Jane Jacobs–The Nature of Economies

Jane Jacobs is best known for The Death and Life of Great American Cities, which revolutionized thought about urban planning in the 1960s. But in her 80s she is still very much alive, and intellectually vigorous. Her latest book, The Nature of Economies, is surprisingly fresh and provocative, if also deeply problematic….

The Nature of Economies is about the parallels between the way natural ecosystems work, and the way economics in human societies does–or better, Jacobs argues, not that these two sorts of processes are parallel, but that they operate according to the same underlying principles. These mostly have to do with the spontaneous emergence of order out of diversity, with feedback mechanisms, and with bifurcations that occur at the edge of chaos. Jacobs is up on all the latest developments (or fads) in complexity theory; her book bears favorable comparison with other recent books on these topics, like Steven Johnson’s Emergence. The Nature of Economies also has interesting parallels to the thought of Gilles Deleuze, who is crucially concerned with issues of emergence and transformation. What’s more, Jacobs restates these ideas from the science of the 1990s in ways that are entirely consonant with what she was already saying, forty years ago, long before any of this theory was developed, about the sorts of diversity and mixed use that make cities thrive.

All in all, Jacobs’ arguments are wide-ranging and cogent. The trouble is, that they are annoyingly presented in the form of a cutesy dialogue among cardboard characters. This is the sort of thing that leaves Jacobs open to attacks such as the hilarious and cruel review Mike Davis gave of the book in The Village Voice. Davis ridicules The Nature of Economies as a compendium of “pompous dinner conversations” by “insufferable yuppies” who throw off their theories of economics and ecology as they are busy “slicing kumquats into their Perrier”.

Davis is being nasty and unfair, but he has a point. Jacobs’ picture of thriving urban economies, in which entrepreneurial drive, with some help from Adam Smith’s “invisible hand”, leads to cultural diversity and widely-spread wealth, is very much an idealized picture. Many of Jacobs’ objections to traditional economic theory are quite correct; and if social policy were organized along the lines she suggests we would undoubtably have a more humane economic system than we do now, with rich and dense urban spaces and their multiplied possibilities, and with mass transit that really worked instead of our present situation of being choked with perpetual traffic jams. But still….

The trouble with idealized pictures, in general, is that they leave out too much of the grit and friction of the real world. It is fine to say that ecosystems have resources for maintaining stability and growth in the face of peril and uncertainty. Some rabbits may die in the process of an ecosystem’s self-organization, but the rabbit species is healthier and better off in the end. Do we really want to apply the same principles to economics? Systems theory is all well and good, and tells us a lot about the world that simple atomistic individualism cannot; but there’s a steep human cost to letting the economy “self-regulate” its way through a depression or a famine, even if it is true that things will be more prosperous and more stable at the end. That prospect does little good to anyone who has the misfortune to suffer or die in the meantime.

Another way to put this is to say that Jacobs has no concept of power, or indeed of politics. She presumes that a high tide raises all boats, and that a prosperous economy is good for everyone in it. To be fair, she maintains that a despotic society, with massive inequality, is structurally incapable of having the sort of economic prosperity she is talking about. But she has no idea that people can be oppressed, discriminated against, and stuck in poverty and want, even when the economy is humming along properly. She has no sense that not everybody can be an entrepreneur, because if everyone were, then there would be nobody left to be the (ill-paid) employees who make all those entrepreneurial businesses run. In short, Jacobs ignores the existence of inequality. As a result, she sees no positive role for politics, or democratic process–all politics is, for her, is something that gets in the way of economic prosperity, when it ought to step aside and let things develop naturally. Only someone in a position of relative privilege–and unconscious of that privilege, because she takes it so much for granted–could think this way.

I don’t want to trash Jacobs entirely: the sort of gentle, mildly leftist, anarchism she espouses has its appeal. But in the absence of any attempt to deal with power and privilege–in Jacobs’ utopian attempt to wish such things away, or more precisely, pretend they never existed–The Nature of Economies ends up being little more than Reaganism with a human face.