A Historical Narrative from which Chapter One Model Emerged: Privatism and Progressivism, Boston and Philadelphia Political Cultures

As Two Ships Passing in the Night:

Chapter I:

Launching the Two Ships of Economic Development: Explaining the Metaphor-Defining the Tasks

 

We do not want to keep the reader guessing what “as two ships passing in the night” means. This is not a murder mystery. The prime tasks for this opening chapter are to explain the metaphor and then describe the origins of our two “ships” or approaches to economic development. Having said that an additional task to be dealt with in the following paragraphs is to present an initial perspective/assessment of how this history perceives key aspects of the contemporary profession and how this historical approach can provide a much-needed long-term view of who and what we are in the grand scheme of urban development and evolution. We confess to having a rather unique sense of the role economic development plays in our cities over the last several hundred years. It is startlingly different from that view which presently enjoys a more paradigmatic consensus. You would not have expected anything different from the Curmudgeon.

 

We assert that our profession’s “big picture image of itself” has little to do with how state and sub-state economic development has evolved over the last century and half. Bluntly, most economic developers and those contemporary academics-policy professionals concerned with economic development possess insufficient understanding of how we have gotten to where we are today. Consequently, economic development’s historical experience does not correspond very well to our contemporary sense of who we are professionally. We need a historical perspective to better understand ourselves.

 

Overall, it is our feeling that at the time of writing the profession, as a whole, poorly understands the forces and dynamics which have driven our professional history and we accordingly miscomprehend the role we play in the economic viability of our jurisdictions and communities. Presently, for example, most professionals cannot explain, or even describe very well, the structures and the variation among our states and communities that presently exist. The wide variety of separate economic development organizations within each community sort of coexist, or not, and, for the most part there is little sense of how and why they were drawn into the economic development policy mix—or if or how they can operate in unison. If the reader dare to cross a state boundary the mélange of EDOs and tools is usually quite different, often doing the same things using different structures and even different tools or worse the same tool with distinctive variation evident in its use. How to make sense of this cacophony? That is one of our core tasks in this history. The mélange and the variation are directly tied to the nature and differential impact of the dynamic forces that drove the profession’s evolution—that will be more evident once we better appreciate the divergent approaches to economic development and the reality of distinctive state and community-level political cultures on which sub-state economic development ultimately rest.

 

At the onset of our history we advance a definition of the profession of economic development as the instrument by which the values, past history and experiences, future expectations and hopes of a community’s residents are expressed, and hopefully achieved, by strategies and programs devised by its political, business, and community leadership through a public policy process. Economic development is a means by which a community can achieve success or at least stability in the ever-shifting and competitive hierarchy of cities, regions, states and nations. Economic development is thus more than economics; in our perspective economic development is the foreign-defense-development policy of our states and their sub-state jurisdictions. It is a “big picture”, wide-screen definition of the profession which embraces and celebrates the various ways in which economic development in states and sub-states can be performed.

 

Accordingly, economic development is not simply a single strategy or a single policy prescription. It is a comprehensive package of sub-policy areas each confronting and specializing in one aspect or set of elements dealing with the challenges and opportunities as perceived by the community/jurisdiction. Economic development is complex and changes over time as problems and opportunities recede, fade[1] or become apparent. Economic development is considerably more than mere job creation, much more than tax generation, and much, much more than diversification or growth in its economic base. It is all those things and more. Rather, economic development is the policy process by which a community in confronting its external threats and opportunities moves from what it is to what it wants to be. Politics is the lingua franca in this nether world.

 

Our Sense of Economic Development: the Drydock for our Two Ships

Economic development, as will be hopefully demonstrated in our history, is the policy area that deals with the forces of change in the outside world that impinge upon what the community-jurisdiction is and what it aspires to be. Economic development, therefore, responds to demographic changes, war, immigration and emigration, shifting sectors of national and global economies, innovation, changes in transportation technologies, skill changes in its population and workforce, competitive infrastructure—and tons more.

 

Those are the forces which set the standards, goals, strategies, tools, and popular expectations by which the individual economic developer and her EDO are judged and evaluated. In this perception of economic development the community-jurisdiction chooses the goals, expectations and strategies and the economic developer implements them and is held accountable to them. The process of converting community values and wants to actual economic development is a public policy process—which, like it or not, is a political process. How this economic development should be performed and who and how it should benefit are hugely shaped by the operations of our two ships of economic development. The economic developer, in any case, is the steward of the community—a manager of external affairs and dynamics—the director of community-level creative destruction.

 

Be Patient! We know this is not the mainstream image or definition of contemporary economic development. Let us explain in the chapters of this book how we arrived at such a startling concept of economic development and the role of an economic developer.

 

In our conception of the profession an individual economic development organization (EDO), and the tools and programs it administers, are the expression of how the community seeks to cope with perceived opportunity and misfortune, defend its self-image and economic vitality and seize opportunities for the future. In this conception, the individual jurisdiction seeks to achieve, regain, enhance, but above all, protect its own image of itself, its preferred style of life, as well as its own economic and fiscal viability against external forces of macro-economic, technological, social and demographic change. Rather than simply float along, the jetsam of the global urban hierarchy, communities and jurisdictions that pursue economic development chose not to go “gentle into the good night”, but to defend and project their hopes and values, sometimes in an almost Alamo-esque heroic initiative.

 

How each individual jurisdiction will defend and project itself into the fight with the outside invaders will not follow one common and universal mode or pattern. Individual communities want to be different things when they grow up. Some, expressly favored by location and history, want to be big, powerful, cosmopolitan and wealthy. Other communities want to live their simpler, high-quality lives in peace, predictability and even fellowship–with a measure of prosperity and opportunity tossed into the mix. Some communities, probably most, seek consensus, homogeneity, and some say blandness in their future. They seek to preserve a lifestyle they love and enjoy; a lifestyle shared through generations. Other community-jurisdictions pride themselves of being “mirrors of the world”, diverse, seething pots of opportunity and change–and misery. Some jurisdictions see themselves as a community of individuals; other jurisdictions see themselves as individuals residing in a community. In short, our sense of economic development asserts that communities and jurisdictions are not all the same–just the opposite, they often want quite different things–and economic development public policy and strategies will reflect these variations and goal diversification. Economic development than is about change and stability and the variation in how communities seek to manage both.

 

The interesting thing about life is that it often is profoundly affected by forces and factors we do not see or even feel with our senses. Equally troubling is that even when we sense and directly feel the forces and dynamics that affect our communities, we often poorly understand their cause and their likely consequences over time. Change does not come with an instruction manual. It is not at all unusual that upon feeling change and opportunity, that states and communities miss-define it and fail to recognize change’s true colors. That is what “Plato’s cave”[2] is all about. Economic developers work deep inside a cave; it is difficult in this cave to see forces and change as they really are. The problem is compounded because our policy process is inherently political and rests upon a community’s dominant political culture, Misperception of change is an endemic professional problem.

 

In essence, we argue that economic development operates within a “fog of war”, struggling to achieve community wants without really understanding what it is we confront. Throughout our history we will find considerable evidence that much of economic development involves fighting the wrong war or attacking the wrong problem. The fog of war is considerably compounded, and choosing to fight the wrong war is quite forgivable, because in most cases several forces and dynamics converge on the community and its policy-makers simultaneously. Also, in the initial periods of change, it is not at all clear that anything in particular is going on. During the initial periods of change, there is no perceived common pattern yet acknowledged or defined and individual instances of events under such conditions defy categorization. Also, and most critically, since our communities differ, they are quite likely to define change and disruptive phenomena from differing value priorities and perceptions. The community often will invent “stories”[3] which, may or may not be either accurate or relevant to the problem, but nevertheless will serve as the policy context or prism through which the community will make policy. What tools economic developers have available to them will also reflect these value priorities and varying perceptions of problems. Finally, communities differ in the assets (resources—especially location) and weakness they possess and their ability to harness those assets in mobilizing to confront their problems and achieve their goals.

