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The two-sided density dividend: Agglomeration economies in *consumption*

Why are people – both in NZ and around the world – increasingly choosing to live in cities?

The answer usually advanced in response to this question, at least from an economic perspective, is “agglomeration economies”. In this post I want to unpack a few things about agglomeration economies, before discussing why I think our current understanding places too much focus on production as opposed to consumption. The post finishes by (briefly) considering why I think agglomeration economies in consumption are relevant to transport policy.

First, let’s consider how agglomeration economies are defined. In general, agglomeration economies are understood as the external economies of scale that arise from proximity. I tend to think of agglomeration economies as spatial economies of scale.

An example may help.

Consider street-lighting. Here the costs of provision (whether public or private) is largely independent of the number of people who actually benefit from the investment. Hence, the cost per person of providing street lighting will tend to be lower in larger and/or more dense areas.  This type of agglomeration economies is one reason why larger (and in particular denser) cities are able to support more specialised public services, such as displays of giant pieces of fruit made from steel-pipe offcuts.


There are a number of other ways in which agglomeration economies give cities a productive advantage. Larger and more dense cities, for example, tend to have more efficient labour markets, in which better matches are found between firms and employees. City centres in particular seem to generate knowledge spillovers, whereby proximity facilitates formal and informal networking which in turn contributes to higher rates of innovation. While agglomeration economies vary across cities and industries, they do appear to be relatively significant. A doubling in Auckland’s “effective density”, for example, would be expected to cause a 5-10% increase in productivity (NZTA 2009).

But is this the full story? More specifically, is increased productivity the only way in which agglomeration economies can contribute to quality of life?

I think not. Instead, I’d suggest that a large part of the so-called “density dividend” manifests by way of benefits to consumers rather than producers Let me present two (personal) examples of agglomeration economies in consumption.

First, consider the “where shall Stuart eat dinner problem”. Now, I am someone who appreciates good food. So the fact I can access a diverse range of restaurants from my apartment in central Auckland makes me very happy. And while culinary contentment ranks high on my list of priorities, it does not directly contribute to increased productivity (NB: given how much time I spend dining out there is a high chance the presence of these restaurants has the opposite effect!). In this example, density has supported greater specialisation in the provision of goods and services (restaurants), which in turn leads to a more contented Stuart.

Second, consider the “who shall Stuart date” problem. Now I’m not ashamed to say that I was recently introduced to the word of “Tinder”, and by golly there’s much romantic fun to be had. For those of you who don’t know about Tinder, let me explain briefly: Tinder is an app for your mobile phone which enables you to “connect” (in all its wonderful forms) with people in the immediate vicinity. So how on Cod’s green earth is this related to agglomeration economies? Well, consider this: The number of potential Tinder matches is directly related to the sheer number of people in the surrounding area. Finding a Tinder match is simply a numbers game in which people living in Auckland’s city centre have a distinct advantage compared to, say, people who live in Waiuku.

As a tip for new Tinderers, I’d suggest taking an evening stroll up Maungakiekie to view splendid sunsets and rainbows.


So based on my own personal experiences of food and dating, I feel compelled to argue that agglomeration economies in *consumption* are relatively significant. Call me a hedonist if you will, but I’m as interested in consumption as I am in production. “Work to live”, as they say.

Unfortunately, consumer benefits don’t seem to rate a mention in most formal academic analyses of agglomeration economies. For example, when completing my masters thesis in economics I could uncover only *one* study of agglomeration economies in consumption, which was published in the Journal of Urban Economics in 2000 and titled “Separating urban agglomeration economies in production and consumption” (NB: I studied Spatial Economics at VU University, Amsterdam; I’d highly recommend this course to people interested in these kinds of spatial economic issues).

The paper’s author finds evidence of substantial agglomeration economies in consumption. More specifically, he finds that while agglomeration do increase nominal wages it tends to decreases real wages, once increased costs, such as congestion, pollution, and housing, are taken into account. In the context of an economic equilibrium that seems counter-intuitive, unless of course there is another (unobserved) countervailing economic benefit which arises from living in cities. The author posits this countervailing effect is agglomeration economies in consumption. While this is an interesting finding, I’d be the first to admit that more research is required before we draw a line under agglomeration economies in consumption.

If you’re still reading by this stage let me reward you by considering one final question: Why might agglomeration economies in consumption be relevant to transport policy?

The answer to this question is that agglomeration economies in consumption are likely to vary considerably between projects that concentrate development, versus those that disperse development. Project like the City Rail Link, for example, will tend to concentrate land use development not just in the city centre but everywhere there is a station. This concentration may in turn be expected to result in agglomeration benefits in consumption as more firms are able to overcome the fixed costs of setting up shop. Hence, agglomeration benefits in consumption may be relatively significant when considered across the entire rail network (in contrast to agglomeration economies in production, most of which will tend to be realised in the city centre).

And how might these agglomeration economies in consumption look when they eventuate? Well, the way they always have, both in NZ and overseas: As cute little shopping centres centered around train stations. Like Kingsland. That’s something worth investigating, methinks.

P.s. Hope you enjoyed “consuming” this somewhat nerdy post!

P.P.s. Puppy photo time! Not sure whether Princess Ku or I was the most chuffed with how the Tinder date worked out …


84 comments to The two-sided density dividend: Agglomeration economies in *consumption*

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  • obi

    Hang on… You used Tinder to fix you up with a date, and the date turned out to be a large black dog?

    • Loraxus

      Maybe his date had a dog too, and the dogs hit it off as well…

    • Stu Donovan


      Yes I admit it – I’m in love with the black labrador-sharpei cross shown in the photo. And the person holding the camera ;).

      This post is actually breaking news on

      • obi

        I have checked out It contains a lot of drama. One of the posts near to yours reads…

        “Me and this guy met on tinder. We talked everyday and went on 3 dates and we slept together on the 2nd date. After the 3rd date I found out he had a gf. I confronted him and he told me he has a gf but he doesn’t know what he wants. I asked him why he has been taking me out and he said “because you make me happy. I have a good time when I’m out with you and it has nothing to do with the physical side of things.” He told me at first it was about sex and he wasn’t expecting it to turn into us having feelings for each other. He said space is best right now while he figures his **** out. He said it isn’t fair to put me in this position until he figures out what he wants. I said then you don’t care if you let me go. And he said “no I do care about you enough to let you go until I know what I want.” And then he said “I’m sorry I hurt you I hope you find someone that treats you well and knows what they want and has their **** together.” I cursed him out and he said “you are so wrong about this. It wasn’t just sex. There was emotion behind it. I know I ****** up, but I wasn’t leading you on. I legitimately had feelings for you and that’s why this needed to stop.”he said “you better believe if/when I’m single im calling you and taking you out on a serious date.” we haven’t spoken in a week, he’s still with his gf. we haven’t spoken in a week and he’s still with his gf, he even changed his profile pic it’s a new pic of them. did he have feelings for me? or was it just sex? explain!”

