state work if they can solve the violence issue, but make countries with hinterlands work is very hard. History pretty much vindicates this.

  27. Ian Welsh

    No, it doesn’t quite work that way, Hugh. Some Medieval cities were very prosperous. Japanese cities under the Tokugawa Shogunate were very prosperous, etc. Governance is absolutely critical, of course, but fairly applied laws aren’t enough, the content of the laws and how they are applied is what matters. Further, even in well governed societies there are cities which aren’t prosperous, even though they share the same laws and are basically well governed.

    So there is more to it than just “well governed societies” except in the sense that, sure, everything in society comes down to governance, so that’s far more circular. Why do some cities in the same society stagnate, while others are vibrant? Why do some cities stop being vibrant. I mentioned a couple causes, but Jacobs gives some other ones. No book review can deal with everything in a book. And, of course, Jacobs deals with the nitty gritty in other books, especially the Death and Life.

    As with everything, a precis can’t actually give you the content of a great thinker’s work, and Jacobs wrote many books, some of which were quite long. Jacobs can be dismissed, but not so easily as many think (and most who have read her, miss the point anyway because they have their own axes to grind and bring those to the project.)

    Cities and the Wealth of Nations is particularly important for larger countries. As even mainstream economics knows, the more resource wealth you have, the more fucked you are. But size itself, if it includes rural populations, is just a problem in itself. (This actually speaks to some of the problems between the Agrarian south and the North, which went far beyond slave ownership.)

  28. Hugh

    We are born into societies. All of our knowledge is created and transmitted through them. But they are not immutable. The questions are always open as to what kind of a society do we want to live in, how do we get there, and how do we maintain it. Governance like the economy is just a tool, nothing more.

    For this reason, as long as we get to the society we want, how productive any particular part of the whole is is irrelevant.

  29. Ian Welsh

    Those tools are how we get there, and the details of how actually do matter, because they form the experience of our lives and thus also form our characters.

    The process is the experience, and the experience is our lives.

  30. different clue

    @Ian Welsh,

    Part of NaCap’s reasonable influence for its fairly sizable size is that the comments are somewhat retro-moderated. That may mean harm is done by excluding comments outside the desired semi-consensus. But it also means nasty time-wasting trolls and johnny-one-note ranters are eventually banned as well. So many readers read the threads as well as the posts.

    So if a lot of non-posting silent readers are silently reading, and one wishes to get a certain person’s name and work before the NaCap readership, perhaps one might mention that person and work oneself in the comments where appropriate.

    I spent about 4 years mentioning economist Frederick Soddy in threads when appropriate and no one seemed to notice. But then starting about a year ago, another person or two has started mentioning Frederick Soddy every rare now and then. Due to me? Purely coincidence? I don’t know.

    But since you are on NaCap’s blogroll, you would be an honored commenter if you commented there every now and then ( unless somebody in command there has a grudge against you personally of which I know nothing). But assuming your occasional comments would be well received there, you could bring Jane Jacobs to the readers’ attention with occasional appropriate comments where indicated.

  31. different clue


    I tried looking on the web to clarify my thinking about airborne Nitrogen compounds. What I could find and understand is that yes, N2O is a heat-trapper gas and some N2O gases up out of the soil as part of the Nitrogen cycle.

    Whereas I could not find anything within the limited span of my patience about the direct heat-trapping ability of airborne NOx gasses. And even the “indirect” effects seem to be difficult to quantify and measure for sure. I found my way to an article-mention about a University Group which is trying to research that question.

    One of the “indirect” effects is that the NOx gasses can react with various airborne organic molecules to form yet other gases which can turn surface-level Oxygen to Ozone in the lower and lowest atmosphere. Decades ago I read about one of these mid-reaction intermediates called peroxy-acetyl nitrate. During the daytime, UV light can cause peroxy-etc. and O2 to work together somehow ( I forget how) to form Ozone. Airborne ozone sickens or cripples or kills plants. Every sick or crippled or dead plant is one less carbon-sucker helping get and keep skycarbon down out of the sky. Which means that much more skycarbon staying up there that much longer, trapping that much more heat.

    But what is the final washout net-net effect of all that NOx up there? Since I don’t know, I will just offer the intuitive guess that if it causes enough Ozone formation to kill significant numbers of plants, then its downstream final net-net effect will be to passively facilitate even more warming by way of killing the plants who could help suck down the skycarbon and dewarm the global.

    So given all the CO2 the Free Trade ships are releasing along with the NOx-s, it seems survival-sensible to come as close to a ban on transocean trade as possible, in order to retire nearly all of these ships from greenhouse-gassing service.

    And America does not have to wait for the sugarcandy sparklepony of International Co-operation to achieve a near-ban on Free Trade. If the American public can conquer the American government and exterminate all Free Trade supporters from within it and around it, then America can declare its Protectionist Independence and begin restoring its own thingmaking ability right here, and reduce trade between America and the Outside Countries as we restore our own thingmaking ability.

    The less we import, the less money we will need to pay for those imports. And therefore the less money we will have to earn by exporting. We can shrink International Trade between America and the Outside World till it is small enough for us to drown it in the bathtub. Then our carbon emissions will be incredibly lower. And so will China’s. Unless China gets its COBOR-CoPS project all the way built. If China achieves that, then China can simply exterminate all industry in Russia, Europe, Japan, Korea, Australia, etc. instead of exterminating all the industry in America any more. ( COBOR-CoPS stands for Chinese One Belt One Road – Co Prosperity Sphere).

  32. Peter


    Destroying Western Civilization by severing its arteries will certainly clean things up but there won’t be that many survivors, we’re too interdependent. If the NOx/methane theory is correct stopping this shipping won’t have any effect on GW in fact it could increase it. NOx emissions on land are subject to emission controls and except for Volkswagen they work fairly well.

