The days are short and dark. Over at Agora, Jim Rickard has published his end-of-year commentary. Here is his blurb from his frequent email.
The End Of Cities Means The End Of Economic Growth. We’re Getting There
We’ve all seen reports of an urban exodus now underway. Major American cities are ungovernable and bordering on collapse. The situation began to unravel with the spread of coronavirus last March, (the virus arrived earlier but the exponential spike in cases emerged around March 10, 2020). It was then followed by extreme lockdown orders, which did not stop the spread but did destroy the economy. Events took a turn for the worse in late May with the riots in reaction to the George Floyd death. Right around the time that merchants were ready to reopen, their store windows were smashed and buildings were burned, sending shop owners and office workers back into hiding. The riots continued throughout the summer. A “defund the police” movement sprang up and police budgets actually were cut in many cities. Not surprisingly, crime surged with murders, gun violence, robberies, looting and assault all on the rise. By then, many urban residents had had enough. They sold their city homes or just walked away from leases. Car sales soared as city dwellers bought them to get to their new homes in the country. Moving vans were impossible to find because so many people were moving at once. Conservative estimates are that 1,000,000 people have moved out of New York City alone. The actual number could be higher. The same is true in Seattle, Los Angeles, Portland, Baltimore, Chicago and other major cities. In case you thought that exodus might stabilize, it didn’t. A new spike in coronavirus cases in November and December was the last straw. This has all happened so quickly, few have had time to internalize the implications. This article spells things out. Cities are the greatest wealth-creating engines in the history of civilization. The word “city” is cognate with the Latin word “civis” which is the root of civilization. Cities are concentrations of talent, creativity, finance, research and capital which are used to generate even more wealth. When you destroy cities, you destroy wealth creation and ultimately destroy the economy. This is one more mega-trend that markets have not priced in.Jim Rickard, Agora Financial, 20 December 2020
I realize that Jim did NOT specifically call this an end of civilization, but the implication is there. That which does not grow, dies. Without a viable economy, our society, and therefore our civilization, dies.
Overall with a whimper, punctuated now and then by moments of sheer terror, blood and fire. But mostly, things just slow down and stop working.
The Christmas RV bombing in Nashville is an example: the bomb was placed (intentionally or not) next to an AT&T facility. Knocking out one fairly unremarkable building in downtown Nashville triggered days and days of breakdown of communications over a large chunk of territory. Not ALL of it, of course. But AT&T is a big company and a big contractor for other companies and for government agencies. As I understand, there was impact on landlines, cellular service, radio communications for emergency response, and more.
Only the perp died at the scene: three or six people were injured. A few million dollars in damage was done.
But the indirect effects and costs? Impossible to ever do more than estimate, it is a massive hit. How many people REALLY died because 9-1-1 centers couldn’t dispatch medics and ambulances in a timely manner? How many MORE will die prematurely because of the juxtaposition of Pandemic Panic, a major holiday shutdown, stress from uncertain conditions, and this attack? How many millions of dollars will be lost because of MORE closed offices and business, and scared tourists going to Memphis or New Orleans instead of Nashville? How much time and money will be wasted on investigating this suicide vandal/arsonist to the nth degree?
Now consider Jim’s thoughts. Now deep in the second (or is it third?) wave of Lockdown, seeing more and more of their lives and fortunes frittered away, how many more businesses will shutter? How many more people will pull their stakes and head out? How many more stupid city and State governments do MORE stupid things to further crush their economies and societies?
As 2020 has already proven, change – BAD changes – can come very, very quickly. And as actions cascade onto one another, we cannot easily predict the results.
Western Civilization and American Civilization is highly centralized. Here in the Fifty States, can we understand what might happen if just a half-dozen mega-cities melt down. Economically, socially, politically? What if we lose New York, Chicago, Los Angeles, Philadelphia, Atlanta, and Seattle? Even for a short time?
The effects will be staggering. Supply chains will break down MORE. Financial matters may screech to a halt. Millions will lose jobs, often permanently.
To some, it will seem like the end of the world as we know it. For many, not just in those urban areas, it may be the end of their world: death, disease, poverty, are all likely results.
