But Jane Jacobs was only reviving an old idea. Adam Smith in his Lectures on Jurisprudence identified the underlying mechanism that makes cities civilized. It is commerce. I quote at length:
Whenever commerce is introduced into any country, probity and punctuality always accompany it. These virtues in a rude and barbarous country are almost unknown. Of all the nations in Europe, the Dutch, the most commercial, are the most faithful to their word. The English are more so than the Scotch, but much inferior to the Dutch, and in the remote parts of this country they
far less so than in the commercial parts of it. There is no natural reason why an Englishman or a Scotchman should not be as punctual in performing agreements as a Dutchman. It is far more reduceable to self interest, that general principle which regulates the actions of every man, and which leads men to act in a certain manner from views of advantage, and is as deeply implanted in an Englishman as a Dutchman. A dealer is afraid of losing his character, and is scrupulous in observing every engagement. When a person makes perhaps 20 contracts in a day, he cannot gain so much by endeavoring to impose on his neighbors, as the very appearance of a cheat would make him lose. Where people seldom deal with one another, we find that they are somewhat disposed to cheat, because they can gain more by a smart trick than they can lose by the injury which it does their character. They whom we call politicians are not the most remarkable men in the world for probity and punctuality. Ambassadors from different nations are still less so: they are praised for any little advantage they can take, and pique themselves a good deal on this degree of refinement. The reason of this is that nations treat with one another not above twice or thrice in a century, and they may gain more by one piece of fraud than by having a bad character. France has had this character with us ever since the reign of Lewis XIVth, yet it has never in the least hurt either its interest or splendour.
But if states were obliged to treat once or twice a day, as merchants do, it would be necessary to be more precise in order to preserve their character. Wherever dealings are frequent, a man does not expect to gain so much by any one contract as by probity and punctuality in the whole, and a prudent dealer, who is sensible of his real interest, would rather chuse to lose what he has a right to than give any ground for suspicion. Every thing of this kind is
odious as it is rare. When the greater part of people are merchants they always bring probity and punctuality into fashion, and these therefore are the principle virtues of a commercial nation.
Smith is focusing on commerce as the source of morality, but another interpretation is that it is human interaction generally that imparts morality. I like both, and don't see them as so distinct. I see commerce as simply a more exact and disciplined kind of human interaction.
It is for this reason that Europe, or any densely populated area, has numerous advantages. Europe has the additional advantage of being historically densely populated. The disadvantages are in politics, or collective action. Democracy, social democracy, and socialism are all correlated with civilization. In America, if not everywhere, cities are the bastion of left-wing politics. As far as I know, there is no such thing as a conservative city. It seems this is an inextricable condition of civilization, and one which Adam Smith did not foresee (as Dan Klein noted this week in class). Libertarianism may wax and wane, but socialism persists in one form or another. It is the baggage of civilization.
So I don't expect the libertarian dream to ever come true. Europe and America seem to be converging on a sort of mediocre social democracy. Countries like Ireland have rolled back the power of the state, while America pushes forward with ever more expensive public works, from Katrina relief to the Iraq War. But I don't see instability. Yes, the Medicare trainwreck looms large, but I expect we'll grow our way out of it, and maybe reduce benefits a bit.
In short, I think we are all locked in to a world wide growth rate of about 2% to 3%. The developing economies are growing faster, but they too will converge to this rate, as social democracy takes hold and achieves its equilibrium state.