IN 1930, JOHN MAYNARD KEYNES, one of the greatest economists of the twentieth century, wrote an extraordinary article, “Economic Possibilities for Our Grandchildren,” in which he ruminated on what the nature of the economy and the quality of people’s lives would be one hundred years in the future. The year 2030 is not so far away anymore, so we can begin to see some of its outlines. In light of what has already occurred, some of what Keynes predicted appears remarkably prescient, but he also failed to see much of what came to pass as the twentieth century unfolded.
Keynes was born in 1883 in Cambridge, England. He grew up steeped in an environment of academic rigor, moral philosophy, and social activism. His father taught economics at Cambridge University at a time when economics was considered part of a larger system of morality going back to the earliest thinkers and writers, including Greece’s Aristotle, India’s Chanakya, and China’s Qin Shi Huang. Keynes’s mother, Florence, was a social activist. After his graduation from Cambridge in 1904 with a degree in mathematics, Keynes’s path took him through the civil service and academia. By the time he wrote “Economic Possibilities for Our Grandchildren” he had been thinking about the social implications of macroeconomic systems for some time. The article, written at the beginning of the Great Depression, begins:
“We are suffering just now from a bad attack of economic pessimism. It is common to hear people say that the epoch of enormous economic progress which characterized the nineteenth century is over; that the rapid improvement in the standard of life is now going to slow down—at any rate in Great Britain; that a decline in prosperity is more likely than an improvement in the decade which lies ahead of us.”1
Keynes intuited a connection between the degree of optimism or pessimism in a society, which he called “Animal Spirits,” and the society’s performance in improving the well-being of its members. We now know that a society must believe in its collective efficacy to truly prosper, and as citizens we must believe that the system in which we live gives us at least a glimmer of hope that we can improve our lives going forward.
Keynes saw a positive relationship between growth, prosperity, and happiness. He predicted compounding economic growth over the ensuing century, and assumed that once there were enough resources to take care of everyone on earth, wealth would be more equally distributed. He wrote, “All kinds of social customs and economic practices affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting the accumulation of capital, we shall then be free, at last, to discard.” Ultimately Keynes envisioned a world in which people would essentially be free from economic necessity, their material desires satisfied so they could enjoy leisure and the pursuit of culture while working fifteen hours a week. In such a world, income and wealth would be fairly equally distributed, because, with widespread prosperity, individuals would not need to defend their economic advantages.
The world has become vastly more prosperous than it was in the 1930s, but we still have not shifted our social customs and economic practices away from the accumulation of capital, so the distribution of income has not been equalized. In 2015 the richest 1 percent of the world’s population controlled more wealth than the remaining 99 percent. Eighty-five billionaires owned as much wealth as everyone in the lower half of the world’s population. The World Economic Forum ranked income inequality as the number one trend facing the world in 2015,2 and it looks as if the problem is only getting worse.
Prosperity in a Resource-Constrained Future
In Keynes’s day the quality of an Oxford don’s life was considered to be pretty terrific. Yet in the 1930s the world’s most distinguished English-speaking professors lacked material benefits that many lower-middle-class families today consider the norm: central heating, air-conditioning, electric washing machines and dryers, televisions, home computers, smartphones, multiple cars, overnight package delivery, and a wide array of technologies like the Internet, WiFi, CT scanners, and laparoscopic surgery.
Keynes thought that higher Gross Domestic Product, or GDP, which measures the economic output of a city or nation, would inevitably lead to greater happiness and less work. Alas, he was wrong. From 1970 to 2015 the size of the average home in the United States doubled, as did its number of cars, and its number of televisions has tripled, all this while the number of occupants per home halved! However, despite all these outward signs of prosperity, Americans are working longer, harder, and with less job security. Nor are the wealthy exempt from professional stresses and strains: for the first time in history, high-income earners now work more hours per week than working-class people. Soaring production and consumption have not turned out to be the pathway to happiness.
At the beginning of economic history, our global economy was directly linked to the fruits of the earth. Civilization was powered by what we grew, the animals we fed, and a bit of water and wind. Estimates of global GDP show a bump upward during the Greek, Roman, and Byzantine empires, but surprisingly modest growth until 1780. During this early period there were vast differences in wealth between landowners and the serfs who worked their land, with only a small middle class between. Interestingly, from the end of the Roman Empire until 1820, India and China produced more than 50 percent of the global GDP.3
So what happened in 1780? Everything changed, thanks to James Watt’s dramatic improvement of the steam engine in 1777. Until then, the world’s economies were primarily powered by the current energy of what was harvested. Watt’s steam engines were powered by coal, concentrated energy that was grown millions of years ago. Coal was followed by more efficient oil, and the invention of oil-based engines and generators. The expanded EROI of these new forms of energy unleashed the industrial revolution, and along with it, the urbanization of the world.
In the nearly two hundred years between 1780 and 1970 the ratio between gross domestic product, or GDP, and the number of tons of extracted natural resources remained fairly constant: roughly two billion tons of resources were consumed for every trillion dollars of GDP. In 1900, for example, global GDP was about $3 trillion and some 6 trillion tons of primary materials were mined or harvested. By 1970 global GPD had grown to $12 trillion and about 25 trillion tons of materials were being extracted. During these two centuries most of the world’s developed nations grew large, fairly comfortable middle classes.
In 1970 the world went off the gold standard and money became less directly linked to production. All of a sudden it became easier to make money from money than it did from manufacturing goods. Agent-based modeling simulations show that under such circumstances those people with more money at the start of a generation will gain a disproportionately larger share of wealth by the end of that generation, which is exactly what happened. One outcome of the new economic system was increased economic inequality. So while Keynes envisioned economic growth producing a more equal distribution of wealth and well-being, in most societies its actual distribution has become increasingly unequal. He foresaw neither the rise of a middle class in the developing world nor the decline of the developed world’s middle class. And we are now discovering that the distribution of well-being also does not track with the distribution of the world’s wealth.
Well-Being and Wealth
In 2013, UNICEF released a report comparing the well-being of children in twenty-nine of the world’s most advanced nations. The report compiled data on health, safety, education, behavioral factors, living environments, material well-being, and subjective “life satisfaction” surveys from children themselves. The United States landed near the bottom on almost all measures, ranking twenty-sixth out of twenty-nine countries; only Lithuania, Latvia, and Romania performed worse.4 Somehow there is a huge disconnect between this country’s prosperity and the well-being of its families. According to the traditional economic view, growth and productivity as measured by GDP are key markers of the success of a society. The UNICEF well-being report underscores just how incomplete is this conventional view. Cities and countries with rising incomes have been confronted by the paradox of unhappy growth, in which increased GDP per capita has not led to increased well-being.
