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The Economy of Cities

Jane Jacobs

4.11 · Rating details · 1,057 ratings · 80 reviews

The thesis of this book is that cities are the primary drivers of economic development. Her main argument is that explosive economic growth derives from urban import replacement. Import replacement occurs when a city begins to locally produce goods that it formerly imported, e.g., Tokyo bicycle factories replacing Tokyo bicycle importers in the 1800s. Jacobs claims that im ...more

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Published February 12th 1970 by Vintage (first published 1969)

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The Death and Life of Great American Cities by Jane Jacobs

A Pattern Language by Christopher W. Alexander

Top Urban Planning Books of All Time

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Triumph of the City by Edward L. Glaeser

Urban Studies for Everyone (nonfiction)

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Jul 15, 2013 Alice rated it it was amazing

Shelves: urban-ideas, 2013-books

"It blows cobwebs from the mind," wrote Christopher Lehmann-Haupt when he reviewed the book for the NY Times back in 1969. Forty-four years later (and just after completing a two-year masters program in urban planning), I would say that it made my brain explode (in spite of how un-academic that sounds).

Jacobs is best known for her 1961 book, The Death and Life of Great American Cities, which sharply critiques the planning practice at the time. In the face of urban renewal in general and Robert M "It blows cobwebs from the mind," wrote Christopher Lehmann-Haupt when he reviewed the book for the NY Times back in 1969. Forty-four years later (and just after completing a two-year masters program in urban planning), I would say that it made my brain explode (in spite of how un-academic that sounds).

Jacobs is best known for her 1961 book, The Death and Life of Great American Cities, which sharply critiques the planning practice at the time. In the face of urban renewal in general and Robert Moses in particular, Jacobs described in great detail a new way to view cities. Although some of what she described is debatable (she's not a fan of parks), much of what she describes as good city fabric has become accepted by today's planning profession. Her mixed-use Complete Streets are now what cities across America are clamoring to recreate. As a result, nearly everyone with an urban planning degree (or just an obsessive love of cities) has read it.

The Economy of Cities goes well beyond what cities should look like and describes the requirements for economic development. Although, it's not a perfect toolkit, it is certainly full of food for thought about how urban economies can be fostered or squelched - valuable lessons for the thriving New Yorks and the dying Detroits alike. The later chapters give clear examples of the evolution in how differently types of work is done, how cities are shaped by innovation, and the importance of all the local support businesses for attracting a wide range of export firms.

Most incredible is the central premise of the text: Cities are primal and rural is secondary. This isn't a point of condescension, but rather a concept as bold as the Copernican Revolution was in its time, and disturbingly under-discussed in conversations about "rapid urbanization" and the planet's "urban future". Rather than imagining that the farms began first and people eventually formed cities (a very "Garden of Eden" view of the world), Jacobs demonstrates that cities (not by our standards but certainly dense concentrations of people) formed before any romanticized version of a farmer emerged.

I cannot understate the value of reading this book to planners, policy makers, business people, inventors, artists, and thinkers. ...more

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Dec 18, 2012 Grady rated it really liked it

Shelves: cities

In this book, Jane Jacobs brings her creative mind and sharp wit to bear on the question of how cities grow economically. While there's a lot of wisdom here, it demands an unusual style of reading. Jacobs was not a scientist or economist in a formal modern manner; rather, she had more in common intellectually with the natural philosophers of an earlier era. That is, rather than proposing a hypothesis and testing it against econometric analysis, Jacobs observes, keenly, and discerns a mechanism t In this book, Jane Jacobs brings her creative mind and sharp wit to bear on the question of how cities grow economically. While there's a lot of wisdom here, it demands an unusual style of reading. Jacobs was not a scientist or economist in a formal modern manner; rather, she had more in common intellectually with the natural philosophers of an earlier era. That is, rather than proposing a hypothesis and testing it against econometric analysis, Jacobs observes, keenly, and discerns a mechanism that explains what she sees. Early in the book, Jacobs offers an explanation of how the first cities came to initiate economic growth. It reads like a modern version of social contract theory: philosophically credible, but not really true in an historical sense.

