This is a classic example of a situation where the interests of individuals and companies are not aligned with the wider national interest. Yes, it makes tremendous economic sense for people and companies to co-locate in cities. In a country where individuals have a choice to live in an urban or a rural environment, and their demonstrated preference is to live in an urban environment, then urbanization becomes a self-reinforcing positive economic spiral.
However, this spiral is offset by a negative economic spiral in rural areas. As the national currency appreciates due to the increasing competitiveness of urban centers, rural industry becomes less and less competitive. When a national economy is in a downturn, the central bank can devalue the national currency to improve the price-competitiveness of national products for export; however, rural economies don't have this option as they share a currency with urban centers. So rural communities continue their downward economic spiral.
Why is this a problem? If we could force the rural laggards to move to urban centers, or if rural populations didn't hold outsize influence over the political process, it wouldn't be. But we can neither coerce rural depopulation nor can we make that kind of political change. So the situation continues.
Unfortunately, there will be a price to pay. Increasing political polarization leads to civil conflict. The EU narrowly avoided collapse by bailing out the Greeks - the US Congress has been practicing "bailouts" for a century (at least) with pork-barrel legislation. So let people move to jobs - as long as they're cognizant that their taxes will continue to go back where they came from.
However, this spiral is offset by a negative economic spiral in rural areas. As the national currency appreciates due to the increasing competitiveness of urban centers, rural industry becomes less and less competitive. When a national economy is in a downturn, the central bank can devalue the national currency to improve the price-competitiveness of national products for export; however, rural economies don't have this option as they share a currency with urban centers. So rural communities continue their downward economic spiral.
Why is this a problem? If we could force the rural laggards to move to urban centers, or if rural populations didn't hold outsize influence over the political process, it wouldn't be. But we can neither coerce rural depopulation nor can we make that kind of political change. So the situation continues.
Unfortunately, there will be a price to pay. Increasing political polarization leads to civil conflict. The EU narrowly avoided collapse by bailing out the Greeks - the US Congress has been practicing "bailouts" for a century (at least) with pork-barrel legislation. So let people move to jobs - as long as they're cognizant that their taxes will continue to go back where they came from.