Farms or Cities: A Chicken and Egg Problem

I am only a few pages into Jane Jacobs’ book The Economy of Cities and she posits something I have yet to hear in any of my time learning economics or philosophy: cities are not made possible by the agricultural economy but agricultural economies are made possible by the economies of cities. I think most of the profession, and many farmers, would argue against that thought. To them, cities must arise out of the foundations of agrarian economies. For the first cities, that is certainly true. What about later cities?

If it wasn’t for cities, there could be no expansion of farming technologies. There could be no global exchange of produce. Without cities, farms would have fewer people to which they could sell their goods.  I am not against farming; in fact, I think transitioning to many more, smaller farms instead of the mega-factory farms would be a net good to our society. However, this does not detract from the case presented by Jacobs; farms need cities to advance their trade and keep it viable.

But let’s face it, cities are unable to produce enough food to keep their own fed. They rely on massive harvests from farms the world over. Vertical farming has recently become a fad, but upon closer inspection, vertical farms can only produce leafy greens and vegetables with low-caloric value. A city cannot be sustained on vertical farms, nor can a farm be maintained over multiple generations without plenty of customers.

I don’t think Jacobs is entirely correct in her assumption. Cities need farms and farms need cities. There is a feedback loop here. Farms feed innovation and human interaction in cites; this, in turn, brings innovation back to the farm and allows it to profit from these interactions. The city is then able to have increased interaction due to increased production from the farms.

One issue that arises is that massive fixed costs undertaken by some farmers attempting to compete with larger farms who are able to dilute the costs across their investments. For the average non-factory farmer, this level of capital expense may be unsustainable. What does competition look like in the farming industry? I imagine the margins are tight.

Author: Deric Tilson

I am a classically-trained economist and doctoral student at George Mason. I'm an ecopragmatist and interested in the cross-section where economics, ecology, and ethology meet. I hope to work for non-for-profits specializing in economic development and eventually moving to either the public sector or a think tank. My research interests include the political economy of war, resource economics, the applications of complexity theory, the mitigation of risk by impoverished individuals, and global water scarcity. View all posts by Deric Tilson