I’ve periodically written about consumption and production theories of cities – that is, whether people mostly move to cities based on consumption or production amenities. The production theory is that what matters is mostly production amenities, that is, jobs, and this underlies YIMBYism. Consumption theory is that people move for consumption amenities, and, moreover, these amenities are not exactly consumption in the city, for example good health outcomes, but consuming the city itself, that is neighborhood-level amenities in which who lives in the city matters. The latter theory, for example promulgated by Richard Florida, is that jobs follow consumption amenities like gay bars, and not the other way around. It is wrong and production theory is right, and I’d like to give some personal examples from Berlin, because I feel like Berliners all believe in consumption theory.
The situation in Berlin
Berlin is an increasingly desirable city. After decades in which it was economically behind, the city is growing. Unemployment, which stood at 19% in 2005, was down to 7.8% last year. With higher incomes come higher rents, and because Berlin for years built little housing as there was little demand, rents rose, and it took time for housing growth to catch up; on the eve of corona, the city was permitting about 6 annual dwellings per 1,000 people, up from about 1 in the early 2000s.
This is generally attributed to tech industry growth. There are a lot of tech startups in the city. I don’t want to exaggerate this too much – Google’s biggest Germany office is by far Munich’s, and the Berlin office is mostly a sales office with a handful of engineers who are here because of a two-body problem. But the smaller firms are here and the accelerator spaces are very visible, in a way that simply didn’t exist in Paris, or even in Stockholm.
Berlin’s production amenities
I might not have thought that Berlin should attract so much tech investment. My vulgar guess would be that tech would go to cities with many preexisting engineers, like Munich and Stuttgart, or maybe to Frankfurt for the international flight connections. But Berlin does make sense in a number of ways.
The city is mostly fluent in English. Jakub Marian’s map has France 39% Anglophone and Germany 56%, which doesn’t seem too outlandish to me. But Paris seems in line with the rest of France, whereas in Berlin, service workers seem mostly Anglophone, which is not the case in (say) Mainz or Munich.
The global tech industry is Anglophone, and good command of English is a huge production amenity. Other English-dependent industries seem to favor Anglophone European cities as well, for example various firms fleeing Brexit moved their European headquarters not to Paris but to Amsterdam or maybe Dublin.
The federal government is here. This is not relevant to tech – the startups here don’t seem to be looking for lobbying opportunities, and at any case German lobbying works differently from American lobbying and firm-level proximity to the capital is unimportant. However, the government stimulates local spending, which has increased employment. The government’s move here has been gradual, with institutions that during division were spread all over West Germany slowly migrating to Berlin.
The quality of infrastructure in Berlin is very good. The urban rail network was built when Berlin was Western Europe’s third largest city, after London and Paris, and has even grown after the war because the West built U7 and U9 to bypass Mitte. This means that commute pain here is not serious, especially on any even vaguely middle-class income. Moreover, Berlin has benefited from post-reunification investment, including Hauptbahnhof and two high-speed rail lines.
Consumption theory and the counterculture
The queer counterculture that I am involved with in Berlin tells a different story. To hear them tell it, Berlin has a quirky, individualistic, nonconforming culture, unlike the stifling normality of Munich. Artists moved here, and then other people moved here to be near the artists, paying higher rents until the artists could no longer afford the city. This story is told at every scale, from Berlin as a city to individual neighborhoods like Prenzlauer Berg and Neukölln. A lot of the discourse about Berlin repeats this uncritically, for example Feargus O’Sullivan at CityLab/Bloomberg Cities writes about the cool factor and about gentrification of old buildings.
It is also a completely wrong story. This is really important to understand: nobody that I know in the sort of spaces that are being blamed for gentrification, that is the tech industry and its penumbra, has any interest in the counterculture. I go to board games meetups full of tech workers who are fluent in English and often don’t know any German, and they have no connections at all to the local counterculture. They interact with immigrant culture spaces, not with the 95%+ white counterculture as defined by queer spaces in Neukölln that complain about gentrification in a neighborhood undergoing white flight at the rate of postwar New York (compare 2019 data, PDF-pp. 25 and 28, with 2016, PDF-pp. 28 and 31). Occasionally there are crossovers, as when an American comedian hosted live standup in February and then there were tech workers and said American also interacts with the counterculture, but a standup comic is not why Berliners complain.
Nor do I find foreign tech workers especially interested in German minutiae comparing Berlin with Munich. By my non-German standards, Berliners already jaywalk at indescribably lower rates, and I gather that Munich is stuffier but that’s not why I’m here and not there, the rents and the language are.
We’re not even particularly oppositional to the counterculture. I personally am because seeing queer space after queer space host indoor events during corona without masks was a horrifying experience; I went to a queer leftist meetup in late October in which people huddled together maskless and I was the only one with a mask on, except for one trans Australian physicist who drank a beer and then masked after finished. But the rest? They don’t care, nor should they. The counterculture is not the protagonist or the antagonist of Berlin’s story; it’s barely a bystander. Consumption theory is just what it promotes in order to convince itself that it’s important, that it spreads ideas and not viruses.