        Which is all very dramatic. But since she didn’t mention “owns a dog”, then can we safely assume this isn’t your TinderGal? In the mean time, you’d probably be better off not accepting dates with anyone whose profile shows them with their partner.

  • Konrad Kurta

    You’ve in a large part explained why I moved to Melbourne instead of back home to Auckland. More choice, more job opportunities (even if there’s more competition), more art/cultural/sport activities… and I don’t need a car to enjoy them. Moving back to Westmere doesn’t seem quite so enticing.

    • bbc

      Indeed and why so many move to Europe and never return, difficult to really want to return to somewhere only interested in place destroying motorways, cars at all costs, and minimal investment in the public realm.

      • That’s me to a T. I’ve been back in NZ almost 3 years, after 9 years in Europe and a year travelling home. I dream of returning there. Sure, NZ has its good points but Europe just fitted me so much better – principally due to the effects of agglomeration as Stuart refers to: more events, more human urban environments with more life, safer and less noisy streets and NOT being obliged to own a car to do any kind of everyday mundane business.

    • Stu Donovan

      precisely: Agglomeration economies in consumption (of goods, services, and social/cultural opportunities) are a major influence on where people choose to live. Hence why NZ struggles to hold onto its young people.

  • Brendon Harre

    Agglomeration is good. But lets not get confused that density is the highest goal. If density was the goal we would live in favelas. I watched a documentary where they were installing gondolas because otherwise mobility was about 1km an hour walking/running through twisted favela alleys.

    The goal is mobility and affordability. The ability to access as many jobs, services, restaurants etc as affordably as possible. Stuart read Alain Bertaud on this. He is practical and non-ideological on how to go about this.

    • Nonsense argument, it is not only possible but much more likely that Auckland’s density will increase without a single soul living in a favela, as it has been all this century. It is like arguing ‘if it’s so good in a dispersed suburb then why aren’t we all living by ourselves in a single yurt on the Mongolian Steppes with no neighbours.’ Look up ‘reductio ad absurdum’.

    • Walkablecity

      No confusion about density – this post doesn’t seem to argue that density is the highest goal. It can, however, lead to a better end, and that’s what this post seems to be about. Geographers have argued at the benefits of agglomeration for quite some time, this is truly not new. Agglomeration can, however, occur in remote areas, or be detached from residential areas and without multiple affordable (transport) options to access them. This is what the discussion is about, the relationship between agglomeration and people’s ability to access these places of consumption through multiple means of mobility – there’s your mobility and affordability.

    • Stu Donovan

      Nobody would argue with you: Density is not the highest goal. I would argue with your suggestion that mobility is a goal. You’re more on the mark when you start talking about “access”.

      One specific point: All I’m arguing in this post is that agglomeration economies in consumption are an externality that should be considered when formulating transport and land use policy. No more, no less. This does not mean that higher density is always good, or that lower density is always bad. All I’m saying is that there seems to be an unpriced externality that is relevant to public policy discussions.

  • mfwic

    I have been thinking about your post. I think the advantages you are talking about are due to scale rather than density. Big cities offer more choices for consumption than small villages. For example if you want to learn to play the Balalaika you probably have a better chance of finding an instructor in Auckland than in Otorohanga. You can have scale either with or without density. For example Silicon Valley is a case in point for production agglomeration at lowish density. Where consumption differs from production economies is the impact of the internet particularly in the market for goods rather than services. I can get size 9 1/2 shoes now rather than waddling around in 10′s. Production advantages are probably more rigid or certain because of access to a common labour force or the knowledge transfers than can occur in bigger cities.

  • The degree of density of a place like its transport infrastructure is only a means to an end: The end being a thriving high quality place for humans to live well in. Is there an ideal density? Well not a universal one certainly. And of course it is possible for a place to be too dense, or overcrowded, as well as vapidly and inefficiently over-dispersed. In Auckland there is one kind of density that is at that point now, it is generally accepted: traffic density is too high; or over-congested.

    Most of the people who oppose the Unitary Plan [eg the 2040 group] consider Auckland to already be too dense and over populated for their idea of an ideal place to live and work and their evidence for this is always traffic congestion- there’s too much of it. They do not consider traffic congestion is a problem that can be addressed directly, in particular by reducing traffic, and especially not while growing the population. This is axiomatic to these people. Not debated; just a fact.

    This explains why these groups are also always vehemently opposed to projects that support a denser and/or higher population through investment in non automobile infrastructure; they just cannot conceive that such a thing is possible: Higher density always must mean more driving, even if only rail lines and bike paths are built. This is essentially the chasm-like disconnect we have all discussions in Auckland around transport infrastructure investment, planning regulation, and urban development.

    Setting aside those who somehow wish to prevent any more people either being born here or moving here, as most accept that the population is growing and that does have benefits and/or is hard to stop, here is the problem:

    As we saw from the ACT party candidate for Epsom here recently the sprawl advocates consider it more convincing that those new residents in their new cars will somehow remain entirely in their own new distant suburbs and therefore won’t bother the people of the Epsom electorate in their cars [even on the motorways?] than that many current Aucklanders as well as new ones might often not drive and use a high quality alternative if it were there. That’s basically it. And which is more credible to you?

    • Neil

      The problem is that Aucklanders have seen little benefit of scale or density. Most of the apartments look horrible and leak, and spec builders are excellent at ruining lovely streets of old villas. Apartments are no cheaper than the equivalent bungalow, and Auckland can never deliver the scale advantages of Europe because there are no other cities within 1-2 hours train journey. Before Auckland start demolishing its older suburbs it should find a way to fill the empty parcels of land in the inner city, some of which have been empty for 25+ years.

      • Two points:

        One: no one is proposing to ‘demolish older suburbs’ that’s just total crap from scaremongers.

