The Economy of Cities Summary

Summary (American Culture and Institutions Through Literature, 1960-1969)

A central theme in The Economy of Cities is that development is a process by which a group of cities engaged in trade with each other create “new work” to add to the work already being done. This process depends on having a large number of diversified economic organizations whose interactions lead to “economically creative breakaways.” Therefore, in describing development in Birmingham, England, Jane Jacobs states that “fragmented and inefficient little industries” were responsible for adding new work and creating new organizations. In her opinion, “valuable inefficiencies,” not efficiency in producing existing goods and services, results in new work. Jacobs believes that cities grow by gradually diversifying and differentiating their economies, and that this process starts with exports and their suppliers. However, she attributes “explosive” city growth to the effects of import replacement. Import replacement brings rapid expansion of total economic activity, expanding markets for rural goods as the composition of city imports shifts, and rapid growth in jobs. This leads to a further expansion and diversification of exports.