Municipal Research Bureaus
In the larger cities, municipal leagues were often supplemented by the formation of a second major reform organization: the municipal research bureau. The municipal research bureau, while business-led as was the municipal civic league association, was financed and governed mostly by elite corporate leaders[1] who controlled the largest firms headquartered in the city. This “almost class” distinction of levels of business elite will be an important feature of local economic development policy making in the future.
The “elite” large business leadership associated with the municipal research bureau reflected increasing concentration in the structure of American business and industry. Simply, referring to the business community or to the private sector no longer by this period was adequate. The business leadership of the large multi-regional and national firms was by no means identical in perspective or self-interest to the smaller firms which rested upon a single regional economic base. By the turn of the century, the business community, as far as economic development policy-making was concerned, consisted of at least three distinct levels: the national, multi-regional corporate elite, the regional corporate elite, and the sub-regional municipal and sub-municipal small business elite. Within these business groupings, of course, key sectoral-based business such as the Real Estate Exchanges often combined firms from the lower two levels.
The first municipal research bureau, in New York City, was established in 1906 and funded by Carneige, Rockefeller and Mellon.[2]
…the organizers of the New York Bureau viewed the corporation as a model for reorganizing municipal administration. They believed … ‘that the technical side of running a government could be analyzed and developed on a factual basis in the same way as a business’. They advocated centralized decision-making along the lines of the corporate pattern and hoped to apply Frederick W. Taylor’s idea of scientific management to city government.[3]
Over the next decade similar entities were formed in large cities across the nation; Philadelphia, for example, set up a pilot in 1908 and formalized its version, the Economy League of Greater Philadelphia in 1912. The Economy League at its formal announcement was described as:
a local agency of a few private citizens who employ experts in what may be called municipal knowledge to examine municipal affairs, with a view to getting rid of antiquated, clumsy, slipshod or extravagant ways of doing things and substituting as far as possible, modern ones — system, precision, competency, and economy — not the economy which merely saves by reducing expenses, but which, rather accomplishes a desired result along the simplest and best lines.[4]
While the typical municipal research bureau advocated much of the structural reforms pursued by municipal leagues, the research bureau pursued a much more robust agenda including research and analysis of the region’s resources and challenges “with a goal of promoting sound public policy and increasing the region’s prosperity”. As an almost a incredible pioneering innovation, the research bureau movement established formal linkages with universities, and not only promoted and utilized university resources but caused the formation of university graduate programs as well. The Municipal research bureau was the forerunner to integrating universities into local economic development and urban management issues and policy-making.
The Municipal Research Bureaus also adopted the mission of applying efficiency and scientific management principles to urban governance. As early as 1912, the first director of the New York City Bureau of Municipal Research (Henry Bruere) published a book applying efficiency principles to municipal management. In 1913 a reform mayor (John Purroy Mitchell) was elected New York City Mayor. He appointed Bruere as his “chief of staff” and tasked him with creating a municipal civil service system. Bruere turned to the Municipal Research Bureau and it assigned the task to a young staff member, Robert Moses. Moses than constructed a civil service system for New York City along scientific management principles in which each position was carefully defined and could be evaluated and assigned a mathematical grade.[5]
Specific areas of municipal research bureau concern also included budgetary practices. For instance, municipal budgeting departments were advocated by the New York Bureau of Municipal Research, which wrote a handbook and sent it to 300 municipalities. That research generated by the bureau’s experts was diffused across the nation and was seized upon by newly elected President Taft who created the first presidential commission on the issue headed by the President of the New York Municipal Research Bureau.[6] Municipal research bureau reform initiatives in these years usually preceded federal and state reform efforts. In this era, local innovation initiatives prompted future federal action and legislation. The municipal research bureau continued the development of effective (and modern) sub-state governance and built upon the municipal governance platform initially put in place by the municipal civil leagues. The research and policy-oriented approach of the municipal research bureau set the platform for the evolution of individual policy area policy-making and implementation–and set in motion the movement to develop “professions” and professional associations in the public arena.
The municipal research bureau represented the entry for the first time in municipal affairs of national corporate elites, elites whose conglomerate empires were at least multi-state, if not national in market area. The personal and corporate wealth of the new elite grossly exceeded that of the more regional and state markets of the civic association’s business governance. The municipal league and the municipal research bureau were two different EDOs–with separate constituencies with a related, sometimes overlapping, but varying considerably in scope (geographical and substantive) agenda and its commitment to research and analysis versus action and specific legislative approval. Municipal leagues, for example, were more pragmatic and practical and focused principally on structural issues, efficient administration and “simple” economy. The municipal research bureau was more analytical, driven more by its experts and its university inspired research, more regional, and its focus of concern more embracive of issues and services necessary for city competitiveness and prosperity. The distinctions between the two EDOs, we contend, reflect the differences in the world view of their governance corporate elites.
