Theme 2 Module
Inward-Big City MED
As Two Ships starts its discussion of Inward, or internal MED with the Gilded Age (1870). There’s a reason for that late start, but it wasn’t that there was no such thing as Inward-MED previous to that. Rather the issue is there really was no such thing as “Big Cities” until the eve of the Civil War (New York City/Philadelphia being exceptions).
It Didn’t Happen Overnight
If one ignores growth rates because they magnify the perception of city size, and instead rely on absolute numbers, by today’s standards certainly, Early Republic cities were remarkably small. Baltimore, the fifth largest in 1790 held 13,500 citizens; in 1830 it was the third largest with 80,600. Updating my previous simple examples of Salem Mass as the nation’s seventh largest city in 1790–and neighbor Marblehead as tied for the tenth, one discovers as late as 1830 Salem was still the nation’s fourteenth largest, and Marblehead was fifty-fifth (a decade earlier it was still thirty-third).
Speaking from both sides of my economic mouth, Early Republic manufacturing was both concentrated and diffused. Manufacturing could be found in most urban centers–and in the earliest years–in then-rural areas adjacent to water power. But it was heavily concentrated during the Early Republic in New York City and Philadelphia–the latter the nation’s leading textile manufacturer, with developing agglomerations in chemicals, medicines, paints, dyes–and machine-building. New York City, by dint of its size, was the nation’s top manufacturing city. Boston, on the other hand, did not meaningfully participate in the New England region’s preeminent sector, textiles, shoes, boots–but the city “came to specialize in industries that required high degrees of skill and initial capital investment. After 1830 Boston established itself as the premier publishing center of the nation [and] also produced fine instruments” across a variety of industries and sectors.
Overall by 1860, the United States, though still an agricultural nation, was the second-ranking industrial nation in the world. Manufacturing accounted for 32 percent of the nation’s gross national product that year, compared to 17 percent twenty years earlier. … An industrial pattern was evolving in the [broadly-defined] northeastern region; the major cities were specializing in finishing goods, or in activities that required the concentration of expertise, capital, and transportation facilities. The profits generated from industrial enterprises spurred yet other investments in [these] port cities. (David Goldfield & Blaine Brownell, Urban America: A History, (2nd Ed) Houghton Mifflin & Company, Boston,1990, pp. 94-5)
Both the industrial revolution and serious Big City-style population growth came later than most contemporary readers probably think. Excepting the exceptions, take-off was after 1850. And then the Civil War and national concerns took precedence. Immigration, incremental industrialization, domestic migration into the nation’s interior, the rise of railroads, and the Civil War aggregated to change all that. For our purposes, therefore,the arrival of the Big Cities with their industrial and political hegemony is a Gilded Age (post-1870) phenomenon.
the Privatist City
Early Republic ED priorities were hugely tilted toward External-MED, and Inward-MED was pretty much delegated to the private sector, and the EDOs it developed (mostly Boards of Trade in this Era). Even absolute urban necessities such as water, was left to private water companies. New York City set up its first city water commission and approved its first aqueduct (Croton) only in 1835, and did not start construction until several years later. Josiah Quincy (Boston) failed in his attempt to do the same a decade earlier.
When Sam Bass Warner described 1820’s Philadelphia as a “privatist city”, the “glorified metro Philly” was 99,000 strong–and the city proper about 61,000. Urbanization, despite high growth rates, was building from a very low base, municipal (and state) government possessed minimal capacity, and in an atmosphere of limited government, the will to embrace an activist public agenda was simply incomparable to our Contemporary Era. Growing the jurisdictional economic base was left to the private sector, with government, usually dominated by its business classes, responding or reacting to its interests or problems generated.
For these reasons, Theme 2 has concentrated on External-MED. This module serves principally to introduce the main Gilded Age drivers that provided considerable thrust to Inward-MED. In effect, our intention is to introduce Gilded Age Inward-MED to the reader. Theme 3 will pick up any slack and concentrate on the rise of Big City Inward-MED. Critical to our introduction is a reminder that MED links community/state ED to the rising capitalist system–in these years, an industrial capitalist system.
the Modern Industrial Corporation, National Markets, Disruption
As we have suggested, the both of industrial capitalism was rather slow, incremental, and driven by market forces, with small manufacturing firms held hostage to its vicissitudes. Railroad development of national markets offered a new alternative. If manufacturing was to seize the opportunities inherent in a national marketplace, it had to discover marketing, changes its production processes, and pioneer new organizational forms. Adjustment is what many did. Alfred Chandler Jr.’s classic work, the Visible Hand, describes the transformation. MED followed along as industrial capitalism coped and evolved into its first modern industrial corporations–corporations that integrated mass production with mass distribution across a spectrum of local markets across the young nation.