Jacobs' writing is always stimulating, and she offered key insights into social order decades before they became widely appreciated. For example, the final chapter of Jacobs' better known Death and Life of Great American Cities discusses cities as iterative, nonlinear systems, decades before those became a hip topic of academic study in the 1990s. In The Economy of Cities, Jacobs correctly predicts the rise of services, and also nails the function of the Long Tail as a source of economic growth. But, she uses her own term, 'growth through product differentiation', which she identifies as the next major form of economic growth after an economy exhausts the possibilities of mass production.

The core point of the book is that cities develop new work first by manufacturing goods that displace imports, and later by budding new products (or services) off of current manufactures. Overarching efficiency in production spells the death of this process, triggering economic stagnation. Jacobs notes the importance of venture capital that is willing to take risks and bankroll new industries without trying to rationalize them or add them to existing calcified corporate structures. There's a lot more as well, including some assertions about poverty and population growth that have since been shown to be wrong.

As a thinker and writer, Jacobs is in a category of her own. I find reading her books takes real concentration, and sometimes several re-reads, despite the lucidity of her prose. Her combination of liberal values and deep distrust of government, so reflective of her struggles against Robert Moses and modernist planning, jars in the context of current political fights, in which liberals are generally trying to protect government from right-wing attacks. Nonetheless, Jacobs' grasp of patterns of order - spatial and economic - is so rich and so incisive that it justifies the effort to absorb it fully. ...more

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Feb 11, 2021 Andrew added it

Shelves: economics, urbanism

OK, Jane Jacobs, while she is a landmark American thinker is not an academic economist or anything of the sort. Of course, that doesn't preclude her from being able to write about economic subjects, but keep that in mind. I was intrigued by her examples, but I'd like to see some more empirical, data-driven arguments that go either for or against her thesis. Something tells me something is not quite right. ...more

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Jul 05, 2012 Chris Ledermuller rated it really liked it

Shelves: urbanism, nonfiction

Jane Jacobs has established herself as an accidental expert on urban theory. Her "Death and Life of Great American Cities," meant to be a defense of her Greenwich Village neighborhood from the designs of Robert Moses, over time revealed itself to be an anatomy book for the city as a being.

Jacobs takes her pedestrian but profound musings to describing the workings of a city's economy. She approaches economics twice, in "Cities and the Wealth of Nations" and this, her earlier book, "The Economy of Jane Jacobs has established herself as an accidental expert on urban theory. Her "Death and Life of Great American Cities," meant to be a defense of her Greenwich Village neighborhood from the designs of Robert Moses, over time revealed itself to be an anatomy book for the city as a being.

Jacobs takes her pedestrian but profound musings to describing the workings of a city's economy. She approaches economics twice, in "Cities and the Wealth of Nations" and this, her earlier book, "The Economy of Cities."

The book opens with a takedown of the anthropological theory that cities are a progression from an agricultural society that became industrious and wealthy. Jacobs says that is nonsense.

Rural development actually develops from cities, Jacobs theories -- the process is backwards.

Cities don't often sprout directly atop fertile agricultural land. Typically, they form off to the sides of these places -- and for much of human history, those places were usually waterways.

Cities serve as depots to send and receive goods, as well as trading posts to form local markets for goods. The markets enable a division of labor that allows for more goods to be produced and processes to be created. These goods and processes then are sent to rural areas, in trade for raw materials to be processed and shipped elsewhere.

This explanation serves as the springboard for her theory of city economics. She calls the term "import replacement." Jacobs says an early city serves as a repository for goods and processes, and the first step is for workers to start figuring out the goods and processes and learn to produce them or find purposes for them. In economics and business, this is the term known as value addition.