Who participated in these municipal leagues and municipal research bureaus? Samuel Hay’s classic article, “the Politics of Reform in Municipal Governments” firmly and unequivocally asserts that for the most part it was not a simple middle class movement, nor in any conceivable way was it working class–rather it came from the upper classes. “The leading business groups in each city and professional men associated with them initiated and dominated municipal movements”.[7] Further confirmation of upper class and business leadership is provided by Leonard White, a founder of the discipline of Public Administration, in his 1927 study of city managers of that period observed that:
The opposition to bad government usually comes to a head in the local chamber of commerce. Business men finally acquire the conviction that the growth of their city is being seriously impaired by the failures of city officials to perform their duties efficiently. Looking about for a remedy, they are captivated by the resemblance of the city-manager plan to their corporate form of business organization.[8]
In city after city, Hays demonstrates that the upper class, business and professional leaders working out of their chambers, the research bureau or civic associations formed the core of the city efficient movement for next two generations.
By the early twentieth century, several types of privatist economic development-related structures coexisted in the largest cities across the nation. Chambers, their industrial bureau, real estate exchanges, local municipal leagues, and in the largest cities, the municipal research bureau labored in the Privatist economic development vineyard. The weak sister in this quasi-policy system still remained municipal government. Effective local policy making, in economic development and all other policy areas required a modernization of local governance structures–and again the private sector assumed leadership in the next endeavor to create an effective sub-state platform for policy adoption and implementation. Their solution? To organize and run government like a business!
Managerial Privatism
Managerial (industrial) Privatism updated nineteenth century agrarian Privatism. The strength and speed in which managerial privatism spread to cities of all sizes and across the nation certainly did vary depending upon the perceived threat and impact of the forces of change upon the municipality as well as on the local opportunity and circumstances. In other words, no one simply switched the button on managerial privatism causing the old Jeffersonian-Jacksonian system to disappear overnight. Lags in popular value systems are notorious and hybrids form naturally as compromises are made. Urban centers felt change first and hinterlands and third tier cities later.
But make no mistake; the yeoman farmer was no longer the mainstay of our economy or our politics. At the time business, corporations and business management were the cutting edge, gazelle-like professions and disciplines of the age. Business was the font of innovation, growth and prosperity. The first Wal-Mart-style transformation in small town business, the A&P grocery store, appeared in virtually every community of any size. Technological innovations resulting from the commercialization of electricity transformed lifestyles, elevated consumer demand, and imposed new changes in vital community infrastructure (telephone, electricity and household appliances).
The old notions of limited government and low growth amid a degree of geographical isolation were turned on their heads. The private business sector of one’s grandfather was no longer the private business sector of the new national and regional corporations which, in other ways, were the scourge of Progressivism. Mega corporations whose market areas and supply chains were multi-regional could not be managed and led as had the small town grocery store. Accordingly, schools of business, and business management degrees were on the rise. In this atmosphere, the expectations of the new private sector toward government and municipal public policy stood in stark contrast to those of even twenty years previous.
In this brave new world, municipal government was expected to operate honestly and openly and be a force in the introduction and accommodation of change. Government was not usually tasked with “leading change”, but rather responding to it–usually in the form of efficient and low cost administration and decision-making as well as the installation of vital new infrastructures demanded by a larger and more mobile citizenry with rising expectations. The new managerial privatism understood ” government as essentially an enterprise aimed at solving social problems and structured in such a manner that the management of the enterprise can be effectively and fruitfully undertaken”[9], i.e. government can be effective in responding to change and can solve problems because it is organized and managed rationally and accountable to its voters–just as business is responsive to consumer demand.
Carried over into government were management principles such as centralization of authority (unity of decision) so that both internal administrative units as well as voters could know who was responsible for decision-making and who could be held responsible. Multiple chains of command invited duplication and waste and so fragmentation was despised as sources of inefficiency and needless cost. Lacking a clear goal or benchmark as profit-sales were to private business, low taxes and cost minimization became adequate public sector substitutes. Business techniques such as budgeting, capital budgeting and bond issuance, leadership, principles of structural organization (delegation of authority to specialized units) were adapted to government–and eventually professional associations were formed to incorporate these new bodies of knowledge.
Professional expertise should be entrusted with the delivery of municipal services and programs and those professionals should be hired and retained on the basis of their merit–not their politics. Politics itself became the source of all government inefficiency and waste. The key to successful managerial privatism was to reduce politics to the choice of the city’s governance and keep it at those levels only.