There were other things going on, of course, lots. In particular growth in non-manufacturing sectors, such as transportation, communication, energy, construction, real estate, consumer trade—and finance/banking– meant there were plenty of employment opportunities—and tax receipts—beyond those generated by manufacturing firms. As Robert Gordon[i] has recently pointed out, these sectors and industries—during the Gilded Age—changed the lifestyle and quality of life of not only American Big City residents, but humanity as well. In combination with manufacturing, the creativity and innovation unleashed in this Gilded Era Years may have been the most disruptive since the 3000 B.C. agricultural revolution.
If ever, America was in a state of constant innovative disruption, tumultuous change, and mobile, diverse, and competitive migrations, the Gilded Age was it. State and municipal government, however, lagged; it could not manage anything but reaction, and a frequently negligent one at that–it delegated responsibility to those it believed had the vision and capacity to manage growth and change: the private sector. This was an Age of Privatist City. This was the Age in which policy outputs from Privatist Big Cities created and institutionalized the first formal manifestations of local and state practitioners of mainstream ED, forming distinctive EDOs, formal strategies, professionalism, and common tools/programs.
the Bifurcated Goals of Big City Inward-MED
Relevant to our purposes, two broad, distinctive dynamic forces propelled MED after the Civil War to the end of the century: (1) change in business structure and the development of national markets, both of which led to the creation of a Big City urban industrial competitive hierarchy and (2) the Big City’s need to accommodate its own growth, expressed in a drive to extend its jurisdictional /urban border-periphery in order to house its expanding and increasingly multi-class workforce/population.
Evolution and Impact of Modern Industrial Corporation on Inward-MED
So in hindsight, the “national market” made inevitable the formation of a modern industrial corporation. Not all corporations participated, of course, and there were several alternative forms of industrial corporation that followed. The most impactful on Inward-MED was the manufacturer that adopted the “continuous-process machinery” that mass produced a standardized produce in volume so it could be sold nationally. At first, marketing and distribution of the final product to the end-user was managed by the factory.
That produced a subset of manufacturing firms whose product possessed a limited shelf-life (refrigerated, food, and consumer items) which discovered quickly enough that “branch offices-production facilities” could market and distribute products more efficiently. As Chandler asserts “they set up branch offices headed by salaried managers in major commercial centers of the country … they built large purchasing establishments … created multi-unit marketing organizations … and often began to supply and transport their own materials“:
Before 1880 Western Union and Montgomery Ward were among the few large firms to operate on a national scale. By the end of the 1880’s, however, a number of industrial enterprises [Heinz, Campbell, Duke (cigarettes), Kellogg, Swift, Pillsbury, Libby, Borden, and in 1879, Procter & Gamble)) were beginning to serve the entire nation. By 1900 the names of many, integrated multifunctional enterprises had become household words. (Alfred Chandler, the Visible Hand, 1977, pp. 287-98)
Branch offices and facilities diffused to major cities meant local startups were presented with a major barrier–yet offered employment and quality of life to young city-building cities in smaller remote regional cities. It also created a distinction between branches and HQ, and it also injected new types of business people (managers, salespeople/marketers) into local business communities and their EDOs–while the Big City HQ retained the highest corporate elites, the so-called one percenters. Integration provided insufficient to generate profits, fostering consolidation through mergers (or underselling competitors)–in the 1890’s.
Regional markets became industrial colonies of Big City HQ. Local economic bases had to adjust, and so did their Inward-MED. EDOs and MED strategies varied by region. So-called “boosterism”, for example, served different purposes in the three different regions. Community economic bases evolved following distinctive regional paths–which, I might add, constrained the diffusion of manufacturing facilities, and of necessity, forced non-Big City regions to move into other sectors. As early as the 1890’s, I argue, American ED was regionally decentralized, and managed by distinctive regional policy systems and business elites.