Jacobs cites Japan as an example of import replacement, saying the country became an industrial powerhouse starting from the small base of bicycle production. Early on, Japan would import bicycles for sale. Over time, workers learned how to fashion replacement parts for the bicycles from locally available goods. From then on, workers added to skill sets to build complete bicycles on their own to satisfy local consumption, then export domestically made bikes to other markets. Bicycles would need to be imported less, but that opens up a spot for other goods and processes to be imported. The process repeats.

Jacobs even has her own equations and flow charts in an appendix. Keep in mind, she is not an academic, but it is a foundation for economists and others to test.

She also dwells upon how the process can slow, stop, and put cities in decline. Amazingly, her theory of decline was probably little better than a guess, but she foresaw deindustrialization in 1969 when far more credentialed politicians, business leaders and economic leaders were -- and still are -- baffled by the collapse of industry. They thought prosperity was a given and that a factory was a hallmark of how far industry has come.

Jacobs, on the other hand, says a large factory marks the twilight of an economic phase and it saps, rather than enhances, the import replacement process. Jacobs in 1969 rightly called the secular decline of industrial cities like Detroit and Rochester. She holds up two British cities, industrial Manchester and diversified Birmingham, to show what has happened. Manchester's enormous factories were powerful magnets and generators of jobs, supplies and capital. Then, other factories opened elsewhere and Manchester's became outmoded, expensive and noncompetitive. Meanwhile, sleepy Birmingham never had a dominant industry, but instead a small patchwork of diverse producers. Birmingham kept on thriving (at least in 1969 -- as of 2013, Great Britain is wholly dependent on London as a dynamic city region.)

Jacobs speaks to a general audience, and her theories are cursory and meant to be accessible to a lay reader. Though over time, Jacobs' sandbox musings have been incorporated in the academic world, and even economics. If you want to know a vital economic function, pick up "The Economy of Cities." The follow-up, "Cities and the Wealth of Nations," published 15 years after this volume, gives another microscopic look at the building blocks of the city economic process.

...more

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Aug 28, 2007 Cate rated it really liked it

Recommends it for: those interested in economics, urban studies, etc.

Jacobs begins this book countering the claims of accepted anthropology/archeology theory that cities are built on a rural economic base. Jacobs instead suggests that much of what is considered "rural work", and what rural economies have to offer, is in fact exported from cities to the hinterland. This is no small claim since practically everyone disagrees with her. She illustrates her thesis well with specific examples throughout history ranging from the ancient Turkish city Catal Huyuk to the i Jacobs begins this book countering the claims of accepted anthropology/archeology theory that cities are built on a rural economic base. Jacobs instead suggests that much of what is considered "rural work", and what rural economies have to offer, is in fact exported from cities to the hinterland. This is no small claim since practically everyone disagrees with her. She illustrates her thesis well with specific examples throughout history ranging from the ancient Turkish city Catal Huyuk to the innovation of the brassiere by Ida Rosenthal in the 1920s to the Post-WWII Japanese economy. What all of these examples have in common is how new work begins, and Jacobs' claim is that new work thrives in city economies. This is because cities are inefficient, and this inefficiency allows for innovation--effecient economies (such as those of company towns) are inherently prone to economic stagnation because they are not import replacing.

The book is interesting because it parts ways with so much "conventional" thought that is still so accepted in universities. And also because I think Jacobs is right. With the U.S. economy currently being in the dumps it is easy to see why after reading this book--American institutions, particularly the American government, has destroyed cities in the post WWII economy (e.g., Johnson's "Great Society" legislation). Instead of encouraging short term inefficiency (trial and error through loans to small business) to achieve long term prosperity, the government has instead practiced protectionism of big industries (steel, auto) through subsidies, therefore stifling innovation and stagnating the economy (if proof is needed look at the current economic mess that is Michigan). Had the government provided more small business grants and loans, instead of big business subsidies, the U.S. would be far more powerful, because of innovation, in world-wide markets.

