Surviving cities. Living and thriving in the age of isolation.
The Rafael del Pino Foundation and the Spanish Regional Science Association organised, on 9 December 2021, the conference live on the Internet via www.frdelpino.es entitled "Surviving Cities. Living and Thriving in the Age of Isolation", which was delivered by Edward I. Glaeser.
Edward Glaeser has been Professor of Economics at Harvard since 1992. There he directs the Taubman Center for State and Local Government and the Rappaport Institute for Great Boston. He is also a fellow at the Manhattan Institute and a contributor to City Journal. Glaeser teaches microeconomics and urban economics and has published numerous articles on the role of cities in today's world.
On 9 December 2021, the Rafael del Pino Foundation organised the master conference "Surviving Cities. Living and thriving in the age of isolation", given by Edward I. Glaeser, Professor of Economics at Harvard where he directs the Taubman Center for State and Local Government and the Rappaport Institute for Great Boston.
Survival in the city has to do with two threats. One is the threat to health and the other, which has been felt for a longer time, is the threat of connecting via Zoom, via the internet, and how this will destabilise the demand for office space in cities.
The densest regions in the European Union have a per capita income that is double that of the least dense regions. This is the agglomeration effect. We are more productive when we find ourselves participating in a maelstrom of economic activity. There is also a positive relationship between population growth and population density which tells us that, at the beginning of the 21st century, instead of moving away, we are moving closer, at least before Covid-19. We see the demand for square metres in cities and we see that cities are places where people work and where they enjoy themselves. What drives up the price per square metre in London is not only the place of work, but also that it is a place of consumption. In other words, London is a fun place to live, like Madrid or Barcelona. We also see that prices are getting higher and higher, so we can't afford it.
In the 19th century we had robust economies, markets that were recovering compared to the bottleneck of some fifteen years ago. And suddenly we are back to what has always accompanied city life, the plague, which has been with us for thousands of years. It is the first face of density. The first documented plague is that of Athens, which arrived in 430 B.C. This city, which is in the Western Mediterranean, had everything we could ask of a city. Networks of creativity in the arts, in architecture, ceramics, history. History itself was born in Athens thanks to authors like Herodotus and Thucydides. Comedy, drama, democracy, a fantastic success both in military and economic terms. All this success generates the envy of its rival, Sparta. In 430 BC, Athens did not give in to Sparta's threats and the result was the Peloponnesian War. The Athenians took cover behind the walls to protect themselves from their enemies while sending the Athenian fleet into the Peloponnese, a very sensible strategy in military terms. But the walls are high and cannot be breached. At some point the plague comes through Piraeus and a hundred times as many people die as we have had in Covid-19. This happens because the citizens live thinking about the present, they don't think that they are going to live tomorrow, there is a total destabilisation for twenty-five years and Athens loses the war and its glory disappears. It is no longer New York, it has become Boston or Cambridge. It has lost its splendour because there has been a war and this destabilises it even more.
The impact is affected by the strength of civil society at the time of the plague. In the plague of Antoninus, the Roman Empire overcomes this devastating event. Again, a great many people died, but it did not destabilise the empire. In the following century came the plague of Cyprian. Politics had already been destabilised and it had more effect. It is one of the most important events leading to the decomposition of the Western Roman Empire.
The most severe of these plagues was the Justinian plague, which reached Constantinople in 541. After the first generation of Ostrogothic conquerors, it disappeared and the heirs arrived. The Byzantine Empire is still strong and prepares to send its warlord, Belisarius, to reconquer Italy and North Africa and impose the Pax Romana. Belisarius is indeed a great success. But just when it seems that he is about to bring the pax romana back to the Mediterranean, Justinian's plague appears for the first time on the shores of Europe. Procopius describes a situation which, once again, refers to mass slaughter. Belisarius can no longer enforce peace, the Byzantines in Italy become another belligerent group and Europe collapses in wave after wave of plague, centuries of chaos. This is the worst of all possible scenarios.
