August 26, 2016

To Your Health

Lower East Side NYC, 1908

Cities are good for your health.  This hasn’t always been the case.  Dickens’ London and Jacob Riis’ New York featured open sewers, high infant mortality, little air circulation in tenements, rancid food, and other ills.  About the same time that immigrants were pouring into New York in the mid 1800s, immigrants to rural areas could build a home out of stone or wood, hand dig a well and thrive in relative cleanliness and comfort.  For the New York experience, visit The Lower East Side Tenement Museum at 97 Orchard Street.  For the rural one, look out the window as you drive anywhere in Eastern North America.

The transition to healthy cities was not easy, but did provide huge benefits eventually.  In about 1800, North America was almost entirely rural.  By 1940 it was more than 50% urban.  After cities hooked up sewers, potable water, and got rid of horses, the benefits flowed.  Robert J. Gordon documents this in his book The Rise and Fall of American Growth.   He refers to the “economies of density”.  Density means lots of customers, and economies of scale.  Thin cut lumber for home construction, standardized tools, bulk manufacturing, and hundreds of other innovations made prices drop, quality improve and innovation occur.  

You can still see odd-shaped square nails in barns in rural eastern Canada.  Some were hand-made and others were horse-shoe nails—what was available when the barn went up.  A rural tradition was burning down derelict buildings to obtain the nails.  But, between 1830 and 1930 density and consumerism caused nails to drop in price by a factor of ten—problem solved.  

Gordon uses electricity as an example of an increase in quality and safety, in addition to price.  Burning town gas (a by-product of turning coal in to coke), whale oil, or kerosene produced less than a tenth the light of a 100-watt bulb.  In the late 1800s, between five and six thousand people died each year in the US because of fire caused by lamp accidents.                  

Today, some bemoan the suburban big box stores such as Walmart.  Others praise the lower prices, competition, and jobs.  Gordon points out that we’ve had this debate a couple of times before.  Country stores used to give credit until the crop came in, but didn’t have standardized prices or goods.  In the mid to late 1800s, starting with Macy’s (and Eaton’s in Canada), and then Montgomery Ward, Sears, JC Penny, and others, good things started happening.  Prices became firm and competitive, and quality was better, and stable.  Catalogues allowed everybody to buy everything.  In food, in part thanks to Upton Sinclair’s expose The Jungle, and in part thanks to chain food stores, the milk sold was mainly milk and not watered down or stretched with foreign substances, and meat was mainly meat and not waste.       

Before the economies of density, shoppers would gather up items and buy them at the checkout for a particular section of a store.  Then they’d do the same in another section-adding time, labour, and cost to shopping.  The central checkout was a savings for all.  

Gordon’s book reminds us how well off we have it in cities.  But the down side is that the leap of progress from 1870 to 1970 could happen only once.  We got a dead cat bounce with high tech around the turn of the 21st century, but that’s not likely to happen again.

 

Here’s why.  We might get a little economy out of being able to pay via our smart phones anywhere in the store, but that’s an improvement on the margins, not a great leap.

We’ll have to be content with health, because service and great economic progress seem to have peaked.     

Click Here to Leave a Comment Below

Leave a Reply: