In his article “Why is the ‘Cost of Living’ in Cities so High?” Robert Murphy argues that higher population density such as in big cities can lead to a greater productivity of labor of the citizens.
But wouldn’t most of the gains of such an increase in productivity go to landowners, since land-in-big-cities is by definition scarce? (Land as such is actually superabundant in the US, but undeveloped tracts of land cannot be considered big cities.)
Sure, they can build skyscrapers or perhaps in the future underground dwellings, but it seems that the urban folks who don’t own the land and buildings lose out.
I mean, they get paid higher wages but also pay higher rents.
Why then are they there? My guess is that the population distribution is somewhat equilibrated, and it’s just a matter of personal preference where one chooses to live.