 

As we proceed through the history of economic development we hope to show the reader that similar patterns emerge in different cities at the same time in response to quite different external forces and catalysts of change–and we will see the same community-jurisdiction over different periods of time seek recourse and salvation by following the same past approach, adapted usually to address the then-current problem or dynamic. A community likely will exhibit a distinct pattern of responding to economic development change communities over time. The existence of a “pattern” of single community’s response to economic development-related external change persisting with only subtle adjustments through our entire history is quite remarkable. Dallas in 2013 is not the Dallas of 1865; neither is Boston, Phoenix, Portland, or even Farmersville Ohio (population 600). In others words, despite the variation among communities, and despite the attack by quite different forces of change over considerable periods of time, there can be considerable continuity. Ca plus change, le meme chose”[4] and all that!

 

How do we explain change, variation and continuity all coexisting within each of our communities-jurisdictions. We believe the answer rests upon a stable, durable, political culture which shapes our values and orders our priorities and substantially shapes our definition of the problems we encounter. Where does this community-level (and state level) political culture come from? Our sense, and that advanced by others[5], is that as our nation was settled, different streams of people flowed into different colonies (regions)–and they developed communities and governments which reflected their approach to the world (and God) and their hopes for its future. We assert that these values and hopes were incorporated into the constitutions, charters and the political and administrative structures they devised, and that these structures and relationships have largely persisted to the present.

 

As different populations flowed over time into the community, the structures and the underlying relationships they developed persisted and through socialization to succeeding generations and immigrants internalized them. New populations (and their value systems) conformed to the established system of values and structures–or moved on. Minority political cultures could develop. Indeed, as Americans sorted themselves out over time and geography, they consciously or unconsciously sought out communities whose lifestyle and values reflected theirs–and settled in those compatible communities. This is, in part, an argument advanced in James Bishop’s The Big Sort[6] and Patchwork Nation.[7]

What does all this have to do with economic development? Among other things, political culture as it spread across the United States by settlers created new sets of communities-jurisdictions whose constitutions and structures reflected the experiences and values of these settlers. In particular, the relationship public institutions to private ownership and the willingness to keep government limited and delegate leeway, if not responsibilities to the private sector are two value sets important to economic development policy-making. In this manner, for example, emigrants from Boston, for instance, eventually made their way to Portland Oregon and that we, contend, will explain, in part, why today Boston and Portland pursue programs of economic development which are remarkably similar–and quite different from programs pursued in Phoenix whose settlers were primarily drawn from Southern states. California, for another instance, exhibits quite different approaches to economic development in its southern and northern cities–and that reflects their different histories and populations. Whatever example we wish to draw upon, the value patterns and priorities associated with the original settlement groups persisted in the communities they established across the nation and over the nineteenth (and twentieth) centuries.

 

The Curmudgeon fears that all this simplistic, stereotypical and generalized hogwash might be too much for the reader to bear at this early stage in our historical tale. So all he asks at this point is patience and an open mind; the evidence presented in the following chapters will support his perception, or it simply will not. That is the reader’s decision. But in alerting the reader to the currents flowing beneath our contemporary economic development senses we can better explain the meaning implied by the title of the book.

 

From what are the Two Ships Constructed?

The two ships are two “styles” or “patterns” of how economic development is practiced in the United States. The metaphor of two ships passing in the night traveling on the “river” of the history of modern American economic development allows us to describe what the reader could reasonably see as simultaneous, contradictory economic development pattern in communities across the nation at any point in our nation’s history. The reader may think the metaphor awkward, but again be patient; it is a useful image and, in the end, it too is up to the reader whether or not the metaphor achieves its desired ends.

 

Both ships travel in the same direction, up river if you will. Each ship carries different cargos, the ships are constructed differently and are managed by their captains differently. The ships have different itineraries–they are not even going to the same places. Mostly they travel up the river at their own speed and itinerary quite independent of the other ship–each ship, more or less, to the extent possible just does its own thing. But every so often the ships come in sight of each other; they are not particularly racing each other but generally the ship that falls behind feels uncomfortable and endeavors to catch up, if not get ahead of the other. Some ports of call are common to both ships (no dominant political culture) and, if there at the same time both ships will clash with each other. Sometimes one ship will actually try to interfere with the other and try to actively prevent the other from “doing its own thing”. At some point the travelers on the two ships have decided that they don’t like each other very much and they start “fussing and feuding” with each other. That is where we are at in 2013, but it could have described any time period in our history that the reader might choose.

 

Each ship represents one of the two “styles”, “traditions”, “value preferences” around which economic development programs and strategies have clustered for over one hundred and fifty years. Each ship has several decks (which mean there are differences among the passengers aboard each ship) and accordingly each ship itself is not a monolithic, united whole. But compared to each other ship, each ship is clearly differentiated from the themes, policy approaches and passengers on board the other ship. A passenger traveling on one ship and then the other would clearly sense the difference between the two–in fact, the contrasting themes of each ship is almost like night and day.

 

Bluntly and simplistically, American state and sub-state economic development can be separated into two general but very different ways of approaching economic development, and we might add, two different sets of goals–beneficiaries–constituencies that economic development should be serving. In a loose, but traceable way these two rival ships stop only at ports settled by populations sympathetic to their values and their approach to economic development. That is to say, each ship prefers stops in those communities whose political culture corresponds to the style, traditions and value preferences embraced by that ship. However, some ports, for various reasons, do not have a dominant political culture and a ship’s stay in such a port can be “short, brutish and nasty”. When a ship stops at a port unsympathetic to the ship’s culture, the ship leaves rapidly and heads off to more favorable climates.

 

We argue in our history that the style, tradition, and value preferences of each ship (and the variations expressed by passengers on each deck of each ship are based on key choices and values on critical economic and political (actually philosophic) questions. In this way, economic development policy-making is heavily impacted by the political debate and value conflicts of its time period. Those who prefer thinking that “economic realities” shape state and sub-state economic development policy-making will now understand that we insert politics and political culture into that equation as an intervening variable. That means that different communities can devise different economic development policy responses to identical “economic realities”–deindustrialization, for instance.

 

Does this raise the issue that politics and political values get in the way of a community embracing the “correct” response to resolving a particular economic development problem or situation? Perhaps (Yes!). But the more important question, at least to the Curmudgeon, is that each community politics and policy-making rests upon its own set of values and preferences, and sets its own goals in quiet consideration of these values and preferences. How can a community’s distinctive values and preferences not be included somehow into economic development policy-making? These values and preferences are transmitted into economic development through politics, law-making, and the economic development structures and tools created from time to time by both policy-making and laws. The idea that there are “correct” economic development strategies and initiatives objectively-rationally derived (or data-driven) applicable to all community-jurisdictions does not take into account that local politics and policy-making will have something to say about how “correctness” is defined and implemented. This is the ultimate source of inter-community (state) variation. This is also how political culture permeates into “correct-rational” economic development solutions. Our two ships are metaphorical frameworks containing two sets of values and preferences reflecting the “great debate” which has characterized American politics since the forging of our 1789 Constitution—and which continue to this very day.

 

The Origins of our Two Ships

 

When, Where and Why Were these Ships Built?

How did each of our “ships” get built and when were they launched? The policy value choices and the historical experiences of modern economic development policy, our two ships begin in the earliest days of our colonial experience. And from the get-go there were quite distinctive variations among the colonies, peoples and the nations that settled our continent. Fortunately, the reader will be spared a detailed review of these early years. Instead, we shall present a brief description of those earlier years and commence with the founding of the American Republic (our present national government) in 1787-1789 and then quickly explain the historical dynamics which affected the construction and launching of our two ships. The real launch point of our history is post-Civil War 1865.

