PART I:
SUMMARY
So what are the takes away from our first four chapters which have both introduced our approach to this history and carried us forward through 1933? One thought is that the past does offer value in our understanding of contemporary economic development. A second thought might be that history is more than valuable; it is essential and necessary to an understanding of what is going on out there today. But, the Curmudgeon guesses that would be self-serving.
The most fundamental lesson for an economic developer is that both the practice and the theory behind economic development hugely reacts to and reflects the various dynamic forces which propel our society and economy. Secondly, all cities, states and regions do not react to identical dynamic forces in precisely identical ways. Sub-state economic development does not occur in a vacuum and there is immense variation among our individual communities and states. It seems that while economic development responds to forces outside the community, the particular response to these forces is often shaped and propelled by forces within each community. What’s more, that individual community variation in response is not only affected by obvious variables such as population size, but is also affected by (1) political culture distinctions represented by our two ships of economic development: Privatism and Progressivism; and (2) by the extent to which the community perceives itself as growing or declining–and population, not jobs, seems most critical to that perception. The perception of community decline seems, if the South is any guide, to generate the most intense economic development program and policy reaction. Decline is very much associated with strategy and program innovation.
At first glance, the most powerful external force involves the movement of people–immigration and internal migration. Population change either means a growing (or probably low wage) labor force, or its opposite, population loss, threatens the viability of the community itself–at minimum it can be perceived by community residents as a rejection of their home town (this is especially true of population loss is disproportionately composed of the young and those perceived as most productive-promising). Population change seems to be a core, perhaps the core, factor which generates economic development policy.
Moreover, population migration change which crosses state and especially regional boundaries, almost simultaneously affecting a mass of neighboring communities, seems especially threatening or gratifying–depending upon whether your community is on the losing or gaining end of the transaction. Widespread shared population decline seems to prompt a larger, more uniform regional response. The Great Migration arguably set in motion a Southern economic development state and local set of strategies designed to cope with its seemingly unstoppable exodus. Immigration, on the contrary, generated societal pressures and economic expansion. The community’s need for to mitigate the former and increase the latter.
Population change, either migration or immigration, sometimes after a considerable time lag can prompt significant physical redevelopment programs: the City Beautiful movement is a reaction to turn of the century immigration and housing reform/slum clearance in large measure more associated with the effects of the Great Migration on the Northeast and Midwestern big cities. Population migration into unsettled geographies obviously provided an opportunistic setting for city-building entrepreneurs who after setting into place an initial infrastructure then engaged in a rather intense promotion campaign.
Geographies suffering from population decline may well attempt population recruitment strategies, but in the Pre-Depression period, these were rather infrequent and not especially successful. The BAWI-Mississippi program, however, pioneered an innovative tool, the IDB wrapped into a more sophisticated set of incentives which included the provision of facilities and equipment in an attempt to “buy a payroll” for unemployed workers in their area. BAWI and the Kentucky programs (as well as Carolinas textile-related efforts) developed a focused “recruitment” program, in some case involving the assistance of site-selector-like firms for targeted specific firms and industries. Population change also fueled the development of a new neighborhood-level community center approach to economic development. This approach, while providing and enhancing some physical infrastructure, relied more upon people improvement-empowerment programs to improve the lives of residents in a specific sub-municipal geography.
Immigration, on the other hand, generated in our pre-1933 period a different set of economic development responses. Large scale immigration is clearly association with a community’s need to (1) integrate the new residents, in this period low wage, and unskilled into the larger community fabric–a fabric which often seems threatened by the older, traditional populations. Also, (2) large scale population increase compels infrastructure (and sometimes association infrastructure modernization) installation and development-redevelopment. Infrastructure of all types becomes a foremost economic development strategy. Immigration (3) creates a need for jobs and sensitivity to image and a community’s “place in the sun”–the invisible pecking order within the so-called hierarchy of cities. Recruitment and attraction of firms, as well as still more residents, is a notable feature of growing communities. Copy-cat program innovation, the flurry of world’s fairs and design competitions associated with the City Beautiful movement and the intensity of harbor and ports competition in Western coastal municipalities supports the notion that growing communities get caught up in creating still more growth.
A second, perhaps powerful source of change hits a community in the form of a time-lagged corrosive rot of jobs from a hitherto agglomeration of prosperity-producing industry or a hyperbolic steroidal burst of employment from an industry seemingly rising from the bare ground. As now usual, a growth in such jobs generates community and business hopes for even more growth–and the loss of jobs fosters lost hope and prosperity tinged by an ever-increasing paranoia of job-theft by the community’s economic rival and despised enemy. Industries and sectors, especially industrial and technological, as will be suggested shortly by Ann Markusen (and others) proceed through a cycle of profits which generate jobs, consolidate them and finally lose them to productivity in a desperate effort to maintain sales based on highly competitive pricing. Eventually, the industry and the firms within it fail. Becoming the private firm equivalent of a ghost town. Communities whose economic base is disproportionately saturated with an industry sector ride their job base and prosperity much like a bucking bronco in a rodeo or Gilley’s.
