Urban Economics in the The Evolution of Great World Cities: Urban Wealth and Economic Growth - Book Report/Review Example

Urban Economics - Book Review The book ‘The Evolution of Great World Cities: Urban Wealth and Economic Growth’ by Christopher Kennedy is rather unique. Though some cities seem to possess all the qualities to become major financial capitals as is the case of Seville, they never become financial centers. Some other cities like Hong Kong struggle through the odds and become financial centers. The book by Kennedy analyzes the situation by drawing from geography, technology, economics, business management, and architecture. In order to look into the issue, the work narrates the history of several urban centers ranging from Venice, London, New York, and Amsterdam. Kennedy starts the book with the acknowledgement in the introduction that the new ‘age of the city’ is welcomed by a large number of books. However, he points out that few of the earlier studies have looked into why certain cities are wealthy and how they have grown so over time. In simple terms, what Christopher Kennedy tries to find out in the book is why some great cities like London and New York are so wealthy and how it becomes possible for some cities to grow and pose a challenge to the existing financial centers. The underlying thesis of the book is that the physical infrastructure including transportation systems, water pipes, sewers, buildings, education systems, culture, and institutional capacity has a substantial influence on the wealth and economic growth of cities. It becomes evident that the scholar has drawn ideas from a range of subjects including geography, urban planning, business management, and architecture. The wealth of scholars who are mentioned in the work is worth noting. Some of them are Aristotle, Adam Smith, Thomas Aquinas, John Keynes, the French historian Fernand Braudel, and economic historian Norman Gras. The first chapter ‘Where the streets are paved with gold’ relies heavily on the works by Peter Hall and Fernand Braudel. Hall’s work is mainly used to provide information about the role of wealth in the cultural, technological and physical transformation of cities. On the other hand, Braudel becomes useful in showing how wealthy cities become financial capitals. Relying on Hall’s Cities in Civilization, Kennedy provides a number of examples for cities which became centers of cultural revolution and innovations. The first one among them is Athens which was famous for philosophy, science, architecture, art, poetry, and drama. Similar are Renaissance period Florence, Elizabethan London, and Vienna of the eighteenth century. In addition, the Paris of the late nineteenth century and early twentieth century experienced a golden age of painting. Similarly, music, theater, and cinema made Weimar Berlin reach new heights in 1920s. Based on the explanation, Kennedy reaches the conclusion that these al cities reached their ‘cultural peaks’ when there took place great social transformation (17). The second chapter named ‘A theory of urban wealth’ is an effort to identify the meaning of the term ‘wealth’. For this purpose, the scholar relies on the value theory as explained by Thomas Aquinas and Alfred Marshall (53). Through the example of the city of Seville, the scholar proves that the wealth of a city can be quantified in terms of the assets of its citizens. It might include the residential housing, financial assets, and business equity owned by citizens (53). In addition, there is the observation that all these assets are often market-based in nature. Following the above, the third chapter deals with the markets. The chapter mainly focuses on the growth of Hong Kong. It is pointed out that the rapid growth in population and prosperity was followed by a growth in real estate in Hong Kong. When there was limited, land, high rises became a necessity. However, the number of new constructions was higher than the demands and hence, the real estate industry faced serious financial crisis. Thereafter, the chapter describes real estate and financial markets in order to further explain how they are related to the growth of cities. Chapters five and six look into the general theories of urban growth. The main argument is based on the fact that production should not occupy the central position of the story of urban growth. Instead, according to him, consumption should be the key of growth. In fact, one can identify three main ideas in the book. The first main idea is that according to Kennedy, the wealth of a city is the sum total of the assets of its citizens. For example, the wealth of a city may not take into consideration the value of public infrastructure. Admittedly, this idea might seem rather bizarre at the first glance when one argues that such public buildings like the town hall in Philadelphia are excluded from the total wealth of a city. However, the explanation from Kennedy is that the residential wealth of the areas will reflect the presence of such infrastructure by their increased locational value. For example, a home which has easy access to transport facilities, energy supplies, and water will have a higher value than a home with no access to such basic amenities. Another vital point as put forward by Kennedy in the work is the way the physical structure of a city is linked to its economic growth. According to Kennedy, it is necessary to ensure a minimum level of autonomous consumption of infrastructure. A perfect example is the North American urban areas. The cities consume a lot of fuel to ensure proper transport. However, if the fuel goes more expensive, the cities would cease to grow. This is so because though the people will continue consuming oil sufficient for survival, it will eat up a considerable proportion of their income. That means there will be less money to invest in new opportunities, and eventually there will be stagnation. Yet another vital theme that one comes across is the way the scholar uses the concept of ecological systems for economic processes. Using the example of Detroit where the population has declined by 50% and 60 square miles of land has been left abandoned; Kennedy proves that it is necessary for cities too to have diversity to survive as is the case of ecosystems. It is pointed out by the scholar that as Detroit was busy in car production as the only way of survival, the lack of diversity led to its demise in the long term. Thus, one can conclude the whole book in the following terms. First of all, access to basic infrastructure like water, transportation, and sanitation will ensure that an urban economy is growing. Such an infrastructure that improves personal welfare will result in an increase in productivity. Once the infrastructure is developed to reduce costs for employers and workers, there will be considerable development in transportation and infrastructure. According to Kennedy, this improvement in transportation is very necessary to ensure that the city has control over the surrounding areas. Once this stage is achieved, the city will progress to the fourth stage of becoming a financial center. Thus, according to Kennedy, the only reason why cities exist is that when transport infrastructure is developed, there is more income. This increased income can be spent on further development like cars, better housing and better infrastructure. Thus, there is a cycle of production and consumption. When the people are unable to invest in newer opportunities, there is stagnation and the growth ceases. However, the cities which manage to invest in newer opportunities sustain their development. For example, Detroit failed to grow because it failed to invest in further development of infrastructure or other areas. As a result, the city became windswept desert with a 50% decline in population. Works Cited Kennedy, Christopher. The Evolution of Great World Cities: Urban Wealth and Economic Growth. University of Toronto Press, 2011. Print. Read More