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The Nature of Economies

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Jane Jacobs, The Nature of Economies, Modern Library, 2000

Commentary by Jed Grobstein. Jed wrote this commentary between his freshman and sophomore years at Pomonoma College.

In her most recent book, The Nature of Economies, Jane Jacobs expands upon a range of ideas first introduced in the work that catapulted her into the public eye, The Death and Life of Great American Cities (1961). Here, however, instead of focusing on the development of massive western, urban centers, Jacobs devotes her attention to an even broader aspect of the natural world: development itself. The root of Economies is the idea that there are fundamental principals at work in the world that govern the development and evolution of every dynamic system. She begins by drawing parallels between human economic systems (bartering, buying/selling etc) and what most people would refer to as Œnatural systems¹: ecological niches, ecosystems and so on and so forth. She then goes one step further and asserts that not only do economies and ecosystems posses many of the same characteristics (neatly laid out in seven, quite accessible chapters), but that they are fundamentally aspects of the same universal processes. She believes, and propounds quite convincingly in fact, that all healthy (read: successful) dynamic systems, be they human, plant, animal or inanimate, operate under the same set of universal laws, and must be diverse and adaptable in order to survive.

The first of her assertions is nothing new to either ecologists or readers of her earlier works. Jacobs speaks of "differentiations becom[ing] generalities from which further differentiations emerge" as her code phrase for evolution, and shows how all differentiations must interact with and depend on others in the same sort of mother earth/web diagram with which all elementary school students are familiar. She has some very interesting ideas about the necessity of diversity in dynamic systems based on reusing waste as energy and on the different methods that systems use for correcting themselves and evading collapse/death. Jacobs actually saves her most biting criticisms for "misanthropic ecologists" and "arrogant, meddling economists" alike, unable or unwilling to grasp the universality of her vision. Jacobs great triumph in ŒEconomies¹ is not in the presentation of a whole array of stunningly original ideas, but in her synthesis of a huge panacea of concepts and theories into a well constructed, convincing argument about the way the world works.

A few words about Jacob¹s decision to utilize a conversational format a la the Platonic Dialogues. While it makes for some amusingly stubborn personalities, her decision to make her characters "insufferable yuppies" (Davis, The Village Voice) probably opened her up to unnecessary and unwarranted criticism. However, it appears that this format may attract those who might not otherwise sit down to read what amounts to a (extremely broad) lecture on natural development. Indeed, that was undoubtedly at the heart of her decision.

Jacobs' work is a very clever, optimistic view of the dynamic stability that humans, as part of a greater ecological web, must participate in. But at the same time it remains a warning to those that think that humanity has some sort of monopoly on adaptation. In her words, "nature affords foundations for human life . . . [but also] sets its possibilities and limits."