Agglomeration and profit cycle industry pressures also yielded some impressive pioneering initiatives such as scientific management, business schools, and community colleges with specific vocational school training. The latter were the earliest seeds of an independent workforce strategy which would solidify in the sixties and seventies. The onslaught of a new oligopolistic gazelle, the auto and truck industry, would create a true regional cluster centering on Motown-Detroit, Southern Michigan, and the Great Lakes. There was no discernible public program or economic development strategy or approach which was associated with this agglomeration.
New England’s efforts to cope with a rapidly declining textile cluster prompted a true regional promotion and capacity-building initiative led by a pioneering EDO-structural type, the regional EDO. Alternatively, declining communities were left largely to their fate, and unemployed workers were provided little assistance and no retraining. The textile firms which failed, downsized, or actually shifted production to the Carolinas were not targeted for special assistance and together with low wage Southern labor and low tax Southern communities were portrayed as villains. Instead, regional programs engaged in more confidence building, reassurance programs attempting to convince residents and resident businesses alike of the region’s continued vitality and diversified economy.
Simple membership in a free enterprise, capitalist economy seems to generate inherent competitive inter-municipal and inter-state pressures to attract and retain private firms–a sort of testosterone-like entrepreneurial vitality. A my home town is better than yours mentality that needs to win its Friday night football game to prove something to itself seems to reside in many communities across the nation. Economic development in such an atmosphere is a safeguard to the community, at least its business community, protecting its status and place in the perceived urban hierarchy and demonstrating to all its economic muscularity. To put some parameters, ensure fair and competent competition on this urban hierarchical rivalry, a national association of economic developers was formed. This national association was meant to both referee the instinctive entrepreneurial aggression and educate its participants. Also evident in the later stages of the City Beautiful era was an inter-city race to construct spectacular convention centers, monuments and parks–less for private recreation than for attracting tourists and garnering prestige.
Age, time, demographic transition, and technological-productivity innovation exerts an almost inevitable obsolescence in a community’s infrastructure. The “community wheel” needs to be reinvented periodically, sometimes generationally. The need to “modernize” is a constant in community’s long time story. Every so often the old infrastructure, downtown CBD needs an injection of “what’s happening now” to create both excitement and a physical base from which contemporary business models and production technology can effectively compete. Unfortunately, modernization is a double-edge sword, inevitably inflicting pain on whatever remains amid the aged infrastructure. The benefit of community and business renewal and the undeniable loss of vitality exhibited by the old usually drive a community to periodically clear out the obsolete and install the “latest and greatest”. The City Efficient replacing dirt streets with paved and installing not only pipes and wires, but a new structural and managerial governance to replace what had worked so well for nearly a hundred years.
In a sub-state economic development system governed by Dillon’s Law, a final and fifth external driving force emanates from state government. During the early years of our Republic, that state government and its authority-programs were more or less controlled by the municipalities themselves and delegated to the municipalities for implementation. The industrial revolution and national expansion changed all that. The powers of the national government increased and the federal government came to be perceived as a rival to state government. States began to compete among themselves for jobs, taxes, and population and the need for an infrastructure and resources beyond the capacity of even its largest city also arose. Slowly and unevenly some states, oftentimes Southern states more than other regions, were at first prodded, than later more willingly became active players in some segment of economic development.
And so thus far in our incomplete history we have witnessed to some degree at least five dynamic forces (regional and population change, agglomeration and profit cycle evolution, urban-suburban competitive hierarchies, entrepreneurialism competition, the need for community modernization, and state policy direction) that have generated economic development programs and strategies. In future chapters, we will see three more dynamic pressures roll out: labor force competitiveness, small business formation, and the most controversial of all–suburbanization. So long as there is a future, we can count on more history to provide opportunities for yet additional thus far unseen forces to show themselves.
Against these economic and social pressures for change and survival, communities have responded with distinctive economic development strategies, programs and tools deemed appropriate to counter the pressure, opportunity or threat. Urban hierarchical entrepreneurial competition seems to have been best expressed by the chamber-dominated incentive-tax abatement attraction, promotion, recruitment and retention strategies. During the pre-Depression era, this pressure seemed to be confined to and played out at the municipal level and local government was a secondary player in alliance with the privately governed chamber of commerce industrial department. Promotional programs were applied to two targets: tourists and targeted firms and sectors. The effect of all these forces on the structure of economic development is just beginning, but chambers, real estate exchanges, port authorities and planning departments do not seem to be mere organizations–they reflect and contain the reaction to the societal dynamics and change of their home communities. Structures, EDOs embody much more than programs and even staff–but that is a topic for which we need more history to better understand.