Over the last six hundred and fifty years or so we have achieved a certain stability in relation to the plague. The 19th century was a first era of globalisation. Ships came, crossed the Atlantic and the Pacific and with them travelled death. At the beginning of the 19th century the big disease was yellow fever. This is a mosquito-borne disease from Africa. In the 18th century it reached the eastern part of the United States and its mortality was 2.5%, ten times more or less than the mortality of Covid-19. In 1817, cholera appeared in the Ganges delta, moved with the Russian and British armies, and in 1837 appeared in New York City. The mortality rate is 5% of the population, which is twenty times the mortality of Covid-19. Despite these horrifying episodes, New York continues to grow.
Most modern cities were places of constant presence of death. These were the centuries of contagious diseases. Why did they grow? Because people were very poor, and given the choice between starving to death in Ireland or taking a boat to New York, many people chose to take their chances with cholera and go to New York. But above all, cities in the West invested in health. In 1842, the Crotton Aqueduct was opened, a very important structure. The investment was tremendous. American cities and towns spent so much on water infrastructure in 1900 that they could hardly spend on anything else except postal services and the military. It was an incredible undertaking. This moment is a historical hinge where governments are no longer deadly agents, which is what they were before 1800. We all like that Frederick the Great corresponded with Voltaire, but what he was doing was stealing Silesia.
From this period onwards, governments start to give life, not take it away. It's not just the infrastructure. It's also the incentives. So we see that, even though the Crotton Aqueduct opens in 1842, in the next twenty-five years New York still suffers from cholera epidemics. What happened was that poor New Yorkers continued to use wells, they continued to use pit latrines that were not connected to the system. It's the same thing that we see right now in developing countries, where poor people can't afford the cost of using clean water and so they keep getting sick. This is a huge civic enterprise that needs to join forces with doctors. So they start taxing the owners of the New York stockyards. That's when we started to see things improve in New York. But, for a hundred years, cities haven't had to deal with plagues, except for the flu of 1918.
In 2020, diseases are appearing in cities. In the United States we see the same as in Spain. Cities are ports of entry for diseases, as Piraeus was for Athens. New York welcomes tourists who have travelled to Italy and bring back Covid-19. There is Boston, New Orleans, Atlanta, Detroit. Cities are the places where the plague spreads. Cities are places where there is a propensity for it to spread because we are so close to each other. This proximity makes it easier to spread in cities, especially where there are favela-type settlements, such as in Brazil, or the slums of India. When Covid-19 was measured in Indian slum dwellers, it was found that more than half of the slum dwellers were infected with Covid-19, but, surprisingly, there was not a very high mortality rate. Why? India is immersed in globalisation, but it doesn't have the public investment in health that England has. But in the slums there are slim young people without the comforts that represent death in the cities of the United States. Like airborne pandemics, this disease travels easily. So Covid-19 quickly appeared in the Dakotas. So density is no guarantee of illness, and low density is no guarantee of safety.
It is also interesting what happens within cities. When you look at the five boroughs of New York you see that those with higher population density have fewer cases. The reason is that mobility matters much more than place of residence. It doesn't matter if you live in a skyscraper. The important thing is whether you get out of it. In this pandemic we have been able to measure travel well and we see that in the heart of the city people stop moving around. In the outer areas, on the other hand, people do travel more. There is a clear relationship between the number of trips and the number of cases. People who live in the higher density areas don't commute because it has to do with the privilege of working in sectors that allow remote working, as opposed to those who work in industries that require physical presence. In finance, consulting, investment, it's all Zooms. On the outskirts are the people who work in grocery shops, in hospitals, in pharmacies. Those people had to go to work and therefore faced more illness. In other cities, the results are very similar, so mobility is very important.
Before the pandemic, more educated people moved around more. That's why the first cases were high-profile people, like Tom Hanks or the president of Harvard, who is at one meeting after another. This was a warning. When a state of emergency is declared, mobility plummets. With the closure of businesses, it is further reduced. Eventually the closures come, but they don't affect mobility. People had stopped moving because they were terrified, not because of government instructions. When businesses start to reopen, people go out on the streets, but they stop again because the contagion figures shoot up. Fear outweighs the rules.
