ABSTRACT
While merchant cities such as Venice and Bruges reached dazzling degrees of civic splendor, and industrial cities such as Manchester and Pittsburgh grew into global prominence, they also all witnessed subsequent decline. While trade and industry can generate spurts of growth they do not, on their own, guarantee longterm economic viability. For cities to survive and grow over the long term they need to be large and have a diversified economy. Size does matter! The urban economist Wilbur Thompson (1965) identifies what he calls a “ratchet effect”: above a critical size, cities will not decline. Thompson cites four reasons: larger cities have a more diversified base so that growth will be maintained even if a particular sector declines; they wield more political muscle and thus put more claims on public expenditures to stave off shrinkage; the big city is an important market in its own right; and big cities are more likely to be sites of innovations which provide the basis for subsequent growth. He proposed that the critical threshold figure was a population of one-quarter of a million, but it is better to consider the threshold as a relative figure varying over time and space. Whatever the exact amount, it is clear that the bigger the city, the more the ratchet effect comes into operation. But as we shall see, even large cities (of almost 1 million people), such as Detroit and Baltimore, have witnessed marked decline in the face
of manufacturing loss. The most extreme examples, ghost towns, are testaments to the fragility of economic growth based on single industries in small towns.