        And two: Aucklanders daily experience benefits from increased density. Here’s a local example, I live in Grey Lynn, the choice and sophistication of retail and dinning options around me now are a direct result of the new higher numbers of people in my neighbourhood because of the apartments and terrace houses built over the last decade. Some are in my street. None of the sophistication of Ponsonby Rd would be possible without the increased supporting population. I look forward to that all continuing as Great North Rd’s car yards are replaced with apartments. The challenge now is to provide the quality alternatives to driving so we don’t then get the disbenefit of more driving with the benefit of more social and commercial exchange. Bike lanes, buslanes and the CRL and further rail extensions are needed now to get the good, those Agglomeration Economies, but not the bad; continued autodependency and more congestion.

  • Poul Tvermoes

    Wonder if you could use the same rational for agglomerations as they apply to the virtual knowledge communities and virtual villages that exist now over the web and complement the physical agglomerations the article / thought piece was about?

      • Phil Hayward

        Poul is right, though, those “communications agglomerations” are increasing productivity overall, it is just very hard to disaggregate this or indeed any other agglomeration effect from each other. “Clustering” and “agglomeration economies” are often confused by some urban commentators, but they are not necessarily the same thing. Physical clustering may have been the sole means of achieving agglomeration economies many decades ago, but this is no longer the case. Transport and communications have increasingly substituted for proximity in the maximisation of “agglomeration efficiencies”, as they evolved and the underlying economics justified it. “Agglomeration economies” are no longer related entirely to “proximity”, but more to “access” and “contact”.

        Physical clustering has diseconomies as well as economies; the diseconomies are minimised by dispersion while the economies are at the very least “not foregone”; and the market will find its own balance if allowed to. It is self-evident that agglomerations have never been “planned”, they have evolved; and it is pointless to attempt to “plan” agglomeration economies into existence on the basis of one single high-density one, period. Crucially, clustering will suffer from the law of diminishing returns while the “transport” factor will suffer less so, and the “communications” factor, not at all. Agglomeration efficiencies, net of diseconomies of congestion and land rent, will be higher when there are multiple clusters by type, rather than a single one of all types of employment. Agglomeration efficiencies are actually of many different types, both in the spatial sense and the functional sense. It is completely unnecessary for production line manufacturers to be located nearby to law firms, for example, to achieve agglomeration efficiencies.

        Alain Bertaud’s “Cities as Labour Markets” is the intellectual tour de force on this. I am pleased to see Brendon Harre recommending it too.

      • Phil Hayward

        When housing and urban land is more expensive due to anti-growth regulations, even tech industries growth is constrained.

        AND the “trickle down” spin-off lower-paying jobs from tech industries are far less when housing costs are higher, because housing costs are mostly sucked out of the local economy’s discretionary spending. Every tech industry job created in Texas or NC creates several more spin-off jobs than a new one in Silicon Valley.

        It is interesting to note in the article you link to, regarding Enrico Moretti’s “The New Geography of Jobs”, that low land cost, growth-welcoming cities like Austin and Raleigh feature on it along with the highly exclusionary San Jose, and the almost as exclusionary Seattle..

        Gibbons, Overman and Pelkonen (2013) in “Area disparities in Britain: understanding the contribution of people vs. place”, do not find any evidence in Britain, that moving a low income worker in the low income city to a high income, high housing cost city, will make him any better off. Britain sadly lacks cities of the kind that the USA has, that provide the low cost land that facilitates affordable housing for low skilled workers, AND commercial sites for the kind of industries that employ them. In the USA, populations sort themselves according to where the opportunities are for housing and employment, for THEM.

        “Superstar Cities” by Gyourko, Mayer and Sinai (2006) points out that certain cities are very similar to exclusionary suburbs, only at the level of the entire city. It is absurd to argue that “growth contained cities have more talented, qualified, socially mobile and higher income people, therefore all cities should be growth contained”, when the mechanism for the difference is the exclusion, by high house prices, of people with less talent. We wouldn’t accept the superior life outcomes of the populations in exclusionary suburbs as an argument that all suburbs should adopt the same exclusionary policies. Nor should these arguments be used at the level of entire cities.

        Cities in the USA that are being accused of “creating low wage jobs” are merely creating ALL wage levels of jobs. It is not helpful to less skilled or less talented people if there are no jobs being created for them anywhere, or only minimal trickle-down jobs in Superstar cities where the only accommodation they can afford is a broom closet. In such cities, the menial jobs are most often taken by immigrants from the third world who are used to living in slums.

  • Phil Hayward

    Agglomeration economies below the level of “the entire city” are very elusive to identify. Bigger (not necessarily denser) cities are more productive (all other things being equal).

    Peter Gordon (USC) more recently suggests, that there is an observable correlation between dispersion and productivity in his data. See:

    Gordon, 2012, “Cities, Networks, Creativity, and Supply Chains for Ideas”.

    Gordon and Richardson “Urban Structure and Economic Growth” – in the “Oxford Handbook of Urban Economics and Planning” (2012) Eds. Brooks, Donaghy and Knaap

    Other academics trying to identify agglomeration economies linked to specific locations, are now finding it very hard to do so (eg Hugh Kelly and Matthew Drennan – 2011 – concluded that “the tyranny of distance is dead” even for the finance sector, with the exception of the few largest clusters of it such as Manhattan).

    Concrete gains.
    America’s big cities are larger than Europe’s. That has important economic consequences.

    “………Differences in metropolitan populations may help explain gaps in productivity and incomes. Western Europe’s per-person GDP is 72% of America’s, on a purchasing-power-parity basis. A recent study by the McKinsey Global Institute, the consultancy’s research arm, reckons that some three-quarters of this gap can be chalked up to Europe’s relatively diminutive cities. More Americans than Europeans live in big cities: there is a particular divergence in the size of each region’s “middleweight” cities, those that teem just a little less than the likes of New York and Paris (see chart). And the premium earned by Americans in large cities relative to those in the countryside is larger than that earned by urban Europeans…..”

    The McKinsey Institute Paper is HERE:

    And “The Economist” hits the nail on the head in their second-to-last paragraph:
    “……..What explains Europe’s relatively small cities? Regulatory barriers to growth may be to blame. Tight zoning rules limit housing supply and raise prices by driving a wedge between construction costs and market prices. This “regulatory tax” amounts to over 300% in the office markets in Frankfurt, Paris and Milan, according to a 2008 study by Paul Cheshire and Christian Hilber of the London School of Economics, but is just 50% in Manhattan and, in effect, zero in fast-growing places like Houston. Taxes that add to transaction costs also help explain low European mobility……”

    • Stu Donovan

      Can you provide any evidence for the following statement: “Bigger (not necessarily denser) cities are more productive (all other things being equal)”? The reason I ask is that from what I have read both density and scale are relevant, but the latter less so than the former. I know this was found by Glaeser in his early work, as well as my own research (which you can read in the link provided above)..