There were notable weaknesses in the cities before Covid-19. These fissures appeared in the last twenty years. After the attacks on the Twin Towers in 2001, or the Madrid bombings in 2004, it was thought that cities could survive because they united. Everyone recognised that whatever happened affected them all. Twenty years have passed since then and cities are more unequal and there are inequalities between cities. This is a typical feature of them. Plato already said that there are two cities, one of the rich and the other of the poor, and both are at odds with each other. But this inequality is tolerable when cities provide opportunities for the poor to get rich. Over the last twenty years it has become clear that there is more productivity, but no more social mobility for children. Our most successful cities are expensive, partly because we have rules that protect insiders at the expense of outsiders. There is more and more permanent pain, terrible unemployment because people can't move and because there are so many problems in the US with policing and incarceration. The chances of ending up in prison depending on where you go to school are very high. In more densely populated areas, people deal with more types of people; in less densely populated areas they do not. A poor child grows up in a neighbourhood, goes to play with other poor children, goes to school with other poor children. An adult who wakes up in a poor neighbourhood in Boston goes to work in higher density areas, spending less time at home. As density goes up, adults spend more time at work and children spend less time at school, so as density goes up, the experience is very different for children and adults.
Problem number two is affordability. The high cost reflects demand, but also the constraints that cities impose on housing supply, to the extent that it costs three times as much to buy a house as it does to build it. What this shows is that cities that are not expensive are those that build a lot and vice versa. If you limit land use, it's going to be very difficult to build in London, in New York, so you get an elitist city where the poor can't fit. People are then forced to live in places with permanent unemployment. That's not the dynamic America of the post-war years; that's a frozen America because more than a third of unemployed males live with their parents. Their parents are not going to buy them a flat in New York or San Francisco. They are going to stay at home in the middle of the countryside and remain unemployed.
Another thing that is very American was the problems with crime in the 1980s. The solution was tight policing and thousands of young people were imprisoned. Some cities had miraculous results thanks to this tight control, but it was so absurd, so excessive, that it had a negative impact.
This pandemic is very dangerous because it has an economic impact for two reasons. In the short term, it threatens our urban model. If we think about pandemics throughout history and we go back to 1350, when the plague appeared and wiped out a third of the population of Europe, that was not an economic disaster for the survivors because in an agricultural economy it is land per capita that counts. So when a third of the population is wiped out, there is a lot more land to go around. Therefore, incomes skyrocketed and the survivors were much richer. There is a hypothesis that the survivors craved those luxury goods that led to the renaissance.
The pandemic of 1918-19 resulted in a tremendous and immediate economic disruption. Factories and mines closed, but the industrial economy continued, it endured, because there was still a need for goods. During the 1918 flu, people continued to buy cars and refrigerators, but there was subcontracting and the less educated workers moved from the industrial to the service sector. Knowing how to make a cappuccino with a smile has been a safe haven, despite the advent of robots and so on. But these jobs can disappear overnight because they become a potential hazard.
Then there is the rise of remote working. In the US there were many Americans working remotely but half of them, more or less, have returned to the office. This, however, is not the case in the high-end office world. There has been a slump in the use of these offices and 80% of them in New York or San Francisco are still empty. It is not yet clear to us whether technology will cause these alternatives to disappear.
Alvin Toffler was very important. He wrote a book called 'The Third Wave', in which he explained that offices would eventually disappear just as other changes had killed urban industry. He wrote this at a time when cars, radio, television, had encouraged people to leave very dense areas. He was a New Yorker. When he lived there, New York had the most important cluster of the knitting industry, which disappeared in the 1960s and 1970s. Thousands of jobs disappeared overnight, so Toffler concludes that, if this has happened to the textile industry, why shouldn't it happen to knowledge workers? He therefore concluded that the skyscrapers would stand empty, but he was wrong. He missed the point that it is very profitable to be smart and we get smarter because we are with other smart people.
The New York City Mayor's offices are based in the park. Parks are fascinating because there is a lot of density, there are no walls and the workers are very rich. Why do these bags exist, because Jamie Taming wanted them to return to the park in the autumn of 2020? Because in this industry, knowing a little bit more than everyone else is going to make you very rich. It's a very intensive industry. So the leads you get from being in the same room are very important because information, knowledge, is the most important thing.
