One of the most fundamental false economies of scale is the overgrowth of cities. At one time it looked economically attractive to cram millions of people together into huge agglomerations. The biggest cities everywhere are running into social problems which indicate that this was a false economy.
This is from Freeman Dyson again. I am big fan of cities and am not really convinced by this point. But maybe cities can grow too big. To the point where marginal returns are small or negative. Maybe two smaller cities could be better than one big one. But to talk about social problems in the cities, you have to consider social problems outside of the cities. My understanding is that people move to the slums in cities like Mumbai and Rio because life in other parts of their country is even worse than life in the cities. In the US, it seems like some social problems are more concentrated in cities, and some more concentrated outside.