    • Stu Donovan

      OK I can’t find evidence to support your statement. In their work on agglomeration economies in the U.S., for example, Ciccone and Hall (1996) note: “Finally, our framework allows us to consider size versus density effects at the county level … estimates suggest that density externalities are more important than size externalities at the county level.”

      So in the absence of other evidence I’d have to conclude urban density is more important than urban size (scale).

      • Phil Hayward

        Of course in the USA, density correlates with productivity, because both things are endogenous to evolutionary processes. Of course Manhattan is productive.

        This does not mean that imposing UGB’s on all US cities would make the US economy more productive.You won’t recreate Manhattan everywhere else just by imposing UGB’s. I hassled Ed Glaeser about this at a Symposium he was at in Wellington. He agreed with me that he did NOT intend urban planners to take this conclusion out of his research.

        The outlier example of a nation that has inposed UGB’s on all its cities long before anyone else did, is the UK; and they have a productivity gap that some literature has found to be contributed to by forced density, high land rents, and other distortions of the planning system. I say more about this in my comment below.

        In the USA, because urban planning has been relatively light for decades, what density they have has been produced by market forces. Of course this will be productive density. The research you cite will be quite right – in the USA, density correlates even more with productivity than “size”. However, size still correlates with productivity – allowing a city to grow both vertically and horizontally makes it more productive, and what growth does occur vertically, will be associated with economic sectors that are by nature more productive at higher density – eg financial services. This productivity will be even greater than that created by allowing horizontal growth – however there are still gains to be made from horizontal growth. Imposing UGB’s on all cities indiscriminately causes these gains to be foregone, and there is no reason to assume that there will be automatic gains from density enforced by regulations rather than created by free market processes.

        This is why the research I cite above is international, and supports what I am saying. Research that compares US urban locations supports the thesis that urban areas that have evolved at higher density are more productive than urban areas that have evolved at lower density; however what this means is that you are lucky if Wall Street chooses your city to locate in.

  • Phil Hayward

    And what “The Economist” does not say (above) about the Cheshire and Hilber paper, is that the “regulatory tax” in UK cities is several times as high again, as in Europe’s cities. The absurd consequence of the UK’s many more decades of urban planning, as Cheshire and Hilber point out, is that small, low-growth, high-unemployment cities in the UK have more expensive office rents than Manhattan……!

    The Cheshire and Hilber paper is HERE:

    These things have consequences. These costs are a drag on the “productive” part of the economy, they are only a “gain” – in the form of zero sum wealth transfers – to a rentier class. The UK urban economist Alan W. Evans (University of Reading) may have been one of the first to insist that there was a connection between urban planning and productivity. The following is from his “The Land Market and Government Interventions” (1999):

    “……With respect to the UK, Monk et al. (1996) observe that, because planning constraints reduce the elasticity of supply, the land-use planning system in the UK exacerbates cycles in house and land prices (p. 509). It has also been argued that they have significantly slowed the growth of the UK economy (Evans, 1988), and although this would be difficult to prove, nevertheless, given that local authorities have deliberately set out to restrict the growth and movement of firms (Evans, 1992), it would also seem difficult to deny. We have already noted that, in any event, Cheshire and Sheppard (1997) estimate the static costs of containment in southern England as equivalent to a 10% tax on incomes. The oddity is that because macroeconomists have little interest in town planning, planning controls are rarely cited by economists as one of the causes of the slow rate of growth of the British economy…..”

    While Evans’ above work was in progress, a McKinsey Institute paper was published in 1998, “Driving Productivity and Growth in the UK Economy”, in which they suggest that a high proportion of the UK economy’s low productivity (lagging comparable nations by 20% to 40%) is in fact due to the UK’s all-pervasive growth-containment urban planning system. There are a few basic reasons for this.

    Congestion diseconomies. Congestion delays are always higher in denser cities. High land rent causes effects like “congestion” dis-economies within the business eg workers crowding each other, stock on shelves being less accessible, aisles narrower, production lines too cramped, lack of space for the adoption of new processes. There is, furthermore “anti-competitive” effects: including not just a reduction in new business start-ups, but also that most potential participants in new spatial clusters of the Silicon Valley type are excluded very soon after such an agglomeration has even started; there is either no spare land at the location, or it is far too expensive. Evans discusses this in his books published in 2004; also of interest is the short discussion paper by the LSE’s Max Nathan and Henry Overman (2011) “What we Know (and Don’t Know) About the Links Between Planning and Economic Performance”.

    • Appreciate the well cited research. Of course, there could be just as many studies cited the other way and we have seen many on this blog over the years.

      However, for me, the only reasonable conclusion is that we really need to stop trying to plan the density of cities. We just need to put in place the transport system, and for Auckland this means public transport, and then scrap all land supply restrictions, both up and out.

      Only then can the market and the investors willing to put their money on the line discover how and where the “market” (i.e. the people of Auckland) wants to live. Offering cycling and PT options which are given priority over SOVs will help curb congestion and make it irrelevant to those on bicycles, trains or buses.

      If that leads to sprawl then so be it, but I dont believe that is what a sizeable chunk of Auckland’s population wants. More and more young families are becoming tired of losing time together because of excessive commutes. There will always be those who think a 1.5 hour drive is worth it for the brief weekends in the exurb and they should be catered for – but we shouldnt be prescribing low density as a planning outcome.

      If the government would commit to rail linked satellite cities like was discussed with Pokeno that would be a great result. Places like Houten in the Netherlands are a great template for that and would offer residents a far superior standard of living:

      • mfwic

        I agree with your view in part. Allowing choice would mean some sprawl and some taller buildings and then whichever was successful would be repeated so people would get want they want. That would be a great outcome. Where I disagree is that either way still needs planning controls to avoid external costs or adverse effects (depending on jargon you prefer). Sprawl still needs clustering to be efficient, local shops, bus stations etc. Taller buildings are more likely to be a success when zoned so you get a few areas of very tall buildings like the CBD, some fringe areas of apartments and a lot of terraces around the periphery of the CBD. Terraces avoid most of the problems people hate, 3 or even 4 levels mean neighbours get sun, no one is looking in each others windows as all the windows are on the ends. I house sat a Victorian semi in Downside Crescent in Belsize Park London which was huge but although neighbours were very very close you only ever saw them if you were coming and going together. The problem is the best streets in Auckland for large terraces all have crappy old villas on them. You can get density with good design.

        • Yes I actually agree with you totally. We do need planning.