Our early cities appear to have been fairly egalitarian. Engong Ismael, a Balinese anthropologist, describes this as a horizontal caste system with clearly defined roles—each respected for its contribution to the health of the community. But as urban cultures developed they became more hierarchical. Most of the grand monuments of the past were built by slaves or indentured labor. As a city grew more prosperous, if the gap between the richest and poorest was perceived as too great, the social cohesion of the city suffered. As we read in the cases of the Mayan and Russian empires, when stressful environmental conditions were accompanied by a low collective sense of we-ness, social unrest followed, and even collapse.
People move to cities because they seek opportunity, hoping to improve their lives, not to stay mired in a lifetime of poverty. Poverty is extraordinarily debilitating, and its persistence limits the ability of a city to thrive. One goal of any well-tempered city must be to provide opportunity for all of its residents to reduce their suffering and improve their well-being. Material prosperity doesn’t necessarily lead to happiness, but grinding poverty certainly makes people more likely to be unhappy, unless they believe that there is a pathway to a better life. As we’ve seen, some aspects of poverty also have a contagious negative effect on the life of a city, including toxic stress, PTSD, inadequate or insecure housing, joblessness, and low-quality education that doesn’t give people a chance to successfully compete in the twenty-first century. Increasing a low-income household’s income is an essential first step to improve factors that contribute to well-being, such as housing, health, and education.
Urbanization is deeply linked to economic development. For much of the twentieth century cities were correlated with wealth. Those nations with the highest per capita income were the most urbanized.5 But for a growing number of cities in the developing world, urbanization does not necessarily rise in parallel with economic growth, nor with increased individual wealth. The forces of civil war, tribal and religious violence, rural poverty, and climate change are driving most of the 200,000 people a day, across the globe, who now move to cities. And if the city they reach does not have the economic, technical, political, and social structures needed to create communities of opportunity for these migrants and refugees, that city will grow in numbers, but not in prosperity or well-being.
Following World War II the World Bank focused a great deal of effort on the economic development of cities in order to overcome the negative effects of poverty. In many cases its efforts produced positive economic results, yet many of the people living in cities today are no happier. The complexities and uncertainty of the modern world are stressful and difficult to navigate. Even the wealthy have not been made much happier by economic development. It turns out that although money is essential to thrive, there are many other important elements of happiness, too. But until recently we’ve known more about how to develop prosperous cities than we have about developing happy ones.
In 1974 the USC professor Richard Easterlin published a groundbreaking paper, “The Economics of Happiness.”6 Easterlin’s paper, which analyzed the comparative happiness of nations, indicated that rising incomes increase the happiness of individuals in lower-income countries, but that as the prosperity of nations rises it hits a point beyond which additional income doesn’t make people any happier. This phenomenon has come to be known as the Easterlin paradox. There’s no doubt that many direct causes of suffering among poor people are alleviated by an increase in their income, yet it’s also clear that income is not the only driver of happiness.
In a 2009 study of 450,000 Americans, the economists Angus Deaton and Daniel Kahneman discovered that for Americans happiness seemed to level off at a household income level of $75,000. Earnings beyond that, even far beyond that, didn’t seem to make people much happier. Interestingly, the $75,000 limit had nothing to do with the cost of living; people were just as happy earning $75,000 in expensive cities like New York as they were in much lower-cost cities. One reason for this may be that although the cost of housing is higher in larger cities, the cost of transportation and food is lower, and there is a much larger selection of goods and services. In fact, as the size of a city doubles, the number of things to buy increases by 20 percent, and their cost declines by 4.2 percent.7
But there is a deeper reason. Happiness is tied to what Deaton calls emotionally enriching social experiences. Dr. Kahneman says, “The very best thing that can happen to people is to spend time with other people they like. That is when they are happiest.”8 The way we spend our time is also a critical component of our sense of well-being. In another study Kahneman and his colleagues tracked how people experience their day by asking them to record events in fifteen-minute intervals and evaluate them. Walking, making love, exercise, playing, and reading ranked as their most pleasurable activities. Their least happy activities? Work, commuting, child care, and personal computer time. How many people really enjoy a night of plowing through endless e-mails?9
This survey should not mislead us about the value of work. Work can be deeply gratifying and meaningful, and it can also provide rich social relations. Employment is a key element of well-being. People who are unemployed or underemployed are statistically more likely to die younger and be in worse health. People who lose their job in middle age and have difficulty finding a new one are more likely to become depressed, and have a two to three times higher risk of heart attack and stroke over the next ten years.10 So one of the key challenges of cities in the twenty-first century is to develop economies that generate stimulating, productive work for all of their residents.
In the past we often held the same job for life, whether as a shepherd, a member of a medieval guild, or an employee of a large corporation. Today the average millennial will have had eleven jobs by the time he or she reaches the age of forty. This underscores the need to acquire many different skills beyond technical ability. Satisfying work often requires not only a high level of education, but the emotional and social intelligence required to work successfully in teams. This wider range of qualifications will be essential in a world where computer coding may become the entry-level position that a factory job once was. As agriculture becomes more and more industrialized, rural people are flocking to cities seeking work. Yet with robots increasingly taking line positions in our factories, there are likely to be fewer jobs for the uneducated in the future.
So what is the future of work in our cities? Keynes predicted that automation would lead to more leisure, but achieving that requires a wider distribution of economic benefits than our economy is designed for. Instead of Keynes’s vision, we are faced with fewer opportunities not only for the uneducated, but also for those who are educated but poorly adapted to the rapidly changing conditions of work. Unemployed and underemployed people tend not to be happy, so this is an issue we need to approach with a thoughtful plan, or it will tear the guts out of our social contract.
In 2005, when Gallup began polling selected residents of almost every country in the world to gauge their state of well-being, respondents were asked about their employment status, trust in government, confidence in the quality of public education, food security, and a variety of other questions. They were also asked to describe their lives as thriving, struggling, or suffering. It turned out that the answer to that question is a key indicator of the social stability of a society.
In the period from 2005 to 2010 the GDP of Tunisia rose by an impressive 26.1 percent11 and in Egypt it rose by a remarkable 53.4 percent.12 But Gallup polls showed something else as well. In 2005, 25 percent of Tunisians said they were thriving, but by 2010, despite the big jump in GDP, the proportion of Tunisians who said that they were thriving had declined to 14 percent. The numbers were even worse for Egypt. In 2005, 26 percent of Egyptians described themselves as thriving, but by 2010 that percentage had dropped by more than half, to 12 percent.13 A key reason for the declines was that growth was accompanied by an enormous amount of corruption, so its benefits were not fairly distributed. For example, a recent study showed that in Tunisia 22 percent of all corporate profits during that period went to companies owned by relatives of the country’s president. So perhaps we should not have been so surprised when mass protests took place in these countries in the fall and winter of 2011–2012.
