Observations on Accounting Procedures and Urban-Size Policies

The existence of inequalities among the population of all free-market economies has led to investigations of the location of social problems. Many of these problems are concentrated in large cities, which places are also believed to generate many of the benefits considered vital to continued economic growth. Measurement and evaluation of the costs and benefits of cities of various sizes is thus important for the derivation of policies which will minimise costs and maximise benefits. With regard to measurement, this paper argues that costs are not properly accounted for, and a method of doing this is suggested. With regard to evaluation, I argue against liberal economists who see costs as necessary evils to be countered by price mechanisms and, as a consequence, inequalities.