          But the people advocating for sprawl all blame “planning” (what they really mean is the urban limits) for the problems in cities. However, the limits on density (not necessarily height, as you say) have been as damaging if not more. The transport choices made have been the biggest disaster of course.

          I am all for planning and I believe what the Unitary Plan was proposing is exactly what you have outlined. We really need that terraced and low rise apartment developments. But everywhere misinformation and scaremongering have ruined any intelligent debate.

          I also dont believe that the “market” would choose sprawl if left to its own devices. You can detect the truth in that when you suggest removing all controls to sprawl advocates. Suddenly the free market is not such a great thing – I can only conclude because people might actually choose good quality dense living over sprawl.

          Of course, sprawl advocates will say that is because those people were “forced” into it when the beautiful character homes were “seized” by the gummint – apparently by some shadowy Density Stasi that we are all unaware of.

          • Phil Hayward

            I like the way this conversation is going. I have no problem with incentivising what we want to incentivise and not prohibiting “choice” of the other things.

            I would be the first to agree that a lot of “sprawl” has been deliberately planned and incentivised; earlier generations of planners had different priorities, such as ending overcrowding, democratising home ownership, and ending unhealthy mixes of all economic activities in one location along with high density living. In fact old, planned suburbanisation has been quite good; there are plenty of nodes of urbanism; post office, swimming pool, supermarket, chemist, bus stops, etc etc – and dispersed employment with new industrial zones created along with the new suburbs.

            My main problem with planning fashions now is that imposing a UGB as the first thing, actually self-defeats everything else because of the effect it has on site rents throughout the city. There is no evidence anywhere in the world to prove that any housing anywhere in a UGB-contained city is “affordable”. You either have affordable housing of ALL kinds – exurban, fringe, suburban and urban – or you have none at all.

            I have said on this site before that if you check any median multiple 3 city’s RE sites, you will find fringe McMansions for $250,000, older houses in mature central suburbs for $300,000, and townhouses close to the CBD for $150,000. Auckland used to be something like this. Containing the fringe means fringe McMansions (on much smaller sections) for $500,000, older houses in mature suburbs for $800,000+, and townhouses close to the CBD for $800,000+

            The rents for CBD apartments are similarly distorted.

            In which city is there “choice” for people who LIKE urban living close to the CBD?

            So I say, leave out the UGB, but do what you like to create the right incentives for efficiency, with targeted land taxes, PT investments, road congestion pricing, water and energy charges, and so on. The big problem for intensification is not zoning so much as NIMBYism, though. But in NZ we hardly realise how amazing we have been with intensification so far, even if we have not managed to ram apartment blocks through against local residents wishes. There would hardly be a single 1/4 acre section left in Auckland now; backyards have been sold off and townhouses built on them everywhere you look. Auckland urban area’s density is already in the same league as Amsterdam, Toronto (the only Anglo New World city that is denser than Akl), half of Germany’s cities, and denser than all cities in France outside of Paris.

            This, along with a lack of highway and arterial road lane-miles, has led to Auckland’s almost global-league-topping traffic congestion delays. Yes, many European cities have excellent PT, but this still costs them heaps in subsidies, and those European cities that have impressively low congestion delays (TomTom or INRIX), do appear on Google Earth to also have impressive highway and arterial networks. There is an appalling lack of statistical data on this so one is forced to do eyeball guesstimates on Google Earth. Bear in mind that private cars are the dominant transport mode in Europe too; the share is only a few percent different to the USA. Most travel is not commuting, and most commuting is not to the main CBD. Impressive PT mode share statistical data invariably relates to the latter only. Tourism is another major source of PT ridership. Of course some tourists from NZ come back raving about how easy it was to get around on PT, but Europe has several hundred million people, and other tourists come back raving about how wonderful it was to be able to drive all over the region at 200 km/h in their rental Audi. Including straight through major geographic obstacles such as the Swiss Alps.

        • I think terraces should be the cornerstone of housing in Auckland. It really is an entirely missing ‘middle density’ form, but one that does so much. Separate houses, more or less, each with a yard and gardens. Two or three stories means plenty of space. A two story terrace, free of encumbrances from side yards and setbacks, can get you a 250m2 house on a sixteenth of an acre with 50% of the land dedicated to garden. Go to three stories and you can get a massive house, heaps of windows, views even.

          Disagree all the best streets have villas on them, plenty more outside of the historic neighbourhood that are ripe for it.

          I think they missed a trick with the unitary plan, lumping terraces and apartment buildings into the same zone. They should have had one zone with three story height limits, no side setbacks and say 50% site coverage. Then a second smaller zone in suburban centres with five or six story limits and 70% coverage.

          • Bryce P

            I agree Nick. I live in what is kind of an apartment, kind of terrace, in what is (funny enough) a planned development. It consists of 2 x tandem garages downstairs and 2 x single floor apartments above, each with it’s own access and balcony out front. If all bedrooms are full, that’s a lot of people in that area.

            The block (which is 2 blocks really) has 8 x 2brm apartments and 6 x 3brm apartments). It covers an area of 2,100 sq/m which includes 2 x shared driveways and a 291 sq/m green lane (affectionately called wiggly lane).

      • MFD

        “If the government would commit to rail linked satellite cities like was discussed with Pokeno that would be a great result”

        Travel time by rail between Britomart and Pokeno based on an extrapolation of the present timetable and rail distances is around 1 hour 50 minutes. Assuming electrification all the way it’s going to be around 1 hour 35 minutes or more than 3 hours a day out of the commuter’s life. How is this a “great result”?

        Yes, the “value added per employee” metric may indicate some increase in productivity per employee as a result of employment agglomeration. Salary/wage figures may well show how much more Johnny L. D. Commuter is getting at his downtown job and we can all celebrate the productivity bonus of agglomeration but I posit that Johnny L. D. Commuter isn’t any more productive on an hourly basis once his travel time is taken into account. All this commuting adds no value from an economic standpoint.

        • But from Pokeno should we assume that Britomart is always the destination? Middlemore or Kings College, just to suggest two quite different Auckland destinations in South Auckland would be pretty handy… then there’s south to the Tron, or Fonterra at Takinini? But even then, say for a student at one of the AK Uni campus, at least that 3hours could be spent studying; surely better than driving as a way to spend time?

          • MFD

            “Handy” is not “great”. The concept of agglomerated employment and dispersed living via satellite towns with the associated long commutes is flawed.
            The choice of Britomart was in response to the hypothetical 1.5 hour drive above. Of course being able to train from Pokeno to, say, Takanini would be handy but driving along the Southern motorway would take less than half the time of taking the train. A bus service would cost much less to implement than rail. Better still if the hypothetical Takanini worker lived in Takanini or Papakura or Manurewa.