Sidi Bouzid is a central Tunisian city of just 39,000 people some 160 miles south of Tunis, the capital of this small North African nation. The World Economic Forum ranks Tunisia as Africa’s most economically competitive nation, ahead of Europe’s Portugal and Greece. Tunisia’s economy is based on its role as a bridge between the European Union and the Arab states of North Africa. Unfortunately, little of the Mediterranean trade that benefits the country’s port cities reaches the inland residents of Sidi Bouzid. This geographic disadvantage has led to a 41 percent unemployment rate in the city, and the highest poverty rate in the country—almost double the national average. To make matters worse, Sidi Bouzid is plagued by corruption that saps its hardworking small-business owners and entrepreneurs.
Sidi Bouzid was an unlikely candidate for global attention, but on December 17, 2010, an event took place there that shook the world: Mohamed Bouazizi set himself on fire.
Twenty-six years old, Mohamed had been working hard selling vegetables in the local market to support his mother, uncle, and siblings, and to pay for the university tuition of one of his sisters. Each day Mohamed would pull his cart through the city’s streets to the market and back, laden with wares. His dream was to save enough money to buy a small pickup truck that would allow him to expand into food distribution, the next step up the income ladder.
On December 17, Mohamed borrowed $200 from a moneylender and purchased a cartload of fruits and vegetables. A policewoman, seeking a bribe, confiscated his unlicensed cart, scales, and wares, and fined him ten dinars. As Rania Abouzeid later reported in Time, “It wasn’t the first time it had happened, but it would be the last. Not satisfied with accepting the 10-dinar fine that Bouazizi tried to pay ($7, the equivalent of a good day’s earnings), the policewoman allegedly slapped the scrawny young man, spat in his face, and insulted his dead father. Humiliated and dejected, Bouazizi went to the provincial headquarters, hoping to complain to local municipality officials, but they refused to see him. At 11:30 a.m., less than an hour after the confrontation with the policewoman and without telling his family, Bouazizi returned to the elegant double-story white building with arched azure shutters, poured fuel over himself and set himself on fire.”14
Mohamed Bouazizi’s act set the country ablaze with demonstrations by young people, frustrated at the oppression of the police, their own lack of opportunity to advance, corruption, and the widening gap between rich and poor. Twenty-eight days later, in January 2011, Tunisia’s president, Zine El Abidine Ben Ali, resigned. A few weeks later the flame lit in Tunisia had spread to the most populous country in the Arab world: Egypt.
On January 25, 2011, a small crowd gathered outside the Hayiss Sweet Shop in Boulaq, one of the informal settlements that had grown on the periphery of Cairo in the 1970s. Egyptians called these communities ashwaiyyat, or haphazard places. The first squatters to move to Boulaq came to work at a nearby Coca-Cola bottling plant, a cigarette factory, and the Upper Egypt railroad. By the 1990s the slum had developed into a dense, thriving community with five-story brick buildings, shops, and small factories.15 Like the banlieues of Paris and the favelas of Rio de Janeiro, Boulaq is not far from wealthier neighborhoods, but is cut off from the rest of the city, in this case by three railway lines, the al-Zumor canal, and a high fence. Only two pedestrian bridges and bus stops connect the community to the rest of the city. The only government presence comes in the form of the occasional visit by police who harass Boulaq’s residents.
During the later 1990s and early 2000s Egypt was overwhelmed by the same megatrends that affected much of the rest of the world—explosive population growth, rapid urbanization, and, in the Middle East, increased violence. For decades the government had lived off income from oil and gas, fees from the Suez Canal, and foreign aid from the Soviet Union and the United States, which were competing for the nation’s loyalty. With the fall of the Soviet Union and the decline of oil prices, President Hosni Mubarak no longer had sufficient income for his people. Instead of formalizing and growing the economy or further taxing his wealthy friends, Mubarak cut funding and services to places like Boulaq. As a consequence, no public secondary school was built in Boulaq, nor a single public health center, despite the neighborhood’s population of 500,000 (larger than Miami, Florida). The Muslim Brotherhood and its network of Islamic charities filled the gap by providing education and health clinics, as well as by helping residents build an informal network of sewer lines.
On January 25, ironically a national holiday established to honor the police, the small group of protesters gathered at the Hayiss Sweet Shop began to march across Boulaq’s pedestrian bridges to Cairo’s Tahrir Square. The first group of protesters to arrive, they resisted police until others joined them. By sunset 50,000 protesters held Tahrir Square. By the end of the week, the square was filled with millions. Eighteen days later, President Mubarak resigned.
Uprisings followed in Libya, Bahrain, Syria, and Yemen, but social ferment was not limited to North Africa and the Middle East. In the summer of 2011 riots broke out in London. Interestingly, they didn’t take place in the poorest areas of the city. They erupted on the edges, between lower-middle-income and middle-income neighborhoods, where the invisible fault lines of British society create barriers to upward mobility. These were followed by demonstrations in Tel Aviv and Jerusalem, where protesters rallied against the lack of affordable housing, jobs, and opportunity, as well as pervasive corruption. On September 17, 2011, the Occupy Wall Street movement took the issue of inequality to the heart of America’s financial district, posing a fundamental question: Is the vast gap in income between the top 1 percent of America’s income earners and the rest fair? Protesters didn’t propose a solution, yet the Occupy movement spread to more than one hundred other cities around the United States.
Protests over inequality continued throughout the world. In 2013 growing concern in China about pollution and toxic neighborhoods boiled over into huge street demonstrations in Beijing, Kunming, Ningbo, Dalian, Qidong (just north of Shanghai), and Guangzhou. At the same time the bus fare protests flared in São Paulo, led by working people who felt that Brazil’s massive investment in facilities for the coming Olympics and soccer World Cup had raised their taxes and their bus fares without delivering any benefit to them. In September 2014, 100,000 protesters shut down central Hong Kong over their right to democracy. And in Ferguson, Missouri, the shooting of Michael Brown, a black youth, by Darren Wilson, a white police officer, touched off tense demonstrations that spread around the nation.
Each of these protests started in a city. And each grew not from the city’s poorest, but from those who felt that they were unjustly deprived of opportunity by corruption, racial discrimination, or other structural barriers in their political systems and economies. The military historian Elihu Rose (my uncle) noted that almost all revolutions begin with a valid issue that goes unheard. Those protests rise to the level of violence only after other avenues of redress have been tried and the system has failed to respond. Each of these waves of protest took its government by surprise. How could any government or major global institution not have a clue that a revolution was coming? Because they were looking at the wrong data. In the Middle East GDP was rising, and governments believed that increased productivity provided a sufficient pathway to happiness. They were wrong.
The Paradox of Unhappy Growth
Throughout most of human history, governments did not measure their GDP. The idea was developed by the economist Stanley Kuznets, who introduced it in a 1934 report to the U.S. Congress regarding the economy and the Depression. The first to caution that GDP does not measure happiness was Kuznets himself, who included in his report a prescient warning about the risks of single indicators, and the need to better understand income distribution.