But I do not think it will be that way. I think that there are enough people with enough sense and guts to work around those big urban cores. Small cities will replace these dinosaurs, and more. Western civilization may ultimately collapse, but its replacement will already exist. There may be an interregnum but I do not see a dark age.
Nasty, but not fatal to most of us.
And the outcome? A realization that liberty is the only option, and that megacities are a bad idea. I can live with that. And I think you can, too.
The darkness of the Biden Collapse might only be a prelude to a darker Harris Collapse. But that will just be the darkness of a bad night before a bright, new dawn. Not just for the Fifty States, but for the world.
Big cities are probably going away.
HOW they go away — through some kind of sudden collapse, or just through a natural evolutionary process of decentralization into smaller groups of people living on larger tracts of land — matters, of course.
But over time they’ve become internally dysfunctional while simultaneously becoming less functionally necessary.
Cities presumably evolved because transportation was slow and labor needs were intensive.
These days, people can and do commute 50 miles or more each way to work in less than an hour (I did so for years), some jobs are now proven (thanks, COVID-19!) to not require commuting at all, and automation is reducing the number of people needed to congregate to do particular jobs.
You’re less likely to work making shoes than you used to be. If you are working making shoes, it may not be at factory scale (“bespoke” is coming back). If it is at factory scale, you no longer need to live within walking or horseback distance of the factory, or (probably) near a bus or subway stop that can get you there in a timely manner.
My wife works 8 1/2 miles from our home (we live “in the country,” five miles outside the city limit), when she works at “the office” (2020 proved she CAN work from home; she did so for months, and now goes in one week and works from home one week).
A hundred years ago, that would have been at least a 3-4 hour walk each way at a normal pace, or a two-hour, one-way leisurely horseback ride (with stabling required at both ends). We’d have needed to live within a couple of miles for such a commute to really be feasible, or at least within city limits if the city had had streetcars or whatever. Now it’s a 20-40 minute drive depending on traffic.
As time goes on, there will still presumably be concentrations of businesses, so that you can do your shopping, get a meal out, etc. without 50 miles between each activity (and for those businesses to be located conveniently close to shipping routes), but people already mostly don’t need to live on top of each other like they did when 500 people who didn’t own cars worked at the shoe factory.
Tom, you make a lot of excellent points, and I appreciate the time you took to write this. As you know, we are bombarded with the idea that we must support our cities to remain civilized – which is complete hogwash and not just for the reasons you provide.
Cities are nasty – I had to go into Denver yesterday for the first time in four months (though not to stay for more than a few hours to do some work) and I regret having to do so. But even cities that are much smaller (like Rapid City, which we live just outside of, with 60,000) are no longer necessary. And frankly, haven’t been for decades – really even before the Internet when you get right to it.
But the key things, huge masses of people living in close quarters are ripe for authoritarian government, outright tyranny, and every aspect of the nanny state. As lovers of liberty, we should welcome their demise.
“huge masses of people living in close quarters are ripe for authoritarian government, outright tyranny, and every aspect of the nanny state.”
Yep! In fact, while the origins of both cities and statism are covered by the fog of history, the standard theory is that they are linked: The shift from hunter-gatherer to agricultural society required people to group, and once grouped they developed politics as a response to the problems that come with grouping. And of course the sociopaths took advantage of that.
In the Industrial Revolution, the requirements for mass production replaced the requirements for agriculture, and even further consolidated populations (and power).
It seems to me that current trends point in the other direction vis a vis population density. Which probably scares the hell out of those statists who are thinking about it very deeply.
A great reminder of human history, Tom. I especially appreciate your last point. Agriculture in ancient times – especially growing crops – resulted in tight grouping with just human and animal power available: when a family is able to efficiently work only 40 acres, that is a population density of about 100 per square mile. Modern farming? More like 4-5 people per square mile if that – in the Northern Plains? 1-2 people per square mile, often for a whole county counting the county seat and market town! Scary indeed for those whose lives are built around controlling other people.
BTW, sorry for the delay in posting and responding to this and your other comment – long weekend doing work and traveling for work. Thank you, as always, for your inciteful comments and patience! Iron sharpens iron, does it not?
No need to be sorry for delays — I’m just glad you’re able to make time to keep TPoL alive and interesting! Mama is proud somewhere.