Yesterday’s Thoughts

November 12, 2006

Network Effects of the Opposite Kind

I have been reading The Economy of Cities by Jane Jacobs.

It was published in 1969 which means I have been walking around blindly for the past 37 years not noticing it. I don’t know how that is possible. So many of my interests intersect in this single thin book, the history of agriculture, the development of cities, the ecology of city life, the impacts of communities on innovation, and yet I had never heard of Jacobs or her work until her death earlier this year.

An significant thing that I grasped from my first reading of the book was the effect of distance from the city on innovation. She is working to paint a picture of the development of the city as proceeding the development of agriculture. This is the opposite of what I learned in elementary school and college – agriculture developed in the Fertile Crescent and the storage of grain was the germ that permitted the development of cities – and this understanding permeated the rural cultures that I have grown up in and around.

Her key argument is a convincing story of how agriculture could have been created in trading cities, so I don’t know the status of the evidence in support of her theory. Presumably the past 37 years have produced some evidence pro or con, but as I never came across her work in any of my smattering of undergraduate anthropology and archeology courses, maybe her theories never made it into the academic mainstream. I’ll have to Google about for some research.

The interesting thing that I want to capture here is Jacob’s ideas about the comparative richness of innovation in urban and rural areas. In the city, innovation reinforces innovation. Suppose I’m a trader of obsidian. I have a number of problems in my business, but for concreteness consider the costs of shipping. If I had an easier way to carry obsidian, I could increase my profits on every trip by carrying more. As I walk around town, I observe weavers making cloth, tanners curing hides, carpenters building boxes. I have several different possible sources for creating containers for shipping. I don’t have to rely on my skills, or those of my immediate neighbors, for innovation. My opportunities for innovation are greater, merely because I have more opportunities. It is possible to combine the work of the carpenter, the tanner and the weaver because they can all work together and learn from one another.

On the other hand, rural areas lose out on these possibilities in several ways. The further from the city, the more times knowledge must be transmitted. Information is lost at every step. Having fewer neighbors means fewer skills in the neighborhood. If you are a farmer, even if you have an idea for an improved shipping container, you have less potential for realizing this idea because you and your neighbors know less than is know in a neighborhood 100 times as large.

[This post was written in the last quarter of 2006, but ended up with a timestamp of January 12th, 2007. I've changed the date back 2 months.]

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