Wednesday, September 7, 2011

Geoffrey West: The surprising math of cities and corporations

Geoffrey West

Organisms scale along a power law with exponent 3/4:
you need less energy, slower heartbeat, ect as mass increases
Economy of scale

Cities infrastrcuture scales with a power law of 0.85:
# gas station/inhabitant, (yes, but what about # restaurants/inhabitant? What makes the gas station different from a restaurant??)
miles of road/inhabitant

Cities outputs/dynamism scales with a power law of 1.15:
Wealth, salary, number of patents, "supercreatives"

The positive scaling in cities comes with a cost-- the exponential growth leads to collapse when the resources it is based on are used up. The solution is to innovate new resources. The challenge is that as the pace speeds up (as a result of the increasing rate of return), so does the time between collapses.

Reminds me of this Hussman Funds on collapse points in markets (specifically gold)

I summarize it here.

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