How to Save Our Small Cities

A recent article in The New York Times on how our expanding “megacities” seem to have less and less need for small cities prompted a thoughtful analysis by the Times’ economics columnist Paul Krugman. 

Krugman pointed out that many of our small cities started out as “central places” that served agricultural areas and resource-based industries, like forestry or mining, then evolved over time into centers for specialized manufacturing or some other industrial enterprise.  As Krugman observes, it was a matter of luck and historical contingency (along with some geographical advantages like access to a railroad or water borne transportation) that determined which small cities were able to expand and thrive.  But the decline of small farms and the outsourcing of manufacturing (among other factors) over the past century have taken a toll.  Some small cities continue to be viable as college towns or immigrant destinations.  Others have become attractive for tourists and vacationers.  But many more are struggling.  Are the rest of them worth saving?  Krugman notes that it will be an uphill battle.  He offers “regional development” as one possibility.

I have a somewhat different take on the matter.  All cities, large and small, provide a vitally important infrastructure that is essential for meeting basic human needs – from fresh water and sewers to schools, hospitals, and local transportation services.  One might even make an argument that – all other things being equal – small cities can do the job better.  But, at the same time, cities have always been dependent upon “imports” of various kinds to sustain themselves – food, energy, fresh water resources, raw materials, manufactured goods of various kinds, and transportation.  In order to be able to pay for these services, cities must produce “exports” – agricultural products, manufactured goods, or services of various kinds – that will bring in sufficient revenues.  Otherwise, a city will in effect become bankrupt, or a parasite, or a charity case.  This is the heart of the matter for many struggling small cities these days – not to mention some larger ones.

So, the broad solution to their problem is to find ways to catalyze and develop the “exports” that are necessary for long-term sustainability.  For some cities, it might be a tourist or “vacation” experience.  For others it might be an innovative business venture that expands and sells its products into a national or global market.  A high-speed rail line might (eventually) make it possible to expand the existing belt of bedroom communities that serve large cities.   Specialized new agricultural enterprises of various kinds in the surrounding region (like wineries, or a global flower business) might also help.  Small cities with excellent schools, hospitals and other amenities might become magnets for the growing number of Internet-based businesses and tele-commuters.  In some cases, the solution might be all of the above.

The alternative, as we have seen in the rust-belt areas of this country, is what the economists euphemistically call high “social costs” – meaning severe harm to the lives and health of many our people and their children (our collective future).  In short, it’s too soon to begin writing the eulogy.  We must put up a fight to save our small cities.