ABSTRACT
The urban capital which makes industrialization feasible is generated by two distinct types of demand. The first is the production requirements of industrial enterprises, and the second is the consumption requirements of the assembled urban work force. The capital requirements of social overhead are generated by cultural standards of consumption, and by the particular relation of the overhead to the productive technology. The traditional aim of development programs has been to minimize urban overhead costs for a given level of output and urban growth. Urbanization supports industrialization by providing external economies of labor assembly, communications, production linkages, and markets. The most serious effects of urban size on social overhead costs, however, result from the greater densities in large cities. The most important form of social overhead, both in terms of the permanence of its impact, and its supplementary role in the utilization of other forms of capital, is education.