The drive-to-the-periphery meant that work had separated from residence, and more distant residences marked the end of the “walking city”. One might cynically assert its need was to “connect its intra urban residential/commercial dots”. These two basic “priority-approaches” constituted the twin core goals of Big City Inward-MED in the Gilded Age.
Inward-MED always preferenced manufacturing, widely defined, as its principal sector target—similar to technology, widely-defined, today. [Indeed an occupation calling itself “industrial developers” had taken form by the end of the 19th century]. Immigration, that horde of ethnics and races, never stopped coming, fueled urban growth, provided a cheap if somewhat troublesome workforce, and created mass consumer demand that fostered increased industrial investment/production. The cyclicality of industrial growth was also quite evident. Several long and profound national Panics exerted substantial impact on MED and CD. Wage growth was uneven at best, and stagnant during much of the Gilded Age. Inequality, called poverty, was pronounced, and individually devastating. We will deal with each in their own time.
Effects of National Markets/Oligopoly on Local Policy Systems and Inward MED
The first dynamic was the huge transformation in scale, composition, and occupational complexity of business firms in jurisdictional economic bases: the rise of the modern industrial corporation. The newly emerging industrial corporation (besides legally constituting itself in the new-fangled “corporation”) pursued a very distinct and different organizational path than had been previously pioneered by the first modern “transportation-communication” corporation, the railroad. The industrial corporation followed in the wake of the railroads having successfully forged interconnected urban centers from coast to coast that by the beginning of the 1870’s created the American national market.
The modern industrial corporation as it evolved during the Gilded Age, combined with the established railroad corporations cemented the manufacturing hegemony of the Big Cities over the South and the West. This hegemony in turn would lend a distinctive character to the Inward-MED of cities in those regions, and would in turn generate from the Big City modern industrial corporation inputs into Big City policy systems which fostered and institutionalized a formal Big City Inward-MED body of knowledge and specialized EDOs. The rise of a modern industrial corporation unconsciously institutionalized the economic primacy of Big City states and cities over the nation’s regions, and in turn, that corporation molded the early priorities and strategies of a very reactive Inward-MED.
There was no particular book, city, leader, date or event that marked or personified this incremental evolution. It simply drew from the permutations of a changing industrial capitalism, in large measure because Inward-MED consciously links/defends/ community-level ED to the larger economic framework or system, whose dominant change agents, the corporate elite (in all its many subtypes) populated and set the tone for Big City policy systems. Such is the advantage/disadvantage of a seemingly naturally closed policy system. The closeness produced many anticipated, unplanned, and serendipitous policies and strategies, some experimentation, lots of herd-copycatting, but it also resulted in a Big City-led industrial hegemony whereby the needs and perspective of the prestigious and powerful Big City were primary. Less noticed, but equally impactful was focus on cost-minimization business strategies (retention and attraction) and favorable business environment. The latter pushed Inward-MED into a struggle with ethnic political machines, and various franchises, but even more disruptive a bitter, ill-tempered civil war with its unionized workforce. Both were chronic, lasting well over a half-century, and neither resulted in victory from the private sector perspective.
Osmosis, not innovation, thus drove the formalization and institutionalization of Inward-MED during the Gilded Age. If you want to encourage, target, prefer manufacturing, and do what you can to ensure its primacy and stability in your economic base, you simply listen to what manufacturers want and think they need. It doesn’t hurt that the manufacturing CEO is on your board of directors. As manufacturers change, you change. It is not surprising that in the 1990‘s, when industrial manufacturing went out of style, creativity, education, and talent–so much in demand by new technology gazelles–substituted for cost minimization. That’s how it happened a hundred years earlier.
Drive to Periphery
The Municipal Policy System Takes Charge
It is probably correct to suggest Early Republic/Civil War era policy municipal and state policy system MED agendas were saturated with external, competitive concerns and canal/railroad “connect the dots” External-MED. With few exceptions, cities in this period were new and fragile; city-building was the primary MED strategy, and economic/population growth in a city-building period was perceived as grow, stagnate or die—that produce a shivelness, if not hyperbolic tone to policy implementation. In the Gilded Age, however, the business community turned against railroads as quickly as the media today turn against a celebrity accused of sexual harassment.
