n Economists’
favorite question is still “How did we get so rich?” We learned how to
coordinate production. We learned how to coordinate discovery. We learned how
to form mutual loyalties – for social as well as economic reasons. Can we unscramble
the social from economic? Does it matter?
n Supply
chains for commodities are ubiquitous; they illustrate and deliver the gains
from specialization and exchange. Most chains for things are accompanied by
chains of information. Think of instruction manuals and accompanying videos and
websites and/or live instructors. Buy an airplane and they send you to their own
training school.
n Supply chains
for information are everywhere; these nurture supply chains for ideas. The more
information, the more ideas. We live in many goods chains as well as many information
chains; we are also likely to live in many idea chains. Some of the latter
involve face-to-face contact. Location choice and interaction mode choice are
concurrent.
n The more
new information, the more new ideas. We seek both. Information can hatch ideas
and also help test ideas. Ideas and information feed each other just like
theory and hypothesis testing feed each other.
n Neither information,
nor ideas, are manna from heaven. Key facts and idea are deemed useful --
and are sought. The search may start with a hunch but can lead anywhere.
Nevertheless, it is directed.
n
All this says (once again) that technological change
is endogenous; new knowledge and supply chains for ideas are emergent.
n Supply
chains involve many nodes/locations; spatial patterns and interaction patterns
emergent. Entrepreneurs must choose what to make vs what to buy. But that’s incomplete.
Make vs. buy involve where to do all these; e.g., location choice.
n All this illustrates
how prosperity and human settlement are two sides of the same coin. Propitious
location choice (opportunities for propitious choice) denote prosperous cities –
and prosperous economies.
n What can we,
should we, do about location choice and cities? We should leave room for
emergent orders. This is how we get a chance at greater prosperity.
n The continued
outward growth of major cities is nearly universal. Local policy regimes seem
to make little difference.
n Agglomeration
opportunities are not restricted to the old centers. There are many
sub-centers. Locators are drawn to favored places as they economize in light of
their peculiar interest in specific commodities, ideas and information flows.
n Cities are
a complex mesh of an uncountable number of supply chains. They are much more
than simply labor markets. It is not about journey-to-work or journey-to-shop
but much more.
n Instead most
urban policy/city planning discussions dwell on top-down plans and “visions”. They even call it “smart” growth.
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