After the crunch: more urbanisation or less? Alex Evans

February 18, 2009 | More on Climate and resource scarcity, Economics and development, Key Posts | 4 comments

As the credit crunch pronounces the last rites on the great debt-fuelled consumer boom, things look pretty grim for suburbia too. But if suburbia was the spatial expression of the consumer economy, then what does the economic geography of the future look like?

Two recent articles by two different authors exemplify a crucial intellectual fault line in assessing prospects for the world’s cities. Richard Florida argues in the new edition of the Atlantic that mega-cities are set to flourish as centres of post-material innovation and creativity.  James Howard Kunstler, on the other hand, argues that resource scarcity trends mean that we’re all heading for a much more localised world.

So who’s right – and why is it that despite largely overlapping analyses, the two authors reach such different conclusions? Find out after the jump…

As the great reckoning continues apace, attended by foreclosures and factory closures alike, one of the critical uncertainties is about long term prospects for the world’s megacities.  Richard Florida, in the current issue of the Atlantic, gives a quick snapshot of the places we’re talking about:

In North America, these mega-regions include SunBelt centers like the Char-Lanta Corridor, Northern and Southern California, the Texas Triangle of Houston–San Antonio–Dallas, and Southern Florida’s Tampa-Orlando-Miami area; the Pacific Northwest’s Cascadia, stretching from Portland through Seattle to Vancouver; and both Greater Chicago and Tor-Buff-Chester in the old Rust Belt.

Internationally, these mega-regions include Greater London, Greater Tokyo, Europe’s Am-Brus-Twerp, China’s Shanghai-Beijing Corridor, and India’s Bangalore-Mumbai area. Economic output is ever-more concentrated in these places as well. The world’s 40 largest mega-regions, which are home to some 18 percent of the world’s population, produce two-thirds of global economic output and nearly 9 in 10 new patented innovations.

Florida is especially interested in what will happen to such cities in the United States as the dowturn unfolds.  He begins by noting that New York [and indeed London, by the way] might prove rather more resilient than is popularly supposed: financial services jobs there account for a much lower proportion of employment than, for example, Hartford in Connecticut. What’s more, he goes on, NYC has a huge network advantage in the financial expertise it has assembled – bond trading, foreign exchange, commodities trading, all the associated legal services and so on; this clustering has taken centuries, and rival cities won’t be able to assemble rival clusters overnight.

Most fundamentally, NYC’s cluster goes far beyond financial services alone: it’s also a hub for “creative industries, from media to design to arts and entertainment”; for high-tech companies like Bloomberg and indeed Google; for “fashion designers, musicians, film directors, artists, and—yes—psychiatrists”. He continues,

The great urbanist Jane Jacobs was among the first to identify cities’ diverse economic and social structures as the true engines of growth. Although the specialization identified by Adam Smith creates powerful efficiency gains, Jacobs argued that the jostling of many different professions and different types of people, all in a dense environment, is an essential spur to innovation—to the creation of things that are truly new. And innovation, in the long run, is what keeps cities vital and relevant.

Even so, Florida accepts that the effects of the credit crunch will lead to a great reshaping of America’s economic geography.  “Sadly and unjustly,” he says, “the places likely to suffer most from the crash—especially in the long run—are the ones least associated with high finance”:

While the crisis may have begun in New York, it will likely find its fullest bloom in the interior of the country—in older, manufacturing regions whose heydays are long past and in newer, shallow-rooted Sun Belt communities whose recent booms have been fueled in part by real-estate speculation, overdevelopment, and fictitious housing wealth.

But above all, he argues, it’s suburbia that will feel the crunch most strongly.  And the reasons for this, he argues, go deeper than just the implosion of a housing bubble. Suburbanisation, in Florida’s view, was “the spatial fix for the industrial age—the geographic expression of mass production and the early credit economy”.  For a while, this model made sense:

The cities of the early and mid-20th century were dirty, sooty, smelly, and crowded, and commuting from the first, close-in suburbs was fast and easy. And as manufacturing became more technologically stable and product lines matured during the postwar boom, suburban growth dovetailed nicely with the pattern of industrial growth. Businesses began opening new plants in green-field locations that featured cheaper land and labor; management saw no reason to continue making now-standardized products in the expensive urban locations where they’d first been developed and sold. Work was outsourced to then-new suburbs and the emerging areas of the Sun Belt, whose connections to bigger cities by the highway system afforded rapid, low-cost distribution.

But now, Florida concludes, that system is well past its sell-by date.  It encouraged “massive, unsustainable growth” where land was cheap, made the real estate economy dominant, encouraged urban sprawl, and created an economy too often stuck in place.

In this, Florida echoes some of the arguments of James Howard Kunstler, one of suburbia’s most trenchant critcs, who recently penned a blog post setting out his scepticism of the current preoccupation with bail-outs in Washington:

The attempted re-start of revolving debt consumerism is an exercise in futility. We’ve reached the limit of being able to create additional debt at any level without causing further damage, additional distortions, and new perversities of economy (and of society, too). We can’t raise credit card ceilings for people with no ability make monthly payments. We can’t promote more mortgages for people with no income. We can’t crank up a home-building industry with our massive inventory of unsold, and over-priced houses built in the wrong places. We can’t ramp back up the blue light special shopping fiesta. We can’t return to the heyday of Happy Motoring, no matter how many bridges we fix or how many additional ring highways we build around our already-overblown and over-sprawled metroplexes. Mostly, we can’t return to the now-complete “growth” cycle of “economic expansion.” We’re done with all that. History is done with our doing that, for now.