Jacobs is prophetic in the ending chapter suggesting the idea of differentiated production (production that is somewhere between mass production and craft manufacturing) as the way of the future. It has in fact proven to be in many sectors including the garment, music, and service industries. I could write more, but I spare you.

Favorite quote of this book: "To seek "causes" of poverty in this way is to enter an intellectual dead end because poverty has no causes. Only prosperity has causes." p. 121 ...more

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Feb 03, 2015 Nolan Gray rated it really liked it

Shelves: city-reads

Another great read from Jane Jacobs. Jacobs continues developing her unique views on human nature and society, exploring concepts like spontaneous order, the centrality of trade (be it ideas, goods, ect.) to human life, and how our natural habitat - the city - works. As in "The Death and Life of the Great American Cities," she takes what may seem like a dry subject (in this case, urban economics) and makes it downright engrossing. With insights on subjects ranging from class conflict to early ur ...more

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Apr 08, 2012 Liz rated it liked it

Shelves: urban-studies

illuminating at points and clearly written but also kind of unimaginative and conservative. plus as a city person I feel dirty for liking a book that is 80% "sorry guys but the country as we know it is an economic and cultural backwater that exists to support the real centre of human life, the city, and I can prove it"; she makes a convincing case, but I also feel like it panders to my biases and I should go read something about the decadence of the cities for a real intellectual challenge. ...more

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Sep 26, 2009 Jake rated it liked it

Shelves: economics, sociology

This review has been hidden because it contains spoilers. To view it, click here. "The Economy of Cities" is a short and compelling investigation into two questions: what makes cities form, and why do some cities grow while others stagnate and shrink?

To the first question, Jane Jacobs argues that cities formed directly out of hunting and gathering societies, and then added agriculture to their economic activities. This overturns the "agricultural primacy" theory that is normally taught in schools: that small bands of hunters and gathers gradually settle down in agricultural ...more

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Jan 02, 2012 Paul marked it as to-read

From Richard Florida, Author of "The Rise of the Creative Class"
http://www.fastcompany.com/1742367/ri...

"I have so many favorite books, but there are three people that really influenced me. The first and most important is Jane Jacobs and her book The Economy of Cities, which I think everyone who works in business has to read. What the farm and agricultural land was for our first great American economy, what the industrial company was to the great Industrial age, what the Great American corporati ...more

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Jan 04, 2011 Stephen Brownell rated it liked it

A good read, with an interesting and persuasive argument, but tended to get too bogged down in case studies showing the same thing over and over again in a different way. The thesis was defended well enough half-way in and the rest of the book was just more of the same I felt.
Good arguments, not excellently written.

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Nov 30, 2011 Melissa Balkon added it

Although this book has some really great information, it was much too wordy. It could have been 150 pages and still provided the same information.

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Oct 10, 2015 Alice rated it liked it

Shelves: non-fiction, psu

The writing style is quite repetitive, but the book contains some very good theories of urban growth.

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Sep 02, 2016 Vincent Lombardo rated it it was ok

I had to read this book for an urban studies class in college, and just picked it up recently for a specific reason. I liked it more 41 years ago! Very dense.

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Apr 10, 2018 Valerie rated it really liked it

Jane Jacobs is a badass.

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May 28, 2021 Jeffrey Anthony rated it it was amazing

Remarkable insights, so much still relevant to this day and it was written over 50 years ago!

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Oct 06, 2014 Kangning Huang rated it it was amazing

Shelves: directed-reading

Human progress and the growth of economy is driven by cities. Even agriculture is first born in cities and then transferred to rural areas.

The growth of cities themselves are driven by innovations. Jane Jacobs used a fantastic formula to describe this process: D+A+nET-->nD. Where D represents divisions of labors, A means additional activities, nET is many errors and trials to innovate, and finally, nD means more divisions of labors and more work. The innovations add new work to old work, and ma Human progress and the growth of economy is driven by cities. Even agriculture is first born in cities and then transferred to rural areas.

