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Good diary.

But then I would say that.

For me, one of the important things about London (and this is reflected in other places around the world, e.g. SF) is that network effects tend to trump cost issues for a long time.

The market theory is that businesses faced with all these expenses (after all cost of living translates into labour expenses in the "higher echelons" of the economy) will move to cheaper parts of the country.

And yet. It just doesn't happen. Some of it is down to the decay of the transport network. But Leeds, for example, has soaked up some percentage of legal service and banking operations (by virtue of being up the electrified train line) from London. But still, you can count the number of business decisions made up here on one hand.

My own view is that this is all a toxic blend of American economic voodoo being applied to a European country. Part of the US ethos of "getting government out of the way" fundamentally relies on geographical plenty. We can see this not only in the expansion of say, Austin TX, but also the business model of Walmart.

Trouble is, we can see that London just doesn't have that much land around it, so leaving things be just pushes us towards an inflection point.

by Metatone (metatone [a|t] gmail (dot) com) on Tue Oct 30th, 2007 at 07:22:26 PM EST

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