This is the claim in Enrico Moretti’s new book ”The New Geography of Jobs”. This book is excellent, I strongly recommend it. I could write dozens of blog posts about this book, and indeed I think I will write several. But one interesting argument he makes is that Richard Florida is wrong that making a city an interesting place to live is a good prescription for economic development. On Moretti’s account, hundreds of millions of dollars have been spent attempting to use arts and culture as an engine of economic development. While it is true that economically successful cities tend to be culturally rich and open-minded, he argues that Florida essentially gets the causation backwards.
He cites two prominent examples. One is Seattle, which was an economically struggling city with a declining population until Microsoft relocated there from New Mexico in the 1980s. This lead to Seattle becoming a software hub with lots of innovative companies, which in turned created a demand for a rich cultural scene. Because history clearly shows the catalyst to development was Microsoft’s decision to relocate, this is almost a natural experiment to show how innovative clusters generate nice places to live, and not vice-versa.