“Economic welfare cannot be adequately measured unless the personal distribution of income is known. And no income measurement undertakes to estimate the reverse side of income, that is, the intensity and unpleasantness of effort going into the earning of income. The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above.”16
Kuznets made a remarkable observation—that not just the amount of income but the way it was distributed was critical to the happiness of a nation. It was an observation that remained buried under the averaging concept of GDP for seventy-five years, but after the 2008 global financial crisis many woke up to the reality that growth at any cost was not serving to make the world’s people much happier.
The Brookings Institute scholars Carol Graham and Eduardo Lora have been studying the relationship between growth and happiness around the world for over a decade. Not only do their findings support the notion that national prosperity and happiness are not directly linked, but high levels of growth seem to make people less happy, not more. As Graham put it, “Rapid economic growth typically brings greater instability and inequality with it, and that makes people unhappy.”17
Graham’s most recent work correlates current happiness with the belief in the opportunity to improve our future or the future for our children.18 People who feel the future can be better are not only happier, but much more willing to work hard and invest to educate themselves and their children. Those who believe that their opportunities are limited are separated from the rest of the world by physical, social, educational, and racial barriers and are less willing to invest in the future. Even if they do aspire to a better future, their additional burden of toxic stress, ACEs, and poisons in the environment makes it extremely difficult to achieve. Remember the lead paint that Freddie Gray grew up with in Baltimore? If things had been different, Freddie and his sister Fredericka might have become scientists, social workers, or community leaders, and the city would have been better off for it.
In 1911, George W. F. McMechen, a Yale-educated lawyer, moved to Baltimore’s prosperous Mount Royal neighborhood. McMechen represented the aspirations of the Mount Royal community in every way, including education, occupation, dignity, and leadership, except for one: his skin was black. In response to his move, McMechen’s neighbors drafted legislation that imposed apartheid on the city. Cynically designed to pass muster with the equal-protection clause of the Fourteenth Amendment to the Constitution, it stated that Negroes could not move to a block that was more than half white, and whites could not move to a block that was more than half Negro. Called the “Baltimore Idea,” the legislation spread throughout cities in or near the South, and was soon adopted by Birmingham, St. Louis, Winston-Salem, Roanoke, Louisville, and many others. These cities are still struggling with the legacy of that decision.
Since the nation’s founding, home ownership in the United States has been a way for families to generate wealth and pass it on to future generations. This pathway was cut off for African Americans by “Baltimore ideas” that became policy thanks to the FHA’s mortgage regulations of the 1930s. Deprived of an important opportunity to generate wealth, African Americans saw the gap between themselves and white families widen, so that by 1992, when Freddie Gray was born, generations of his ancestors knew their opportunities were limited. With little belief in a better future, they disconnected from education and work. When police harass young African Americans, call them by racial epithets, and arrest them for petty crimes and push them into the criminal justice system, they cement the death of their aspirations. Alas, the broken windows policy, which does reduce disorder, if misdirected can have the countervailing effect of also reducing social efficacy.
Although the deck has been historically stacked against African Americans, they are not alone in their pessimism, at least in the United States. In this country 62 percent of all people, regardless of race or ethnicity, think their children will be worse off than they are. Graham’s work shows that the least optimistic cohort of the nation’s population, poorly educated, lower-income whites, have declining life expectancies, while poor blacks and Hispanics are more optimistic about their futures, and their life spans are rising.19 By contrast, people who live in Latin America are much more optimistic about the future; only 8 percent of Chileans think their children will be worse off. Even in Brazil, which has been struggling with a stalled economy, 72 percent of people think their future will be better.20
Cities are cauldrons of opportunity, but their overall happiness is dependent on the degree to which that opportunity is open to all their inhabitants. People can intuitively tell when access to opportunity is unfairly distributed. But it also can be measured.
Measuring Income Inequality: The Gini Index
The global standard for measuring income inequality is the Gini index, developed by the Italian statistician Corrado Gini in 1912. A Gini index coefficient of 0 indicates a society of absolute equality, in which every member of the society has exactly the same income. At the opposite end of the spectrum, a Gini coefficient of 1 (or 100 percent) represents a society of maximal inequality, in which one person has all of the income and the rest of the population has none. The United Nations warns that a Gini coefficient above 0.40 increases a society’s risk of social unrest.21
Ironically, Corrado Gini had no interest in tackling the problem of inequity; he was a fascist and an early advocate of eugenics, the sterilization of any group that would ostensibly dilute a nation’s racial purity. Gini postulated that if the ratio of low-income people to high-income people became too extreme, the higher birthrate among low-income families would dilute the genetic virtues of the high-income families, drive the country into decline, and make it vulnerable to conquest. His solution to eliminating poverty was to eliminate the poor!
Today the world’s most income-equal cities are found in northern Europe. Copenhagen has a Gini index coefficient of 0.27, and Hamburg and Stockholm have a coefficient of 0.34. Barcelona’s Gini coefficient rose from 0.28 in 2006 to 0.33 in 2012, due to reallocation of income from the global financial crisis. But Europe’s cities were not always the world’s leaders in equality.
The French Revolution of 1789 may have been led by intellectuals, but it was mostly waged by starving farmers who had come to Paris and settled in the slums of Faubourg Saint-Antoine, seeking work in its tanneries and workshops. The district happened to be adjacent to the Bastille prison. Like today’s urban immigrants saving to send money home to their families in the countryside, they lived in overcrowded slums, with fifteen or more people sleeping in a room. The cost of bread consumed 60 percent of their wages, and although it seems that Marie Antoinette may never have said, when told of their lack of bread, “So let them eat cake,” the phrase stuck as a potent symbol of income inequality. When the call came for revolution, they were highly motivated to storm the Bastille.
In 1875, Berlin became the most densely settled city in Europe. Its new residents were crammed into Mietskaseren, human warehouses, built in huge blocks, five stories tall, with little light, air, or sanitation. In 1930, Werner Hegemann’s exposé Das Steinerne Berlin (Stony Berlin) called Berlin “the largest tenement city in the world.” Even in 1962, only 19 percent of the Mietskaseren apartments had a toilet. These tenements were centers of discontent.
But Europe emerged from the collapse of its empires, brutal industrialization, its experiments with fascism and Nazism, and its two world wars with a new social contract. Today its cities are the most equal on earth because Europe’s leaders and people have intentionally made them so.