… a city is a corporation; that as a city it has nothing whatever to do with general political interests; that party political names and duties are utterly out of place there. The questions in a city are not political questions. They have reference to laying out of streets, to the erection of buildings; to sanitary arrangements, sewerage, water supply, gas supply, electric supply; to the control of franchises and the like; and to the provisions for the public health and comfort in parks, boulevards, libraries and museums. The work of a city being the creation and the control of the city property, it should logically be managed as a piece of property by those who have created it…[10]
From this sense of the political would evolve a conception of the public interest which would maximize the minimization of expenses and taxes, professionalize the delivery of public goods and services, and would expect from government those goods (largely infrastructure) and services which would benefit the citizens and firms residing in the municipality. Municipal government was no longer a passive entity to be kept closely curtailed, weak, and fragmented so that it could not imperil the rights and pleasures of its citizenry and resident firms. The weak government, which had long served as the basis and precondition of a strong nineteenth century Privatism, was being replaced by a government strong enough and active enough to serve and effectively-efficiently deliver those goods and services demanded by its citizens and firms.
It would not, however, be the responsibility of the city to redistribute benefits and services to the advantage of some citizens at the expense of others. In this vein, the nature of public-private partnerships was also updated so that business should no longer expect to extract profits and contracts from municipal government without having delivered market-quality goods and services in return. Government and business could jointly work together to accomplish mutually desired ends so long as no such conflict of interest occurred. In effect, conflict of interest was the flip side in the coin of Managerial Privatism’s redefining the concept of public interest.
Because the continued growth of the city could be identified reasonably with protecting the profitability of business enterprise and hence its capacity to provide jobs and contribute to the municipal tax base, it was not a long step to identifying the general civic interest with the interests of urban business.[11]
In turn government could ask, accept, and expect an impartial involvement of private sector experience and expertise in the making of decisions and government’s delivery of goods and services to the community as a whole. There was very much an implied quid pro quo between two independent sectors which underlie a public-private partnership conducted in accordance with the assumptions of managerial privatism.
Managerial privatism in this period would result in a considerably more “bureaucratic” city administration. This increased bureaucracy is not without its drawbacks and heritage. Specialized bureaucracies organized around professional and/or programmatic lines, of course, result in bureaucratic politics. In a real sense, despite managerial privatism’s goal of centralized authority, the various specialized bureaucracies simply created a new form of fragmentation. Some types of bureaucratic units, which will be very important to economic development in particular, the Quasi independent EDO, were at least partially governed by private, usually business leadership and frequently were able to develop their own organizational constituencies. These, and other programmatic bureaucracies, demonstrated a pronounced tendency toward autonomy. In another day and age (the sixties, for instance, some commentators, such as political scientist Theodore Lowi, will denounce the city efficient by observing that “the legacy of Reform is the bureaucratic city-state”[12].
Managerial privatism, associated with the city efficient era, did not disappear as the era faded into history. Although, as would be expected, time has wrought some refinements and extensions to its early core principles and assumptions, managerial privatism continues in many communities to this day. Managerial privatism is strongly associated with city manager form of government, but is also evidenced to some degree in all forms of municipal government in cities and counties of all sizes. Arguably, municipal privatism has also become incorporated into the ethics and expectations of many members of the economic development profession–and the professional associations which represent them. This is also to be expected because managerial privatism made it possible for government to be an effective and efficient instrument, a platform for the approval and implementation of public policy across a variety of policy areas. From this point on, sub-state government had the potential to enter into the delivery of economic development strategies, programs and tools, independent of the business community.
One last point regarding managerial privatism, While very much more than business administration applied to the public sector management, managerial privatism would reflect somewhat the subsequent evolution of business management theory, techniques and approaches. Schools of Business, and later Public Administration and still later Public Policy would flesh out the principles and structures of private and public management. This more or less close relationship with the evolution of business and public management would, in future years, enter into economic development practice and theory. In its very early years, managerial privatism and the structural and organization principles it advocated, would reflect one of the earliest of business management approaches: scientific management. In its way, scientific management would commence municipal privatism, state and sub-state governance, and eventually economic development strategy down a path which would eventually lead to workforce development, the federal Manufacturing Extension Partnership, and even to Michael Porter’s version of clusters.
The City Efficient: The Golden Era of Privatism
The “city efficient” movement presents two problems for our history. First, there is the issue of “where to put it” and secondly, the movement, to our knowledge, did not have a distinctive economic development tone per se nor did it result in its own flavor of economic development programs and strategies–it was really a political and administrative reform of municipal governments. From a different perspective, the city efficient period was about the building of “capacity” in local government and the public sector–capacity is the precondition for constructing a public policy process.