    Trying to control a system as complex as western industrial civilization by shutting down one of its major components is bound to lead to unintended consequences such as nuclear war, conventional war, the four horsemen. If humans were actually wise we might be able to achieve a planned dismantling of WC and humane reduction in population but we lack wisdom.

    I read a report on the first co-prosperity Silk Road trainload delivered to Iran as part of China buying Iranian oil. A trainload of cheap junk consumer goods was delivered that put local producers out of business and won’t do much for their or their workers prosperity but the government needs oil revenues probably to make prosperity in their arms businesses. This has already happened in Africa where along with displacing local productivity the Chinese build wonderful new roads, rails and ports and the locals sit by the roadside and watch their natural resources and wealth flow out of their country. Capitalists such as the Chinese know how to brand and sell their grand plans for penetration and exploitation and the elites in developing countries they sell these plans to will prosper but there is little trickle down for the displaced.

  33. Senator-Elect

    Thanks for the review. I have read Cities and the Wealth of Nations. It’s a very good book, full of history and perceptive analysis. Particularly relevant today is the discussion about currencies and Jacobs’s idea that, ideally, each city should have its own currency, as they are the most important units of the economy. We can see the logic of this in any large country, as economic conditions vary widely from city to city or region to region and it makes no sense that either the interest rate or the currency be the same for all cities/regions. This also bears on the Eurozone debacle, obviously.

    Also useful is her section on Appalachia and its long-time poverty, which was not alleviated more than briefly by New Deal programs like the Tennessee Valley Authority. It is stunning that even today we have not managed to overcome such historical tendencies. In fact, thanks to free trade and other terrible economic policies, we are creating new such regions, and the political effects are becoming increasingly apparent (Trump).

    Jacobs looks for the causes of this poverty and, conversely, the sources of economic growth. This is really the heart of the book: what sparks economic dynamism. Her answer is the city. I’m not sure the economists have a better one. The subject remains fascinating and essential today.

  34. Lisa

    Peter: The NO, SO2 and particulate matter from shipping do cause a neutral or cooling effect, BUT they are very short lived in the atmosphere, while CO2 stays there for centuries.

    They also are significant pollutants on their own with nasty effects, such as acidification and so on.

    Whether or not the short term NO (etc) emissions are enough to counteract the far longer term CO2 effects is very unlikely.

    The economics of shipping is very distorted due to tax evasion which, as in the case of moving heavy large volume bulk products (such as coal) means in effect a subsidy. When oil was in the $100 a barrel region shipping companies were doing things like cutting their speeds to save fuel and costs and there was nascent signs of a reversal of off shoring of manufacturing, which gives you an idea of how marginal it really all is.

    Take away the tax evasions and the direct and indirect subsidies to fossil fuels and suddenly a lot of offshoring becomes totally uneconomic.

    I might add that is was (from memory) Ricardo that stated ‘you can have free trade OR free capital movement, not both’. Most commentators here have focused on the post WW2 trade barriers, but the capital movement ones were just as important, perhaps even more so.
    The optimum is a mix of both …and Keynes Bancor system (which eliminates all this nonsense).

    For our world to dive into both free(ish) trade AND free capital movements was an act of unbelievable economic stupidity, as soon as you do that then you automatically get a ‘race to the bottom’ in wages, environmental protections and so on.

  35. different clue

    Free Trade is not Western Civilization. Free Trade is a cancer process exploiting Western Civilization. We kill the cancer carefully enough to avoid killing the patient. That’s why I have said it would take decades to achieve.

    Your description of the effects of China’s first dumping of cheap crap junk onto Iran is a demonstration of exactly what COBOR CoPS is meant to achieve, on purpose and with malice aforethought. The goal is to exterminate all industry in Africa, Europe and Asia and turn these places into suppliers of raw materials strictly and only. Europe might be permitted to live on as a cultural petting zoo for the amusement of Chinese tourists.

  36. Peter


    I think of ‘free trade’ as an ideology used for market penetration, investor protection and exploitation while trade has been useful and beneficial for centuries. Maritime shipping may be as you describe but it is much larger than just the free trade agreements it services. Low wages and high profits is what drives offshoring and shipping pays whatever the world price is for its fuel so I’m not sure about its subsidies.

    Your Ricardo quote is confusing because under my understanding of free trade it depends on the free flow of capital in and out of target countries with strict investor protections.

  37. Lisa

    P{eter: “My understanding of free trade it depends on the free flow of capital in and out of target countries ”

    That is the current neo-liberal model. But people used to (correctly) differentiate between ‘free movement of capital’ and ‘free trade in goods’.

    Hence at the end of WW2 there were struct controls of trade, within an international framework to stop ‘begger my neighbour’ policies and strict capital controls everywhere..

    Free movement of capital is inherently destabilising in many ways. First the ‘race to the bottom’, second chaotic ‘international speculation’, 3rd contamination where a financial crisis in one place spreads elsewhere.

    That’s what happened in the Great Depression and in the GFC. Such as in 2008 international money markets froze up totally and, to give an example, the Australian banks faced bankruptcy due to their short term borrowings that they couldn’t roll over and the Govt had to bail them out.

    Restricting capital flows to a limited range (such as Govt borrowings, actual physical investment in new things, no speculation allowed, etc) actually increases real investment locally (people cannot run around the world chasing returns) , stops speculative instability (runs on currency, stock market swings, etc) and all the rest.

    Of the two free capital movements are far worse than free trade, without the capital movements free trade is (eventually) self correcting and trade imbalances are limited.

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