In general, the larger a city or metropolitan region, the more likely it is to be unequal. London, the largest city in the UK, has a disproportionate share of both the nation’s wealthiest people and its poorest, as do Rio de Janeiro, Bogotá, and Bangkok.22 The least equal cities are found in the developing world. Officially the worst are Johannesburg and Cape Town, both in South Africa, with Gini coefficents of 0.75, the legacy of a half-century of state-sponsored apartheid. I suspect that some cities in the world are even less equal, but that between corruption and poor management their economic data is not reported as accurately as in South Africa.
Addis Ababa, the capital city of Ethiopia, comes in slightly above bottom-ranked South African cities with a Gini index coefficient of 0.61, followed by Bogotá, Colombia, at 0.59. Brazil’s Rio de Janeiro, with its famous slums, has a Gini score of 0.53, and its sister city, São Paulo, weighs in at 0.50. For a decade China claimed that Beijing was one of the most equal cities in the world with a Gini index of 0.22, but after a change in leadership in 2012, China acknowledged that the numbers were inaccurate; the nation’s Gini index was changed to 0.61, but through a process that was still not transparent.23 All these cities with high scores have seething undercurrents of social unrest.
The United States has an overall Gini coefficient of 0.39, just barely below the warning level, and many of its individual cities don’t fare so well. New York City and the Miami/Fort Lauderdale region have Gini indexes of 0.50, the same as São Paulo’s. New Orleans comes close with a Gini index of 0.49, and San Francisco, Los Angeles, and Houston are only slightly more equal, with indexes of 0.48. The ten U.S. metropolitan areas that come nearest to Europe’s level of equality are all smaller cities, none of which has a population of more than a million people. These include Lancaster, Pennsylvania; Salem, Oregon; and Colorado Springs, Colorado. Ogden, Utah, has the lowest Gini index coefficient of any U.S. city, at 0.386, although, for perspective, this is 40 percent higher than Helsinki’s 0.26. It seems that if you want to live in a city but want to enjoy the happiness that comes from income equality, you would do better in a moderate-size one!
The ancient Greek philosopher Plato observed, “If a state is to avoid . . . civil disintegration . . . extreme poverty and wealth must not be allowed to rise in any section of the citizen-body because both lead to disasters.”24
As we have seen with the collapse of the Mayan cities, the fall of Moscow after the starvation of 1603, the French revolution and the Jasmine revolutions, inequality undermines the social fabric that keeps communities together—especially in times of stress. Consider the Argentine paradox. In 1913 Argentina was a rapidly growing country, the tenth most prosperous in the world, and its capital city, Buenos Aires, was regarded as one of the world’s most beautiful. It was celebrated for being home to one of the world’s finest opera houses, wide boulevards, South America’s tallest buildings, and the continent’s first subway system, yet villas miserias, or shantytowns, surrounded its industrial zones. When the global depression reached Argentina in 1930 the nation’s vast chasm between rich and poor—its income inequality—became its undoing. In response to a restless population, a fascist military coup supported by the wealthy overturned seven decades of democracy. Meanwhile, the gap between the opulence of the city’s downtown and the squalid living conditions of its disgruntled laborers erupted into a mass mobilization on October 17, 1945. Since then the nation has staggered through cycles of default and economic restructuring. Today, its economy lies in the hands of hedge fund opportunists, who bought Argentina’s bonds cheaply.
Infrastructure
Mexico City lies at the heart of the tenth-largest metropolitan region in the world, home to more than 21 million people. It is a thriving metropolis, the sixteenth most prosperous in the world,25 but its prosperity is not evenly distributed. Many of the city’s most affluent families live and work in the secure central city, or in northwestern neighborhoods with fine restaurants and trendy shops, a comfortable drive away from their daily activities. Only 30 percent of Mexico City’s residents have cars; except for those living in the finest neighborhoods, its streets are choked with traffic and pollution. The 70 percent who live toward the city’s sprawling edges spend an average of three hours a day on their commute to work, carried by the informal collectivo system of small independent vans and buses.
Like many of the world’s largest cities, Mexico City and its region are rapidly growing, but because this growth has been unplanned, the city has failed to balance the location of jobs and housing in an equitable way. One of the solutions for large, sprawling megacities like Mexico City is to develop multiple downtowns and connect them with a high-capacity mass-transit system. Singapore’s 2014 master plan divides the city-state into six regions, each with a dense downtown core as well as health and education facilities, open spaces, civic services, and a superb mass-transit system connecting them.
Infrastructure is the armature upon which civilization advance; it provides the necessary conditions for healthy density—the connections between workers and workplaces, between companies and markets; it also provides the framework for the flow of information, the substrate upon which communities grow their health and well-being. Cities cannot have a vibrant economic future with congested roads, overloaded airports, a brittle electric grid, slow Internet connections, aging water and wastewater treatment systems, outdated schools, and a lack of ubiquitous information and of smart municipal management systems. Almost every one of these systems needs to be redesigned, or at a minimum updated, in order to dynamically respond to the challenges of climate change, population growth, resource constraints, cybersecurity, and other results of global megatrends.
One of the first ways to improve opportunity for all communities is to provide them with effective mass transit. The design and construction of new infrastructure and the repair and upgrade of existing infrastructure also create new jobs. China has vaulted itself forward economically with twenty-five years of significant infrastructure investments. By contrast, the United States has been underinvesting in its infrastructure for decades. When I last flew to Hong Kong, I departed from Detroit. What a contrast the two cities pose!
Once Again, Neighborhoods Matter
Income inequality in cities always has a spatial dimension, reflected in their more and less prosperous neighborhoods. In 2010 not a single resident of London’s three most affluent districts filed for unemployment benefits, while in its poorest neighborhoods 28.9 percent of the population received them.26 Average life spans decline by a year for every two stops east one goes on the London Underground. The range of life expectancies from the best neighborhoods to the worst varies by twenty years.27
In China a residence permit, or houku, is needed to live and work in a city. More than 800 million Chinese have only a rural residence permit and are therefore denied the economic opportunities of city life, although an estimated 150 million have illegally migrated to cities anyway. Technically nonresidents, they have no access to public health, education, and social welfare systems, or to the city’s housing system. As a result they crowd into dormitories and basements, and sublet apartments. Since their children cannot attend school, parents must leave their children behind in small, isolated villages. Their houku-less parents work long hours to earn enough money to send home to grandparents raising their children. A recent Economist report estimates that in 2010, the lives of 106 million children were profoundly disrupted, most of them “left behind children” as the Chinese call them. Tong Xiao, director of the China Institute of Children and Adolescents, notes that the emotional and social damage “on left behind children is huge.”28 The full economic consequences of urban workers’ salaries subsidizing their parents and children in a declining rural system, because they are not supported by educational, health, and social services in the emerging urban one, have not been addressed. This is not just an issue for China, as almost every nation faces it. The cross-subsidy between urban and rural families has long been a driver of migration, but in the twenty-first century, is this the best way to achieve it?