The “where to put it” problem arises from the conventional consensus that city efficient reforms fall into the Progressive category–and therefore shouldn’t be in the chapter at all. We propose to handle this concern in two ways.
First, in the next section we shall talk of “Managerial Privatism” and explain more completely why we believe that, at root, the city efficient falls into our Privatist world. Secondly, by anyone’s reckoning, the inspiration and the power behind the city efficient movement was business, chambers and the upper and to some extent professional middle class. The constituency behind the city efficient was the private sector and the principal advocacy vehicles for the movements were the municipal league, research bureau and chambers of commerce–all bastions of reform, but privatist reform.
The second issue, that the city efficient movement is primarily political and administrative in nature, is more easily dealt with. Economic development, in our view is one of many public policy areas in American government. Public policy is the consequence of the interplay of elections and governmental structures and the city efficient movement constructs a distinct set of electoral preferences with a particular political management structure (city manager) and style of management (rationality-based professionalism). The city efficient political-management system is quite distinctive, very common place today, and has been recognized by political scientists as an important classification-variable (the reform city) in explaining differences in public policy from other political-management systems such as the mayor-council or even the political machine.
After all this palaver just what is the city efficient movement? The city efficient era is generally placed within1900-1920. First, the movement is commonly associated with a Progressive reform of the corruption and inefficiency found in big city political machines governments which dominated this period. We agree but the city efficient movement really swept smaller, more ethnically-homogenous middle class second and third tier cities even more than the big cities. In the second and third tier cities, machines and immigrants were much less a concern.
More pressing was municipal government’s inability to be responsive to voters and their concerns regarding municipal decision-making openness and municipal modernization. Pre efficient city second and third tier municipal government structures were often dominated by cliques, factions and cabals who used government for their own purposes and often held an extreme Jeffersonian limited government, low taxes mentality which inhibited the city’s ability to modernize and install new technologies such as paved roads and street lights (and electricity and telephone), not to mention water and sewer. Unpaved streets, in particular, got quite old when an affordable paved alternative was available to be installed; we might add that these are the first years of the Model T and the consumer love affair with the car.
To address these concerns, city efficient reformers advocated two sets of reforms. The first was electoral, replacing district elections with at large and partisan with non-partisan. The second set was administrative, creating a commission or city manager form of government and instituting new-fangled, business derived management practices such as unicameral city councils, budgeting, planning, professional management, capital budgeting and bond issuance–and civil service. Frankly, the intention was to transfer to government the administrative and management practices that were working so well in the corporate sector. Centralization of authority (which led to greater efficiency and less corruption), professional management, and accountability to voters were the key goals.
While it took awhile to build up a head of steam, the city efficient movement was quite successful. For instance, before 1910 non partisan elections were non-existent. By 1929, fifty-seven per cent of all cities over 30,000 were non partisan. By 1967, 85% of cities with less than 5,000 had non partisan elections. Several states amended their state constitutions requiring non partisan elections for their sub-state governments. At large elections are usually linked with non partisan elections[13] and as a consequence, over the next half-century, the character and structural nature of elections in sub-state governments reflected city efficient ideals. This “reform city election pattern” today is the norm for almost all our sub-state governments–except the largest big cities which usually remain mayor-council or mayor-chief operating officer-council.
Why business leaders pursued structural reforms and the city efficient is still a matter of some debate, particularly within urban political scientists. Judd and Swanstrom represent a significant number of political scientists who assert that the principal motivation for these city efficient structural, in particular the electoral reforms, was to reduce to the greatest extent possible the influence and impact of the working class and the downtrodden[14]. In that the ethnic, immigrant and working class voter was probably the mainstay of the political machines, against whom the business elite opposition and reform-desire was based, that is probably more accurate than not. Politics in this period yielded a rather strong class distinction. Again, we believe that perspective can explain big city politics better than second and third tier city politics.
But Judd and Swanstrom do also observe that business reformers of the city efficient ilk are quite distinct from another group of business reformers: the social reformers (which we shall discuss in Chapter 3). City efficient business reformers
sought a local political climate that would be favorable to growth and economic development. They were not true social reformers, who would have wanted lower utility rates, safer and more affordable housing, or additional public services to improve the lives of the poor. Instead, the structural reformers were interested primarily in more efficient government and lower taxes as a way of advancing the political agenda of the business community.[15]
The distinction between city efficient business reformers and business social reformers will further expose divisions within the business community which will feed into our two streams of economic development.
The city efficient movement did not acquire its reputation through advocacy of home rule or reducing taxes; they, instead, were the authors and the principal driver behind the switch away from mayor-council form of government–which in 1900 99% of municipal and county governments were –toward commission and city manager government. The city commission form of government was born as a consequence of the 1901 Galveston hurricane which destroyed the greater part of the city (killing 6,000 residents).
