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Paul Romer Interview About Charter Cities on Zurich Minds

April 22, 2011

Video here:

Rolf: Twenty years out, what’s your dream?
Paul: I hope for a world where every family has a choice about living in one of several different cities, all of which are competing to attract new residents. That’s something that we take for granted. You [Rolf] could go to any city in Europe. I could go to any city in the United States…Many of those cities want to grow, they want more activity, they’d be eager to have us as residents. That kind of competition leads to new cities…that do something different, but it also disciplines cities—that if they don’t do their job well, the residents can go someplace else where things are done better.

Hat tip Brandon Fuller

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3 Comments
  1. Prakash permalink
    April 23, 2011 11:07 am

    A very interesting interview.

    It is worthy to note how Romer is considering non-libertarian aspects like a national service to build a common experience and culture.

    But the question I’ve asked in a previous note as well is not answered here. How much of a market is there for the 10th free city. What can the 10th free city do to attract immigrants when the market for another free trading city is minimal?

    • Mike Gibson permalink*
      April 23, 2011 8:57 pm

      Good question Prakash.

      Historically, this hasn’t been too much of a problem. If you think of the European diaspora to North America during the 19th and early 20th century, there were many cities and many immigrants. Boston, New York, Philadelphia, Pittsburg, Chicago, all thrived.

      That’s not to say that there could have been more cities in America during that time. This was by and large a bottom-up emergent process. The only planned city I can think of is Washington DC.

      Still it’s clear that over time a number of cities can attract a number of people for different reasons.

      You might say that conditions in Europe and the rest of the world were so awful back then that America was much more attractive by comparison. Needless to belabor, life is much better in the West today. Still, according to Gallup, there are 700 million people in the developing world who have expressed a willingness to emigrate. So the numbers are there.

      It is true though that the first charter city will have a first mover advantage. But if we take a long view, there’s no reason to think we’ll see more cities over time. Some may fade, as Detroit and Cleveland and Buffalo have, but overall we’ll have a larger total with greater levels of prosperity and density.

    • happyjuggler0 permalink
      April 24, 2011 9:29 pm

      “How much of a market is there for the 10th free city”

      Unlimited I say. The reason question is how much supply will there be for charter cities.

      How many screwed up countries are there around the world that would love to have a local Hong Kong to learn from?

      Note that Hong Kong is mostly populated by Chinese people from the province right across the border in China. I suspect that there will be no shortage of poor people from the host country who would be willing to migrate a few miles away to work at menial tasks (both manufacturing and service) in a new Hong Kong. If such a country were set up in a low to no tax legal environment, with good rule of law and investor protection, without governmental price floors on the cost of labor (i.e. minimum wage, artificial forced unionism laws etc.), with an airport and a seaport, with reliable electricity, there would be no shortage of manufacturers willing to set up shop there. Assuming of course there is a low skill labor supply willing to work without governmental minimum wage, and I see no reason why that wouldn’t happen.

      As for skilled labor, I say build it and they will come, from both rich and poor countries. Markets clear.

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