It is with unbridled pleasure that I have finished reading a most wonderful and thought-provoking book of economic theory, Jane Jacobs paramount work “Cities and the Wealth of Nations“.

Her economic theory is founded upon the absolute requirement of cities. No city, no foundation for economy, other than a very basic subsistence form of economy. At the heart of her theory is the replacing of imports; a place that starts replacing imported goods with locally created ones automatically becomes a city. As it keeps doing this, the city grows, eventually giving birth to a region dominated by this city.

Expanding on this, she analyzes economies and draws several conclusions from this; that all schemes to support regions without import-replacing cities are doomed to failure; that efficiency improvements in rural economies can be disastrous for the economy in terms of unemployment. Her vision of an economy is not a functional system ruled by regulations and laws, but a living organism, growing and expanding on its own. Trying to transplant factories and foreign economic factors into this organism may, in fact, kill it.

The thing that stands out in her analysis is that there is no alternative to local small business. This is the very lifeblood upon which any economy lives or dies.

Another interesting point she makes is about currency: How the value of the currency is proportional to the strength of the city economy. (Forgive me if I misquote.) A nation’s currency is dominated by the largest city regions; and it will suit them the best. However, for smaller cities growing, the currency will provide what she calls “faulty feedback”, as they are out of sync with the dominating economy. As a result, nations will gradually begin concentrating their economic life to one, large city region. She takes France as an example, which is almost entirely dominated by Paris. Italy is dominated by the industrial north, Japan is increasingly dominated by Tokyo, and so on.

This gives birth to financial transactions, aimed at restoring the weaker regions and provide jobs and development; these transactions are, however, foreign aid to these smaller cities, and, like transplants, fail to stimulate the economy in a permanent way: they do not stimulate import-replacing businesses. Moreover, they sap the economic strength of the city region that provides the national economic growth; the further this process develops, the more stressing this situation will become. The nation will continue to be dominated by a large city region, who increasingly carries the burden of the rest of the nation out of sync with the currency valuation, and further and further “transactions of decline” are initiated.

Building on this, it is easy to show how all empires must fail, due to systemic economical difficulties built into the very structures of an empire. In this light, the implementation of the Euro is a bad idea: It will gradually become dominated by a fewer and fewer economical regions inside the EU, requiring all the more financial transactions to be made to “equalize” the lesser developed regions inside the EU, sapping the strength of the main city regions and ultimately dooming them to failure.

What is the answer to this? She sees one possible solution – a highly theoretical one, she admits, and rarely, if ever, tried in history.

As a nation grows and becomes stronger, building on a city region, and before too heavy support transactions come into play for its underdeveloped regions, the nation should split: Divide itself into two, with separate currencies, and, if necessary, tariffs to protect its internal markets in their infancy. As the new region grows stronger, the need for tariffs disappear. When this economy, in turn, becomes too large, it should split again, repeating the process as necessary. Their local currencies will always be in direct relation to the economic strength of their regions. Of course, pitfalls abound, but this way it will counteract the negative forces in play when the synchronization fails.

As controversial as it sounds (and I have little hope for its practical feasability), I find it attractive, because it provokes a vision of the world as a living organism, growing organically, and multiplying as cells do – by splitting. And in doing so, it is directly at odds with romantic dreams of uniting the whole world under one government and a single, worldwide economic system.

And that is why I want to believe in it. :)

A few years ago, my friend and I traveled to Poland. We went around the place, spending most of our time in a little town called Gorzow Wielkopolski, with an old church and a rather charming mix of new-style apartments, malls and old buildings.

Poland joined the EU, recently, which gave us remarkably little trouble in visiting the country. In fact, all I had to do was wave my passport at the border guard – I didn’t even have to open it – and they waved us buy. Of course, when they saw that my friend had an American passport, they quickly halted us, took his passport away and went into a little house to check it up.

That was when it hit me: I am a citizen of Rome.

Paul the Apostle had a similar experience, which we can read about. As soon as he waved his Roman citizenship around (which you either got by birth, or by a large sum of money), special privileges and laws applied to you, and you were treated with better dignity.

The Roman Empire was an enormous empire that spanned most the entire Europe, Middle East and North Africa. And while it was founded on a military power, states were usually willing (with some initial resistence) to join as it brought trade, money, a distinct legal code, culture, and many other benefits – not the least protection from neighboring tribes. The Pax Romana ensured a peaceful environment within which trade could flourish from all parts of the empire.

When the West Roman Empire ceased to exist 476 A.D., Europe quickly degenerated into a chaos of Germanic tribes and remnants of the empire. The different cultures solidified and became the basis of the European nations, which were more or less continually at war with each other for over 1500 years, eventually culminating in the First and Second World Wars.