At the request of the city’s business elite, the state legislature quickly established a five man commission to substitute for the mayor-council form of government, which had collapsed during the disaster. Each commissioner headed one of the municipal departments [bureaucracy}, thus defining clear lines of responsibility for municipal affairs. Because the commission had policy-making and administrative powers, urban decision-making was streamlined. Within a few years, Galveston had been rebuilt and business leaders in other Texas cities (including Houston, Dallas, Fort Worth, el Paso and San Antonio had secured similar commission charters. Labeled at first the ‘Texas Idea’ …[16]
Des Moines may have been the first Northern city to adopt the commission plan (which included electoral reforms as well) in 1907, and by 1917 a “reform contagion” occurred and nearly 500 cities (75 in Texas alone) had adopted the commission form of government–most of them newer, smaller, off the immigrant trail and more middle class in social structure[17]. Only a few large cities would adopt the commission structure (Kansas City (1910), Oakland (1911), Denver (1913), Omaha (1912), St Paul (1914), Jersey City (1913), Newark (1914) and Buffalo (1916)[18]. Many cities would in later years abandon the commission structure, testifying to its structural inadequacies, but county government would become saturated with the commission form over the next half century.
More successful, and enduring, than the commission form was the city manager form of government. The City Manager form was first adopted in Dayton in 1913[19] (after a successful home rule charter reform) pushed by executives from National Cash Register. After endorsement by the NML in 1919 and shortly thereafter included into a revised “Municipal Plan”, an estimated 158 cities embraced city manager form of government by 1920 and by 1923 there were 270 city manager-led cities[20]. Cleveland, Cincinnati and Kansas City were the only big cities that converted to city manager.
Like the commission form, city manager form appealed to the smaller and mid-sized cities of American. Both drew from similar demographics. The big cities retained the mayor-council system; several of the larger cities, like Buffalo, which had switched to commission “came back” to mayor-council rather quickly. Still, we ought to recognize the relatively steady climb of city manager cities. Today the National League of Cities cites a 2006 ICMA survey reporting that 55% of American cities are governed by city managers (only 1% are commission). Again, counties are another matter entirely. Counties are much more likely to be commission form and city manager is probably the least utilized form of county government. Finally, City managers were among the very first to organize nationally; the ICMA was founded in 1914.
The so-called “reformed city” model includes the city manager, non partisan and at large elections, merit or civil service systems, separation of local elections from state and national elections, the initiative, recall and referendum. Studies have consistently demonstrated that reform cities tend: (1) to be less than 500,000 population; (2) most prevalent in the 25,000-250,000 population range and (3) to be ethnically-homogenous, middle class, white, and exhibit high rates of population mobility. The reform electoral systems seem to have become diluted over time and non partisan elections have permeated into mayor-council and most cities today have a mixture of ward and at large elections. Also, the professionalization usually associated with city manager governments has subsequently spread to all governmental forms, even in the big cities, and many mayor-council systems have adopted some form of a chief administrative officer (CAO) who usually is appointed by the mayor[21]. The movement toward the strong mayor-council form of government, it can be argued, is a legitimate expression of the city efficient movement in the big immigrant-based cities of the United States
Consistent policy differences resulting from different municipal and county governmental forms have been fairly elusive to uncover. Criticisms of the reform model have included (1) its inability to successfully confront diversity and effectively include minorities and (2) the establishment of professional bureaucracies which to some degree can be unaccountable, closed, driven by professional norms as opposed to popular wants, and prone to the usual ills associated with bureaucracies. It is likely, in our opinion, that the reform model, while immensely popular in the recent past, may well have outlived its usefulness as an important variable in present day municipal policy analysis. The impact, however, of the efficient city-reformed city model on the structure and policy-making of the pre-twenty-first century sub-state government should not be discounted.
Indeed, the success of the city efficient movement in the first two decades of the twentieth century has left a lasting imprint on local government. Judging from today’s perspective the city manager system has moved to be the most used of all municipal forms of government and with the city manager has come all sorts of service delivery, management, and efficiency reforms such as budgeting, governmental accounting, budgeting, leadership and even the inspiration for new disciplines such as public administration.
