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Jane Jacobs: Unraveling the True Nature of Economics

August 17, 2009 By

This interview with Jane Jacobs was first published by Government Technology in November 2003 and is reprinted here in honor of Jacobs' effects on American cities and her recent recognition in a new book: "Wrestling with Moses: How Jane Jacobs Took On New York's Master Builder and Transformed the American City" by Anthony Flint.

Jane Jacobs has been called one of the most influential thinkers of the 20th century. With the publication of her book, The Death and Life of Great American Cities, she changed the way people think about cities, redefining urban studies and economic policy. Her subsequent books change how people thought of life in general. She has just published a new book, The Nature of Economies, in which she proposes a radical notion that is breathtaking in its common sense: Economies are governed by the same rules as nature itself. She summed it up saying, "economic life is ruled by processes and principles we didn't invent and can't transcend ... and the more we learn of these processes and the better we respect them, the better our economies will get along."

Q: A prevalent view today is that the old Industrial Age economy is now being replaced by an Information Age economy and that this new economy will somehow work differently. Your book starts from a very different view: That economic life is always ruled by basic processes and principles that we have not understood properly.

Jane Jacobs: Well, as for there being a new and an old economy, defined in the way you just did, I think that this is the change that people are groping for: A lot of the production work, design work, economic work that is being done now has a much higher proportion of what we call human capital in it and a much lower proportion of natural resources and other materials in it than in the past. And that is an important change that is very promising for sustainable economies because, after all, human capital - the experience, the skills, the inspiration, the imagination that goes into these things - is not a resource that is subject to the laws of diminishing returns. The more human capital is used, the more it grows.

The smaller the amount of material in things that are used, the metals and so on, and/or the cheapness and ubiquity of the materials that are used -- I'm thinking of silicon for instance -- the better. Better for the planet and better for us. So there is a change that has been occurring. It hasn't occurred as abruptly as people think. It has been happening for quite some time. It is comparable and is of the same sort of order of change as the change from craftwork to mass production. There was a time when people made one pot at a time or one pottery lamp at a time. And of course that changed even in very ancient times to mass production of pots. This kind of thing keeps happening in economic life. But that doesn't mean that the rules that govern the economy are actually changing. What we've just been talking about are all instances of development. The actual things that development produces change, and even the methods by which people make the things change. But the process of development, the process that yields these methods -- that doesn't change. That is what we can't transcend. And that is what we have to pay attention to.

I don't think I've been complete in any way in describing everything to do with development. That is a huge subject. But what I have tried to do is mention the underlying or overriding nature of the process. And the word nature is deliberately used both

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