The Economy of Cities, chapter 3: Aren’t big cities terribly inefficient and messy? What’s up with that?
Answer: Yes, but efficiency is incompatible with strong growth .
Also, the largest cities are always inefficient messes until they solve the problems that hold them back, at which point their previous size becomes normal and the new largest cities are even bigger, constrained by other problems. She notes water supplies, storage of food, proliferation of draft animals without sufficient fodder crops, and disease as problems that have held back city growth at one time or another (in roughly chronological order).
Her theory for explaining why efficiency and strong growth never go hand in hand is proliferation of ‘breakaways’. This is a British term for when a team leaves a larger company and goes into business on their own, sometimes to try new markets or products but other times just to compete with the larger business. Breakaways are much better than large companies at discovering/creating new work while taking advantage of the expertise the large companies produce, but are terrible for efficiency.
There is also the important note that efficient, focused cities are vulnerable to an economic shift; the massive textile mills of Manchester were turned into vast empty buildings when the developing world acquired textile mills and ran them cheaper, and Detroit’s current terrible situation is obviously connected to the fortunes of the big US auto companies.
Jacobs presents a number of predictions about the future, nearly all of which are totally wrong. Many of them are about what she saw as the problems holding cities back in her day and how they would be solved; most of these solutions involve productive recycling and green development, and many of them are familiar because they’re still being predicted to arrive any year now, fifty years later.
She also predicts that New York City’s economy was going to go to pot and that England’s attempt to drain off the energy of London and Birmingham to energize new towns and cities would inevitably fail; neither was true. It is true, though, that New York became more of a monoculture than it had been; it is more of a company town for finance than it was in her day, it just didn’t go as far as she expected in terms of wrecking the economy. I suspect strong personal bias on her part; development efforts she bitterly opposed were reshaping the city while she wrote this, and I think she was reaching for arguments to say that would go poorly.
Overall I am somewhat losing confidence in Jacobs as a thinker; even if the strongest version of the arguments for city-based economics has been written, I’m increasingly doubting it will be her books.