 

The different sections (that’s what they called census regions back then), colonies and immigrant groups which settled in America in colonial times in 1789 launched a new nation by forging/approving a federal constitution. This constitution reflected compromise, sheer necessity, and hope negotiated by representatives who held beliefs akin to our two ships. That governmental system, based primarily on a decentralized agricultural economy” “managed” the affairs of the pre-Civil War Republic. There was considerable activity we could identify as economic development through this period. Mostly economic development consisted of trade and transportation-related infrastructure strategies such as canal-building, railroad-building, establishment of ports–and city building (what we call founding and establishing an urban settlement). The rudiments of several current economic development strategies and the use of key economic development tools (tax abatement, for instance) can certainly be found in this early period.[8]

 

That set of compromises around which the early Republic system was based collapsed in 1861 and the great civil war followed. One cluster of peoples, states and values (the North or Union) crushed the other set of peoples, states and values (South or Confederacy) and reconstructed the Constitution to reflect that victory. Without intending anything particularly relevant to economic development, however, that new Constitution and the military victory which made it possible, set up (perhaps preserved would be more accurate) for the next seventy-five years a regional political, social, and economic hegemony of victors over the vanquished. For instance from 1868 thru 1948 no President was elected from a state in the Confederacy[9]. That regional hegemony of North over South and West affected considerably the evolution of the economic development profession and state and sub-state economic development itself. In our history, (census) regions matter greatly. Bluntly each region has different cultures, history, economies and demographics and economic development will reflect these dynamics.

 

From the environment created by the post-Civil War Northern hegemony sprang the first modern American economic developers. The North won the Civil War in large measure due to her size, population inflows from its hinterland and immigration, and most critically enjoyed a near monopoly of manufacturing (and railroads)[10]. Previous to 1865 and certainly after that year, the North head over heels set up factories and the soft-infrastructure of industrialism (banking and insurance for instance) and, like Great Britain, galloped into urbanization and the development of, by the standards of the day, large cities. The South, with exceptions–but relatively minor exceptions, did not follow the Northern path as we shall argue in our next chapters and, for various reasons, did not pursue manufacturing or big city urbanism in the post-1865 period either. The West in 1865 is best left to John Wayne movies, and Bonanza, Wyatt Earp and Deadwood reruns.

 

In summary, the North (Northeast and Midwest) post-1865 were evolving into the Industrial (and Urban) Age; and the (post-Reconstruction) South, politically conquered and socially divided and weakened, remained largely small city and agricultural, rent by racial and class warfare. The West, California and to some extent Texas and the Northwest, were comparatively unsettled west of Kansas City (one could argue St Louis). There were only three functioning economic regions at this time: Northeast, Midwest, and South[11]–but one didn’t matter very much. Having said that our history really commences in 1865, we must acknowledge and relate to the reader that the true origins of our two ships lies much earlier in our history. The modern profession is a post-1865 evolution, but the origins of our two ships (political cultures) occur in the colonial era.

 

The Colonial Experience, the Industrial City and Economic Development

Political, economic and military events-dynamics were one thing, but in 1865 the Northeast and the Midwest entered into the last stages of what arguably was the nation’s most dramatic economic transformation–from a colonial, agricultural economy and its geographic landscape to an industrial, manufacturing economy populated by hordes of cheap labor, immigrants from foreign lands and former farmers from hinterlands adjacent to the cities. It was to be the Big (central) Cities which initially housed the new factories and immigrants. Industrial America was Urban America–Big City America.

 

Cities, factories, innovation if you must, immigrants and migrants drove the economy, the physical landscape and the class structure of the Northeast and Midwest in the thirty or so year period after 1865. Needless to say, the politics of these cities (and their former political culture and policy processes) were tossed about pretty radically. Thank god for states and state legislatures. They were able to isolate the pernicious effects of Big City change and preserve, through state constitutions and legislative gerry-mandering (rotten boroughs), much of the previous value system of the colonial era. In other words, the colonial past could persist and eventually reach accommodation with the arrival of the industrial city.

 

As the industrial city came into being and within its limited geographic boundaries, one of the two ships of economic development was incrementally built in the dry docks of these new Big Cities. Responsive to Big City problems, class inequalities and a strong dose of morality and upper class noblesse oblige an economic development ship was pushed into the historical river of economic development around the late 1880’s. We shall name this ship the “Progressive”. It is a reaction to immigration, large dense cities—and above all industrial capitalism. Its values, however, can be traced to the “old time religion” of Calvin and the Massachusetts Puritans.

 

There was, however, another ship already constructed and long in use from the colonial, pre-industrial days. This ship, the first ship of American economic development, had served in the economies of the pre-industrial, smaller city era. The values and traditions of the first ship reflected core founding American values, economic preferences, and an agricultural way of life probably preferred by most non-immigrant Americans at least in the nineteenth century. These values are well known, even today: staunch individualism, self-initiative and self-reliance, decentralization of decision-making, and above all a fear of government and a willingness to use private business forms to handle community-level problems and opportunities. Agricultural-rooted, it had no problem with small business and small-scale capitalism and it prospered best in smaller communities, common in all but the Big Cities, whose citizenry shared common roots and heritage.

 

Transportation being what it was, competition among major cities was more rhetorical than economic, but each city carved out of its immediate interior area a hinterland which it protected, but also extracted all that it could. Pre, even early industrial era cities were fairly small and sparsely populated by today’s standards. Suburbs already existed by the 1860’s although they were less bastions of wealth than small agricultural or trade stops living off the central city’s economy. Second and third tier cities existed sprinkled throughout each state; by this period they were linked by railroads to each other. Along the coast, a vibrant coastal trade among ports existed. Privatism flourished in these small urban enclaves and as citizens immigrated into the frontier areas of the south central, mid-west and south east states, they established urban centers which mirrored their past experience.

 

Inequality was accepted—a reflection of the Protestant ethic in daily operation. The reality that community-level decision-making (and economic development policy-making) was dominated by, and all too frequently was compatible with, the interests of this business elite was more or less tolerable in that the average individual wanted as little to do as possible with government, politics and such. Anyway, growth generated jobs, and jobs provided household income—and that is what these businesses wanted. So why shouldn’t they dominate politics and the pubic-policy? After all, a rising tide lifts all boats. For the most part, this is the set of values that had gotten America, for better or worse, to where it was in 1865. This ship is named Privatism.

As exciting as our tale must have been to our reader, we suspect our two ships on the river of history metaphor is appearing a bit tired and overworked at this point. We do hope, at least, that it conveyed to the reader the outlines of the pre-history of modern American economic development. Both “ships” rest upon American values, traditions, choices evident in colonial and early Republic America. The onslaught of the industrial revolution, immigration and the economic, social and political system set in place after, and as a consequence of the Civil War, crystallized into two quite different approaches to state and sub-state economic development. These two ships or approaches were based on rival, certainly contrasting answers to key political, economic and social questions which, so far at least, have proved to be timeless. We turn in the next section to these key political, economic and social questions, the answers to which distinguish and divide the passengers of our two ships.

 

A Relatively Brief Sense of the Origins of Privatism

For most of us our earliest professional roots evolved from a decentralized, municipal, ethnically homogenous political culture, what Sam Bass Warner, Jr. called “the culture of privatism”. His description of privatism was based on his study of Philadelphia and conventional wisdom has often extended Philadelphia’s version of privatism to most American cities. As the reader might suspect, while we are willing to agree that most cities in the early Republic were by default Privatist in nature, we strongly expect that variations on the theme among other cities, say Charleston and Baltimore, existed.

