How National Currencies Stifle Cities

The decentralism of author Jane Jacobs (1916-2006) rests on her belief in the regenerative power of cities themselves and their regional economies. Jacobs, one of the 20th Century’s most important regional thinkers, writes not about “economics,” but about “economic life.” She observes economies in motion, not in stasis, and argues that city regions are the heart of that economic life – pulsing, changing, and engaging in “exuberant episodes of import-replacing.”

Jacobs abhorred the idea of “city planning.” She imagined cities as living entities, ever transforming themselves as a result of the intricate “sidewalk ballet” of interactions among residents, office workers, shop keepers and manufacturers.  She criticized the “planning” community for treating cities as stagnant, locked at a point in time, ready for them to manipulate the individual pieces as from a distant chess board.

She worried that this regenerative capacity of cities would be constrained artificially by policies that impeded the natural evolution of economic life. She saw national currencies as such an impediment.  She argued that regional currencies could provide feedback about regional economies and be elegant tools for making needed adjustments.

In Chapter 11 of her Cities and the Wealth of Nations (1984), Jacobs brilliantly maintains that the best strategy for economic development is to generate import-replacement industries. She would have us examine what is now imported into a region and develop the conditions to instead produce those products from local resources with local labor. Unlike the branch of a multinational corporation that might open and then suddenly close, driven by moody fluctuations in the global economy, a locally owned and managed business is more likely to establish a complex of economic and social interactions that build strong entwining regional roots, keeping the business in place and accountable to people, land, and community.

Jacobs worries that the policies of nation-states hold back the individualized development and diversification of cities, leading to stagnation and deterioration. She seeks examples of how cities can counter this generalized tendency to decay under the monoculture of a national economy. She finds hope in the cultivation of differentiated form and style. Which is to say, she finds it in esthetics.

The March 1984 edition of The Atlantic published the full text of “How National Currencies Stifle Regions.” You can read it here or subscribe to The Atlantic and access more from Jane Jacobs.