Despite their immense economic power, American metros would have to be much larger to remain competitive around the world.
Ross Douthat’s suggestion that we break up America’s “big, booming, liberal cities” in The New York Times this past Sunday has set off a firestorm among urbanists.
His argument: We should treat big cities like the monopolies of yore that concentrated wealth and power and conspired against the public good. The remedy? Take a Teddy Roosevelt-sized stick to break them up and spread their institutions around.
Douthat is one of the sharpest commentators around and he is smart to center his argument around Will Wilkinson’s essential Washington Post piece on how these cities actually make America great. The columnist takes great care to position this as a thought experiment, calling it the latest “installment” in his series of “implausible, perhaps even ridiculous proposals.”
Urbanists were happy to oblige and ridicule it. At City Observatory, Joe Cortright put it this way:
What this misses is that cities actually create value through increasing returns, what economists call agglomeration economies. People in cities are more productive, more innovative, and have higher skills because they live in cities. Absent cities, the innovation and productivity upon which these industries depend for their success, they simply wouldn’t exist.
The world is indeed concentrated, clustered, and spiky. And Wilkinson—along with Jane Jacobs, Edward Glaeser and I—have all argued that dense cities power innovation, productivity, and growth. As I’ve written, the economic power of cities such as New York City rivals that of nations.
Relatively speaking, however, America’s cities and metro areas are not that big, a fraction of the U.S. economy, compared to cities in other parts of the world.
Take a look at the map below produced by my colleague Taylor Blake at the Martin Prosperity Institute (MPI). Based on data from the Brookings Institution’s Global Metro Monitor, it shows the share of national economic output or gross domestic product (GDP) made up by a sample of large metros around the world.
Here in the United States, New York generates 8.3 percent of GDP. Los Angeles accounts for 5.2 percent, Chicago generates 3.2 percent, Houston covers 2.8 percent, Dallas and D.C. each produce 2.5 percent, and San Francisco and Boston kick in 2.1 percent each.
That pales in comparison to Toronto, which accounts for nearly a fifth (18.5 percent) of Canada’s GDP. Mexico City generates 22.5 percent of Mexico’s economic output. Tokyo, London, and Paris churn out 30 percent in Japan, England, and France respectively; in Sweden, Stockholm accounts for 36 percent of GDP. Tel Aviv is responsible for 48 percent of Israel's economic output and Seoul generates more than half of South Korea’s GDP.
If anything, America’s big cities and metro areas are too small. Research I wrote about recently shows U.S. cities would have to be much bigger than they currently are to optimally capture the productivity benefits that come from clustering and agglomeration, while balancing the costs of congestion or the other economic externalities from running a city.
Thought experiments like Douthat’s can be fun to argue about (and we are), but Trumpism is dangerously anti-city. The reality is this: If we are to overcome economic stagnation, generate new innovations, improve productivity, and create new and better jobs, the United States needs even bigger cities—and they need to be both more affordable and more inclusive.