As we saw from the work of Robert Sampson, the neighborhood effect is extremely potent. Raj Chetty and Nathaniel Hendren, researchers at Harvard University, looked at data from millions of families to study the effects of moving a poor family to a different neighborhood. Their information came from “Moving to Opportunity,” a twenty-year-old federal housing program that provided low-income families with a housing voucher to pay the difference between the rent they could afford and market rent in the neighborhood where they wished to move. More than 5 million families received these vouchers, and each family was then encouraged to relocate. Some moved to middle-income neighborhoods, while others remained in low-income communities. Chetty and Hendren discovered that the odds of a poor child escaping poverty as an adult were deeply dependent on the choice the parents made as to where to raise their family, and the age of the child when they made the decision. For example, a poor child born in Baltimore who stayed there earned 25 percent less money as an adult than a poor child born in Baltimore who subsequently moved to a more mixed-income community.
Those cities most conducive to upward mobility share several traits: elementary schools with higher test scores, a higher share of two-parent families, greater levels of involvement in civic and religious groups, and more residential integration of affluent, middle-class, and poor families. And the younger children were when they moved, the better they did economically as adults, the less likely they were to become single parents, and the more likely they were to go to college. These characteristics begin to point to where cities can make investments to create communities of opportunity.
Interestingly, communities that provided more opportunity for poor children also helped wealthier children do better. For example, if a child whose parents were in the bottom 25 percent of income earners in Manhattan moved to Bergen County, New Jersey, just on the other side of the George Washington Bridge from New York City, by the time that child reached the age of twenty-six, she was likely to earn 14 percent more than the national average earned by children of poor families. Yet for children whose families were upper middle class, earning in the 75th percentile, those who lived in Bergen County also had a better future, earning 7 percent more than the average child in their income cohort. Even children who grew up in the top 1 percent of all income-earning families in the nation did better by the age of twenty-six if they lived in mixed-income Bergen County. So place matters.29
There Are Many Kinds of Inequality
Income disparity and lack of access to infrastructure are not the only forms of pervasive inequality that affect the well-being of city residents. Health care and education are also unequally distributed. Health outcomes are linked to the effectiveness of the larger nation’s health-care systems. Tokyo is considered by many to be the healthiest city in the world, yet its cost per person is only half that of the United States. What makes this achievement even more impressive is the fact that Tokyo’s population includes lots of older people. How is this possible? There are many reasons, including Japan’s deep commitment to the health of its people; a superb mass-transit system that keeps air pollution, greenhouse gases, and commute times low; strong social networks; and a healthy diet with lots of fresh fish, vegetables, and rice. The city is also perfused with temples, and taking time to reflect, to meditate, is encouraged.
Despite spending twice per person what Japan spends on health care, the United States is ranked thirty-third on the Economist’s 2014 “Health Care Outcomes and Cost Report,” the same list that placed Japan at the top.30 The United States is underperforming compared with its peer nations in life expectancy, infant mortality, low birth weight, injuries, homicides, adolescent pregnancy, sexually transmitted diseases, HIV/AIDS, drug-related deaths, obesity, diabetes, heart disease, chronic lung disease, and disability rates.31 And whereas health outcomes throughout Japan and the other OECD nations are fairly consistent, in the United States they vary widely, indicating the absence of a system that integrates housing, health care, social services, and healthy food systems, and makes them available to everyone.
Creating a healthy city is a collective activity. It is difficult for even the wealthiest citizens to remain healthy if the rest of a city is doing poorly. For a city to be healthy it must provide communal infrastructure for water, wastewater, and sanitation; mass-transit systems; and parks and open spaces for all its citizens. It must establish policies to develop a wide range of housing that is affordable and meets the full diversity of its residents’ needs. It must require all citizens to be immunized against early childhood diseases, and undertake concerted efforts to prevent the spread of HIV/AIDS, tuberculosis, Zika, methicillin-resistant Staphylococcus aureus, and other rapidly spreading drug-resistant superbugs, as the poor health of a few can threaten the health of all.
Education Equality
In 2011, the Moroccan economists Benaabdelaali Wail, Hanchane Said, and Kamal Abdelhak examined data from 146 nations in order to track levels of educational inequality from 1950 to 2010 and compare it with Gini indexes for those same countries. They concluded that there was a strong correlation between equality in education and equality of income. They noted, “The distribution of education is a key element of human capital, growth and welfare.”32
Educational equality has two primary components: access and quality. To maximize access, residents’ circumstances—where they live, their gender, their socioeconomic status, their disabilities—shouldn’t limit their opportunity for academic success. Quality is achieved by the standard of excellence set by a city’s schools, and the degree to which excellence is available to everyone. It’s no wonder that cities like Singapore, Seoul, and Helsinki, which rank among the world’s best for accessible high-quality education, also rank so high in every other category of well-being.
In 1763, King Frederick the Great of Prussia developed the modern world’s first great public education system. It mandated that all municipalities must provide and fund education for all boys and girls between the ages of five and fourteen. It required teaching reading, writing, music, religion, and ethics—skills considered essential for citizens to build a modern society. The system quickly adopted an excellent teacher training and testing system, a national curriculum, and mandatory kindergarten. The second public school system was developed in Denmark in 1814. Called “Schools for Life,” it combined academics and life skills such as introspection, cooperation, and joy, which provide both the technical skills to succeed and the reflective skills necessary to thrive. As the nineteenth century unfolded, both Prussia and Denmark lost much of their territory—the shrinking of a nation often triggers cultural decline—but the excellence and values of their public schools provided these countries with the cognitive and social capacity to successfully adapt. Today, Denmark is one of the happiest nations on earth, and Germany the most prosperous. Each has a strong social support system, and very green policies. Their universal curriculum has created communities with the shared values, ethics, and knowledge that underlie the ability to adapt and succeed.
In the late 1800s the United States adopted a public education system designed to enhance democracy, with a focus on reading, writing, mathematics, civics, and history. Its early-twentieth-century curriculum was designed to train workers for the industrial economy. However, as the kinds of jobs have rapidly changed, the education system has not kept up. There is a disconnect in the United States between what is being taught and the education needed to thrive in a VUCA world. A Center for Urban Future report on CUNY, New York City’s public university, notes that few of the university’s 480,000 full- and part-time students are being educated to meet the needs of New York City’s largest employers. In a world where robots are taking over menial industrial tasks, the emerging jobs of the twenty-first century require training in systems thinking, collaboration, critical analysis, and rapid adaptation, which are not skills possessed by many of America’s tenured faculty, who were trained in the twentieth century.
