Cities and the Wealth of Nations

Principles of Economic Life

By: Jane Jacobs

Narrated by: Bernadette Dunne

In this eye-opening work of economic theory, Jane Jacobs argues that it is cities—not nations—that are the drivers of wealth. Challenging centuries of economic orthodoxy, in Cities and the Wealth of Nations the beloved author contends that healthy cities are constantly evolving to replace imported goods with locally produced alternatives, spurring a cycle of vibrant economic growth. Intelligently argued and drawing on examples from around the world and across the ages, here Jacobs radically changes the way we view our cities—and our entire economy.

©1984 Jane Jacobs (P)2022 Blackstone Publishing

Why are other economist not talking about import replacement theory?

I’m very interested in economics and try as much as I can to pay attention to the topic. I’ve got to go back through my Audible library and examine what I have and haven’t read on the subject, but it appears to me that this import replacement theory of cities, isn’t being discussed in contemporary economics.

Is this because we have arrived at a kind of global trade and transportation that it’s literally impossible to replace the products one imports?

In the last section of the book Jacobs talks about innovation coming from curiosity and aesthetics, describing metallurgy as developing first for the purposes of jewelry making. Another example she uses is movable block, printing being used first for image making first before it become movable type. She makes a very compelling argument that wealthy cities supporting these kinds of activities. Set the stage for innovation to take place because there is an embarrassment of riches of ideas being circulated.

This seems to be expressed in the earlier work of Richard Florida, “The Rise of the Creative Class“, which he has apologize for in later works because he has been accused of causing gentrification.

Jane makes a very compelling argument that subsidy at the expense of city generated wealth always leads to decline. This is fascinating and completely out of sync with our current policies. Her arguments are compelling.

Why are we not talking about this? Is it that we don’t want to admit how valuable cities are? Or is it that we don’t want to admit how many of our cities are nowhere near becoming import replacing economies, but rather function as depot, cities or extraction and service cities.

I think there’s a lot to grapple with here. I’m going to be looking for other authors who have engaged these ideas whether building on them or refuting them. I think there is a lot to learn from this book.