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Because the economy is driven by a small number of star workers at each firm. The 80/20 rule, which is probably the 90/10 rule in the age of computers, etc. Most of the population could disappear overnight and productivity would not suffer. Demand would fall, meaning most people are more valuable as consumers than workers. Cities have network effects regardless of politics, and these star workers are attracted to each other.
Meanwhile a lot of people want to make it so they move to the city. But in reality they have no chance. The super productive workers have a lot of surplus income so they inflate asset prices and price the normal people out. As a result the normal people turn to liberal politics to try to eak out a living in the city.
It's debatable whether normal people would have better lives in less dense, less economically vibrant places since those places are cheaper. But simply looking at incomes without comparing costs is mistaken. A good example of this is the supplemental poverty measure that includes cost, under which California has the most poverty of any state, because of the high incomes of a tiny sliver of Californians.
So cities' liberal politics is an effect of the productivity of a small section of their workforce, not the cause of the productivity. We see this dynamic playing out as we speak, as increasingly expensive cities like Houston become more liberal over time.
I will not discount the liberating effects a city can have on some people (rural areas are very socially conformist), so the city can be a magnet for social dissidents who are more productive than average. However that also makes them a magnet for layabout dissidents, who arguably outnumber the hardworking dissidents. I will also not discount the effects of more public funding for education in improving the productivity of the population, but the big gains to be had from education occurred in the mid 20th century. We seem to be in a regime of diminishing returns on educational spending.
I still consider my first theory to be better, and it's borne out by the revenue profiles of cities like New York, where a handful of Wall Street people fund most of the city's operations, or the state of California which is similarly propped up by technology money.
If these super productive workers could have a city all to themselves that normal people could not live in, believe me they would. That's called gentrification. The problem is that once a city becomes prosperous and starts spewing out money everyone wants to move there and the liberal wannabe cycle starts again.
Urban areas are where the businesses and jobs usually are.
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