The introductory chapter highlights the importance of market coordination. Societies rely on coordinated activities to procure and trade goods and services, manage resources, and ultimately survive. Webster and Lai establish two strict forms of coordination: a top-down hierarchy (embodied by government), and a spontaneous network (represented by the market). To illustrate the struggle between the two forms, Webster and Lai introduce ten factors that help explain the forms of coordination that exists within cities:

1. Agglomeration of individuals and businesses occurs in capitalist markets to reduce costs and maximize benefits.
2. Order emerges as individuals create customs that minimize their transaction costs.
3. Market and government institutions emerge to address collective transaction costs.
4. Property rights of scarce resources are assigned in order to reduce transactions costs.
5. Institutions that protect private property are essential for market activity and economic growth.
6. Public domain resources have unclear property rights and are vulnerable to congestion.
7. When the value of a resource changes significantly, a corresponding change in the assignment of property rights occurs.
8. The relative positions and power of city stakeholders are constantly changing in response to internal and external shocks.
9. Systems of coordination are imperfect due to limitations in the cognitive ability of individuals, as well as imperfect information.
10. Efficiency of institutions is a function of the distribution of knowledge, resources, and transaction costs.

Webster and Lai go on to explain one of the central themes of their book - constrained spontaneity wherein everyone acts in their own interest and their collective decisions create net benefits. The authors believe that the term spontaneous can apply to two distinct processes: (i) the ability of the market to change supply and demand without central planning and (ii) the political markets ability to adapt to changes in demand for collective action. Our authors believe that planned systems of order are inherently inferior to spontaneous systems of order; price is a clearer feedback mechanism than the signal of votes for acquiring information. Planned systems are also subject to corruption; experts have clear information and decision-making monopoly powers, which privileges them over other market actors.

Clearly, some form of property rights is necessary to empower a functioning spontaneous market system. Webster and Lai prescribe a property rights theory that distinguishes between economic, legal, formal, and informal rights all of which, in principle, are infinitely separable. The authors believe that rights to a resource should be assigned to whoever is in the strongest position to bring about the desired outcome with respect to the resource. Rights that exist in the public domain are not assigned by any formal or informal contract because it is simply too costly to assign property rights to these goods. As such, they are subject to congestion.

In this context of property rights, the allocation of goods and services are sometimes inefficient. Our authors redefine such market failures as occurring because of unpriced goods and resources. Using this optic, the authors assert that there is an optimal city size where the average benefits to city living are maximized in relation to average costs. Webster and Lai believe that, in the long term, markets will succeed in reducing market failures through spontaneous adaptation.

Webster and Lai use Chapter 1 to lay out their central tenets. They believe that political systems are simply one approach to organizing collective action in the provision of shared goods. Information scarcity and the cognitive capacity of decision-makers hamper the benefits of planned action. The authors assert that there is a role for urban planning in a market economy. Yet, cities should not be managed with the strict belief that planned order will alone bring prosperity, justice, and equality.