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Robert A. Margo: As an economic historian who passionately believes that public policy debates would benefit substantially from greater use of historical evidence, I view Joseph Gyourko's paper as a cause for celebration—and, hopefully, a start of a trend. In terms of the big picture, I find myself largely agreeing with Gyourko's analysis, but I do have some quibbles. My quibbles focus on language and the role of race, and I offer some additional evidence on the extent of and reasons for Philadelphia's success in attracting manufacturing in the nineteenth century.

Language

Cliometrics is economic history as it is practiced by economists. One of the odder features of the intellectual history of cliometrics is that its practitioners have largely bypassed urban history. This is especially true in the case of the United States. Indeed, when I teach an undergraduate course in American economic history, I am lucky if I can devote a single class, much less two or three, to urban topics. As a result, an economist seeking to write an economic history of cities or a particular city à la Gyourko is essentially forced to rely heavily on the secondary literature by traditional historians. This is not necessarily a problem when the historians are as eminent as those writing on Philadelphia. However, because the secondary literature does not derive from economics, the language and metaphors herein are generally not economic metaphors, and consequently, not always illuminating for economic analysis.

How does Gyourko frame his debate? The frame is one of relative failure. Every so often, a city is hit with a negative shock. How, if at all, does the city respond, or in the author's more colorful language, "reinvent" itself? If a city fails to reinvent itself and loses population—retaining or growing a population being a measure of success—can one say why? Gyourko argues that, in the case of Philadelphia, one can find evidence in the city's ability to reinvent until comparatively recently, when a series of bad decisions along with "path dependence" (to use trendy jargon) made reinvention much less likely.

This way of framing bears more than a passing resemblance to one of the classic early debates of cliometrics: Did Victorian Britain fail? England was the first country to industrialize and, for a time, it had the highest per capita income in the world. But then along came the United States and other countries and, sadly for the British, they were no longer the highest per capita income country in the world. Why did Victorian Britain fail to retain economic leadership? Perhaps the British government spent too much time and too many resources taking up the so-called White Man's Burden. Perhaps Britain should have spent more money earlier in the nineteenth century bolstering its educational system. Perhaps free trade was a bad idea after all, unlikely as that may sound.

The resolution of this debate is that economic tales of failure are inherently problematic. The flip side of failure is convergence. Britain did not retain its status at the top of the economic heap but the average Brit is far richer today than his ancestors at the start of the Industrial Revolution—as is the average Philadelphian. Tales of "who's on first, who's on second" are not especially interesting as economic narrative. W. C. Fields notwithstanding, one would much rather be living in Philadelphia than in a great many places in the world.

In a nutshell, Gyourko says that Philadelphia evidently is no longer able to reinvent itself as it once did. Is this necessarily a bad thing? As economists, we should resist thinking this way, or at least think twice about it. As Gyourko remarks, a city is all about location—the need for everyone and everything to be somewhere. How does one know that the way Philadelphia looks (and behaves) today is not the optimal way? Would the gross national product of the United States really be higher...