Geoff Scott, emeritus professor at the University of Western Sydney, polled employers from Australia’s top professions to determine what capabilities they most wanted from graduating students. From those answers Scott and his colleague Michael Fullen developed a list of competencies needed to succeed in an increasingly volatile and complex world. Interestingly, employers were not looking for job-specific expertise; they were focusing on the “attitude of mind, set of values, and the personal, interpersonal, and cognitive capabilities identified repeatedly in studies of successful early career graduates and those leaders who have helped create more harmonious, productive and sustainable workplaces and societies.”33 These include character, citizenship, collaboration, communication, creativity, and critical thinking, qualities that make employees capable of thinking like global citizens, with a deep understanding of diverse values and with genuine interest in engaging with others to solve complex problems that impact human and environmental sustainability.
These attributes, which we used to call the soft social and cognitive skills, have become the hard skills cities need from their citizens and leaders if they are to thrive. These are the skills that children with ACEs and toxic exposures struggle to attain. These are the qualities that robots and computers will be unable to provide. And these are the attributes needed in a well-tempered city.
We’re All in This Together
In 1972, Louisville, Kentucky, and Detroit, Michigan, received similar court orders to desegregate their schools. Both cities were mandated to create regional plans tying together city schools with those in the suburbs, busing students from their neighborhoods to other schools to ensure an integrated mix. Both populations were 80 percent white and 20 percent black, but each city took a very different approach to the court mandate. Louisville embraced it; Detroit subverted it.
Both plans got off to a poor start. In Detroit the Ku Klux Klan blew up ten school buses in the suburban town of Pontiac. The judge who had ordered the busing of Detroit’s students received several death threats, suffered two heart attacks, and died before his case was heard by the Supreme Court. Louisville had a long history of racial segregation; having eagerly adopted the Baltimore idea, it entered the 1970s with highly segregated housing. The court decision that required Louisville’s school district to be integrated with surrounding Jefferson County was also met with protests, but they were nonviolent. But leading members of Louisville’s elite families, including key Binghams, who owned the local newspaper, and the Browns, who owned the city’ most visible employer, the Brown Forman Company, defended integration. Five years later the judge who had imposed the order of segregation was celebrated at a banquet in his honor. The difference in educational outcomes was also significant. In 2011, 62 percent of Louisville’s fourth-grade students scored at or above basic levels for math, twice as high as the percentage of Detroit students.
Detroit’s approach ended up increasing the city’s segregation. In 2006, the public school population was 91 percent black and only 3 percent white, whereas public schools in the wealthy town of Grosse Pointe, which borders Detroit, were 89 percent white and only 8 percent black.
Detroit was not alone. For most American cities, the school desegregation orders of the early 1970s led to white flight to the suburbs. The resulting decline in population, concentration of poverty, and loss of tax base proved to be disastrous. Regions are anchored by their core cities. As the work of Dean Rusk has indicated, the health of the city is key to the health of its suburbs. We are all in it together.
Louisville was one of the few brave cities in the United States to recognize that, even more remarkably because it is a southern city. By integrating its urban and suburban schools, it removed the fear-based motivation to abandon the city. The city called on its residents to be citizens of the region. The strategy worked so well that, in 2003, the city and Jefferson County merged their governments into a new polity they named Louisville Metro, which shares not only students, but also tax revenues, infrastructure responsibilities, and economic development opportunities. This shared sense of destiny has become a key element in the Metro’s appeal.
Louisville Metro is home to a great deal of economic diversity, ranging from census tracts in which more than 50 percent of the residents live below the poverty levelto some with fewer than 10 percent. But because the schools are all operated as one system, there is no correlation between neighborhood and school quality. In fact, some of Jefferson County’s best schools are in its poorest neighborhoods, attracting white families.
Once Louisville’s schools were integrated, it was much easier to integrate its neighborhoods, using programs such as the voucher-based Moving to Opportunity, which produced such excellent results when families with young children moved to better neighborhoods. Between 1990 and 2010, neighborhood segregation declined by 20 percent.
The result in Louisville is a workforce better prepared for the twenty-first century. As the Chamber of Commerce states in support of Louisville’s busing plan, Louisville is “a city unlike other places, where you could hire people from any school and they would actually be educated, and they would know how to work with others.”34 Louisville intuited what data now clearly shows: the more unequal a region, the worse everyone does, even the wealthy.
In studies of weak market cities and regions in the United States, the social scientists Manuel Pastor and Chris Brenner note that regions with the largest income disparity between central cities and suburbs in 1980 had the lowest level of job growth in the following decade. Pastor and Brenner concluded, “The research presented here suggests that equity is not a luxury but perhaps a necessity. As much as income inequality, poverty concentration, and racial segregation are outcomes of a declining city and regional economy, they are also themselves triggers of decline. Competitiveness strategies for weak-market cities should focus on the basics—infrastructure, good government, and a positive business climate—but it is good to keep the equity piece front and center as well.”35
Happiness
If wealth and income were the main determinants of happiness, Kuwait City would be the happiest city in the world. Alas, it is not. As the Easterlin paradox predicted, income is not the only contributor to happiness, and as the economist Jeffrey Sachs observed, “We need societies that work, not just economies that work.”36
The first government to take a wider view of happiness was the Kingdom of Bhutan. In 1972, Jigme Singye Wangchuck, Bhutan’s sixteen-year-old Druk Gyalpo, or Dragon King, proposed that the role of government was to increase not the nation’s gross national product, but its gross national happiness. The concept continued to be developed by global think tanks and was even adopted in a few cities and provinces, but mostly it was disregarded by other nations until the global financial crisis of 2008. As the tide of financial growth rapidly receded, it revealed deeply unsettled communities. All of a sudden, the idea that the happiness of a society and its people mattered struck a chord.
In 2009 Gallup Healthways began extensive polling in the United States and around the world to report on the degree to which communities were thriving, struggling, or surviving. In 2011 the United Nations issued its World Happiness Report and began convening biannual conferences on happiness, along with report updates. At the same time, the Organization for Economic Cooperation and Development (OECD), an NGO comprising of the world’s thirty-four most prosperous nations, proposed its Better Life Index. France, seeking to put its own stamp on well-being, hired the noted economists Joseph Stiglitz, Amartya Sen, and Jean-Paul Fitoussi to develop a well-being index, too. The Stiglitz report noted a disconnect between the quality of a country’s health and its GDP. For example, since 1960 life expectancy in France has grown relative to the United States, while its GDP relative to the United States has been declining.37
Each of these indexes has a slightly different approach, but they share some common characteristics. Each recognizes the importance of family income, health, education, good governance, vibrant social networks, and a healthy environment to well-being. Bhutan adds to this list psychological well-being, community vitality, cultural diversity and resilience, and time use. The OECD adds work-life balance (another take on time use), safety, and civic engagement. The UN World Happiness report contributes a focus on trust, generosity, and the freedom to make life choices. This list will continue to grow and become more refined as the science of happiness becomes more sophisticated, integrating neuroscience, behavioral economics, sociology, public health, and urban informatics to define and measure healthy communities.