To put an end to this division – to bridge the gap between the different nations, and establish a peaceful European community – the European Union was formed, the basis of which was the Treaty of Rome in 1957. All the European nations are now coming together into one democratic union, which will establish a Pax Romana, whose foundation is entirely economic – the benefits of trade and commerce under peaceful conditions will far outweigh any sentiment towards military confrontation.

For the first time since 476, we now have a new, peaceful, economically united Europe, wherein all citizens may travel freely (within the Schengen territories), with a single currency (within the Euro zone) and trade without hindrances.

I am a member of the European Union. I am a Citizen of Rome.

(This is what happens when I read books.)

I. Purpose of humanity

The primary goal of a human being is labor. A man derives a certain amount of personal value from the work he carries out. In previous days of human age, you were known as a blacksmith, a farmer, a priest, or of a similar profession. It was normal for sons to follow in their father’s footsteps. With increased education, this field has widened enormously, but the premise still holds. We define ourselves largely by what we produce with our hands, i.e. the results of our creativity, whether it be goods or services.

II. The growth of commerce as a foundation for cities

With productional capacity reaching beyond simple self-sustainment, transportation and logistics become increasingly important to trade or sell produced goods to others. Roads become important; where roads appear, trade flourishes; and where roads meet, marketplaces appear. These start to produce specialization, and densification follows. Although a certain need for services always existed in an purely agrarian society, densification and the resulting spatial organization (building on the transportation network) produce a region, with a hub, in which enough synergistic effects become visible to sustain an increasingly specialized service-based market. We have an embryo of a city.

As the region grows, there will be a gradual growth of services in comparison to goods. As increasing synergy leads to further increases in production capacity, more opportunity arises for people to specialize, allowing entirely new specialized markets to appear. Banks, insurance companies, entertainment industries, restaurants and other diverse markets open up, providing services to the entire region. Competition grows, forcing businesses to become more effective; but as competition in the same field grows, businesses operating in different fields find reason to cooperate in interdependent ways; producing even more specialization.

All this forms the basis of a city, and the larger these forces grow, the more the city will grow.

III. Government

The primary goal of a governing body is to encourage and sustain these forces; and the primary means to do so is to provide a secure climate for business.

External safety is necessary to avoid threats of a disruptive foreign power. Business can only survive with difficulty in volatile regions.

Internal safety is necessary to ensure fairness and to establish justice, building upon a set of common laws which are upheld by a judicial system, as well as a necessary police force. Internal safety also means safety from natural hazards, fires, starvation, disease, and other factors which may hamper the growth of business. These are usually established through one or other form of a political system; and as they are usually costly, are also financed through taxation. This yields an administrative bureaucracy; and building on the synergistic and spatial organization of a region, are usually set up in the cities, for maximum efficiency.

Thus the city comes to function as a center for administrative control, as well as a marketplace for goods and services.

IV. The organization of nations

Thus we find, that cities are a perfectly normal way for human beings to organize, building on regional production and logistics. Cities grow to contain a multitude of services as well as administrative functions for the entire region. These form the collective underpinnings of a nation; identifying itself by a common culture and language. The strength of a nation is directly proportional to the health and vitality of its cities as hubs of trade and commerce; which are able to finance national services: for instance, a unified government, and a military force.

I just came back from taking a walk through town, and it struck me when I took my walk that this town – with a few reasonable changes – could be so beautiful. Right now, it’s full of narrow, winding streets without any particular order to it. The main street through town is also narrow and winding, and there’s a speed limit of 30 km/h imposed on it (~20 mph).

What follows is my proposed changes to Skärhamn. There’ll have to be some changes, some widening of the streets. Most of this won’t fit into the existing town structure, so we probably have to BLAST A FEW OLD SCRUFFY HOMES WITH DYNAMITE! BOOM!! BOOM!! HAHAHAHAHAHAHAHAH!!!!!

The blast map below indicates where major demolitions may have to occur.

The main road will be replaced with a boulevard-style street with trees planted in the middle and nice pedestrian walkways along the side. This will make everything much greener, and with the appropriate changes to the local businesses along the side – placing little french cafeterias, boutiques and so on there – the town could be given a much more cozy and enjoyable feeling.

Of course, the existing white, wooden houses would be preserved – at least a nucleus of them – to provide a quaint, picturesque part of the old historic city to stroll through.

The boulevard would be built along the green line in the map below. The blue corridor would be changed into a four-lane, 70 km/h (45 mph) business street with ample space reserved for shopping malls, movie theatres, gas stations and fast-food restaurants, providing a casual shopping experience for the entire family. A proposed Wal-Mart Supercenter might have to be located – depending on available space – on the other side of the cross-Tjörn freeway, marked in red on the map.

Altogether, I feel that this represents a rather modest improvement to the town and could very well be the thing that drives Skärhamn into the 21st century.