Monday, February 06, 2012

New York City Is Dying

I've covered the decline of Brooklyn. What about the rest of New York City? The lure of Brazil's boom speaks to the tarnished luster at the top of the US urban hierarchy:

It just made sense to be in South America’s economic heart, Jonathan Rosenthal reasoned, no matter that he had been working on Wall Street with some of the investment world’s most heady firms. ...

... “When you’re talking about skilled labor, there’s a huge lack of supply, so as a result if you have the courage to come down to Brazil, or you have the language skills, or you’re Brazilian American, it’s a no-brainer to come down here,” said Rosenthal, 31, who runs Newfoundland Capital Management with a Brazilian partner.

In New York, Rosenthal had a golden career. At 22 he joined Morgan Stanley, and he later worked for one of Julian Robertson’s Tiger Cub funds. But the culture of New York’s financial world can be stiff and closed, Rosenthal said, and he was attracted by the investment possibilities in Brazil and neighboring countries.

Here, Rosenthal said he runs into the executives of big firms at the gym, and he is a cab ride away from 80 percent of the firms on the Sao Paulo exchange. “Those interactions are priceless,” he said. “You don’t get that in New York.”

Emphasis added. Use to be, not too long ago, that one could get anything in NYC. Americans didn't need to migrate to another country. They could move to the Big Apple and tap into the world. BRIC economic geography is changing that. Sao Paulo (not Brazil) is where the action is.

This talent emigration pattern helps me to rethink the prospects of hegemonic transition. Will China or India replace the United States at the top of the heap? The question ignores the current urban century and the rise of the metro hegemon. The economic power of New York and London challenges that of nation states. The main metric for measuring that power is migration. The domestic and international draw of NYC is a testament to that metro's might. But talent choosing Sao Paulo over New York is a sign of the times.

3 comments:

Randy said...

Nice post! One point, if I may.

"Sao Paulo (not Brazil) is where the action is."

Sao Paulo is a metropolis the size of Argentina's Buenos Aires, but even though Argentina is the richer country of the two it's Sao Paulo that has been getting the more international attention. I'd argue that one reason Sao Paulo has fared better than Buenos Aires in this regard is that Sao Paulo is the metropole of a Brazil with five times' Argentina's population--Sao Paulo state alone has the population of Argentina.

(Fun with maps: http://www.economist.com/content/compare-cabana)

Sao Paulo is clearly a major selling point, but it's a selling point in large because it is the metropole of a populous demi-continent that's itself far and away the largest nation-state in South America. Buenos Aires' direct sphere of influence is smaller and less obvious.

Jim Russell said...

Randy,

Thanks for the comment. My first reaction to the "fun with maps" point was that it supported my thesis. Sao Paulo is the Brazilian economy. Then I started thinking about metropoles in less populous nation states. Can you get a comparable metro economy in a country with a dramatically smaller population than that of Brazil? No counter-example (to your point) leaped to mind.

Randy said...

Thinking about it, Sao Paulo's ratio is actually not atypical. A comparable proportion--one-sixth--of Britons, French, Mexicans, and Japanese live in the environs of London and Paris and Mexico City and Tokyo, respectively.

Other countries have higher proportions in their core than that. Buenos Aires has a bit more than a third of Argentina's population in its metropolitan area, Seoul nearly half of South Korea's, while Gauteng--the province centered around Johannesburg, excluding exurbs beyond the province's boundaries--has one-fifth of South Africa's population, as does (I think) Istanbul in Turkey, Cairo in Egypt, and Tehran in Iran. (Do higher proportions of national populations live in unquestionably primate cities in later-urbanizing/developing countries?)