Book Review: Cities and the Wealth of Nations

Cities and the Wealth of Nations: Principles of Economic Life by Jane Jacobs
Random House, 1985
Hardcover, 272 pages

Although published in 1984, the ideas that Jacobs describes in this iconoclastic work still apply to our economies twenty years later. From the title, it is apparent that she attacks Adam Smith's 18th century economic treatise (among other accepted theories) while also alluding to the importance of cities in regard to national wealth, something missing from Smith's book and subsequent works. Known more in architectural circles for another masterpiece, The Death and Life of Great American Cities, both books embrace cities as great places that foster diversity in many ways. Here she focuses on a city's ability to create mixed economies that replace imports with local production, prospering or stagnating based upon its ability to continue this import/export cycle over time. She also discusses the inadequacy of supply- and demand-side economic theories, technology and its effect on rural areas, imperial success and decline and other topics, each reiterating the importance of cities and their dependent regions. While the book does not give any simple solutions (none probably exist), it promotes the idea that intelligence, innovation, ingenuity, and even improvisation can help us deal with economic problems, given an understanding that doesn't rely upon accepted economic theories.