            As for the university student example; why would a student live in Pokeno and commute by rail, road or any other means? We had that choice to make recently (not from Pokeno but a similar distance) when one of our daughters started at Auckland University. She got densified right quick and lives on the 12th floor of a student residence some 4 minutes walk from the campus and she loves it. Long distance commuting would have been bad for her studies, her health and her social life.

          • Sure, however other students choose not to leave home [fridge and internet], like two in my house, and their families may live down the line like you.

            On another matter, these are good places for park ‘n’ ride, serving dispersed populations.

          • MFD

            Students not leaving home – quelle horreur!
            If something isn’t done about the cost of housing they may never leave.

          • Yes; our Band is too Broad, and our parenting too lax, I fear.

            Also: Grey Lynn. Proximity.

          • MFD

            Ah yes, parenting. Massive job, lousy pay…but hugely satisfying.

          • Yes the non-contributing mess-making flatmates are a lot of fun!

          • Luke Christensen

            yes most people would like to move out of home, but when the cost of the student residence is $235 a week (plus food) many people cannot afford that, and end up staying at home in far flung suburbs, with their only cost being the $200 a month PT pass (free rent and food at home!).

        • Luke C

          1 hour 50! What a load of rubbish. Only 1 hr 10 to Pukekohe, and 15km to Pokeno with 1 stop. At 60kmh average sounds like 15 minutes to me. So thats 1hr 25, minus 15 mins for electrifications gives 1hr10, same as successful Pukekohe service now.

          • MFD

            “What a load of rubbish”

            That’s harsh, sir! – more like 49.7% of a load of rubbish. Allow me to illustrate:

            Papakura is a shade under the halfway point between Britomart and Pokeno with a current journey time of 53 minutes. A hypothetical scenario of Pokeno being designated a satellite town is surely going to occur after the development of the “South Karaka” area already identified in plans. It is therefore reasonable to assume that such a hypothetical scenario involves stops at Drury, Karaka South and Paerata. It is also unlikely that Tuakau would be omitted and there may be others. A rough estimate of twice the distance requiring twice the time (1h46). In restrospect this does seem pessimistic (and for that I am truly contrite and have adjusted the resistance on my exercycle upwards in an act of post-religious penance accordingly) since station frequency is unlikely to be as high as north of Papakura but on the flip side freight traffic is heavier south of Paerata since all Mission Bush traffic travels south…so yes, the 1h50 estimate seems too high, but your 1h25 seems too low so shall we split the difference? 1h37.5?

            The improvements gained from electric operation derive primarily from better acceleration and deceleration (since track speed limits are not, to my knowledge) being increased. They are thus most advantageous where stops are closely spaced. Post electrification Papakura will be 9 minutes better off. Based on an increase in station spacing from Papakura to Pokeno the advantage of electrics over diesels will be less so shall we say 4.5 minutes improvement? That would give 1h33 for a Britomart-Pokeno service. Let’s say a nice round 1h30, shall we?

          • Phil Hayward

            What this argument seems to be missing, is that most cities grow by way of balance between different uses of land, including housing and employment, so horizontal growth does not correlate in any data, with commute to work times.

            If you compare cities in the US and the UK with similar population levels, where the US city is 1/5 the density of the UK one, there will seldom be much difference in average commute to work time, and this will often be in favour of the lower density city.

            Besides congestion, there is a major reason for this. The systemic affordability of housing. We automatically assume that the only house we will be able to afford, will be at Pokeno. But the US low density cities that are free to grow at the fringe, all have systemically affordable housing – and as I say in another comment above, that means that there is housing available for under $200,000 virtually everywhere. None of this insanity of $1.4 million for a ramshackle villa or a townhouse, near the CBD; and housing for over $500,000 everywhere that there is reasonable employment in the general area. .

  • You forgot to mention that cities only exist on the basis of externalising environmental and social costs. Get the people in the food producing nations up to western standard of living and the whole system collapses, because it relies upon extremely cheap production costs in order to offset the shipping costs, whilst the environmental costs of that shipping, and producing everything for the supply chain, are ignored.

    Two-thirds of the human race lives in poverty because of the way western society works.

    You may have noticed, humanity is on the brink of destroying both itself and life on Earth in general. By advocating a better way to run cities, you are really just writing about rearranging the deck chairs on the Titanic.

    • Stu Donovan

      one could also argue that agricultural areas only exist because cities provide markets for their goods. Like most economic relationships causality runs in both directions.

      • Yup, she’s a miserable life on the farm with no market to take your sheep to…. mutton surprise again.

        • mfwic

          Exactly! I went to Pirongia school with a kid who had mutton sandwiches every day. They ate mutton most nights, man did he hate the stuff. I never had mutton so I would swap anything I had for his sandwiches- damn they were good. My first experience of the benefits of trade. It made us both better off.

    • Loraxus

      Bull. Cities have nothing to do with excess, or living above sustainable levels – that is a totally different metric that has almost nothing to do with density (or if so, arguably often in the opposite from what you claim).

      In fact, some of the most low-density lifestyles can be enormously damaging (or simply so low-yield that they are unsustainable in the other sense – they can never support more than very small populations – think slash and burn jungle farming). Some of the most high-density life-styles are, person by person, the least damaging to the global environment overall. If I live in a small (relatively speaking) apartment, with my job close by, I may use as little energy as a whole bunch of car-commuting suburbanites together.

      Cities are sinply the most visible sign of humans having specialised strongly. They are an epitome of efficiency, not excess.

      • Phil Hayward

        The operative bit there is “……can be enormously damaging……”

        There are such things as “eco villages”.

        High density dwellers “can be damaging” to the environment too – it all depends on their income and consumption.

        I personally believe that there is more scope for “sustainability” at low density, because there are so many things you can’t do at higher density, like grow your own food, dry washing on the line, use solar panels and wind turbines on your own property, compost and recycle onsite, dispose of organic waste onsite, burn biomass for heating and cooking, use sunlight for passive heating and lighting, use fresh air for passive cooling, use shade trees for cooling, use your own backyard for recreation instead of traveling, and…. (keep brainstorming).

    • “cities only exist on the basis of externalising environmental and social costs”

      When you say “city” what do you mean? Rome at its height was the biggest city in the world with around one million people and that was c.2,000 years ago. So how far back in history are you looking for your model of living? Cities have been with us since the dawn of agriculture for exactly the agglomeration benefits outlined above.

