Tuesday, March 29, 2016

A New Age Theory of Urban Development amounts to Economic Snake Oil

The Curse of the Creative Class 

“A New Age theory of urban development amounts to economic snake oil”:
Providence, R.I., is so worried that it doesn’t appeal to hip, young technology workers that local economic-development officials are urging a campaign to make the city the nation’s capital of independent rock music. In Pittsburgh, another place that fears it lacks appeal among talented young people, officials want to build bike paths and outdoor hiking trails to make the city a magnet for creative workers. Meanwhile, a Memphis economic-development group is pressing that city to hold “celebrations of diversity” to attract more gays and minorities, in order–in their view–to bolster the local economy.
If you think these efforts represent some fringe of economic development, think again. All of these cities have been inspired by the theories of Richard Florida, a Carnegie Mellon professor whose notion that cities must become trendy, happening places in order to compete in the 21st-century economy is sweeping urban America. In his popular book “The Rise of the Creative Class,” …Mr. Florida argues that cities that attract gays, bohemians and ethnic minorities are the new economic powerhouses because they are also the places where creative workers–the kind who start and staff innovative, fast-growing companies–want to live. To lure this work force…cities must dispense with stuffy old theories of economic development–like the notion that low taxes are what draw in companies and workers–and instead must spend heavily on cultural amenities and pursue progressive social legislation.
A generation of leftish policy makers and urban planners are rushing to implement Mr. Florida’s vision, while an admiring host of uncritical journalists tout it. But there is just one problem: The basic economics behind his ideas don’t work. Far from being economic powerhouses, several of the cities the professor identifies as creative-age winners have chronically underperformed the American economy. MORE

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