Samuel Hays provides us with an excellent summary of the city efficient reform model and its long-term impact on municipal government:
The model of the efficient business enterprise, then, rather than the New England town meeting … [instilling] the process of rationalization and systematization inherent in modern science and technology … a gradual shift upward in the location of decision-making and the geographical extension of the scope of the area affected by decisions …[introduction of] experts [and bureaucracy and] involved a tendency for the decision-making process inherent in science and technology to prevail over those inherent in representative government.[22]
The outputs of this new public policy process were quite dramatic and their impact on the city physical landscape and lifestyle were huge and transformative:
Most direct public investment during the late nineteenth and early twentieth centuries was concentrated in four areas: education, water and sewage, street improvements and urban beautification. The school building boom was fueled by explosive urban population growth …. Water and sewage investments were driven by growing public health knowledge, continually reinforced by outbreaks of fatal disease…. Spending on streets and roads, already the second largest item in most municipal budgets (trailing education) …increased sharply during the 1910’s and 1920’s in response to surging motor vehicle usage… During the same period, finally, many cities invested heavily (see Chapter 4) in public buildings, often of a monumental character, and parks, particularly with the aim of enhancing the attractiveness of the downtowns.[23]
In effect, the city efficient movement constitutes a radical redefinition and restyling of old-style sub-state privatism. City efficient privatism is often linked with Progressive reformism, but to us the city efficient movement is an important movement away from the previous Jeffersonian-Jacksonian-limited government Privatism which hitherto had been dominant in American sub-state political and administrative practice. The new Privatism which emerged from the city efficient movement, which we label “Managerial Privatism” more accurately, describes the sub-state Privatism prevalent throughout the twentieth, and so far at least, twenty-first century.
Scientific Management
The introduction of scientific management into a discussion of economic development may inject some wonder, perhaps curiosity, and more likely concern that the Curmudgeon is wandering off the trail a bit. Other readers schooled in disciplines for which scientific management has probably not been discussed at all may be wondering what the heck it is and why do they have to fuss with it? Scientific management itself, as we shall shortly explain, is less important than what followed in its footsteps and what was associated with its introduction to business, government and even politics in and around the turn of the twentieth century. Scientific management and its successors penetrate into the bowels of privatism (a charming metaphor), the mechanics of creative destruction, and the substance of economic development strategies and tools.
To provide the reader with some motivation to continue forward, through the course of the history we will hopefully demonstrate to the reader that scientific management constitutes an albeit clumsy first step in a century of innovation and thought which includes such notables and phenomena as Edward Deming, Peter Drucker, Six Sigma, the Quality Movement, Lean Manufacturing, NIST’s Manufacturing Extension Program, and Michael Porter’s corporate competitive strategy and his later approach to clusters and agglomeration economics. From another perspective, scientific management is the first analytical attempt to understand how productivity can be achieved, how humans relate to work, how to understand and implement automation (today we call it robotics), and how firms can innovate better. These will be cornerstone elements in our various approaches to workforce development and will underscore later approaches drawing from innovation and knowledge-based economics.
Scientific management and its successors will strongly impact workforce, small business, entrepreneur, strategies and it will open up new economic development strategies such as innovation and knowledge-based economic growth, enhancement of the internal corporate processes and skills to ensure greater competitiveness and profitability, and even affect initiatives such as regionalism and how we reason to information and data regarding economic base. With scientific management we begin a tale of some importance to the profession of economic development.
The events and initiatives of this period were set in motion by, among other factors, the second phase of industrialization and the change it unleashed in corporate structure, location, market and the labor force–factory and managers/workers. Scientific management is most concerned with the last aspect: the process of production, the management of production, and how we can produce more at less cost. A core transformation, occurring in the factory during the 1880-1920’s period, is the movement from craft (hand-made) to automation accomplished by investment in technology (equipment and improved processes) and skills enhancement, often through better management.
Scientific factory management pioneered by an engineer named Frederick W. Taylor, spread widely by the end of the century. Scientific management brought a new level of organization and structure to factory work. Factory managers rearranged and integrated various aspects of production on the shop floor. They introduced a greater degree of specialization and imposed a more rigorous work discipline on the labor force. New factory machinery hastened the transformation of work and production …[24]
While scientific management and Frederick Taylor[25] are sometimes reduced to synonyms, the movement even in the early 1900’s was always more than Taylor and it certainly didn’t end with his death in 1915. Henry Ford and “Fordism” demonstrated the power of the assembly line and Taylor’s negative, at times almost vicious, depiction of worker motivation sparked further research which discovered the “halo effect” proving conclusively that positive human motivation could increase production, The Hawthorne studies, completed at the Western Electric Cicero Illinois factory, following Taylor’s death have been called the “seed bed of the Quality revolution”. All of these developments occurred during the transition years and should be considered as derivatives of scientific management.
