We are all, said Keynes, the slaves of some defunct philosopher. For philosopher, read economist. The thought came to mind one day last week when, in the course of a journey from my home near Cambridge to the railway station, I passed by the Marshall Library in the university's Faculty of Economics and Politics. The library takes its name from Alfred Marshall, the eminent Victorian who did a great deal to shape the emerging 'dismal science' and whose collection of books was the seed-crystal from which the present magnificent library was grown.
As the crow flies, my journey measured just over six miles. But it took almost an hour to travel the distance in a car. It would have been quicker by camel. As it happens, I do not normally have to drive into Cambridge at rush hour, but tens of thousands of less fortunate folk do, and they endure interminable traffic jams and pump out unconscionable amounts of pollutants in the process.
Cambridge is choking on prosperity. It has the heaviest concentration of high-technology companies, venture capital and ancillary services of any town in Europe, perhaps of any town outside North America.
Every shop in the centre has signs advertising vacancies. One cannot enter a supermarket without running into posters advertising for, nay, begging for, workers. Unemployment is, to all intents and purposes, zero.
The Science Park, on the outskirts of the city, is so crammed with hi-tech companies that their employees queue for half-an-hour merely to exit on to the A14. Across the road the St John's Innovation Centre, a nursery for start-ups, is filled to the rafters with new companies. The old Cambridge City football ground has been turned into a huge office complex. Ditto the old council offices on the top of Castle Hill. Ditto the old Chivers jam factory in Histon, and the suburban gardens at Mount Pleasant. A few miles out of town a new 'research park' has risen from a gravel pit, and its first units were let before the water had been drained from the site.
What has all this to do with Marshall? Simple: Cambridge is an example of a phenomenon about which the old boy wrote extensively - the tendency of firms to cluster together. Marshall called it the theory of 'industrial districts'. Such districts enjoy the same economies of scale that only giant companies get. Specialised suppliers arrive. Skilled workers know where to come to ply their trade. And everyone involved benefits from the spillovers of specialised knowledge. As Marshall put it in his Principles: 'The mysteries of the trade become no mysteries, but are as it were in the air.'
But the 'Cambridge phenomenon' - the name comes from a famous 1985 report by Segal Quince Wicksteed, a consultancy firm - is not just 'in the air'. In a new report, featured in The Observer last week, the firm estimates that Cambridge hi-tech firms generate exports of more than £1.5 billion annually. Several are already billion-dollar companies. As the second-rank companies move into that league, the attractiveness of the cluster will increase, and with it the pressures that are choking the city to death.
What can be done about it? Probably nothing. As we reported, the local authorities seem paralysed by the Cambridge phenomenon, like rabbits caught in the headlights. Marshall would probably counsel them to do nothing, on the grounds that the feedback loops in the system will solve the problem in time.
Property is already so expensive in Cambridge that young academics and post- doctoral researchers, the lifeblood of a research university, cannot afford to live there. Will people continue to cluster in a place where rabbit hutches cost £200,000 and nothing moves faster than a camel? We will see.
