CTRonquillo, under the mentorship of Scott Dadson, City Manager of Beaufort , South Carolina
Cities are indeed such urban marvels. They radiate and manifest all the efficiencies, triumphs and failures of every single person that makes them. They reflect a greater balance and a certain fragility that also self- refurbishes back into equilibrium as they are governed by the five axioms of economics. Cities indeed have become economic life forms on their own. As a spatial designer, it is very essential for me to gain realization of their nature (brought by a certain level of engagement to economics) through the pages of Glaeser and O Sullivan’s books. Mr. Glaeser, in his writing “The Death and Life of Cities” provides his insights and observations of the American cities, its history and their economic cycles.
‘Choice’--- Ed Glaeser’s initial disposition points out that the success of every city is very reliant on the individual’s choice, of whether he chose to stay or work there. We listed down the obvious contributors: Wage, Housing costs and amenities- but as we have assessed further, we realize that these are mere manifestations rather than the cause. Upon investigating and observing historical trends of cities, like New York, the author had taken into account an important economic element that has served as the main catalyst of the city’s growth. This Axiom- “Self- Reinforcing Effects generate Extreme Outcomes[i]”, have introduced the importance of transporting goods; it is cheaper to buy goods when they are produced nearby. New York , as mentioned, has been blessed with a strategic economic location that enables it to transact goods and raw materials efficiently via its port; thus, most manufacturing firms at that time made a smart choice by clustering together to save transaction costs. As an effect, economic agglomeration occurs- a cluster of firms attracted more entities – employers, employees and demand for consumption. The rippling effect of having a good trading post goes through layers of effects: a. having a huge labor demand meant more employment and productivity. b. which means higher competitive wages and utility that covers living costs. c. More density means more amenities and choices of lifestyle for the people. One good example is Singapore, it is a rather small city with no natural resources, but since it has established itself on a very strategic geographical spot, international firms came in and it now has become one of the world’s richest financial destinations and has the busiest port.
This behavior of agglomeration and clustering of firms in succession resulted in New York being the top economic city since the 1624. As Mr. Glaeser had sought, as an efficient transportation system being the primary key to growth, the economy back in the days were heavily relying on waterways for transaction. As an effect, most of the primary cities are located nearby bodies of water.
As New York had progressed exponentially, so did Boston and Detroit. By means of the Lake Erie, the Hudson, Mississippi and Illinois Canal, these 3 cities were able to establish a very efficient trade route to the rest of the country. The United States now has a network that connects New Orleans to New York, and Chicago eventually became a significant geographical spot in trade, especially for the Midwest.
As more people and firms cluster together on growing cities in America, certain economic presumptions should be considered. Transactional costs (commuting time), disease and crime, starts to beleaguer the people. O’ Sullivan states that the revenues derived from the agglomeration of firms and huge number of workforce could compensate all the diseconomies brought by urbanization, hence, desirable Utility Cost--- but only to some point[ii] . O’ Sullivan had mentioned that beyond a certain number, the Utility Cost does decrease. Nevertheless, since Glaeser had pointed an equally important economic presumption: Spatial Equilibrium (which goes along with O’ Sullivan’s first Axiom: Prices adjust to achieve Locational Equilibrium[iii]); this explains that the cost of distance to workplace would be economically compensated by means of less expensive housing rent/sale. Therefore, the table[iv] had not mentioned other factors that would eventually justify the lower Utility Cost. However, as wages are balanced out, it would not mean that everything is in the state of equilibrium, not until the workforce and Utility Cost has been maxed out. Until then, upon observing the system of cities, there will be some activities of immigration that will happen, that eventually will tweak Wage and Labor income values depending on the number of existing workforce. I would also like to mention that Singapore at its current state, has room for a couple of million more workers- I would like to see how the government reacts once it reaches its saturation point, which will happen soon.
It is now agreed upon that agglomeration and clustering of firms is an essential part of City Growth. But one aspect that is to be considered is that proximity brings in more intangible goods like competition and knowledge spillovers. And this has been fancied by Glaeser….. repeatedly- “the idea- producing function of cities used to be an interesting side product of people living close to one another to eliminate transport costs for goods”[v]. The main reason why this is such a very important factor for Mr. Glaeser is that it significantly boosts competition and innovation between clustered firms and people. A healthy and accessible use of knowledge leads to innovation and produces skilled labor force. This is evident during the nineteenth- century Chicago where individual innovative architects learned from their proximate competitors-- Burnham, Sullivan etc.- the idea of the skyscraper has paved the way for Modernism, to which Mies Van der Rohe later on championed. The second importance of Knowledge spillover is that it produces Idea Producing cities- to which was an effective way of bringing skilled people and firms back into the downtown area. With the advent of internal combustion transportation technology, people have fled the cities and went to more desirable areas. As much as declining transportation costs and innovation of new systems helped push the economy further, some cities once great that cater to walking and public transportation were abandoned in exchange for newer cities that design itself around the car. For once, New York and Boston felt that they are bounded for a permanent decline. Nevertheless, things has its own way of balancing itself out, the 1970’s saw the surge of the Skilled and Consumer city, to which Boston and New York has reinvented themselves to be. Today, Boston had successfully supplied a very lucrative amount of human capital (schools, institutions) and Manhattan had become a prime financial district. This has also been tied with a better sense of consumerism, because a good skilled city would translate to good consumers.
After a careful assessment and clear realization of the important factors that build the city, it is very imperative for an urban designer/architect such as myself to learn cities within the lens of an economist, because we can never predict its behavior; we can only adhere to its own uniqueness and plan accordingly.
I guess Urban Design had itself all along another ally --- Economics.
[i] Arthur O’ Sullivan, Urban Economics, 9
[ii] ibid, 56
[iii] Ibid, 7
[iv] Ibid, 56, Table 4-2
[v] Eduard Glaeser, Making Cities Work, 49