 

Already at the time of the Revolution, privatism had become the American tradition. Its essence lay in its concentration upon the individual and the individual’s search for wealth. Psychologically, privatism meant that the individual should seek happiness in personal independence and in the search for wealth; socially, privatism meant that the individual should see his first loyalty as his immediate family, and that a community should be a union of such money-making, accumulating families; politically, privatism meant that the community should keep the peace among individual money-makers, and, if possible, help to create an open and thriving setting where each citizen would have some substantial opportunity to prosper.[12]

 

For Warner privatism was roughly equivalent to liberal (classical) capitalism.[13] Boosterism[14] which exists to some extent in all cities but seemed inbred in Privatist cities. Colonial privatism, according to Warner, was incorporated by our Founding Fathers, the revolutionary generation into the Constitution of the United States. More importantly for our purposes it also was built into the charters and constitutions of Pennsylvania and Philadelphia and the other major cities of the early Republic

 

Pure privatism of the early Republic meant that most activities today described as economic development were performed by the private sector–with municipal government serving as a sort of referee among competing and rival private sector members. Compared to the American Revolution’s separation of church from state, early Republic privatism did not really separate the private from the public realms. Private and public spheres were not exactly joined at the hip, but were more a sort of partnership with the public sector the junior partner. Limited government is the cornerstone of early Privatism:

 

The tradition of privatism is, however, the most important element of our culture for understanding the development of cities. The tradition of privatism has always meant that the cities of the United States depended for their wages, employment and general prosperity upon the aggregate success and failures of thousands of individual enterprises, not upon community action. It has also meant that the physical forms of American cities, their lots, houses, factories, and streets have been the outcome of a real estate market of profit-seeking builders, land speculators, and large investors. Finally, the tradition of privatism has meant that the local politics of American cities have depended for their actors, and for a good deal of their subject matter, on the changing focus of men’s private economic activities.[15]

 

So the earliest economic developers in the United States were land speculators, surveyors, lenders, and builders. Lest we feel too uncomfortable, George Washington was one–and Washington D.C. (and some of the Shenandoah Valley Virginia) can be associated with his personal, city-building economic development efforts. In any case, in most cities in these early periods, city planning was little more than the creative use of the easy to profit from grid. The exception to this was Boston where the first urban planner was apparently a cow.[16] In any event, by the 1870’s privatism had matured a bit from Warner’s classic description, at least in the sense that city building and increasing population had led to the settlement of much larger cities on the Atlantic seaboard and in the Midwest. Transportation modes had torn down what had been a more or less hard to climb over fences between the hinterlands of the port cities and competition, more aptly described as rivalries, between cities had developed.

 

Judd and Kantor[17] carried Warner’s privatism a step or two further as they describe Privatist cities around the Civil War. In particular, their conception of the government-business relationship was somewhat more formal and extended beyond the role of “peace-maker” or regulator. They saw city municipal leaders as more driven by, and responsive to private sector business leadership but that a distinct public sector had evolved. This business-government mentality, perhaps inevitably, led to insensitivity toward non-business sectors, i.e. labor. Theirs is a more negative depiction of Privatism of the period.

 

The Curmudgeon, however, finds little evidence that a distinct political class existed at this time; most public officials remained transplanted businessmen in and out of government service. Still, all agree that public sector conceived as its purpose to facilitate private sector growth and profit–and saw any role in economic development as a partnership with private sector as the best vehicle to obtain community good. Late nineteenth century muckraking had yet to turn public-private sectors into a zero-sum game. In this world it was not inconceivable that the success of local business propelled the community’s growth and prosperity. Helping a local business could mean helping the community as a whole.

 

The reader might sense that this more favorable image of business and businessman-politician was more prevalent in the pre-1865 period than today because capitalism still operated from the bottom-up. The ties of the ptr-1865 local businessman to the community were close and quite extensive. The market area of most, even many of the largest firms, was still regionally bound. The emergence of the great “captains of industry”, robber barons if one prefers, is really just starting at the point. The struggles with labor are also only beginning at this time. As we flow into the 1870’s and 1880’s this increasing concentration of industry will change dramatically the structure of American business and will transform business and American capitalism into a system of impersonal interregional corporations. This change in the structure of American enterprise will exert considerable effect upon business participation in economic development decision-making and will reshape urban governance as well. Less appreciated will be its effect on Privatism—but we will deal with that in another chapter.

 

The Privatist mentality also led to a tendency to view the municipal corporation (i.e. the city government) as being in competition with other cities, chiefly regarding trade, wealth accumulation, and population. Growth was desirable. The Privatist competitive streak is usually reduced to simple boosterism, but it also drew upon more native capitalist drives. This early American version of  what today is called “global competitiveness” is also the consequence of a the private sector’s recognition that business, capital if one prefers, is inherently mobile–and will flow to where profits and markets are most bountiful. This competition prompted a desire/need to seek an edge vis-à-vis other cities and injected inter-jurisdictional competition as a central feature of what would evolve into the standard practice of economic development. Today business climate is a paramount economic development strategy. We suggest that appealing to a private firm’s microeconomic needs is an extension of an approach to economic development based upon a Privatist, non-zero-sum public-private relationship. That this inter-jurisdictional competition could rebound to the advantage of private business, to the detriment of the public interest, was left unsaid.

 

Founded originally as centers of trade and commerce, the nation’s cities and towns came into being as places where people could make money. The aristocrats and businessmen who ran them recognized that in order to ensure their mutual success, they had to take steps to promote their city. This economic imperative became deeply embedded in politics because there was no separation between economic and political leadership-and because the urban population generally believed it too.

 

…. By espousing the (Warner’s) notion that cities existed mainly to serve private economic activities, urban leaders permitted the agenda of local political and even the physical character of cities to be driven primarily by the market decisions of traders, builders, land speculators and investors. Warner maintains that the culture of privatism made it difficult for public authorities to respond with much effectiveness to the problems of cities ……. (Instead) Cities could prosper only by gaining a competitive advantage over other cities as trading centers.[18]

 

As Warner related the story of early Philadelphia, it is apparent that a major reason for the weakness of the city’s Privatist municipal government was the structure of government imposed on it by state charters and constitution. Municipal governance was based on a system of committees (resembling today’s commission form except in the sheer number of committees) in which each committee performed a specific municipal function. The committees were loosely under the control of the mayor and council. The separateness and independence of these committees allowed for the participation, and dominance, of businessmen in public affairs. This style of decentralized and fragmented government was inherited from the colonial era, therefore having a very long tradition in Philadelphia.

 

The wealthy presided over a municipal regime of little government. Both in form and function the town’s government advertised the lack of concern for public management of the community. The municipal corporation of Philadelphia, copied from the forms of an old English borough, counted for little. Its only important functions (at the time of the Revolution) were the management of the markets and the holding of the Recorder’s Court. A closed corporation, (the municipal government0 choosing its members by co-option, it had become a club of wealthy merchants…. By modern standards the town was hardly governed at all….ineffective police… streets went unpaved, the public wharves little repaired…no public schools, no public water, and at best a thin charity.[19]

 

Warner’s Philadelphia was characterized by a decentralized, municipal-level, small business elite whose partnership with the weak municipal government would transform the city into an arena of business development, private profit and hopefully, general prosperity for its residents. This city was a community of individuals, seeking jobs and profit for themselves-families. As a holistic community, Philadelphia seemed not especially concerned; the provision of public goods was afforded little priority–and the role of the state government or its colonial equivalent in municipal affairs or in the provision of public goods was noticeably absent. Yet, the success of Philadelphia in acquiring population and business growth cannot be denied. The canals which earlier business leaders had secured, and the future railroads which they would secure, ensured Philadelphia’s competitive ranking in the American hierarchy of cities throughout the nineteenth and most of the twentieth century. If this was a principal goal of Philadelphia’s Privatist economic development approach, it worked–and worked brilliantly. Compared to cities such as Boston which lagged behind, Philadelphia was very much the success story.