So Florida and Kunstler agree on two key reference points – a twilight for debt-fuelled consumerism, and a bleak prognosis for suburbia.  But what intrigues me is that they appear to disagree fundamentally on what will happen to the biggest cities.  Here’s Florida:

We need to encourage growth in the regions and cities that are best positioned to compete in the coming decades: the great mega-regions that already power the economy, and the smaller, talent-attracting innovation centers inside them—places like Silicon Valley, Boulder, Austin, and the North Carolina Research Triangle. Whatever our government policies, the coming decades will likely see a further clustering of output, jobs, and innovation in a smaller number of bigger cities and city-regions.

Kunstler, on the other hand, thinks that:

We have to get off of petro-agriculture and grow our food locally, at a smaller scale, with more people working on it and fewer machines. This is an enormous project, which implies change in everything from property allocation to farming methods to new social relations. But if we don’t focus on it right away, a lot of Americans will end up starving, and rather soon. We have to rebuild the railroad system in the US, and electrify it, and make it every bit as good as the system we once had that was the envy of the world. If we don’t get started on this right away, we’re screwed. We will have tremendous trouble moving people and goods around this continent-sized nation. We have to reactivate our small towns and cities because the metroplexes are going to fail at their current scale of operation. We have to prepare for manufacturing at a much smaller (and local) scale than the scale represented by General Motors.

So how come the disagreement over what happens next, when the two seem to agree on so much of the diagnosis? As Kunstler’s argument implies, the key differentiator here is about scarcity trends.  Kunstler isn’t only a critic of suburbia: he’s also one of the leading voices in the peak oil crowd (c.f. his book The Long Emergency). Accordingly, he’s worried about the length of cities’ supply chains, the oil intensity of the goods they rely on, and so forth.  Florida’s analysis of cities’ sustainability, on the other hand, largely takes resource availability as a given in the outlook for the world’s mega cities. So who’s right?

I don’t share Kunstler’s certainty that the oil peak is imminent or indeed already upon us – but I do certainly share his broader fear about energy security.  So should you: the International Energy Agency was warning just yesterday that with investment in new oil production falling off a cliff following the collapse of oil prices amid the downturn, we’re set for a supply crunch as soon as we emerge from the dowturn – and perhaps as soon as 2010. And as I argued in The Feeding of the Nine Billion, if and when oil prices do that, you can expect food prices to go straight up with them.

But I wonder whether that necessarily spells localisation, as Kunstler argues.  As far as road transport goes, after all, cities are way more sustainable than suburbs: more concentrated, shorter distances, highly efficient mass transit systems.  They’re also more energy efficient in the broader sense, given urban heat island effects, the potential for combined heat and power systems and so forth.

Admittedly, that still leaves an open question about supply chains – above all in the case of food, which as Kunstler observes elsewhere is very energy-intensive (whether you’re looking at fertilisers, on-farm energy use, transportation, refrigeration, processing or whatever). It’s also the case that if we’re tackling climate change successfully, then some quite big question marks appear over international trade in bulk commodities (like food). There are plenty of substitutes for, say, coal in power generation, or petrol in cars – but the same can’t be said for marine bunker fuels or kerosene aviation fuel.

But while making those general observations is one thing, actually backing them up with hard data is quite another.  One of the things I found when I was researching Feeding the Nine Billion was that actual numbers on agriculture’s energy use – which parts of the supply chain are most energy intensive, which bits would be most exposed in a $200 a barrel oil scenario – are awfully hard to come by.  What data there is seems to date mostly from the time of the last oil shocks, in the 1970s.

So partly, I think we just need more analysis before we come to any hard conclusions about the prospects for our cities.  Richard Florida’s argument is the weaker for omitting resource scarcity from its analysis; but while Kunstler acknowledges the issue, he also jumps to a preferred conclusion.

But there’s also another, more fundamental area where I wish there were a bit more synthesis between the two authors’ perspectives.  While I have sympathy for a good deal of Kunstler’s critique, I’m also very much drawn to Florida’s hopefulness.  I like cities.  I adore living within a couple of miles of hundreds of people who are working on similar issues and asking similar questions to me (and no, Facebook and Twitter are not acceptable substitutes). Above all, I think cities are an important part of the solution to the challenges that lie just ahead of us.

Yes, we may need to re-localise some things; as David and I argue in our new Renewal article on resilience, politics will need to become “internationalist by default, but also hard-headed about the perils of globalisation”, and “renewed attention [will have to] be paid to subsidiarity, the tricky task of determining which function should be discharged where”.

But is there a risk of throwing the baby out with the bathwater in the pro-localisation arguments set out by Kunstler (or the transition towns crowd, or John Robb in his thinking on resilient communities)?

Throughout human history, after all, complexity and non-zero-sum co-operation have grown in tandem – and cities have been a central part of that process.  If we were all to pull back to more or less self-sufficient communities, then that looks to me a lot like the collapse scenarios discussed by Joseph Tainter in his seminal book The Collapse of Complex Societies.  At the very least, localised self-sufficiency would leave us far fewer resources available for global problem-solving.  And right now, it seems to me, we need those resources more than ever.