Issue Briefs

The Madness of cities

The Madness of cities

Martin Hutchinson

December 18, 2018

Charles Mackay’s 1841 masterpiece asserted that the “madness of crowds” created “extraordinary popular delusions” that led to investment bubbles and crashes. Recent events suggest that when those crowds congregate in cities, rationality flies out of the window, and delusions infect the entire urban body politic. Rationalists, dwelling in leafy suburbs or deep in rural hideaways, need to find ways for their calm consideration not to be outvoted by the passions of the urban mob.


The behavioral researcher John B. Calhoun illustrated the dysfunctionality of cities in his 1960s studies of mice. When they were given infinite quantities of food but finite space, the mice developed antisocial habits that ended in mass population extinction – the overcrowded conditions formed a “Behavioral sink”, in the terminology of that time.

We are not mice, of course. Yet the human species was also not designed to live in vast agglomerations of population. For one thing, before the onset of industrial technology and modern agriculture, such agglomerations were almost impossible to feed.

Ancient big cities

Ancient Rome had a population of 1 million and drew food from its domination of the entire Mediterranean basin. But Ancient Rome fell, and anyone who has read histories of the nastier 3rd Century Emperors can certify that their behavioral patterns, even though they lived in luxury, became pretty antisocial. Sir Lawrence Alma-Tadema’s picture of the Roses of Heliogabalus is very beautiful; but the behavior it illustrates, inviting guests to dinner and then suffocating them in rose petals, was truly pathological and would have been recognized by Calhoun. It would also be recognized by the inhabitants of the more decadent parts of New York, San Francisco, Paris or London.

Today’s madness

Today, the madness of cities manifests itself, not so much in moral decadence, but in extreme and foolish political and economic ways. Economically, the housing markets of Tokyo in the 1980s, or of London and San Francisco today, have no basis in the real lives of their citizens. There is no way in which people earning even above-average salaries in those cities can afford to buy adequate living accommodation there, unless they have large parental or lottery resources. In these cities the housing markets are entirely governed by demand from speculative foreign billionaires.

Rational actor: move out

If city-dwellers in the largest cities were economically rational, they would immediately leave the poor living conditions of those cities and migrate to smaller cities or towns where the housing market was more reasonable and their net living conditions would be better, even at some sacrifice in earnings. Similarly, large companies would move their operations out of the mega-cities, in order to give their employees better living standards while paying less in wages and benefits.

New corporate headquarters

But this is not what is happening. Amazon, one of the most fashionable of large employers, is opening two new head offices in large cities with exorbitant real estate costs. One, in Crystal City, VA., one can understand. The 25,000 employees Amazon will employ there will mostly be lobbyists, adding value to the company by extracting rents and privileges from the overstuffed and corrupt U.S. government.

However, the other headquarters, in Long Island City, Queens County, New York, has no rational purpose at all. Amazon will have to pay a substantial wage premium to employees in that location, and they will suffer New York’s exorbitant real estate costs and very sub-standard services, all for the privilege of telling their rural cousins they have a job and an apartment in New York (and not even Manhattan!) One would like to think that the equation works because Amazon’s ultra-high-quality employees have a passion for the Metropolitan Opera but alas, these people are Millennials!

Irrational political choices by city dwellers

Since they are highly irrational to live in large cities, at least when those cities’ real estate markets are overstretched, it is I suppose unsurprising that the inhabitants of large cities are irrational in their political and political-economic choices. For example, urban dwellers consistently support higher taxes and welfare payments than those from rural locations. Since both taxes and welfare payments are designed progressively, this makes no sense if city dwellers’ incomes and expenses are both higher than those of country folk. Similarly, urban dwellers are consistently more favorable to immigration than rural dwellers, yet they pay the greatest costs in crime and welfare services of low-skill immigration gone wrong (the chief benefit, cheaper lawn maintenance, goes to suburban dwellers rather than the urban, who don’t have lawns.)

