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Document Page 58 Thünen model: they offered a deeply satisfying picture of how market forces trade off access for land, of how space becomes structured into zones characterized by different activities, of the simultaneity, the general equilibrium, that characterizes economics when there is competition for scarce resources. Unfortunately, the new models also shared the basic vice of von Thünen: the (literally) central fact, the existence of a central business district around which the city was organized, was left uncomfortably unexplained. One could, of course, appeal to loosely specified agglomeration economies to complete the model, but that was not a very satisfying closure. Worse yet, it became increasingly inadequate because the real world decided to play a nasty trick on the modelers, by abolishing the monocentric city as a reasonable approximation. Anyone who has driven around an American metropolitan area knows what I am talking about. The quintessential city of America in 1950 was Chicago, a city built on railroads and exemplifying the centralization that rail transport fosters. Chicago in 1950 was clearly centered on the Loop, the famous, densely packed office district that was the original home of the skyscraper. Even now it is, urban geographers tell me, the most monocentric city remaining in the United States. But Chicago is no longer the number-two city. Its place has been taken by Los Angeles, the city Gertrude Stein described as having "no there there." LA is not, whatever Ms. Stein may have thought, an undifferentiated mass: neighborhoods are sharply distinct in terms of character and land use. But there is no single center: a dozen or more office districts compete with each other. Those of us from the "real" cities of the East and Midwest used to scoff at Los Angeles. Nowadays, however, the file:///D|/Export2/www.netlibrary.com/nlreader/nlreader.dll@bookid=409&filename=page_58.html [4/18/2007 10:30:23 AM]
Document Page 59 fact is that most of us for all practical purposes live and work in LA-like environments. Most of my friends in the Boston area work for the high-technology companies along Route 128; they commute outward from their inner-suburb homes to the "edge cities" that have grown up around Boston, as they have around every old U.S. metropolis. The point is, of course, that the von Thünen ring scheme sheds at best a very dim light on the spatial structure of polycentric cities. What we need to understand, first and foremost, is where the competing centers are located precisely the question that von Thünen-type models avoid answering. And the reason they do not answer it is, in turn, because it is a question that is inevitably intimately bound up with increasing returns. 3 Into the Mainstream Up to this point I have been telling tales of frustration; of sensible ideas that could not be effectively formalized, or of formalizable ideas that seem to have missed the point. Now I want to explain why I believe that this will all have a happy ending. The essential reason for optimism is that economists now have at their disposal some new tools. It used to be that as soon as you tried to deal with any question involving economies of scale at the level of the individual firm, you were either restricted to studying pure monopoly or to a handful of awkward duopoly models. Above all, there was no way that you could speak about general equilibrium. This situation has not completely changed: there are still no general models of economies characterized by increasing returns and imperfect competition, or for that matter even any models that are plausible in detail. If you file:///D|/Export2/www.netlibrary.com/nlreader/nlreader.dll@bookid=409&filename=page_59.html [4/18/2007 10:30:23 AM]
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