Cities, at Their Best, are Non-Excludable and Non-Rivalrous Goods

 

 

You may not remember, but in your Econ 101 class way back when, you probably learned the terms “non-excludable” and “non-rivalrous.” Given that your eyes probably glazed over when you read those arcane phrases, you can be forgiven for wondering why I am attempting to construct a blog post on the subjects.

Bear with me while I further nerd out by trying to define these concepts: 

1. A “non-excludable” good is one that you can’t really keep someone from freely enjoying. Once you secure national defense or clean air, you can’t easily prevent someone from reaping the benefits from them. Conversely, country club membership and running shoes are not universally available because you have to pay to access them. 

2. A “non-rivalrous” good is one that, if I am enjoying it does not crowd out others from also enjoying it. Public parks and public sidewalks are good examples of “non-rivalrous” goods, because my accessing them does not meaningfully restrict others from also enjoying them. A country club membership, while being excludable, is also non-rivalrous, because my being a member does not adversely affect your being a member. Running shoes are rivalrous, though, since once I buy and own a pair, you can’t buy and own that pair too. 

Having bored you to tears or perhaps stirred a faint memory from your undergrad days, let me get to the point of this post, which is that cities, at their best, are non-excludable and non-rivalrous goods. Which may seem obvious, but I want to further assert that they non-excludable and non-rivalrous in ways that suburbs are not. 

This is all another way of saying what Paul Levy, founder of Center City District in Philadelphia, has long said, which is that in cities, more is more, whereas in suburbs, more is less. To restate this insight, more people in the suburbs means more traffic, more difficulty in finding parking, and perhaps other congestion issues that either diminish your enjoyment (e.g. the pool at the community center is crowded so you have to wait for a lane to open) or sock your tax bill (e.g. enrollment increases necessitate that your school district invest in expanding capacity). 

Most cities, particularly in the Northeast and Midwest, are still well below their highest historic population levels. Which means that most of those cities’ main infrastructure can support many more people that current population levels. Roads, bridges, transit systems, schools, park systems, and so on may be in need of investment (more on this in a sec), but they exist in a way that can be scaled to meet any rising demand should population go up significantly from current levels. Another way I like to say this is that cities in the West and Sunbelt are levying taxes to raise tens of billions of dollars for the kinds of things that Northeast and Midwest already have in place, like mass transit and park systems. 

These public goods, and cities as a whole, are non-excludable and non-rivalrous, because much of what is good and enjoyable about a city is available to all and does not diminish but rather gets enhanced as there are more and more people there enjoying themselves. A bustling downtown does not portend traffic and parking issues as much as it creates a sense of safety in numbers and a vibrancy that comes from people watching and bumping into colleagues. Even a vibrant shopping and restaurant district, which may cost money to purchase food and goods, is free for folks to walk through without anyone feeling like they can be excluded or crowded out. 

Ah, there’s a caveat. In fact, in the history of cities there have been occasions in which some people are made to not feel welcome, either by public pressure or official policy, so maintaining a welcoming and inclusive spirit takes work to overcome past barriers. And, the ability for cities to scale requires the existence and upkeep of mass transit to move people en masse, lest people choose to or have to drive, which does in fact have a diminishing effect on the value of density. 

Cities, at their best, are non-excludable and non-rivalrous goods. But it takes work. Let’s hope we are willing to put in that work.