The Prosperity/Well-Being/Equality Matrix
And so it seems that the world’s best cities balance prosperity, equality, and happiness to create well-being. But how can we tell if a city is doing a good job of balancing these three attributes of a thriving population? While there are ample data on income, income distribution, and household wealth, and a growing body of information on well-being, few approaches combine these metrics to provide an integrated assessment of a city’s performance.
My colleague Will Goodman and I set out to solve this. We began by examining prosperity and well-being indicators from the 100 largest U.S. metro areas, and then synthesized data. To this we added the Gini index for each city, to develop a prosperity, well-being, and equality matrix.38 The top ten American metropolitan areas for prosperity, well-being, and equality are:
1. San Jose–Sunnyvale–Santa Clara, CA
2. Washington–Arlington–Alexandria, DC-VA-MD-WV
3. Des Moines–West Des Moines, IA
4. Lancaster, PA
5. Honolulu, HI
6. Madison, WI
7. Salt Lake City, UT
8. Minneapolis–St. Paul–Bloomington, MN-WI
9. Ogden–Clearfield, UT
10. Seattle–Tacoma–Bellevue, WA39
Note that these are all medium-sized communities, although Lancaster is fairly small. They have excellent colleges, universities, and health-care systems, and stable, growing economies. Around the world, large cities are often the most prosperous, midsize cities the happiest. (For a full list, see note 39.)
The Civic Realm
The most enduring cities envision, grow, and maintain an extraordinary civic realm. We are inspired by public libraries that contain lifetimes of knowledge; museums that recall the past and connect it to the future; performing arts centers that allow us to pause and immerse ourselves deeply in the language of music, dance, and theater; parks that weave together humankind and nature; and sports stadiums that excite us. Taken together, with investments in transportation, housing, health, and education, these institutions of excellence and the infrastructure of opportunity make good cities great ones.
Jaime Lerner, the visionary mayor of Curitiba, Brazil, described the transformation of the city as being accomplished with “urban acupuncture” on its leverage points. Curitiba, the capital of the state of Paraná, has a population of about 1.5 million. In his first term, while the rest of the world was tearing apart its cities to accommodate more cars, Lerner began closing major roads to traffic, and started developing a pedestrian-oriented city. He created an integrated mass transit network with one price per ride, no matter how long, to reduce the cost of transportation for those living at the city’s edge.
Lerner then updated Curitiba’s zoning code to tie together development and the transit system, requiring higher density close to transit lines and lower density farther away. Lacking the finances to build an extensive subway system, Curitiba created the world’s first bus rapid transit system in 1974.40 To improve education the city developed “Lighthouses of Knowledge,” public centers with libraries, Internet access, and cultural programming. These were located next to transit centers to make them easy to get to. By the 1980s job training and social services were also tied into transit locations. From 1970 to 2010, Curitiba’s population more than quadrupled, but its green space outstripped that rate, growing from one square meter per person to fifty-two square meters. And the city’s park system has been very effective at flood prevention during heavy rains.
Curitiba’s “garbage that is not garbage” program collects and recycles more than 70 percent of its waste, and puts funds from selling recyclables into social services. Recyclers are paid for garbage with transit tokens, saving the city cash while expanding their job and educational access. An open university funded by the recycling program provides inexpensive job training. Retired city buses are used as mobile classrooms and service offices. Curitiba’s economic development program also widely distributes opportunity. Like most developing-world cities, Curitiba is surrounded by poorly serviced slums, and it’s aiming business incubation efforts at growing small businesses in these communities. Entrepreneurial sheds located in low-income communities are supported by the Crafts Lycée, which provides finance and business education.
As a result of these efforts, Curitiba is not the richest city in the world, but it is a contender for the happiest. Ninety-nine percent of its residents reported being happy in 2009, and in 2010 it was awarded the Globe Sustainable City Award. Mayor Lerner says, “I believe that some medicinal ‘magic’ can and should be applied to cities, as many are sick and some nearly terminal. As with the medicine needed in the interaction between doctor and patient, in urban planning it is also necessary to make the city react; to poke an area in such a way that it is able to help heal, improve, and create positive chain reactions. It is indispensable in revitalizing interventions to make the organism work in a different way.”41 Curitiba’s magic came from the belief that “we” must thrive if “me” is to thrive. Jaime Lerner understood the fundamental truth that happiness and well-being are a collective experience. And they make for a better city.
Toward the Purpose of Cities
Our current economic system is based on flawed premises: that markets are efficient, and that efficiency, in itself, will produce the best society. Efficiency is an important function in complicated, linear systems, but it is less so in complex systems. Alas, in the latter half of the twentieth century, economists made efficiency itself our most important value, lauding creative destruction and the rule of the market. The efficient market exacerbates inequality. It knows what Oscar Wilde called the price of everything and the value of nothing. Wynton Marsalis said, “The reason things fall apart is that people create things to celebrate themselves rather than embrace the whole.”
But human societies and our cities are complex systems, not complicated ones. And complex systems have both a function and a purpose. The purpose of our cities and societies is well-being, not efficiency.
Complicated systems can be maximized. Complex systems thrive when they are optimized. A city is optimized when all of its components are thriving—the ecology in which it is nested, the metabolism that sustains it, the region that contains it, and its people and businesses. To achieve this, city leaders need to focus on optimizing the whole, not the parts.
Thriving in the twenty-first century requires a cultural shift from an individual-maximizing worldview to an ecological one, recognizing that our well-being derives from the health of the system, not the node. This new cognition is enhanced as a city defines its purpose as the well-being of its wholeness. Then the system will naturally want to equalize its landscape of opportunity and the distribution of health and well-being. Seeking wholeness, the city begins to become more naturally adaptive to the VUCA world.
Funding the Well-Tempered City
Many nations have the financial capacity to make their cities more well tempered. With the federal thirty-year bond interest rate at 2.62 percent in the spring of 2016, the United States could divide its budget into a capital and an operating budget, and borrow, not to cover its deficit, but to invest in new schools; roads and mass transit; smart, renewable energy systems; circular water and wastewater systems; smart city operating systems; affordable housing; community health centers; parks and open spaces; and the other components of communities of opportunity. It would create millions of local jobs and the armature for future well-being while reducing its environmental footprint. And if the nation invested its domestic operating budget in evidence-based solutions to the issues of health, education, and trauma, it could better prepare its people to thrive in the twenty-first century. Its criteria for investment should be determined by the goals of regional well-being indexes, as those are more likely to reflect the needs of communities, and less likely to be distorted by the industry lobbies that pervade Washington.
Investments in infrastructure, human development, and the restoration of nature will make nations much more resilient to the coming megatrends of the VUCA age. Their cities will be refuges of prosperity, equality, and well-being. The only thing missing is the will to make it so. And that requires compassion.