Of particular note, was the work of Walter Shewhart, an engineer who today is considered the father of statistical quality control. Shewhart also worked, as did Taylor, at Western Electric, and its Hawthorne Works and he later worked for Bell Telephone. A leader in his field, he wrote several impactful works . and was a founding member in American Society for Quality and a leader in the American Society for Testing and Materials (ASTM) His works and reputation came to the attention of two physicists in 1938. One of these physicists, W. Edwards Deming and Shewhart became collaborators on applying Shewhart’s work to increase productivity. The result, called today by various names, including PDCA (Plan-Do-Check-Act), the Shewhart cycle or the Deming circle is the foundation of continuous improvement of processes. Continuous improvement became a cornerstone principle of Deming who applied it to World War II production, and in the 1950’s carried it to Japan and was credited with launching the post-World War Japanese manufacturing miracle. That, however, is a story for another chapter. In many ways, Shewhart was the force that carried scientific management, under new titles, into the twenty-first century.
But to give Taylor his due, he launched not only a movement, but a series of professional disciplines that insisted upon scientifically understanding workers, management and production, and subjecting them to precise measurement and calling attention to the centrality of process improvement in not only production, but productivity. Drucker was later to think of Taylor as a founder of knowledge management and in the generation following his work statistical methods and even quality assurance and control was widespread throughout manufacturing.
Finally, not directly connected to scientific management per se, is the link that developed between the corporate elites, their Bureau’s of Municipal Research and scientific management as applied to government and urban areas. Also, during this efficiency era schools of business were created at several of the leading educational institutions. To be sure, the first School of Business was Wharton in 1881, but Harvard in 1908 and Columbia in 1916 established professional degrees in business. These schools, as the reader is no doubt aware, became associated with research, innovation and think tanks for future leadership in industry and all sectors of the economy; from Harvard Business, for instance. would come America’s first venture capital firm founded by General Georges Doriot. These business schools would be pioneers in university partnerships in economic development and their entrance into the field at this time marks the arrival of yet another set of institutions involved in sub-state economic development. Universities and Schools of Business, because they have evolved today to be critical players in many sectors of contemporary economic development, started down this path most convincingly during the period of the city efficient.
Scientific management is the beginning of our story regarding these topics. At this point in history, it is easy to see the core privatist nature of the firm-industry specific approach to economic development. The approach rests upon the internal operations and decision-making of an individual firm–if that isn’t proprietary, what is? Indeed, for the next half century or more almost everything about this approach will originate with firms, industries, business schools and the ubiquitous “consultant or management expert”. The best evidence of its effects on economic development directly during these years, is to watch the role and the curricula of a new young educational institution, the community college and the degree to which economic development agencies recognize the utility of that institution in matching their workforce strategy to the changing dynamics of key firms and industries. Little appreciated in economic development, the community or junior college as it was known in 1900 will be our last topic in our discussion of scientific management.
Junior colleges in the 19th century followed many of the same patterns and influences associated with K-12 in our American cities. They tended to be established from the inspiration and efforts of business and religious leaders in many, but far from all cities. Their continued existence depended upon corporate or business philanthropy and what revenues they could generate. In many instances, business boosterism was associated with both the establishment and subsequent funding of junior colleges. Failure rates were high, especially during the various recession, depression or panics of the nineteenth century.
The 1893 Panic prompted Baptist colleges in Louisiana and Texas to gather together and agree that their colleges should develop two year curriculum and then transfer students to a few select four year institutions. William Rainey Harper, a Baptist minister (and by the way. first President of the University of Chicago) picked up the idea and, financed by Rockefeller, led the establishment drive for a “community college” (his name for the two year educational institution). A member of Harper’s congregation established from his high school, what some say is America’s first, and now oldest, junior college, the Joliet (Illinois) Junior College in 1901. For the next twenty years, the decentralized, community level establishment of junior colleges and similar style educational institutions intensified across the nation. In 1921, The American Association of Junior Colleges was formed. Certainly, by the end of our transition years, the Junior or Community College had become a bone fide member of our Patchwork Profession.[26]
Scientific management and the approaches which evolved from it over the next century follow within a micro economic tradition in which prosperity and economic growth is driven by the decision-making, the interaction of supply and demand to produce prices and a level of outputs of each firm. Price of goods and the factors that produce price are always a central reference point. Approaches which subscribe to the microeconomic model tend to focus on costs relative to demand and their concentrate upon the “internals” of a firm. Competitiveness, productivity, the shifting nature of market demand, corporate strategy, entrepreneurism and disruptive innovation and their effects on an individual firm are other important forces considered in this approach over the next century.
Specialization, division of labor, time savings studies transformed not only entire industries, but dictated over time how the industrial corporation was to be structured and organized. These approaches would over time permeate into the new disciplines of business and public administration. An understanding of the principles of scientific management (and its immediate spin offs such as the human relations approach) created the gazelles of the 1920’s and 30’s. Factories, mostly small previous to scientific management, became huge real estate intensive enterprise-factories resembling more like small cities than a single production facility. The landscape of manufacturing was changed and each factory enterprise could house tens of thousands of workers. Manufacturing became the driving force of the American economy and the urbanization of America. As Sam Bass Warner exposed these big cities with manufacturing at the core of their economic base became giant “engines of private enterprise”[27]. The business of America was now business.