 

The More Long-Winded Origins of Progressivism

Again, Warner implies that what he found in Philadelphia was typical of American cities in the colonial and early Republic period; he suggests that “American cities have grown with the general culture of the nation, not apart from it”[20].Warner’s study is based on Philadelphia, with its English Quaker and early German values (what Woodard labels as Mid Land). At this point we reopen the question of whether Warner’s Philadelphia-derived privatism was as universal throughout American cities as supposed. We have asserted that, in fact, a second approach to governance and economic development policy has also characterized American economic development. From where could this alternate approach have evolved?

 

Early America did not possess a great number of large cities and Boston (New England in general) clearly drew its roots from different immigrant groups. The possibility that alongside Warner’s Privatist city there might also have existed an alternate, rival version of municipal governance (and economic development) prompted us to look at early Boston for clues.

 

Boston, as is commonly known, was settled by Puritans–Calvinists who preached of a vengeful God, a corrupt humanity, and a heaven meant only for those predestined by God (the Elect) himself to enter. This Elect of God, evidenced by their strict moral life and personal rectitude, frugal lifestyle and hard work which led to material success, was tasked to provide leadership and care to the community it governed. The colony’s first leader, and the founder of the Town of Boston, the former English country squire John Winthrop embraced these Calvinist principles to set up in Boston and Massachusetts. In this approach to governance Winthrop and Calvinist Boston embraced a quite different sense of the role of the private and public sectors: Winthrop stressed “A Modell of Christian Charity… under a due forme of government, both civill and ecclesiasticall” in which the concern for “the publique” must outweigh all private interests[21].

 

We must bear one another’s burdens… We must be willing to abridge ourselves of our superfluities for the supply of other’s necessities. We must uphold a familiar commerce together in all meekness, gentleness, patience, and liberality. …For we must consider that we shall be as a City upon a Hill. The eyes of all people are upon us. So that if we shall deal falsely with our God in this work we have undertaken, and so cause Him to withdraw His present help from us, we shall be made a story and a byword throughout the world.[22]

 

If this were approach were applied to the governance of a municipality, it would easily be privatism turned upside-down or inside-out. Winthrop, Puritanism and an Elect which saw government as an instrument to make men holy and provide for the needs of the community’s most desperate would set a “tone” or a framework from which could evolve an alternative to a Warner’s privatism. A second key distinction, in our mind, seems to be that the Puritan colonial commonwealth set up by Winthrop was “from the get-go” a strong, unified state level government–that contrasted sharply from Penn’s decentralized Pennsylvania and Philadelphia municipal governance. Boston and Philadelphia operated under two quite distinct “styles” of state governance. That colonial distinction, the reader who survives our many chapters will recognize, endures to the present day.

 

Penn established Pennsylvania and Philadelphia intending to be free of a state religion–government and church separated to achieve religious toleration, To Penn strong unified government was linked to religious persecution–and was to be avoided where possible. Winthrop, to the contrary, retained the unity of church and state in his municipal corporation. Municipal governance was entrusted and infused with a moral purpose and held accountable, not simply to the will of the community (achieved through the famous New England town meeting which was established in Boston and Massachusetts in 1636)[23], but to God and his Elect as well. For Winthrop and the governors that followed, Massachusetts State was entrusted with responsibility to improve the community so that its residents could be moral, and hopefully hard-working, prosperous citizens of these cities on the Massachusetts hill.

Accordingly in 1642 the Massachusetts General Court instructed each town to “train their children in learning, and labor and other imployments”; by 1647, the same General Court required towns of fifty inhabitants to retain someone to teach children to “write and reade” and a town of one hundred to set up a”grammer schoole” supported by public funds. Interestingly, the Massachusetts General Court was restricted to members of the established religion, and the powers of that legislature were sharply respectful of the powers of the Governor and his staff—the existential expression of the Elect. This was government by moral elite on behalf of the community imposing itself on sub-state jurisdictions–top-down governance– contrasted to Philadelphia’s bottom-up style into which poured a small business-individualist entrepreneurial elite. Despite the establishment of a system of locally controlled town governance, the role of the Massachusetts colony’s General Court in municipally-relevant affairs was significant and would remain so to the present day.

 

Times change and so did Winthrop’s Puritanism, Winthrop’s Puritanism was a bit too strident, and predestination with its vengeful God requires a certain mindset; as the seventeenth century rolled on into the new world of the early 1700’s a new mentality gripped new generations of Massachusetts citizens and over time replaced the increasingly old, weathered Puritanism of Winthrop.

 

Without questioning either the existence of the Almighty or the authority of the Bible, a new religious group called the Unitarians had begun to attract attention as they placed greater emphasis on the beneficence of God, the innate goodness of man, and the availability of salvation to all souls … the Unitarians accepted the importance of human reason and conceived of a truly Godly community that would operate in a rational, orderly manner in accordance with the natural laws designed by the Almighty.[24]

 

A second development, a hundred years later, also transformed the composition of Winthrop’s Elect. The older Puritan-Unitarian “codfish” aristocracy, based on the fishing industry and early whaling and trade with Europe and the Far East became infused with a new, entrepreneurial business elite. The new elite, its money in textile manufacturing in places like Lowell, Andover, Salem and southern New Hampshire (textile factories started as early as 1810) made fortunes quickly (gazelles tend to do that) and by the 1820’s were moving into Bulfinch-designed mansions in Boston. By the early 1830’s the textile elite lived alongside, married into the now Unitarian codfish aristocracy. Samuel Eliot Morrison described this elite fusion as the marriage between “the wharf and the waterfall” and in an 1861 novel, Oliver Wendell Holmes Sr. dubbed these new composite business elite the “Boston Brahmin”.[25] In essence, by the time of the early American Republic the old Puritan elite had evolved into a more secular business elite, embracing sector-economic change—but retaining its traditional role as “the Elect” and its commitment to the community, especially its less fortunate.

 

In short, we (and O’Connor) argue this wealthy business elite became the new Elect of Boston and Massachusetts. O’Connor compares the new elite with the “priestly Brahmin class .., who performed the sacred rites and set the moral standards … of a modern caste system”. This Brahmin elite retained a great

 

a renewed sense of obligation on the part of older families to the welfare of “their town” and new determination to participate actively once again in local political affairs … Boston could be saved if members of the “better class” took over their responsibilities and regained positions of social and political leadership in the community….Pitching their appeals to the Boston working class [they] emphasized the responsibility of “the happy and respectable classes” to watch over those laws that affected “the less prosperous portions of the community”. Their obvious desire for political control of Boston carried with it a sense of responsibility for the prosperity of the town and the welfare of its less fortunate classes–a sort of moral stewardship, a form of noblesse oblige–that would continue to be an integral part of Boston’s political heritage.[26]

 

deal of the beliefs and values of Winthrop’s Elect. Whatever else is emerging in Boston (Massachusetts and New England), we assert this is not Warner’s Privatist elite[27].

 

While it took nearly thirty years from the inception of the American constitution and Massachusetts as a state, Boston finally asserted itself from stringent state legislative control. Part of the reason for this delay is that this Brahmin elite was more attracted to participation in the new federal government and leadership of the New England-based Federalist Party which in the first decade of the nation controlled Washington politics. Only with the victory of Jeffersonian (Privatist) populism and the War of 1812 (unpopular with the New England federalists—Hartford Convention and all that), and the increasing threat of a new radical “western” populism (also Privatist) led by Andrew Jackson did the Boston Brahmin federalists lose their federal government focus to become interested in municipal affairs.

