Agglomeration economies are “the benefits that come from clustering in cities” (46), where the concentration of industry and transport systems makes shipping easier and cheaper, and where large urban populations gather to further shrink the distance between manufacturer and consumer. These factors improve “returns to scale” (46), so that larger production runs become cheaper per unit manufactured. In the US and Europe, major cities grew on land next to rivers and oceans to take advantage of inexpensive water transport; railroads later fanned out from these transportation centers into the hinterlands, bringing the advantages of scaled-up production to people living well inland. Agglomeration economies constitute a large portion of the advantage that cities have over rural areas. 

Hard-charging, outspoken Boston mayor James Curley’s angry defense of the city’s poor Irish Americans so alienated well-off local Anglo-Saxon Protestants that they moved away, leaving Boston with a population largely of poor people and little investment money to create jobs for them. Glaeser calls this type of ethnic politics “The Curley Effect,” and he uses it to characterize Detroit Mayor Coleman Young’s alienation of that city’s white population, especially its wealthy elite, most of whom moved out, leaving behind a town with few financial resources and a population that could no longer find enough jobs.