The most famous cluster of the 21st century is exactly the one in the sector that should have worked better remotely: Silicon Valley. But Google, the company that could have done it, didn't send its people home. Google relies on the idea of the schoolyard at work because, Google thinks, it makes for more creativity. This is what was there before Covid-19, an extraordinary relationship between productivity and density. After the 1970s, not all cities manage to recover. It is the educated cities that do. That's when we realise that cities are still important because density, proximity, allows us to share skills. We get hold of information and we see the relationship between this knowledge.
What have we learned? Emmanuel and Harrington did a study sending Chinese call centre workers home and found that the call centre employee is no less productive at home. He works just as well. But the probability of promotion plummets by half. What does promotion mean for a call centre worker? How is he going to learn if he's on his own? How is his boss going to see him resolving the issue? The channel has been closed, that is not being achieved. The mysteries of knowledge are missing, nobody knows anything when working remotely.
Another study, by Morales-Arilla and Daboin, shows that jobs that cannot be done remotely plummet during the pandemic and then pick up again, as do vacancies for these positions. But in the jobs that can be done remotely, employment is maintained, but hiring plummets and remains very low because it is very difficult for companies to hire workers who are not going to go to the office. They are concerned because physical contact is important. Established relationships are maintained by Zoom, but it is much more difficult to establish a relationship. Last year, the students had a very hard time. Remote schooling has been a disaster, it's counterproductive. It has been very difficult to teach children, young people, and it is very difficult for teachers to work remotely. Microsoft researchers show that, after the pandemic, there has been a decline in new relationships and synchronous communication. There is a lagged communication that is not as rich as real-time communication.
If we think about the future remotely we can see that it is going to be more unequal than the recent past. Let's see what happens to employment in May 2020. People with advanced university studies are working remotely. 68.91 PTE3T do so. So do 59.6% of those with a bachelor's degree. But only 5% of those with less than a high school education are working remotely. This information shows us that this is a very different world, a world of great inequalities. The experience is very different in different parts of New York. Remote work is for the elites.
I am not saying that remote working is not real. The reaction will probably be to make it hybrid. But there will also be companies that move. I don't think a Silicon Valley company is going to say never meet in person. No. The interpersonal relationship is essential for these companies, but maybe they decide they don't want to pay Silicon Valley rents anymore and they move to Texas. They don't want to pay state taxes. Or they go to Hawaii because they like the south. Anyway, it's all more mobile.
In the future, the impact will depend on the medical response. If we have years ahead of us of more Covid-19 victims, it will be more difficult because of the density. Even worse would be another pandemic that is more deadly. In the past we have been very lax about the risk of pandemics. There were warnings and rich countries did very little. The WHO is not enough and we need a much stronger alliance to tackle pandemics. But even if we are more pandemic-proof societies, the impact is tremendous. There is not going to be a massive change, but there will be changes in the short term. Commercial real estate is very vulnerable, more so than residential. Young people are going to want to move back to the city, even if they don't want to move back to the office. We are going to see more remote working. Also, we need to help the disadvantaged. We need smarter administration, we need to constantly research, learn. We're going to see real estate prices go down, but we're not going to see vacant buildings in the long term. There is going to be demand so that people who can work in the environment can work.
Cities have been able to recover. They are essential to human beings because our talent, as a species, is that we can bond with, work with, have fun with other human beings. We achieve this in cities. Teachers know that the hardest thing is not what we know, but communicating well, and this cannot be done at a distance. Cities can survive and the age of miracles is not over.
The Rafael del Pino Foundation is not responsible for the comments, opinions or statements made by the people who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their sole responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio González, are the result of the debates held at the meeting held for this purpose at the Foundation and are the responsibility of the authors.
The Rafael del Pino Foundation is not responsible for any comments, opinions or statements made by third parties. In this respect, the FRP is not obliged to monitor the views expressed by such third parties who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their own responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio J. González, are the result of the discussions that took place during the conference organised for this purpose at the Foundation and are the sole responsibility of its authors.