As railroads crisscrossed the nation, the urban dots connected, and in the 1870’s and 1880’s opened up the South. Cities reached a sustainable size, early urban competitors crushed, and growth seemed inevitable, temporizing the competitive zero-sum survival motif of city-building. Our Darth Vader-like railroads no longer were a blessing, worth paying money to lure in, but rather a price-fixing monopoly and an unwanted intrusion into municipal affairs and local corporate profits. Gilded Age municipalities, and states, switched priorities, trading External for Inward MED. Chambers would assume lead agency role over cost-minimization, political environment, and drive-to-periphery coordination.
Regions and states had matured, and the national competitive urban hierarchy, no longer threatened life or death survival so media-driven rivalries developed, infusing the competitive Darwinistic spirit of the day into the urban competitive hierarchy. Personified by the Chicago-New York City rivalry, urban rivals invoked civic pride and “my city is better than yours” ethos into its Inward/External MED.
Big City “boosterism” expressed in Expositions, World Fairs, and wild-ass copycatting of physical and infrastructural public works innovation (parks, reservoirs.gas, bridges, electricity, telephones skyscrapers, department stores,subways and all transportation modes, housing styles–and in the Progressive Age forms of government like home rule, commission, city manager, and government capacity-building (budgeting, fiscal, planning). The absence of sports teams, this form of “boosterism” permeated MED. More typical than outright rivalry was copycat imitation of strategy/program innovation. Inward-MED from its beginning exhibited a pronounced herd-like tendency as programs and strategies from other cities were adopted, often with little question, simply as “arrows in the urban quiver” potentially available to compete or fill a future need.
By the 1870’s, with immigration on the uptrend, density increased, pathologies (public health, congestion, and fire) intensified, and ethnic machines cemented a policy-making foot-in-the-door through municipal bicameral legislatures and weak mayor systems. The 1873 Panic and municipal bankruptcies (from overspending due not only to corruption, but to municipal water/utilities and government bond issuance) created a perfect storm that forever after bent the municipal ED twig, tilting it toward new forms of public-private partnerships. The public franchise and public utilities were new private-public hybrids that dominated the Gilded Age.
The Early Republic city had long outgrown its britches. Observers–and citizens–were frequently treated to sights that offended the eye and enraged sensibilities. American municipal government was labeled as “the most conspicuous failure of the United States”. With municipal government facing its most pressing demands ever, and fiscal capacity limited by debt ceilings, with a policy process so bad it made a slaughter house look pleasant, MED, consciously, was delegated by municipalities to private EDOs.—supported and subsidized, tempered and fueled, by compromised policy outputs from businessman mayors and machine city councils. The most common government EDO of the period were hybrid public-private boards and commissions. A purely ED government agency was rare indeed–probably because survival in a weak mayor system was unlikely.
Chambers advocated one percenter agendas. Alternative private EDOs (boards of trade, real estate exchanges, and old-style port authorities) on the other hand, organized much earlier then chambers to protect interests like low taxes, facilitate commercial activities/resolve disputes, commodity and port-related export-finance trade exchanges, internal-MED, and drive-to-periphery agendas. Non-chamber EDOs tapped the small, commercial and professional local business community. Big City attraction was defensive and opportunistic for the most part–more concerned with retaining existing firms and taking advantage of periodic entry of new onesl
Chambers were more “political”, coordinative, and focused on larger infrastructure, urban top priority issues, and national policy. Chambers often mediated between private EDOs, and it was chambers that institutionalized the “businessman mayor” municipal/board and commissions coalition. increased and better services, public health, increasing quality of urban life, and many assumed responsibility for municipal attraction and retention strategies. Honesty, and merit—a reaction against the Jacksonian municipal policy systems—meant an unwavering opposition to machine-dominated city councils, and more importantly strengthening the capacity of urban governments (municipal charter/home rule movements) to regulate, yes, but more importantly to deliver effective services to their residents. Cities today, characterized often as the service-delivery level of government, became that only during/after the post-1900 Progressive Age, when professionals and middle class took over municipal governments and chambers.
Left untouched, to be considered later themes are unions.
Enter the “drive to the periphery”.
