Aug 28

Jane Jacobs Understood How to Resurrect a City from its Ashes

was a beneficiary of loans, grants and subsidies from the United States, but it wasn’t those that brought
about Taipei’s
development as an import-replacing city. Something else entirely was happening
in the city itself, where imports of sewing machines, machine tools, dies, raw
materials, building materials, and so on, were being earned by work of city
enterprises, most of them small and improvisational. Unimpressive as those
earnings were in comparison with the great, splendid funds of capital goods
that can so swiftly be financed by big borrowings, grants and subsidies, those
scrabbly city earnings were what counted in Taipei’s development as a
ramifying, versatile producer and, subsequently, in its region’s development.
It was the imports earned by city work, not the unearned ones, that powered
development there,” Jane Jacobs, Cities and the Wealth of Nations, Principles
of Economic Life, Random House, 1985.


Taipei Train Station circa 1950


Taipei Train Station today

In today’s terms, I would put it differently. Governments
should get preconditions for economic takeoff right, then get out of the
way, and let entrepreneurs do the rest. 

Ms Jacobs also looked at the example set by the TVA, Tennessee Valley Authority, which spent decades and untold amounts of imported capital trying to turn one of the poorest parts of the US into a manufacturing hub by building dams and offering low power rates to transplanted enterprises. 

“I am going to argue that loans, grants and subsidies,” said Jane, “sent into regions lacking vigorous cities can shape inert, unbalanced or permanently dependent regions, but are useless for creating self-generating economies…”


TVA managed to create an environmental nightmare as well as some huge artifacts (their dams) that will last a long time, but not a sustainable economy. 

No, that must come from countless entrepreneurs capitalizing on the special characteristics of their area and on their own ingenuity, encouraged by the societies in which they reside.


What governments should and must do is get the preconditions for economic takeoff right, then step aside. Preconditions for economic takeoff include:

1. education
2. health
3. supply of and private ownership of housing (safe, affordable, privately owned)
4. clear title to housing and accurate addressing and surveying
5. tolerance of and legalization of cottage industries
6. tolerance of mixed use neighborhoods where people can work, live, shop, trade, play, entertain all in the same location/relaxation of zoning codes, by-law enforcement and master plans/official plans
7. effective legal system, respect for the rule of law and contracts
8. moderate levels of taxation/avoidance of confiscatory levels of taxation
9. re-integration of black and gray markets (deeding of lands and title in informal settlements)
10. active capital markets (borrowing circles and financial recycling of savings and investment, home mortgage availability)
11. culture of and support for entrepreneurship and innovation
12. widespread Internet access and effective communications system
13. sound public infrastructure
14. extensive private ownership of economy
15. respect for human rights
16. protection of private property rights
17. good, honest and transparent government
18. social peace and harmony
19. strong civic institutions
20. civil defense
21. trust, courage, hope and faith.

@ profbruce @

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About the Author

Bruce is an entrepreneur/real estate broker/developer/coach/urban guru/keynote speaker/Sens founder/novelist/columnist/peerless husband/dad.