But it does seem apparent that the goals of economic development in the pre-1933 period, however tempered by strategies, tools, staff and EDO type, are quite different from those which seem to be practiced in contemporary America. Job creation as we know it today, for instance, is virtually non-existent in this period. Infrastructure on the other hand and inter-city rivalry, not to mention the need of a developing economy to enter the twentieth century and the negative reaction of developed economies to this search for a modern, diversified industrial economy suggest that still other dynamics play a considerable role in the definition of economic goals and policy formulation as well.
As might be evident from our summary, some strategies could be applied, in different ways, to manage the effects of several dynamic forces. A good example is the recurrent use of some form of physical development or redevelopment programs–often combined with the installation of some infrastructure. This “Development and Infrastructure” Approach to economic development could be applied in many different environments, such as: (1) city-building; (2) initial development; (3) redevelopment (i.e. modernization and urban hierarchical entrepreneurship); and (as we shall discover in our final chapter) (4) consolidation. The Development and Infrastructure Approach be used to create a city from scratch, a neighborhood, the CBD, or a new suburb-planned community.
Finally there is the beginning tale of our two ships of economic development that by 1933 have traveled a considerable distance up river. Within each city and state, and certainly among the nation’s regions, the two ships have contended against each other–but in our initial historical period it is not yet clear whether one or another seems to possess some sort of natural advantage in any single municipality, state or region. Frankly, we need more evidence, more history, before we proceed much further along those lines. But it is clear, even in this early period, that each ship contains several decks–that neither Progressivism nor Privatism is a single, monolithic block of beliefs and values. It is equally clear, at least to the Curmudgeon, that there exists a clear distinction in types of economic development practiced within the traditions of each of the competing approaches. We also can suggest that the policy political culture most critical to our two ships is most affected by the nature of the beliefs-values and composition of its business community. Democrat-Republican distinctions seem less obvious and seemingly less important to economic development policy-making–at least in this period.
Quo Vadis
In the next two chapters especially, the reader will be deluged with sections devoted to some aspect of urban renewal. In fact, urban renewal will probably be viewed as a disproportionate element of the entire book. To explain this no doubt accurate perception the Curmudgeon will offer some defense of why this urban renewal “tool-strategy” consumes so much attention and space in our, all too wordy historical blather. The following bullet points constitute our defense and explanation–we hope they are sufficient to inspire the reader to trudge dutifully through the following sections:
- Urban renewal dominated a rather long era of American big city history: from 1933 to arguably 1987 when UDAG was terminated. In this period of time, urban renewal was either the prime economic development strategy, or was the prime strategy under attack and in decline. In either case, urban renewal was the center point of economic development in the central cities especially.
- That we have either (or both) forgotten/unaware of our urban history or frankly hate and disparage urban renewal, and those who participated in it, only make a, hopefully more balanced treatment of the strategy more necessary for today’s reader. Urban renewal carries in today’s conversation a negative legacy which obscures a certain reality that we still use urban renewal to this day–but have amended it and renamed it as redevelopment. Urban renewal is only a particular period in the history of two economic development strategies (infrastructure and redevelopment) which remains to this day as core to economic development practice and urban revitalization.
- Urban renewal as it evolved over its fifty year cycle demonstrates the interaction of our national, state and local policy process in our policy area. There is much to be learned as we can see how federalist levels of government as well as local policy actors played at the game of economic development. The assemblage, for instance, of the post-war Progressive Coalition will offer useful perspective to our current economic development policy system. Also, in this period we begin to see the serious evolution of our State-Sub-State economic development system (the “SSS”) and see displayed the essential leadership role of the state in local economic development, the amazing diffusion of economic development programs and strategies-tools among the states, and the “yin-yang” of a tension-filled relationship between the state and its sub-state EDO actors.
- We have characterized economic development as a “patchwork profession” and urban renewal is perhaps one of our very best examples which support our characterization. The interaction of actors within both streams of economic development, cooperating and competing, is responsible for much of the evolution and prominence (and durability) of this classical economic development strategy-tool.
- Finally, urban renewal is our best example of two foundation concepts underlying our book: diversity/variation and the impact of political culture on economic development policy. Urban renewal was never one, cookie-cutter-like program. There were different models and styles of urban renewal programs–even within the same city at different periods of time. Today urban renewal is regarded as one-size-fits all program concepts. We believe that to be incorrect–to repeat, it was never correct. The internal politics of each individual urban renewal policy system (or regime as Dr. Stone would have it) are, while not necessarily unique, quite varied in time, actors, and purposes. We have lost that sense of variety and diversity which has proven to be an inherent feature of our economic policy system.
Ron W. Coan 