I think you are underselling the networking advantages of cities.
Most people are eventually part of a couple or family. Most couples make compromises in terms of one or the other taking not-the-best position for their career because they want to live in the same area as their spouse. In a big city (my experience is London) their are enough jobs in enough industries close together that a typical couple can both usually pursue their ideal careers (or close) without being in different places.
Add into this that your job might change. If you live in Boeing town: population—high, employers—one, then you work at Boeing, and if you stop working at Boeing you move house and your children change schools etc. If you live in a big city and you are a career-ist you can do the whole “monkey bars” thing where you keep jumping between companies as you think you can do better, all without moving home every 2-3 years.
To be clear, when I talk about “high-wage areas” with expensive housing, I am not talking about US cities in general. I’m talking specifically about particularly expensive places like NYC and London.
I don’t think London is expensive or has high wages because it’s productive. I think that’s because rich people brought money to London from elsewhere because:
their property rights are secure there (relative to Russia/etc)
there were lots of high-end stores
they could get luxury services like butlers and high-touch financial management
there were other rich people there to network with
Now that you can get some services and goods online, and there’s more international competition for those rich people, you see whole sections of London where rich people have houses that just seem dead to ordinary people on the street, with luxury stores that are closed most of the time, houses that are occupied 1⁄3 the year and have private chefs when they’re occupied, and so on.
You make a convincing case that their are forces that encourage very rich people to congregate relatively close together, I don’t think its the main force behind what is going on but I can see that it exist. Other forces also exist, like those I outlined above. Mine is not a productivity argument, and you could if you wanted even lump my suggestion under “there were other rich people there to network with” where “network” here means “marry” and “rich people” here means “people with a career, not a job.”
I think you are underselling the networking advantages of cities.
Most people are eventually part of a couple or family. Most couples make compromises in terms of one or the other taking not-the-best position for their career because they want to live in the same area as their spouse. In a big city (my experience is London) their are enough jobs in enough industries close together that a typical couple can both usually pursue their ideal careers (or close) without being in different places.
Add into this that your job might change. If you live in Boeing town: population—high, employers—one, then you work at Boeing, and if you stop working at Boeing you move house and your children change schools etc. If you live in a big city and you are a career-ist you can do the whole “monkey bars” thing where you keep jumping between companies as you think you can do better, all without moving home every 2-3 years.
To be clear, when I talk about “high-wage areas” with expensive housing, I am not talking about US cities in general. I’m talking specifically about particularly expensive places like NYC and London.
I don’t think London is expensive or has high wages because it’s productive. I think that’s because rich people brought money to London from elsewhere because:
their property rights are secure there (relative to Russia/etc)
there were lots of high-end stores
they could get luxury services like butlers and high-touch financial management
there were other rich people there to network with
Now that you can get some services and goods online, and there’s more international competition for those rich people, you see whole sections of London where rich people have houses that just seem dead to ordinary people on the street, with luxury stores that are closed most of the time, houses that are occupied 1⁄3 the year and have private chefs when they’re occupied, and so on.
You make a convincing case that their are forces that encourage very rich people to congregate relatively close together, I don’t think its the main force behind what is going on but I can see that it exist. Other forces also exist, like those I outlined above. Mine is not a productivity argument, and you could if you wanted even lump my suggestion under “there were other rich people there to network with” where “network” here means “marry” and “rich people” here means “people with a career, not a job.”