While everyone wishes to move towards a bigger and better city, I decided to settle in a small town. All of my friends questioned about this strange decision. Anyways, before I may discuss about the reasons for which I opted to settle in a small town (Sagar in M.P.) rather than trying to make a mark in a big city like Mumbai, Bangalore, or Chennai, let us try to understand the benefits of living in a big metropolitan.
Living at any place is a subject of economic evaluation. The economic principles in a large, densely populated city are magnified. The exactness of economic principles can be easily experienced while living in a big city, the small town doesn’t offer that much competition and refinement for economic viabilities. As a result, big cities offer a great deal of attraction for those who can make good use of their personal entrepreneurial drive if they can understand the economic laws. Let us discuss about the salient economic features of a big city.
The Division of Labor
The necessity of Division of Labor was emphasized by Ludwig Von Mises as he stressed that the base of a prosperous civilization is the higher productivity made possible by the division of labor.
If every one of us is required to grow and cultivate their own food, make their own cloths and build their own house and so on, most of us will miserably fail in life, and the few geniuses who will survive, will be forced to live in extreme poverty. The good thing is each of us gains the opportunity to specialize in few tasks compatible with our natural skills. This allows us to produce more than what we need. For example, a farmer in the field produces much more grains than his family will eat in a year and the workers at TATA Motors produce more tractors than they could ever drive. All of these producers sell their products to the highest bidders, who in turn sell their own products or services to others at highest possible prices.
Labor is certainly more productive when distributed in this manner and hence, division of labor results in much higher total production. More production leads to more consumption per capita and this improves the standard of living that would be impossible without division of skilled labor and trade.
While this basic principle also work in a small city like Sagar, the significance of division of labor are much more visible in a metropolitan like Noida, Gurgaon or Delhi.
Every workday begins with the voluntary act of people making the city run. Street vendors configure their carts and booths, Metro trains, local buses and subways begin transporting masses of workers to their workplaces, and shopkeepers sweep the sidewalks to welcome shoppers to their stores. Delivery boys zoom around the different parts of the city moving newspapers, Dominos Pizza, lunch boxes, and other packages from one business to other, while trucks bring fresh meat, vegetables, fruits to various restaurants.
While it all happens in a small town such as Sagar too, but whatever happens here is very slow and it is just a fraction of the happenings in a big city like Chennai, Mumbai or Kolkata.
However, I preferred to stay in Sagar because, I have got a much faster channel of delivering packages and making the world run smooth and my channel is the internet. I really don’t need to pick up the Metro train at 8:45 Morning everyday to reach office at time. I work from my home and I deliver my product within a few seconds through internet, it is faster, reliable and secure channel of delivering products, yes I am a computer programmer and a freelancer.
Big cities are heaven for shoppers. You will be able to enjoy the best and most attractive shopping malls, all sorts of branded product chains, multiplexes, adventure parks, entertainment parks and a lot more in a densely populated urban area. The best clothing designers, lawyers, actors, academic teachers, and chefs of India can easily be located in a metropolitan like Delhi or Mumbai. It is genuine too.
Let us take an example of a highly skilled chef. This chef can prepare the most sumptuous Italian food in India, he simply is the best. However, it is really expensive to provide the excellent taste. The chef can actually run a profitable restaurant in Sagar, charging Rs1000 per meal. However, not many people in Sagar will prefer to invest Rs1000 for a meal. Yet, the chef may succeed in selling (say) 30 such meals in a month. So he will make Rs30000 per month which would be enough to pay the rent of the restaurant set-up, equipments, ingredients, and his four other employees who work as helpers and waiters. But the chef will fail to save any worthy amount for himself.
In contrast, if he goes to Mumbai, the chef can make a team with the most talented marketers, designers and other creative workers to design and promote a much more impressive restaurant in Mumbai. He will also be able to hire the best waiters and waitresses of India as most of the best talents live in Mumbai or other metropolitan cities of India. The big thing is he will get a huge and wealthy customer circle. If the chef is really good, he will succeed in serving his food for an inflated charge of (say) Rs2500 per meal and he may succeed in serving 30 meals in a day. Obviously, his expenses would be much higher in Mumbai, yet, his earnings will be sky-high and he will save much more than what he can in a small town like Sagar.
This is the main reason why everything which is best, such as the food, used bookstores, ladies shoes, designer garments etc. are typically available in big cities such as Indore or Bhopal, while you may not get this much quality in Sagar.
However, I am no chef. What I produce, I sell it in a much bigger market than the market of Mumbai or say Delhi. I deal on internet and my clients can approach me anytime, day and night. Furthermore, I am not that much keen shopper. So, I really don’t like the idea of getting the best Italian food, or designer clothes or shoes. Obviously, I prefer to live in Sagar.
The Increasing Market Prices:
Living in a big city is certainly a plus point for entrepreneurs and talented workers. There is a huge market of rich customers. Anyone who succeeds in making a grip in a large city like Mumbai or Chennai can easily become a millionaire within a year. However, it would be very hard in a small town like Sagar.
While it all seems true, yet not all the talented people move to big cities. Furthermore, while one can say that many of the best products and services are available in metropolitan areas like Noida or Gurgaon, why don’t all consumers move to these places too?
For a person like me, I don’t like big crowds and prefer to live in small, peaceful and green place with uneven earth or small hills like Sagar and this is a big reason. However, the major reason is the extreme price rise in big cities which is a natural parameter to control the movement from small towns to big cities. The price of land increases to extreme limits in big cities such as Noida or Gurgaon and this happens to control the land expanse among the competitive users. It is extremely expensive to buy or rent a living house in Noida or Delhi and the current scenario in which the Supreme Court has already aborted the plans of many constructional sites in Noida, the things have gone murkier. As a result, the available apartments and houses are smaller and densely situated to accommodate large and increasing population.
The high price of real estate decreases the profitability of businesses and to counter it, the prices of every other commodity are raised by the entrepreneurs and vendors. As a result, living in a metropolitan like Mumbai or Delhi becomes highly expensive and it also becomes showy.
While the economical set up of big cities certainly describe the importance and truthfulness of general principles of free markets and confirms that property rights and voluntary exchange brings prosperity to humanity, the internet or the online voluntary transactions prove to be much profitable and better means to establish the essence of free market.