Nature of Economies

Nature of Economies
Jane Jacobs

Jacobs takes on a narrative voice to emphasize her points on how economies develop, something that both strengthens and weakens her essay, but nonetheless conveys the method of the economy like a ever-evolving machine.

Chapter Two: Nature of Development

All things “depend on the same underlying process of development”(16). Differentiation emerging from generality describes development on every scale of time and size, whether animate or inanimate. This can be applied to all living things and all systems of life. The second universal principle of development: Developments depend on co-developments. “An economy consists of interdependent relationships, competing and yet also knitting together co-developments”(22). For example, if the development process is lacking in a town or settlement, things either given or sold to it are merely products of the process somewhere else. Thus, Jacobs almost suggest a Darwinian belief of development, despite the fact that she argues that organisms influences differentiation decisions. Jacobs rejects the notion of “The thing theory” which believes that development is a result of possessing things such as factories, dams, schools, tractors…etc.

Chapter Three: Nature of Expansion

Self-sustaining systems are not really self-sustaining. Systems need infusions of energy from outside itself. The ultimate source of the earth’s energy infusions is sunlight. “Energy infusions are only the first half of the energy story. The second half is energy discharge. Eventually, a system discharges all the energy it receives. Energy/matter can be converted from various forms to various other forms, but it can neither be created nor destroyed…it is eventually radiated outward (45)” Thus, Jacob’s principle becomes: Expansion depends on capturing transient energy. The more different means a system possesses from recapturing, using, and passing around energy before its discharge from the system, the larger are the cumulative consequences of the energy it receives. “This energy-flow hypothesis of economic expansion explains why countries whose settlements are overwhelmingly rural are invariably poor, no matter how small or how large their exports and imports may be”(63). Diverse ensembles expand in a rich environment, which is created by the diverse use and reuse of received energy.