Publisher's Synopsis
People are naturally inclined to look for order in what seems like chaos. Sometimes order is emergent, meaning it reflects not an intentional design but the outcomes of many independent decisions or actions. There's inevitably-also randomness and an element of chance. Thinkers such as Adam Smith and Charles Darwin are justly celebrated for identifying emergent orders in markets and nature. Perhaps less widely understood for her discovery of what she called the "intricate order" of cities is the urbanist Jane Jacobs. This book provides the first formal test of Jacobs's intricate order. Why is this important? Sustained economic growth explains human flourishing - and offers grounds for hopefulness. Cities are essential engines of economic growth. They are places people go to find collaborators and opportunities. Once they move to a city, the new arrivals must choose a location. Settling on a site means concurrently choosing a set of interactions and interaction modes. In the process, the newcomers join one or more supply chains. Supply chains are emergent, and all the nodes of all the chains have an address. Therefore, cities can be seen as a fine mesh of an uncountable number of such chains. Cities' spatial organization is, therefore, emergent. Economists refer to the stimulating and self-perpetuating effects of interactions in cities as agglomeration economies. Is our understanding of agglomeration economies adequate? We come at this from a slightly different angle, focusing on agglomeration as supply chain formation and management. Supply chains reflect the "magic of the market." They are a manifestation of vast price-led coordination. The uncountable number of supply chains that serve us-that work so well that we hardly think of them-are impersonal emergent phenomena. Most of the market magic is unseen. Supply chains are likely to include information and idea chains. Information is exchanged in most voluntary transactions. Some of it fosters the exchange and emergence of new ideas. Supply chain formation and management explicitly involve choices, actions, and agency. Most people, especially those with an entrepreneurial bent, think strategically and are keen to find useful information, and so they are willing to incur the costs of identifying and acquiring it. Seen this way, elaborated supply chains can replace the notion of agglomeration economies-a key part of the formal study of cities followed by urban economists. Actual location choice is not akin to solving an operations-research optimization problem. There are typically just a few candidate sites. Few people look for or deliberate over the globally-optimal choice. Time and effort are limited. We claim that our approach to the study of agglomeration and cities also replaces the utopian perspective of many top-down urban designers and plans. The bottom-up view notes that people making personal plans is a universal activity. Markets coordinate the plans of large numbers of private individuals and firms. Each one is propelled by identifiable incentives and faces peculiar constraints. In the aggregate, this process can be seen as bottom-up planning. Markets coordinate the many private plans, but there are also many top-down plans from governments and public agencies. Large businesses too have top-down plans and expect their managers to solve difficult internal coordination problems. We discuss a planning division of labor that involves more of the former and less of the latter. Incentives are better than edicts. In this book, we suggest how the division of planning labor can be achieved. The vast complexities involved are beyond the abilities of top-down planners to wholly grasp or implement. Just as self-reported commuting and shopping trip durations reveal a wide range, indicating loose and variable colocations, our test of US cities' intricate order finds nonrandom colocations of firms at distances near and far. Spatial organization is more complex than o