The growth of cities themselves are driven by innovations. Jane Jacobs used a fantastic formula to describe this process: D+A+nET-->nD. Where D represents divisions of labors, A means additional activities, nET is many errors and trials to innovate, and finally, nD means more divisions of labors and more work. The innovations add new work to old work, and make the economy of cities increase.

A city is not an isolated entity, it is connected to other cities, even in pre-agriculture time. The connections are established through exports and imports of products and services. These two types of connections can bring two multiplier effects to trigger urban economy growth:

1. Export-Generating multiplier:
New products and services generated by innovations can increase exports, in exchange for more imports, which enhance internal productions and consumptions to generate even more products and services.

2. Import-Replacing multiplier:
Triggered by the first multiplier, the imports of a city increase. When a considerable amount of diverse inputs are available, a city can start replace imports by innovative ways of producing them locally. Suppose the amount of exports does not change, the replacements allow the city to import less original products and services, and replace them with more diversified new imports. The new imports as new As added into the above formula, can stimulate even more divisions and innovations. More innovations can increase exports and trigger the first multiplier again.

These two multiplier working together, can keep the explosive growth of urban economy.

Innovations involve nET (lots of errors and trials), which require lots of available capital to support them. However, these capital tend to be controlled by well-established economic activities, rather than those new emerging activities. The release of those trapped capitals is very critical for a city to utilize the two multipliers for economic growth.

-----------------------------

On Growth and Decline of Cities -- Implications from Import-Replacing Process

On one hand, the import-replacing process is enhancing a city's economy; one the other hand, it also undermines other cities' economy by reducing their exports. Therefore, when while other cities are replace one's exports, but it is not innovating enough, then it will stagnate and become obsolete.
...more

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Feb 12, 2016 Ashley Leong rated it it was ok

This review has been hidden because it contains spoilers. To view it, click here. i suppose the ideas that were once revolutionary are now normalised. Dry, did not finish.

Inefficiencies are needed for cities to grow. Growth- when new work is added to old work + output produced per year. Inefficiencies means that there is trial and error going on to produce new work.

Separate efficiency of operations and efficiency of developmental work(DW). A large amount of effort put into developmental work, but low results. This does not mean DW is inefficient but because DW is a trial and ...more

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Jan 07, 2015 Paul rated it really liked it

This is the first book I have read by Jane Jacobs, and it will not be the last. I have know of her work since studying architecture in college, particularly The Death and Life of Great American Cities, but never sat down to read anything. As this one was available at my local library branch, it seemed like a good a place as any to start. Despite the density of the topics covered I found her prose to be quite accessible, and the theories she expounded upon interesting and logical.

Jacobs examines ...more

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Apr 11, 2019 Juan Pollardo rated it it was amazing

Shelves: non-fiction, creamdelacream, asap, yup-that-s-the-guud-stuff, eskettit, ubermensch

Outlines how economic development originates in cities, not in rural agriculture as previously assumed, in 5 steps. 1. The city establishes itself supplying an expanding market in an older city 2. Local businesses set up to support exports begin exporting their own work 3. Imports are replaced by local workers causing a growth explosion as the economy diversifies and create new work that was neither imported nor exported prior to growth 4. New work becomes new exports and the composition of impo ...more

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Jul 29, 2011 Jim Talbott rated it it was amazing

Jacobs makes a convincing case for the urban ecosystems that incubate intensive economic growth. She rightly moves the economic discussion from extensive growth (e.g., divisions of labor in pin making from Adam Smith) to intensive growth (the development of this new product called a "pin" from the existing industry of making the spines in wool carders). Perhaps the book's major fault is that it lacks insightful policy prescriptions like those found in "The Death and Life of Great American Cities ...more

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Jan 15, 2013 Charles Allan rated it it was amazing

Shelves: economics

Jane Jacobs was a fascinating thinker, economist, urban studies and public policy theorist. Her work addresses the growth of cities and their economies.

