This year, for the first time in human history, more people will live in urban areas than rural areas. Some of the quantitative statistics are staggering. Every day in the world, 200,000 people migrate to cities. Half the new buildings in the world in the next 10 years will be built in China.

Construction in China

Mexico City has gone from three million to 20 million. In 1950 50 million people a year crossed national borders mainly from cities – last year it was 840 million. But even more interesting is the qualitative: the city has a logic of its own.

The first sign of this at Davos was the emergence of clear allies on real issues. Like Gavin Newsom, the mayor of San Francisco, who last year attended the signing of the agreement between the C20 group of large world cities and the Clinton Foundation for action on climate change. San Francisco has the highest rate of recycling domestic waste of any city in the world – nearly 75 per cent. We also heard from Lester Brown of the Earth Policy Institute and Lawrence Bloom of Ecocities.

In the afternoon session, The Future of Urban Mobility, we discussed London’s congestion charging and how technology can be used to revolutionise and personalise public transport – bicycle parks and car pools operated by smart cards; the ability to text "home" on your mobile phone as you get on the underground and be met at the other end by an electric car that takes you the last mile home. In the evening, there was a dinner for mayors to discuss the report on world cities.

I am not trying to pretend the number of participants in these discussions rivaled such Davosian topics as "rebalancing risk in financial markets" or "hedge fund transparency." But, as on climate change, the sessions revealed that there were definitely some soulmates around.

The discussion emphasised how many cities are going through the same experience as London did in the 1980s and 1990s – the failure of free market solutions. It also placed this in a wider context. When Mrs Thatcher abolished London’s city government, in the form of the GLC, the belief was the market would solve everything. It didn’t. By the late 1990s London was desperately short of transport, housing, police and environmental protection while experiencing soaring crime and deteriorating quality of life.

There are clear lessons from this experience. Free markets deliver some things superbly – give me Brick Lane or Southall curry houses over the Cold War’s east European restaurants any meal. But free markets don’t deliver the infrastructure that makes a great city work – its transportation, its housing, its security, its education, its health system. All this demands huge investment. Unless the state steps in it will not be delivered. For the overwhelming majority of those in cities – even if they live in nice private houses and apartments – only the state can provide what they need. A democratic system that ties the state to its citizens will always deliver these requirements far better than the unfettered market.

This reality applies even to details in city life. There is no great city in the world that will satisfactorily resolve its transport system or its environmental problems on the basis of the car. Only public transport will achieve that.

Some cities are still experimenting with car-based transport systems or deregulation solutions to infrastructure problems. All these will fail. California, which three decades ago produced Ronald Reagan, is now the seat of America’s greenest policies, and some of the greatest city activism in the US.

The discussion at Davos showed that many cities already understand this reality – that the state and democratic self-government are indispensible to develop an environment for city living. The Davos forum, however, has still has clearly not fully grasped this. Compared to the stellar collection of business leaders cities are under-represented. But the dynamic reflected here is clear.

In the 1990s neo-liberalism believed it would sweep all before it. Today it is beginning to retreat under the impact of four huge developments.

In Iraq the attempt to reintroduce overt colonialism has led to a deepning disaster. In Latin America, the continent which was the testbed of neo-liberalism, there is a spreading wave of revulsion against its consequences. Neo-liberalism has failed in the great cities of the world. And the new imperative of fighting climate change requires government and international action.

Out of this, the elements of a progressive alliance are emerging which must be sought and supported wherever it is reflected. The problems facing the world are too deep for sectarianism or hesitation. These issues affect billions of people.

At Davos the breeze could be felt. Outside the wind blowing against neoliberalism is strengthening.

Ken Livingstone

By Ken Livingstone

Via the Guardian