 

The city itself had grown to a thriving cosmopolitan trading city and its population (about 18,000 in 1790) had grown to 43,000 in 1820 (Philadelphia was nearly double that size). The needs of the old city were apparently severe and compelling. The city needed modernization and upgrading. The older Puritan-built sections of the city were collapsing and the new neighborhoods and population needed new services, new industries need to be accommodated, and infrastructure scaled to deal with a growing city. The newly empowered municipal corporation soon had much on its policy agenda.

 

Old buildings needed to be razed and new ones erected. The lighting and paving of streets required municipal attention, and a fresh water supply was desperately needed, as was a more adequate system for cleaning the streets and disposing of garbage. Even more important, the recent growth in Boston’s population point out the serious lack of adequate police and fire protection for the general public.[28]

 

So the initial thrust of this new Brahmin Elect was to secure state legislation and convert Boston from a town to a city, centralize Boston’s municipal authority in the hands of a single executive, a mayor, and assume a measure of local control. In 1822, the city of Boston[29] was officially chartered by the state legislation; it was governed by a bicameral legislature and a mayor in whom “the administration of all the fiscal, prudential and municipal concerns” were vested. Boston’s second mayor[30], the Brahmin Josiah Quincy III was elected to the office (1823). He would subsequently serve six terms in office.

 

In a dramatic demonstration of how an upper-class Federalist mayor could work for the welfare of the “less prosperous” classes of the city, Quincy set to work rescuing the oldest part of the city from decay and ruin. Refusing to be handcuffed by the obstructionist tactics of old town board members who objected to the new mayor stepping on their administrative toes, Josiah Quincy took whatever municipal powers he needed to accomplish his purposes. By appointing himself chairman ex officio of all executive committees, he assumed a controlling voice in all municipal activities and decisions. By appointing professional administrators who reported to him personally, he established a system of direct accountability.[31]

 

While Philadelphia was brandishing its business Privatist weak, committee-led municipal government which neglected its public functions and services, Boston was hiring teams of sweepers to remove six tons of dirt from the city’s streets, establishing a garbage pickup, setting up municipal level police and fire, creating a department of corrections for youth offenders, acquiring control over the city’s sewers and minimizing the pollution which emanated from them–oh, and in case you missed it, conducting the nation’s first known municipal led urban renewal program–building in the cleared land the very first Faneuil Hall-Quincy Market[32]. When Josiah Quincy left City Hall, denied a seventh term by the long lines of political opponents he had created in the past six years, he went directly to Harvard and stayed seventeen years as its President. One of his seven children, Edmund, would be Vice-President of the first Anti-Slavery League and his son and grandson future mayors of Boston.

 

The city of Boston that he left behind in 1828 was then rated as the healthiest city in America–and the most indebted. As far as Progressivism goes, Quincy, Boston and Massachusetts, in our opinion, represented the best example of the distinctive approach to economic development that would later emerge more fully formed in the 1880’s. Indeed, many of the Brahmin’s descendants and migrants will be the social reformers of the late nineteenth century who formed modern Progressivism.

 

Privatism-Progressivism and Federalism-Anti-Federalism

 

Both Privatist Philadelphia and Progressive Boston were reasonably pure sub-state approaches to early urban economic development. Neither directly depended on the federal government for resources or other forms of support. In fact, the national political debate had by the 1820’s moved away from the earlier Federalist-Anti-Federalist debate which was a hallmark of our Constitutional period. The Federalist party had collapsed after the War of 1812 and federalist Congressmen and Senators, as was Josiah Quincy in his past life, had moved on–in the latter’s case to City Hall. The “federalist wing” of the Democrat-Republican party controlled national government (John Quincy Adams) during Quincy’s administration–but that subsequently proved to be federalism’s last hurrah as the 1828 victory of Jackson launched a period of Jeffersonian anti-federalism on steroids.

 

Nevertheless, at least two important principles, key aspects of the anti-federalism-federalism debate, continued on the national agenda–and would continue, in one form or another, to the present day debate between Blue and Red states: (1) the definition of limited government and (2) the job description for the federal government and state (and sub-state) government. Positions on each of these two open-ended and timeless national debates have consistently climbed onboard each of the two ships of American economic development. We cannot ignore them.

 

The consensual role of government and the role of the federal government vis. a vis. state-local government are both attitudinal positions embedded in the political culture of each of our two ships. Because of the different mix of ethnic settlement inflows, the regions (and states) of colonial America, New England, Middle Atlantic and the South tended to hold different positions on these fundamental attitudes. The Constitution of 1787 in many ways was forged around compromises and processes central to these debates. The federalists wanted strong, national government and the anti-federalists wanted a limited national government–limited government in general–but government, if it had to be, should be government closest to the people-voter[33]. It would be easy in this context to link Privatism with anti-federalism and Progressivism with a strong federal government. At one level that might be a reasonable linkage, but over the long two hundred year history of the profession that probably would be a mistake.

 

Among other factors, the Industrial Revolution would intrude into this debate–as would its consequent urbanization and foreign immigration derivatives. All would complicate the future role of the federal government. At the time when Privatism and Progressivism first manifested themselves in our early American cities (the 1820’s), the federalist party had collapsed nationally, the anti-federalist Jeffersonian-Jacksonian Democrats were in ascendancy (due to Western migration into two newly settled regions, the Midwest and South Central states) and the two most visible issues associated with the debates on these three critical questions were the national bank, tariff policy, and the national road. There were certain infrastructures and institutions that did not fare well if decentralized to the states.

 

Anyway, the potential effect of each of these issue-areas could have profound implications for the business communities in each city of America–as well as the competitiveness of each city (or region). Federal policy, even this early in our history, hugely affected business and the community-level private sector, whether Privatist or Progressive, and, therefore, the local business community was never free to ignore the goings-on in Washington D.C. That is equally true of 21st century Privatist and Progressive cities and private sector. State and sub-state Privatism and Progressivism, in our approach, cannot ignore the policy impact (potential or real) of the federal government–although one or the other approach may, for its own reasons, wish to temper or expand the federal role. The budding onslaught of the industrial revolution, among other transformations, fundamentally altered the debate on the role of government and the federal role in our federalist system. In short, concern over the antics of the federal government was always a concern of both ships in our metaphor. To be sure, the Privatists usually preferred things done at the state, sometimes local, level and the Progressives always have seemed more comfortable in their dealings with a strong federal government.

With considerable irony, both ships would in the early twentieth century fight for control over the federal government and that struggle would finally forge a Privatist adjustment to the industrial revolution-urbanism-demographic change: a blend of corporate and business management philosophies and tools which would be advocated for government use: we shall call this Managerial Privatism. Progressivism will not be immune to pressures unleashed by these dynamic forces. It shall evolve at least two quite distinct sub-approaches: (1) more in tune with the early Unitarian Quincy Progressivism and another (2) more populist devolving from the social reformers of early Progressivism which we shall label Community Development. As the twentieth century progressed, as one would expect, both ships would continue their adjustment and refit themselves to deal with additional change and transformation. Our two ships are not static–they react and adjust as they travel and race upstream.

 

Core Tendencies Inherent in Privatism and Progressivism

 

In this section we need to elaborate upon Privatism and Progressivism (P&P) in terms helpful to the reader as he or she will cope with the lessons imparted from our history. First of all, P&P are not hard and fast “ideologies” or “philosophical approaches” to which economic developers blindly and thoughtlessly impose on their pliable thought, decision and policy-making processes. In real life probably most economic developers bring together elements of both approaches into their advice, decisions and program administration. It would be rare indeed to find any one economic developer, think tank or even academic that is solidly and completely locked onboard one or another of our two ships.