In Britain, dwellers in the immense urban agglomeration of London, where real estate prices are utterly unaffordable for the normal Briton, are fanatically in favor of enslaving their countrymen by subsuming British independence into the Soviet-style super-state of the EU, rather than reasserting the country’s time-honored autonomy and freedom through Brexit.

Over representation

If city-dwellers suffer from irrationality, and support policies that are damaging both to themselves and to society as a whole, it follows that we should not continue to over-represent them in our political systems. Historically, there have been two methods by which allocation of representatives in a parliament has been made.

One, the system more common today, is by population. This inevitably produces over-representation for the large agglomerations of population in big cities. Given the corruption and poor record-keeping that are customary in big-city governments, the over-representation of cities is worsened by election fraud, whereby the large transient and immigrant populations of those agglomerations, many of whom are in any case not eligible to vote, are misrepresented or personated by unscrupulous party organizers. Thus, they nominally cast votes to which they are in many cases not entitled, and in other cases did not themselves cast, for lethargic, drunken or drug-induced reasons.

Rural voters, on the other hand, living in smaller communities where everybody knows everybody else, are recognized by the poll-watchers when they vote, and so everybody concerned knows that their votes are valid.

Representation by location

The other method of apportioning seats and votes, common at the founding of the Republic, is by identifiable location. This survives today in the voting for the U.S. Senate; each state is a well-defined place, and each well-defined place is entitled to elect two Senators, no more and no less, whatever its population.

The same principle applied in the pre-1832 British franchise. London was a place in 1295 when the system was set up, as was Old Sarum, so each place had the right to send two burgesses to Parliament (there was a separate franchise for the counties, also with two MPs per county.) Places that did not have parliamentary constituencies, such as the American colonies before 1776, were represented virtually.

By 1800, the populations of some of the places, such as Old Sarum, had moved – in that case to the cathedral town of Salisbury – so the original place had become uninhabited. There was thus a need on a case by case basis for such parliamentary seats either to be moved to the new city of Salisbury or, if as in the case of Dunwich the entire constituency had fallen into the ocean, for it to be replaced by one of the new places that had sprung up since the franchises had been allocated, such as Leeds, Manchester or Birmingham – or, if the American colonies had still been colonies, Boston, New York or North Carolina.

UK: 1832 Reform Act

This principle was destroyed by the badly designed 1832 Reform Act, which was largely an exercise in Whig gerrymandering. All kinds of time-honored constituencies were abolished, many of which, especially in Cornwall, were still just as inhabited as when they had been established centuries earlier. Their franchises were given, not only to Leeds and Birmingham, but to constituencies that were not really places at all, such as Finsbury and Lambeth, which were not separate places at all, with a civic life of their own, but mere locations within London where agglomerations of people happened to live.

The redistribution of 1832 was allegedly carried out on the basis of population, but at the same time the franchise was radically restricted to householders of £10 ratable value, so that even with the inclusion of new big cities, the electorate was increased by only 15%, and many working class “forty-shilling freeholders” were disfranchised. Far from being the well-spring of our modern democracy, as Whig historians have alleged, the Reform Act did nothing whatever for the bulk of the population, disfranchised many rural voters, and gerrymandered the inept Whigs into semi-permanent power for the next half century.

End cities’ over representation

Cities are a blight on our democratic system. They introduce corruption and irrational thinking. Of course, they must continue to have representation, but we should consider a franchise based on “place” that would reduce their power.

That way, the superior wisdom and undamaged intellects of suburban and rural electorates would dominate our political decision-making, to the great benefit of all citizens.


Martin Hutchinson is a GPI Fellow. He was a merchant banker with more than 25 years’ experience before moving into financial journalism. Since October 2000 he has been writing “The Bear’s Lair,” a weekly financial and economic column. He earned his undergraduate degree in mathematics from Trinity College, Cambridge, and an MBA from Harvard Business School.

This article was originally published on the True Blue Will Never Stain

The views and opinions expressed in this issue brief are those of the author.