The Wrong Kind of City?
27th October 2025
Historically, cities in industrializing countries were often identified with the things they produced. Manchester is where they made textiles, Pittsburgh is where they made steel, and Detroit is where they made cars. These urban identities weren’t confined to heavy manufacturing: New York is synonymous with finance, Los Angeles with movies, and Milan with luxury goods. Nor has the tendency to identify urban areas with specific economic activities fully disappeared: Today, the Bay Area is where they write software and Taipei is where they fabricate semiconductors.
These are all examples of what the sociologist Max Weber called, in a 1921 article The City, 1 producer cities: urban areas organized economically around some specific trade or particular manufactured goods that could be exported to other areas.
In contrast to these producer cities are what Weber called consumer cities. These were places organized economically around a specific set of residents with rights or privileges to some stream of income, like land rents or taxes. Weber used historical Beijing, which was centered on government officials, and Moscow, centered on landowners collecting rents from peasants, as examples. A contemporary example is Dubai, which grew rapidly around oil revenues. 2
Weber attributed the economic development of Europe relative to Asia to the predominance of its producer cities. The advantage he posited wasn’t because producer cities were necessarily larger?—?Beijing was perhaps 10 times as large as Manchester on the eve of the industrial revolution?—?but because producer cities had a higher capacity for innovation. They were dynamic.
Because producer cities are dependent on trade with other cities or countries, they have more incentive to innovate to gain market share. Consumer cities, on the other hand, are more likely to rely on rent seeking?—?and therefore experience economic stagnation. Moreover, innovations in one producer city can spill over to other producer cities through supply chains (cheaper steel in Pittsburgh makes for cheaper cars in Detroit)?—?but anything that benefits a consumer city likely comes at the expense of another city or region (like higher rents for agricultural tenants).