 

The communities and jurisdictions from which economic developers draw their paycheck, however, impact heavily upon practitioner expectations, define their goals, and advantage or disadvantage community constituencies thereby shifting, however imperceptibly, the community’s political and administrative economic development context. No community or jurisdiction operates wholly within the confines of one of our ships, but it is at the jurisdiction level that we see more clearly the consistent application of the values programs and attitudes quite compatible with our two ships passing in the night. Often, these communities tend to hire, promote and retain economic developers who can deal more effectively and with less cognitive dissonance with these preferences and predispositions.

 

The predisposition of communities-jurisdictions to one or another of our two ships is particularly evident if we look over an extended period of time. Stuff can happen in the short term, but over time newly-adopted strategies and program initiatives display an amazing tendency to be redefined and their administration shift back to correspond to the long-term community preferences and predispositions of the community. P&P are most evident when we look over the long haul of a jurisdiction’s economic development choices.

 

This contrast between economic development strategy-program initiatives and a community’s long-term preference for one or another of our two ships exposes another interesting characteristic of state and sub-state economic development–that economic development strategies-programs with the same “name” (i.e. TIF, tax abatement, EDZ, cluster, small business lending, etc.) often vary considerably from community to community in their terms and definitions, conditions, eligibility, priority of use and even goals. Indeed, in some states, states control these programs, in other states the communities do. Sometimes, the programs exist, as arrows in the quiver, but they are seldom, if ever, actually used–while in other communities, the same strategy-program becomes a cornerstone of the community’s economic development approach. When we look “under the hood” of a community’s economic development approach, our two ships become much more apparent than when we content ourselves with a simple “listing”, or an inventory of approved programs and media-announced strategies. Look at what a community actually does over time, how they do it and which consistencies are better served and a consistency of approach will usually emerge.

 

So don’t expect any sign “Welcome to our Privatist (Progressive) community” when you cross a state, municipal or county boundary. How then are we do know the extent to which a community-jurisdiction follows a more or less Progressive or Privatist path? Logically, we ought to provide some concrete description pertinent to each of our two ships. P&P communities are usually very different in tone or “political atmosphere” and the economic developer is hard put not to feel it from the “get-go”. The first, not always the best, indicator of long-term adherence to one or the other approach is by looking at the EDO which is the lead agency for the jurisdiction or the principal EDO in the state-imposed sub-state system.

 

Evidence of these preferences between the two approaches arise from choices made between (1) the degree to which the community prefers economic development to be led by public-governmental bodies or by private-sector, public-private EDOs; and (2) the extent to which the benefits of economic development programs should be felt directly by the private sector and indirectly by the community, or directly by the community with the private sector as a community-pass-through. The reader should reflect a moment on the subtle distinction between these two processes. The ultimate consequence of these two different ways of delivering economic development programs is who more directly benefits from them–what is the constituency being served exposes who is supposed to benefit most from economic development strategies. The same program implemented in different communities can yield different beneficiaries.

 

Ultimately the answer to the above question “does the community benefit from economic development by creating and promoting strong and growing business firms or should business firms be assisted so that they create benefits to deserving sectors of the community” will provide the best indication of whether the jurisdiction is on the whole more Progressive or Privatist. A second confirming observation follows as to whether the jurisdiction further commits to an approach by entrusting economic development to be government or private sector driven? Let’s explore each of these preference-choices.

 

Many believe that government should not be the primary instrument of social and economic change; for them community and individual prosperity and growth is best achieved by a dynamic private sector creating wealth and opportunities for citizens and residents to garner. In this perspective, the community is composed of individuals and through individual innovation, hard work, innovation, risk-taking and entrepreneurship the overall community will derive benefit. In this approach to economic development non-governmental forces are paramount. But even in these jurisdictions, however, to the extent government can provide assistance, level the playing field for firms to more effectively compete with firms in other communities, or create a supportive risk-taking environment (often characterized as low taxes, a willing and cheap labor force and less regulation) that is all too the better. In this perspective government can partner with business or business can direct economic development to the benefit of the private sector. This is the tone found in a Privatist jurisdiction.

 

Others communities, conversely, see the community as their home, their modern polis, by which citizens working together benefit individually and collectively and achieve individual meaning–together. “It takes a village etc.” taps this conception that individuals achieve their personal empowerment, however, defined by membership in a caring community-polis-(church?).If each element of a community “does its thing” well and provides benefits to community members the community will prosper and provide meaning and support to its members. This Progressive approach to economic development sees the private sector less as an engine of growth and innovation than as society’s vehicle for distributing the benefits of growth and prosperity to community members.

 

In the first community (Privatist) economic development should benefit and promote private sector growth as the best way to achieve overall community prosperity. In the second community (Progressive), economic development assistance to the private sector is meant to provide direct and tangible benefit to community members. Whatever else, private sector action should not harm or abandon community members. The program rhetoric and the mix of economic development programs in both community-types can sound and be much the same, but the purpose behind economic development and the criteria and manner by which specific economic development strategies and programs are evaluated and implemented, however, can be quite different.

 

Between these two extremes there are opportunities for some variation[34]. Our research suggests that two variations are especially common. First, in some communities, it is felt that economic development should be an instrument to assist and empower the community’s disadvantaged primarily. In these communities, economic development that assists the wealthy or which simply enhances private profit with no discernible benefit to the unemployed, low income or distressed elements of the community is not only a waste, but is morally wrong. In later chapters of this book we shall label this approach as “community development”.

 

A second common variation occurs when the private sector assumes responsibility, through various economic development strategies and programs, to create the backdrop by which private firms can grow and in so doing provide enhanced opportunities for the greater community, especially its disadvantaged elements. In this instance, private sector leadership assumes community-level responsibility to ensure that all elements of the community benefit from economic growth and in so doing the overall economic system and community viability is preserved. In these communities, a public-private partnership, expressed in a quasi-public-private EDO, will serve as the vehicle for community transformation. In the past, particularly in the generation following World War II (urban renewal period) and in today’s current regionalism approach, we see strong evidence of a private sector led community transformation. We shall discuss these variations at some length in our history.

 

Who controls the EDO can be a derivative choice arising from the decision made as to who should ultimately be the beneficiary of economic development strategy-programs. Certainly, there is certain logic that if the private sector is to benefit from economic development, then the private sector should lead the economic development process. That logic, however, may be difficult for many to follow. For them there may well be boundaries and conflicts of interest which government must be more sensitive. This is particularly true when serious government powers such as eminent domain and tax abatement are involved. For many, the use of key public powers ought to be based on clearly understood public benefit. Privatist communities can hold this attitude as well as a Progressive community. In many other communities, however, economic development may be relegated to a “mere” government agency, tucked away in a community closet,–in effect minimizing the role and commitment to economic development itself and leaving to the private sector the prime role in creating community prosperity.

 

In each of these instances and variations, it would appear that the decision as to who controls the EDO is a supplemental or tactical decision. For us the key distinction between Progressive and Privatist follows from the choice of the direct beneficiary of economic development strategies and programs: the private sector as the engine of community and individual growth (Privatist) or the community as a whole or to advantage the disadvantaged elements of the community (Progressive).

 

[1] We were tempted to use the pun “fad” instead of fade because so much of economic development history reveals a sharp tendency to respond in waves or herds to “innovation” and problem-definition. Whatever else the individual community level economic development policy-making process is, it is open to suggestions by almost anybody who lives more than fifty miles distant from the community.