Only criticism: lack of empirical data in a lot of her work.

Here are some interesting ideas she poses in her work The Economy of Cities:

Why adding new work to old work is crucial to growing an economy (instead of merely dividing existing work more)

Why loosely structured and inefficient economies are better suited to survive change.
Why cities pre ...more

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Dec 15, 2007 Steve rated it liked it

Shelves: non-fiction

This isn't as well known as her classic The Death and Life of Great American Cities, but perhaps it should be. I have always been curious if further scholarship since its writing in the late '60s proved her hypothesis that agriculture came after settlements. She makes a convincing argument, based on archaeology of the time, that at trading posts/meeting places de facto seed trials might occur as well as the domestication of animals. Another interesting idea covered in the book is the role of imp ...more

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Feb 08, 2009 David rated it liked it

A little out of my areas of interest, this book turns the argument that cities arise out of rural areas on it's head. The author's argument is that the city needs must come first and the rural agricultural fringe arises from and benefits from the needs and production of the city. This leads to all sorts of corollaries that are too much to discuss here. The author also gets into what makes a city vibrant and growing. It is interesting reading and still relevant despite that the book was written i ...more

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Oct 03, 2010 Heather Ann rated it it was amazing

My first Jane Jacobs book, and what a book. It has reframed the way I think about cities, about rural regions, about poverty, and about economic development. I'll be pondering this and likely re-reading it.

The style and format of this book reminded me very much of Eric Hoffer's The True Believer: Thoughts on the Nature of Mass Movements . ...more

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Feb 25, 2010 FiveBooks rated it it was amazing

Shelves: fivebooks-on-education-and-soc

Jane Jacob’s argument was that cities, which in the early days were just small trading and administrative posts, generated agriculture, not vice versa. Cities are where the ideas all come from, where all the wealth comes from. They are also much more environmentally friendly because you use much less energy if you live in the city than if you live out in the countryside. Read the full interview here: http://thebrowser.com/books/interview...
...more

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Jun 02, 2010 David rated it it was amazing

Excellent Writer. I should have read this long ago. Reminded me of A Pattern Language by Christopher Alexander, but with patterns observed, not patterns imposed. ...more

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Aug 08, 2007 Blanca rated it it was ok

Shelves: booksihadtogiveupon

After reading her best known book, The Death and Life of Great American Cities, I really looked forward to reading what insights she had about municipal government.

It is difficult to get into and it's obvious that she isn't an economist. At this time, I will respectfully put this back on the shelf and I'll attempt again in the near future. ...more

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Aug 02, 2007 Brandon rated it it was ok

i wasn't wowed by this. i'm not an economist however and have very little understanding of these things. supposedly revolutionary, but ultimately just a bunch of common sense to me. if you have to choose, read "death and life of great american cities" instead. ...more

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Aug 23, 2007 David rated it really liked it

Recommends it for: city planners

Interesting look at the day to day of how cities create wealth among the population. I don't think that most of this was common sense, sometimes the very direct understanding is overlooked, this brought a lot of good things to light. ...more

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Dec 20, 2007 Steven rated it liked it

More economics lessons from Jane Jacobs. Talks a lot about multiplier effects and specialization and the way cities generate new industries, and then sub-industries to support those industries, and so on and so forth.

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About Jane Jacobs

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Jane 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 inf ...more

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“Cities are not ordained; they are wholly existential. To say that a city grew “because” it was located at a good site for trading is, in view of what we can see in the real world, absurd. Few resources in this world are more common than good sites for trading but most of the settlements that form at these good sites do not become cities.” — 1 likes

“The primary economic conflict, I think, is between people whose interests are with already well-established economic activities, and those whose interests are with the emergence of new economic activities.” — 1 likes

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