With immigrants pouring into devastated inner city neighborhoods, working/middle class residents, enjoying a none-too-shabby quality of Gilded Age life, moved up into new homes in new neighborhoods. Chronic major urban fires were the disaster du jour of that Age. Yellow fever, TB, and a host of maladies that killed mercilessly, drove population to the city periphery to escape. The city grew outward, horizontally, not vertically. Building “up” vertically, with densities that made houses affordable, was limited to about four floors—the tenement house and three-decker became the McMansions of the day. Housing seemed in permanent crisis and by sheer necessity it permeated into MED—and CD. Moreover, new subdivisions created new neighborhoods, and as previously discussed in a CD module, economic development diffused into a new level of urban organization.
Real estate speculators seeing opportunity launched several brand-new economic sectors—we call them FIRE today. Inevitably, these new sectors organized, and the first building codes, required by fire insurance companies, and real estate exchanges came into being. The growth coalition had been midwifed by the housing crisis. Given the imploded fractured policy system that existed, the tender mercies of the 19th century growth coalition at least provided sufficient coherence to build housing—some of which stock for current Big City gentrification. In the Gilded Age neighborhood associations were common, particularly in more affluent geographies where the machine ward-heeler was not welcome.
The most entrepreneurial, competent and ambitious neighborhood/housing developer of the Gilded Age was the streetcar franchise and it assembled periphery land, built housing along the streetcar line, and an amusement park at one end, and a newfangled modern central business district on the other. Anchored by something called a department store, with nearby women’s apparel and personal goods, with entertainment and lots of offices; other innovations elevator, skyscraper powered the new CBD, downtown if you prefer was born.
That mere speck of geography became the skyline, the heart of commerce, and the soul of the community. In the Gilded Age it was only a hint of what it would become. The effort fifty years later to save it nearly destroyed Big City MED and didn’t do the Big City much good either.
Emerging from the new, post-1873 phase of gifts and loans clauses—and urban fiscal incapacity—the streetcar franchise became the next hybrid public/private partnership (along with utilities)—replacing the railroad corporation. Inward-MED now included a rogue (mostly) private, semi-regulated, publically-empowered (eminent domain and bond issuance, not to mention tax abatement, even rudimentary zoning powers) private/public hybrid EDOs.
Streetcar franchises began in the 1870’s, and lasted through the 1920’s. Technologically volatile, transportation (and energy) innovation ripped up municipal streets and bridges every decade or so—financed by its fare box receipts, and municipal subsidies, the heavy burden of energy and transportation infrastructure was off-loaded onto private balance sheets. In the 1890’s another innovation, the subway, appeared—and typical of the era two brothers, one in Boston, the other in New York City competed to open America’s first subway. Boston won.
Streetcar franchises were a love them or hate them affair. More than anything you needed them to get to work. Gas, than electricity, than phone lines were buried/strung from poles, on streetcar franchise land along its routes. Want electricity? Be nice to the franchise. In this Age’s convoluted and cross-pressured policy system, real estate exchanges and city councils (controlled by ethnic machines)—occasionally the chamber/board of trade—were the only effective check on their autonomy. Boycotts meant walking to work, usually not an option. Streetcar franchises became the crisis du jour of the next Age, the Progressive Age–and will be considered further in Theme 3.
Whatever its deficiencies, by 1900 American Big Cities possessed unquestionably the most modern transportation infrastructure in the world. Inward-MED that emerged from the Gilded Age matured and expanded considerably by the end of the Gilded Age. It was in this Age Big City MED truly jelled into a coherent wing of MED, ready and poised to enter its golden Era between 1900 (or so) and 1930.
Finally, in this period annexation (except for Boston) was relatively successful. Lost in current history, however, was that it was very expensive. Cities went broke following an annexation strategy–and stable political coalitions collapsed. Annexation fueled infrastructure, schools and services inflamed the fiscal crisis of cities, and injected new players into the municipal policy system. Early suburbs, mostly upper class, one percenter residential havens emerged. Suburbs needed infrastructure, particularly water, and as long as the city could provide it cheaply, annexation was a reasonable alternative. Corrupt ethnic machines, high taxes, and incompetent urban administration, however, made middle-class, extra-boundary residential areas question annexation–and by the end of the Gilded Age (1900) Big Cities were increasingly unsuccessful.
Footnotes
[i] Robert J. Gordon, The Rise and Fall of American Growth (Princeton University Press, 2016)
Ron W. Coan 