[2] Plato, or Socrates if one prefers, uses the interplay of darkness and light in a cave to demonstrate the imperfection inherent in our discovering knowledge through the senses only. In a cave (life and sensual experience) we see mixtures of darkness and light, shapes and colors which when fully exposed to the light (complete understanding and knowledge) are quite different than what we saw in the cave. To achieve understanding, we need to go beyond the senses to “see” what our senses fail to discern. Our history is an attempt to shed more light upon economic development,

[3] By “stories” we employ the concept as developed by Deborah Stone, Policy Paradox: the Art of Political Decision-making (3^rd Ed) (New York, W. W. Norton & Company, 2001). The complex interrelation of “stories” “socially embedded political culture is demonstrated by Meredith Ramsay, Community, Culture and Economic Development: Continuity and Change in Two Small Southern Towns  (2^nd Ed) (Albany, State University of New York Press, 2013)

[4] “Ca plus change, le meme chose”–the more things change, the more they stay the same.

[5] At this point we will not develop this concept in depth, but will acknowledge early on to the reader that, if pressed, we have embraced, at least in part, an argument advanced by Colin Woodard in American Nations: A History of the Eleven Regional Cultures of North America (New York, Viking, 2011). Woodard stands on the shoulders of a long line of scholars and commentators (DeToqueville, for instance) who have advanced the notion of political culture as a fundamental causative force in the formulation of public policy and social relations. Advocates of political culture have suggested how the values and patterns of a past so long ago can persist to the present day–thus defying our senses, especially common sense. As we develop our history we shall in turn deal with the issues and vulnerabilities of a political culture approach as they become apparent to us. At this point, our goal is simply to present our approach and warn the reader of our biases.

[6] James Bishop, The Big Sort

[7] Patchwork Nation

[8] Also, industrial parks, eminent domain, and municipal bonding for private firms, and, of course, attraction and infrastructure as economic development strategies.

[9]  Hoover was born in Iowa (a Northern state) and Wilson, born in Virginia, was elected to the Presidency as Governor of New Jersey. During most of this period, Presidents were usually from Ohio or New York.

[10] Manufacturing and railroads were the result of the North’s early pioneering leap into British-inspired industrial revolution—a close examination of such innovation, however, suggests that entrepreneurism and innovation bears close resemblance in this period to thievery, illegal copying, reverse engineering, and outright chicanery. Some things never change.

[11] See for instance, John F. McDonald, Urban America: Growth, Crisis and Rebirth (Armonk, New York, M.E. Sharpe, 2008), p. xvii.

[12] Sam Bass Warner, Jr., “The Environment of Private Opportunity” in The Private City: Philadelphia in Three Periods of its Growth, (University of Pennsylvania Press, 1968), p. 3-4. The reader might keep in mind that this conception of privatism was drawn from the Middle Atlantic States, Philadelphia. Most historians would be likely to extend this concept to all the cities of America at this time. In light of the tale to be disclosed in this chapter, and in our final chapter of this book, we are unsure that each of the original thirteen colonies-states and their cities and private elites shared a perfectly identical approach to the government,-private sector-economic development relationship.

[13] Sam Bass Warner, The Private City: Philadelphia in Three Periods of its Growth (2nd Edition) (Philadelphia, University of Pennsylvania Press, 1996), p. xi.

[14] Boosterism is usually defined as an unabashed advertisement and promotion to others of the virtues associated with a particular jurisdiction or region. Immigration, investment, and tourism are generally associated as boosterish-related goals. It is often referred to as a “civic philosophy” in that it involves the “polis”, its residents, citizens, tax payers and even emigrants–in raw form it is the community as a whole that participates in the implementation of the strategy. Boosterism intrudes upon the community’s collective psychology (if we can presume such actually exists) and civic pride and even patriotism can be manifestations of an individual’s inner needs and wants.

[15] Sam Bass Warner, The Private City, op. cit. p. 4.

[16] Anyone who has driven in Boston, and the Curmudgeon drove a cab there, knows that the streets to the Boston Common were apparently converted from cow paths. If so, this may be the earliest evidence of herd behavior in American economic development.

[17] Dennis R. Judd and Paul Kantor, American Urban Politics: the Reader, Fourth Edition (New York, Pearson-Longman, 2006), p.62-63.

[18] Judd and Kantor, op. cit., p. 62; Judd and Cantor support and develop the notion of inter-jurisdictional competition or competitive advantage as built into early Republic cities through their inclusion of the work by Richard C Wade, The Urban Frontier: The Rise of Western Cities (Cambridge, Harvard University Press, 1959). Wade’s Western cities are today’s Midwestern cities as his book examines the time period previous to the 1840’s.

[19] Warner, the Private City, op. cit. p. 10; see also, Judith M. Diamondstone, “Philadelphia’s Municipal Corporation, 1701-1776,” Pennsylvania Magazine, XC (April, 1966), pp. 183-201; and Edward P. Allinson and Boise Penrose, “The City Government of Philadelphia”, Johns Hopkins Studies in Historical and Political Science, V, (Baltimore, 1887), pp. 14-33.

[20] Warner, op. cit., p.3

[21] Drawn from Thomas H. O’Connor, The Hub: Boston Past and Present (Boston, Northeastern University Press, 2001), see Chapter 1 “A Wilderness Zion”.

[22] John Winthrop, “A Modell of Christian Charity” quoted in Thomas H. O’Connor, The Hub: Boston Past and Present (Boston, Northeastern University Press, 2001), p. 8.

[23] Approved by the Massachusetts General Court, the colony’s equivalent to state government, in March 1636 set up a decentralized town government system giving power to the “freemen of every towne” the power to carry out local responsibilities.

[24] O’Connor, The Hub, op. cit. p. 82.

[25] Holmes’s novel, Elsie Venner (1861) described this elite as “harmless, inoffensive, and untitled”, with houses by Bulfinch, their monopoly on Beacon Street, humanitarianism, Unitarian faith in the march of their mind, Yankee shrewdness, and New England exclusiveness”.. Lest we be accused of plagiarism, our presentation of the transformation of the Boston model from Puritanism to something else is drawn, lock, stock and barrel from O’Connor, the Hub, in his chapter “From Town to City”.

[26] O’Connor, The Hub, op. cit. pp. 87-88.

[27] See E. Digby Baltzell, Puritan Boston and Quaker Philadelphia (Transaction Publishers, Reprint Edition, 1996); and David Hacker Fischer, Albion’s Seed (New York, Oxford University Press)

[28] IBID, p. 89.

[29] Interestingly, contrasting Pennsylvania’s willingness to allow Philadelphia to go its own way, Philadelphia was incorporated as a city in 1701–one hundred twenty one years before Boston. Town governments afford more control by the state over municipal affairs.

[30] After a one year term, the first mayor, having been more or less drafted into that position, left due to political conflict. Quincy, a former Congressman for many years, strong Federalist and a stolid Brahmin, was quite the charismatic personae. He was indeed a “professional politician” much in line with Judd and Kantor’s earlier characterization. Yes, he is related to John Adams and his sone John Quincy Adams.

[31] IBID. p. 93.

[32] Ironically, Boston’s first commercial urban renewal project conducted by Logue in the 1960’s was to modernize the first urban renewal project of Josiah Quincy. Ca plus change!

[33] We have relied on several sources for our discussion. Herbert J. Storing, What the Anti-Federalists Were For: The Political Thought of the Opponents of the Constitution (Chicago, University of Chicago Press, 1981) and Gordon Wood, the Creation of the American Republic 1776-1787 (Chapel Hill, University of North Carolina Press, 1969, and, of course, we are familiar with the The Federalist Papers.

[34] Political scientists may be tempted to rush in and insert “regimes” into this opening. We are ok with that, but the regime approach, as we understand it, would leave out a great deal of what impacts economic development policy making.