The Internet, New York, Detroit, and House Concerts
By Arnold Kling
This paper advances the hypothesis that improvements in transportation and communica-
tion technology can explain both the decline of Detroit and the reinvigoration of Manhattan. While we present some suggestive evidence, the main contribution of this paper is a model that illustrates how reductions in the costs of communication can cause manufacturing cities to decline and innovative cities to grow. Reductions in transport costs reduce the advantages associated with making goods in the Midwest, but they increase the returns to producing new ideas in New York.
Not exactly news to Richard Florida. Although I wonder if the low dollar won’t interrupt the decline in manufacturing for a little while.
Speaking of changes wrought by the Internet…This weekend, we went to a “house concert,” where a professional artist does a gig in somebody’s basement. The artist in this case was Mike Rayburn, who appeals primarily to a demographic of aging baby boomers who are willing to laugh at themselves.
The Internet lowers the cost of arranging this sort of gig. I think it makes it easier for an entertainer who does not hit the big time in the mass market to still make a decent living.