      If you now live in a small city of 10,000 people in NZ, that would have been a thriving metropolis in the Middle Ages. Do you want us all to go back to living in small villages of a few hundred? Have you ever seen subsistence farming in a small village? I have in Romania and believe me it doesnt look much fun. Sorry, I dont fancy that and judging by the flood of people into cities, most of humanity agrees with me.

      A modern person living in the rural backblocks (or Swanson) in a bif house and driving everywhere consumes far more resources, especially in regards to transportation, than someone living in the centre of a big city in an apartment and travelling by bicycle or PT. So what is your solution? Everyone lives a paleolithic lifestyle where we just eat what we can grow?

      Once again you seem to be confusing “sustainable” with “self-sufficient”.

      • Phil Hayward

        Great comments on this thread, Goosoid. Where governments in developing nations have been unable to make housing systemically affordable in the city, there are millions of people living in informal shanties, who have chosen to leave rural living and take their chances in the city, even without the sanitation and safety of formal housing.

        Technology has meant that the numbers of people producing food and primary products for the rest of the population, has steadily reduced. This always correlates with income and well-being. The higher the proportion of a nation’s population is still employed in its rural sector, the more poverty and deprivation will be a problem in that nation.

        It is nonsense that any part of the world has lifted itself out of poverty at the expense of the rest of humanity. This is a positive sum game, not a zero sum one. No-one in the world was better off 400 years ago because no evil capitalists were buying resources from their general area.

  • “Cities are sinply the most visible sign of humans having specialised strongly. They are an epitome of efficiency, not excess”

    You believe that only by ignoring the external factors. Western society externalises its costs onto poor nations and the environment. If you take those into account, your statement is false. People say Rome was an efficient city 2000 years ago, but they ignore that it required slave labour to work. It’s the same with Western society today, except we enslave entire nations, turn a blind eye to the millions with no food, and fly and ship it all to ourselves instead of to those who need it the most, because we want to live in ivory towers pretending we are civilized and don’t need to provide for ourselves .

    The claim by this article that cities provide agglomeration benefits is also completely false. Everything is more expensive in a city. Why do you think supermarket prices in Auckland are higher than in Wanganui? There’s no economies of scale at all, absolutely everything in Auckland is priced at a premium. Even a slice of chocolate cake in the Auckland CBD is $6, compared to $2 in the suburbs. I’m surprised anyone who spends anytime in the Auckland CBD could claim it is a cheaper way of living. It’s anything but!

    The more you lump everything together, the more expensive everything gets.

    • Stu Donovan

      Let’s start from the top:
      1. Cities do provide agglomeration benefits. The latter is a pre-requisite for the former. Since antiquity. The only questions up for debate are 1) how large these benefits are and 2) whether they are strengthening over time.
      2. Not everything is more expensive in a city. Personal transport is significantly cheaper, for example. As is home energy. I spend about $50 per month on the former and $70 per month on the latter.
      3. Where things are more expensive, it is usually because there is a commensurate efficiency pay off. For example, coffee is more expensive in the city, but I only have to walk 3 minutes to get it.
      4. This morning I paid $2 for a slice of chocolate brownie from Shaky Isles, Customs Street East. And as indicated above, the price of the good does not reflect it’s true cost – especially once incomes are considered.
      5. The more you lump things together the more expensive land gets. But at the same time transport costs reduce and productivity increases. In general, the costs are outweighed by the benefits.

  • No goo, someone living in Swanson does not consume more resources than someone living in an apartment. If you live and work in the same area, transport won’t be an issue. However, if you are one of the workers caught up in the mass centralisation of employment in the CBD, then yes you’ll probably have a higher requirement for transport, which is why centralisation of employment is daft. It means you have to build lots of motorways and railway tunnels at great expense, or cram everyone into ivory towers and charge them a massive premum for doing so.

    Apartment dwellers don’t have low land use, they just externalise their landuse and pretend it doesn’t exist. Their land use will be the same as everyone else’s, as we all consume roughly the same. The difference is they freight everything in from far away locations and pass on the cost to the environment.

    The most efficient and sustainable way for human beings to live is to have land and take more responsibility for the provision of what you consume, with less reliance on supply chains. This can either be done individually, or as a community.

    I wonder how many more reports the UN has to issue warning us of the dire consequences of modern living to life on Earth, before you lot finally start to get it?

    • Geoff you need to read Green Metropolis by David Owen. He lives out of town and shows how its the more wasteful than living in the city. Lots of evidence, not just anecdote or opinion.

    • Stu Donovan

      Geoff, I can’t find any evidence to support your arguments that urban dwellers consume more energy than rural dwellers. This article, for example, directly contradicts your key conclusion:

      Note that these analyses consider the energy input in the food consumed by each. So it accounts for the energy associated with importing food into cities. As Ed Glaeser put it: “If you want to take good care of the environment, stay away from it and live in cities”.

      • The most efficient way to obtain an apple is to pick it from your tree where you live. Obtaining an apple by using land elsewhere on the planet and relying upon an energy-guzzling supply chain and manufacturing base to get it to you, is extremely inefficient by comparison. The comparison I’m making is with a theoretical way of life, of having some land and actually using it. You’re right that there’s little difference between city and urban dwellers, because most urban dwellers don’t do anything productive with their land.

        • bbc

          What if I don’t want apples but rather pears? The whole point of not growing everything yourself is the fact that I have the choice to buy what I want, when I want and for the rest of my day do a job that I actually enjoy and requires my skills. Or would you prefer all the hospitals were shut down such that we can go home and trim the apple trees? I assume you’ve completed medical training, electrical training, mechanical training etc to take care of yourself? Because it would appear that in your ideal world everyone is to too busy growing vegetables and tending their flock to actually do any of those jobs.

          • “I have the choice to buy what I want, when I want and for the rest of my day do a job that I actually enjoy”

            Yes, that’s how the 5% live, at the expense of the 95% and also the environment. Stop passing the buck and see how long your lifestyle lasts (hint, it won’t be long). Western society requires great sacrifice for the majority. End that sacrifice and you’ll have to start doing your share for your own survival.

          • bbc

            I don’t quite get how this society is supposed to function? You seem happy to block society off but I’m guessing will be more than happy to be flown to a coronary unit at the hospital to have an emergency stent if the need arises. We get to live the long lives we do because of specialisation and the fact that people have the time to undertake research and undertake the training to apply research. If we all go back to subsistence farming, we’ll all die early from malnutrition, lack of medical care and lost crops next time a storm comes through. So yes I agree that by shortening everyones lives back down to 20-30 years at most the planet will be better off as there will be less humans around to use its resources.

