Text 4 Economic theory suggests that regional inequalities should diminish as poorer places attract investment and grow faster than richer ones.The 20th century bore that theory out:income gaps narrowed across American states.No longer.Affluent places are now pulling away from poorer ones.This geographlcal divergence has dramatic consequences.Opportunities are limited for those stuck in the wrong place,and the wider economy suffers.If all its citizens had lived in places of high productivity over the past 50 years,America"s economy could have grown twice as fast as it did.Divergence is the result of big forces.In the modern economy scale is increasingly important.The social network that everyone else is on is most attractive to new users;the stock cxchange with the deepest pool of investors is best for raising capital.These returns to scale create fewer,superstar firms clustered in fewer,superstar places.Everywhere else is left behind.Even as rcgional disparities widen,people are becoming less mobile.Demographic shifts help explain this.But the bigger culprit is poor policies.Soaring housing costs in prosperous cities kcep newcomers out.In America the spread of state-specific occupational licensrng and governmeni benefits punishes those who move.The pension of a teacher who stays in the same state could be twice as big as that of a teacher who moves mid-career.Perversely,policies to help the poor unintentionally exacerbate the plight of left-behind places.Unemployment and health benefits enable the least employable people ro survive in struggling places when once they would have had no choice but to move.Welfare makes capitalism Iess brutal for individuals,but it perpetuates the problems where they live.What to do?One answer is to help people move.Thriving places could do more to build the housing and infrastructure to accommodate newcomers.Accelerating the mutual recognition of credentials across state borders would help people move to where they can be most productive.But greater mobility also has a perverse side-effect.By draining poor places of talented workers,it exacerbates their troubles.The local tax-base erodes as productive workers leave,even as welfare and pension obligations mount.To avoid these outcomes,politicians have long tried to bolster left-behind places with subsidies.But such"regional policies"have a patchy record,at best.Better for politicians to focus on speeding up the diffusion of technology and business practices from high-performing places.A beefed-up competition policy could reduce industrial concentration,which saps the economy of dynamism while focusing the gains from growth in fewer firms and places.Fostering clusters by encouraging the creation of private investment funds targeted on particular regions might help.Perhaps most of all,politicians need a different mindset.For progressives,alleviating poverty has demanded welfare;for libertarians,freeing up the economy.Both have focused on people.But the complex interaction of demography,welfare and globalisation means that is insufficient.Easing the anger of the left-behincl means realising that places matter,too. The author warns that greater mobility would______.