Why is New York America’s largest city?

A superb paper from Edward Glaesar of Harvard Univ. He explains why NY has remained the largest city of US.

For 200 years, New York City has been the largest city in the nation, and it continues to outperform most cities that
were once its competitors. In the 1990s, the city’s population grew by 9 percent and finally passed the eight-million mark. New York is the only one of the sixteen largest cities in the northeastern or midwestern United States with a larger population today than it had fifty years ago. Its economy remains robust. Payroll per employee is more than $80,000 per year in Manhattan’s largest industry and almost $200,000 per year in its second-largest industry.

All cities, even New York, go through periods of crisis and seeming rebirth, and New York certainly went through a real crisis in the 1970s. However, while the dark periods for Boston, Chicago, or Washington, D.C., lasted for thirty or fifty years, New York’s worst period lasted for less than a decade. While Boston’s history is one of ongoing crises and reinvention (Glaeser 2005), New York’s is one of almost unbroken triumph. The remarkable thing about New York is its ability to  thrive despite the massive technological changes that challenged every other dense city built around public
transportation.

Hmm. What are the reasons for NY supremacy? Pretty much what Mario Polèse said – Weather, centrality, geography, history and diversified economy. These factors have led to talent and skill moving to NY making it even a more bigger city.

First, New York’s emergence as the nation’s premier port was not the result of happenstance followed by lemminglike
agglomeration. While there are limits to geographic determinism, the clear superiority of New York’s port in terms
of its initial depth, the Hudson River and its location, and the other advantages provided by the water-borne connection to the Great Lakes ensured that this port would be America’s port. In this case, geography really was destiny, and the significance of trade and immigration to the early republic ensured that New York would dominate.

The second theme to emerge from New York’s history is the importance of simple transportation cost and scale economies. The rise of the city’s three great manufacturing industries in the nineteenth century—sugar refining, publishing, and the garment trade—depended on New York’s place at the center of a transport hub. In all three industries, manufacturing transformed products from outside the United States into finished goods to be sold within the country. Because New York was a hub and products were dispersed throughout the country and the world after entry into that hub, it made perfect sense to perform the manufacturing in the city.

The tendency of people to attract more people is the central idea of urban economics, and nowhere is that idea more
obvious than in America’s largest city. New York’s initial advantage as a port then attracted manufacturing and services to cater to the mercantile firms and to take advantage of their low shipping costs.

There was some crisis in mid-20th century due to technological changes- decline in transport costs, invention of Air conditioner and increase in automobile usage- led people to movement to other cities. But this was just a brief hiatus. NY had all the advantages which made people flock back to NY:

New York’s remarkable survival is a result of its dominance in the fields of finance, business services, and corporate management. Forty years ago, Chinitz (1961) described New York as a model of diversity in comparison with industrial
Pittsburgh. New York in 2005 does not look nearly as diverse. Today, 28 percent of Manhattan’s payroll goes to workers in a single three-digit industry; 56 percent goes to workers in four three-digit industries. New York’s twentieth-century success primarily reflects an ability to attract and retain a single industry, and the city’s future appears to be linked to a continuing ability to hold that industry. The attraction of finance and business services to New York  reflects the city’s advantages in facilitating face-to-face contact and the spread of information.

What about future?

While New York’s ability to weather past challenges has been remarkable, we cannot be certain that its future success is assured. New York’s importance as a port is long past. The declining transport costs of moving goods indicate that the scale advantages remain important only in services. Even in this area, technological changes may reduce New York’s transportation cost advantages. In the long run, New York City’s success depends on its advantage in transmitting knowledge quickly. This advantage may also be eroded by changes in information technology; however, in the short run, information technology may increase the value of face-to-face interaction and make New York stronger, not weaker (Gaspar and Glaeser 1998).

This crisis thtreatened to change equations but finance has only become more powerful. Not much changes expected in overall city economics.

Superb account of history, economics, geography, urban development..

Must read.

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