          • obi

            bbc: “If we all go back to subsistence farming, we’ll all die early from malnutrition, lack of medical care and lost crops next time a storm comes through.”

            I’m basing this mainly on the UK where my family all originated from… But census and other records show that pretty much everyone were farmers or farm labourers before the industrial revolution. Then they start to drift in to the new industrial cities and find jobs working in mills or other manufacturing industries. I can’t imagine this work was very interesting, the working conditions would have been pretty grim, and it certainly wouldn’t have been fun living in a tenement in Bermondsey or Liverpool. BUT… They moved voluntarily because Bermondsey and a job in a tannery was better than the rural life that Geoff pines for.

            Ultimately the move to the cities was a collective investment in society’s futures. Within a generation or two, some of them are starting businesses, becoming literate, traveling, and establishing what we now call the middle class. Their descendants are teachers, computer programmers, doctors, and transport planners. They have lifespans over double those of their pre-industrial revolution ancestors, probably fifty times the income, and we don’t lose a third of our children to disease.

            I give thanks every day that I live this side of the industrial revolution. And that I can pop down to the supermarket to buy fresh fruit, cornflakes, and a bottle of wine for a fraction of my hourly wage, rather than have to put in hours of back breaking work to produce my food at home.

        • No Geoff it is not more efficient for everyone to have their own apple tree, a cow, a bee, a book shop, a car plant, an oil rig, a hospital, a university…. you’ve got it completely backwards. The whole economic basis of all human society is specialisation and exchange; because it is more efficient. This is what agglomeration economies are. You may not get it but every other society on the planet does, everyone everywhere, except for the odd very unusual hermit, prefers to exchange their labour and skill and assets, for someone else’s; because it’s more efficient.

          My guess is you do this every single day. You may not think you do, but you do. Self sufficiency is a lot of things, including very resilient, but it is never more efficient than interdependence and exchange with others. By all means pursue self-sufficiency, just don’t kid yourself that a society of little islands can ever be as efficient as one that works together.

          • “The whole economic basis of all human society is specialisation and exchange; because it is more efficient”

            Only if you ignore the external costs that you create for your fellow humans, and the environment. It’s actually highly destructive, and ultimately unsustainable.

          • Luke Christensen

            Geoff if your points are valid, and agree with some of your criticisms of the global good system, then they surely are equally as valid in suburbia, and even most lifestyle blocks.
            Considering Auckland is carpeted with suburbia, under your model we might expect most of them to be self sufficient, at least in fruit and vege. However I would say that this is certainly not the case.
            There is also of course no reason why people can’t grow their own food in terraced houses or even apartments.

            Another point of course is that if your agrarian vision comes true, I suspect people may start to find they are more productive if they specialize, and trade with their neighbours. You might be great at growing apples, and your neighbor great at pears, or your land, rain and sun may be more efficient at growing a certain product. Of course then you would start trading and specialising, and before you know it……

          • Stu Donovan

            Geoff, my apartment is coming up to 100 years old and should be good for at least another 100 yet. Ongoing maintenance costs are minimal, apart from a coat of paint on the external walls every 5 years or so. I have not owned a car for 10 years and my electricity bill is tiny. We have a common laundry where we can share washing/dryers, although I dry my washing inside my apartment. I use the stairs to get to/from the street. My building has a worm farm in our back yard and recycles as much waste as goes to landfill. Even though I don’t grow my own food, much of what I do consume is sourced relatively locally.

            I’d be prepared to wager a fiver that my lifestyle is more energy efficient and sustainable than most people living in suburbia and rural areas.

          • Stu Donovan

            Link posted again for Geoff’s benefit; he seemed to miss my earlier comment:

            And still hasn’t provided any evidence to support *his* claims. Hmmm …

          • Geoff you need to decide what you’re arguing about: is it efficiency or sustainability? They are related but not interchangeable. Industrial western society has been very efficient at running unsustainable systems, for example. It does not follow that we should abandon efficiency in the pursuit of sustainability. That is a false dialectic and one taken as axiomatic by the forces of ‘Business As Usual’ (Joyce, Brownlee, Grosser etc).

            Is current society unsustainable? Yes, it clearly is. Does it then follow that urban life is inefficient? No. Is abandoning the city and everyone moving Swanson, or even the actual countryside, and each keeping an apple tree the answer to this problem. No it clearly is not.

            It may be counter intuitive to old school back-to-the-country Greenies and old school small town Conservatives, but it has been clearly established that individual autarky (self-sufficiency) is no solution for founding sustainable societies of any scale. Fine for a much much smaller global population so if that’s your plan which billions are you selecting for genocide and how do you intend to carry it out?

            What did David Owen find was the most inefficient spatial order and the least sustainable? Suburbia. And other than just how poor the land use is under this system the biggest contributor to both its inefficiency AND un sustainability is its autodependency. The answer to improving the sustainability of our society is in large part about extending the efficiencies of the city proper to its half caste bastard son the suburb. And therefore enabling the countryside to be more itself too; both farm and wilderness.

            Clearly offering mobility without having to use the space and resource eating private car at all times is the urgent first step, and complementary to this is increasing the place quality and diversity of possible exchange to more places. So it is about making Swanson (say) both better connected and better to be in. Currently highly dispersed places that do this better will thrive this century.

            Autodependent monocultures won’t.

  • Phil Hayward

    Geoff Blackmore needs to read a good book like Colin Clark’s “Population Growth and Land Use”, that explains the long evolutionary process out of near universal subsistence, to specialisation and exchange creating vastly better living conditions for all.

    The percentage of incomes needing to be spent on food and clothing have steadily dropped as countries develop. This is also true for housing, until urban planners interfere with the beneficial process.

    “Consumer Surplus” is the difference between what we would have paid for something if we absolutely HAD to have it, and what we actually get it for because of competition and increasing technology. The “transport cost” embodied in most items has only steadily fallen for centuries.

    The “Externalities” are NOT a 1 for 1 counterbalance of this beneficial process; they are tiny fractions only. The net benefit to humanity has been orders of magnitude. Each paradigm shift actually eliminated “externalities” that were WORSE than the later ones – take for example the externalities of having to burn wood or dung to cook anything or warm yourself – including the need to do this in a confined space to exclude the weather.

    I also recommend the book “The Rational Optimist” by Matt Ridley.

  • donna

    Slightly off topic (OK, a lot off topic). Is that an SPCA puppy? We have one that looks exactly like her.

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