The $64,000 question for economists, politicians and business leaders is all the same one; how to create high real gdp growth (5%+) without excessive debt, excessive environmental damage and/or war.
The following theory is pretty simple, doesn’t require math or physics and is basically common sense. I theorize that our lower gdp growth is the lack of a basic recognition that cities themselves are the engine of a high marginal productivity rate vital to strong, environmentally conscious growth.
This idea isn’t mine. Augustus Caesar, after losing 3 legions of troops in the German forest, altered tactics and began building cities in his conquered lands. He didn’t think of it either. His home was Rome, the first city in the world with more than 1 million people and he could see, right out his front door, the marvelous engine of marginal productivity that the world’s first city was. Culturally, militarily, architecturally and in so many ways it’s silly to list them all, Rome was at the top or even inventing the category altogether. I’ve fallen in love with Rome.
Imagine Caesar’s full realization, a million Romans, spread out over a few hundred square miles, would all be peasants, weak, disorganized, only marginally productive enough to feed themselves and their families, but gather those million Romans together and you have strength, coliseums, water systems, roads, sanitation, and tyranny of course, but a different kind of tyranny; people were proud to be Romans!
How can we fix our cities and re-prioritize our national planning, economic and growth priorities around cities? Priorities that will pay back these investments hundreds of times over, rather than sap our economic growth potential by ignoring how much explosive economic growth can happen, inside of our established cities, with relatively minor economic and environmental disruption — if we simply re-prioritized; modernized, and in some cases radically change — our transportation systems, all of which is doable.
I don’t want to curse poor Gus Bauman with anymore (likely unwanted) attention but I must insert here — that based upon his writings — I think he agrees with me, that the economic vitality associated with creating dense, city centers, is not just worth the risk, the alternative has proven to be both a planning and economic failure.
I also contend that socially we will progress faster as a united nation if we simply apply the lessons history has taught us over and over again about what humans are capable of and how much better things are when we cooperate, build, and strategize to solve these problems.
Baltimore and the city centers of Montgomery County need to be simultaneously prioritized, made denser, with friendly mass transit, and the resulting economic growth will create the expanding governmental tax revenue to fight it’s core priorities; while providing the economic growth the population not working for the government, depend upon, for wealth creation. Wealth creation or erosion being defined as the difference between an expanding ability to buy goods and services for the household OR a declining ability to do so through some combination of inflation/deflation, wage growth or stagnation, and either an acceleration or decline in the rate at which innovation improves your wealth base.
That third one is the important one. Over time all those other factors actually average out to almost zero, the thing that matters is marginal productivity increases through innovation, those are the important changes that add permanent, systemic wealth and actually all the other factors combined – DON’T equal this one.
If you made the same money, paid the same for everything except gas, even taxes, and the value of your currency was stable BUT, because of a new invention, your car got twice the gas mileage, this could impact your standard of living hugely through some combination of cash savings, more freedom to travel, and lower fuel prices (as a result of lowered demand). Those other factors, over time, do equal out, but not the productivity one.
Knowledge is power and great knowledge is great power, and great numbers of people living and working together in great cities have great communal, cooperative, directional power that has fueled human innovation, and therefore our ability to care for one another – since we began having this ability. Tribes were the first cities and even at this level, the benefits are so obvious, no science is needed.
It’s the cumulative effect of all these productivity enhancements that have provided all wealth growth, and accomplishing these levels of high productivity is easier in cities where humans are concentrated.
The Internet can partially offset this effect — but only partially — and we must recognize this openly in our planning doctrine, which is currently structured around inhibiting the growth of cities, not promoting them. Click here for the official version of this from Gus himself!https://karlspain.wordpress.com/2015/09/05/i-was-wrong-about-gus-bauman/