There's worry that the decline of New York City is reaching a crisis point. A spate of incidents, especially the murder of the Mormon youth who had stepped forward when his mother was punched in a midtown robbery, has called into question its viability. Worse, the Daily News, the potent symbol of New York's enormous middle class, is facing labor conflicts, as is the still more fragile New York Post. The recurrent movie vision of collapse -- best exemplified by the savagely funny "Escape From New York" -- seems closer to reality today than the glory days of 1945.

What is the glue that holds New York together? How strong is it? What, if anything, might be done to keep it from coming apart?

The key thing to understand is that the commodity that causes people to pay Manhattan prices is information -- the information that is in the air. It may sound peculiar -- in a day when television, cellular telephones, satellite dishes and fiber-optic cables seem to connect every corner of the earth -- to say that you've got to be there in the central place if you want to play the game. But it is true -- as true today as it ever was.

What people want from a city is other people who are in the same and related businesses. That's why they arise. The human brain is a far more complex and effective scanner of a constant wash of new information than the biggest computer. The essence of a city is not that people pick each other's pockets there (though they certainly do that, too) but that they pick each other's brains.

So advertising specialists cluster closer to the news bosses. Stock traders hang out around the corner from investment bankers. Universities buddy up with hospitals. Lawyers set up shop next to the corporate headquarters on whom their businesses depend. (Not all corporate executives need to be in New York, of course; just those businesses that are the fastest-changing.) And cultural impresarios throng to the biggest cities because that's where the good taste -- and the money -- is.

A headquarters city is thus a big version of a research laboratory, chockablock with smart people from different fields working in close proximity -- plus a lot of less smart ones who are there to catch the crumbs. The city's citizens go to restaurants and parties to observe what other people are doing, to hire their workers and to take advantage of them if they get ahead.

New York, therefore, is a city of finalists, all right, but finalists in very particular fields. It is the capital of finance, banking, law, communications (both computers and telephones), media (both television and print), culture, fashion and, above all, wealth -- at least competitive wealth. ("I once came to the conclusion that other cities were sending us rich people that they want to get rid of," writes Calvin Trillin.)

The next thing to note is that there are six other, smaller headquarters complexes yoked loosely to the fortunes of New York. Philadelphia and Boston have been rivals since colonial days; Hartford, Wilmington, Del., and Baltimore have been secondary centers just as long. Washington is a comparatively recent arrival -- but thanks to its role as the seat of the national government, it has grown quickly to rival New York.

Each of these cities has its niches vis-a`-vis New York; each has its own congressional delegation. Boston is a city of squires, of universities and old money. Hartford is a center of insurance. Wilmington has long been the home of the corporate bar, and now it has attracted many banks. Philadelphia, once a serious rival to New York, is still a center of banking, publishing and industry. Baltimore, with its Johns Hopkins University and its spice trade, is a big noise in the medical and biological business -- and a suburb of booming, sprawling Washington. These cities don't exist separately; they function together as a region, each benefiting from the ebb and flow of vitality among the others.

Now it's certainly true that there are other centers of power and influence in America beyond the Boston-New York-Washington Corridor. Chicago has amazing vitality; witness the way it created a financial center through its commodity and options markets that makes it a rival to New York: It's not for nothing that they call it the Second City. Texas is coming up. So is Florida. But only California can rival the East Coast corridor as a seat of power and competitive strength: Los Angeles is the undisputed capital of a loosely integrated economic zone that runs from San Diego to San Francisco.

Compare this to Japan, where there is only one imperial city. Look what that does to land rents in Tokyo! Indeed, New York City's centrality really comes into focus when you look at the alternatives to it as capital of the world. Paris? London? Tokyo? No other city can offer near the same combination of diversity and concentration, plus the political stability of the United States. The European cluster of cities -- from Edinburgh to Rome to Berlin -- will give the Boston-Washington corridor a run for its money during the next 20 years, if post-1992 Europe knits together as quickly as some hope. Indeed, European science, that early-early indicator of success, is already on the march. But that 20 years is more or less the length of time in which New York has got to turn itself around.

That it needs a turnaround is beyond a shadow of a doubt. In a new quarterly, "NY: The City Journal" that appeared last week (it is published by the Manhattan Institute), editor Richard Vigilante writes: "It has been three decades now since the quality of New York city life began its rapid decline. A whole generation has been raised that has never known, and can barely imagine or hope for, a New York that works. And yet just three decades ago the city's public school system functioned tolerably well, we still had a reasonably affordable housing market, our transit system was envied around the world, and the city's infrastructure was not only being maintained, but expanded."

Elsewhere, Vigilante observes, "The two lives of New York are, like the identities of Jekyll and Hyde, an unstable pairing. Eventually, one will dominate the other and become the truer character of the city. New York will once again become a city of people who wish to be {there}, or it will inevitably be transformed into a city only of those who must be here."

How to help? Well, it's a relief to discover that economic geography has suddenly become highly interesting to economists, the result of a series of insights developed over the past few years by Robert Lucas, Paul Romer and Paul Krugman. A growing circle of youngsters is thus beavering away with a resulting battery of new tools, thinking about the crucial role of information exchange in producing cities. Indeed, Richard Zeckhauser has produced a (highly mathematical) paper showing that the market, left to its own devices, will systematically under-concentrate the economy's resources, strewing them too thinly across the landscape. It is but a short step to the argument that governments should subsidize downtown.

It's just another case of economists telling us what we already know in our bones -- telling us what the writer Jane Jacobs began putting down on paper with unsurpassed eloquence 30 years ago. But in a sense their discoveries are coming just in time.

When malls kill the center cities, everybody loses. Headquarters complexes like New York, Washington and Los Angeles are important to the nation not for their tourist business, but because they are pure economic muscle. We need a city policy in a big way.

David Warsh is a columnist for the Boston Globe.