Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts

of George Mason University and Stanford University's Hoover Institution. Our website is econtalk.org

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Today is October 17, 2011, and my guest is Ryan Avent. The economics correspondent for the

economist and author of the Gated City, Ryan, welcome to Econ Talk. Hi, Russ, thanks for

having me. Our topic for today are the ideas in your recent book, The Gated City. It's

a Kindle single, by the way. It is brief by book standards, but it is full of interesting

economics and many, many important observations about how cities actually function. Your

main argument in the book is that urban policy of various kinds is handicapped growth in

America. It's a very interesting and provocative argument. So I want to begin by talking about

what's special about cities, the topic you deal with in the book. Why are cities important?

Why are they places of productivity?

Right. Well, cities exist basically because there are limits to how easy it is to ship

goods and how easy it is to move people. And so despite all the improvements we've seen

in transportation and communication technology, distance isn't dead, it's still important

for different kinds of activities to group themselves together. And so during the industrial

revolution, when it was very expensive to move goods around, it became really important

for big factories to locate near to each other. We had these huge industrial cities. Now

it's cheaper to move goods, but it's still expensive to move people. And people still

need to interact and to do all sorts of things to make the economy run. And so cities

...