Each city tended to specialize, to agglomerate as the economists would label it. Rubber in
Akron, glass in Toledo, cars in Detroit, cash registers in Dayton, brassware in Waterbury, electrical products in Schenectady, fur hats in Danbury, cotton goods in Fall River and New Bedford, collars and cuffs in Troy, leather gloves in Gloversville, brewing in Milwaukee, farm machinery in Racine, flour milling in Minneapolis, shoes in Lynn, Salem, Haverhill and Brockton, silverware and jewelry in Providence, steel in Youngstown, Cleveland, Pittsburgh, Johnstown, Lackawanna, Birmingham and Gary, and meat packing in Kansas City, Omaha and, lest we forget, the meat packing capital of the world–Chicago[28]. At the core of all these different economic bases lay manufacturing; at the core of manufacturing was scientific management and the revolution in production, management, and worker motivation that it unleashed.
Because the environment of an individual firm is both shared and deeply affected by dynamics of other firms producing reasonably identical outputs (shoes, for instance), firms tend to be grouped into sectors and industries. After all, a shoe manufacturer does not compete with U. S. Steel or with Wells Fargo Bank. In this manner, the micro economic approach often will stretch into sectoral and industry dynamics. Given the likelihood that sectors tend to concentrate geographically, (agglomerate or gravitate into “industrial districts”–the older name for something similar to a cluster), the micro economic approach can easily involve itself with sectors and industries. In dealing with sectors and industries issues arise such as technological innovation, mature-stagnant-young industries, business cycle, sector rotation, and supply and value chains. And, importantly, the geographical implications of agglomerated sectors and industries and their impact on a regional economic base can become important aspects of economic development.
The micro economic approach to economic development has, as they say, always been with us–but it has assumed an especially important position since mid-1980 or so. Workforce development strategies have always, like it or not, been a tail in the evolution of the micro economic needs of firms. In many ways, workforce economic development initiatives serve to match the skills and labor supply needs for firms, sectors, and industries. As such, an economic development workforce strategy and the micro firm-industry specific economic development strategy are natural partners.
[1] For example, an investment banker, Bullitt led the Philadelphia Economy League, Patterson of National Cash Register in Dayton, and Eastman in Rochester New York. The Chicago Bureau of Public Efficiency, founded in 1910 would merge with the Chicago Civic Foundation (a municipal civic improvement association) in early 1940’s and today is known as the Civic Federation. Boston, ever the “Johnny comes lately”, founded its Bureau of Municipal Research in 1932. Hays in his article includes an additional number of cities as evidence.
[2] Bruce D. McDonald III, “The Bureau of Municipal Research and the Development of Professional Public Service”, Administration and Society, November 2010; see also, Norman N. Gill, Municipal Research Bureaus (Washington D.C., 1944); Jane Dahlberg, New York Bureau of Municipal Research, Pioneer
[3] Mohl, op. cit. p. 118.
[4] Philadelphia Evening Bulletin (1912), Philadelphia Economy League (www.economyleague.org)
[5] Dennis R. Judd, The Politics of American Cities (2nd Ed) (Boston, Little, Brown & Co, 1984) pp. 99-100.
[6] Handbooks of Management Accounting Research, Volume 3, Edited by Christopher S. Chapman, Anthony Hopwood, and Michael D. Shields, p. 1079.
[7] Samuel P. Hays, the Politics of Reform in Municipal Governments in the Progressive Era”, Pacific Northwest Quarterly, Volume 55, 1964, pp. 157-169.
[8] Leonard D. White quoted in Hays, op. cit., p. 109.
[9] Peter J. Steinberger, Ideology and the Urban Crisis (Albany, New York, University of Albany Press, 1985) p. 28.
[10] Andrew D. White, “City Affairs are not Political”, Forum (December, 1890), pp. 213-216. The quote goes on to say “Under our theory that (if) a city is a political body, a crowd of illiterate peasants, freshly raked in from Irish bogs, or Bohemian mines, or Italian robber nests may exercise virtual control. How such men govern cities we know too well; as a rule they are not even alive to their own most direct interests.” Dr. White was a co-founder and first President of Cornell University, and his daughter was acknowledged as the first female PhD in the United States. At a later point in his career he was offered the position of the first President of Stanford University–but he declined. A diplomat, ambassador to both Germany and later Russia (and other nations), he declined repeated Republican entreaties to run for office, preferring instead to become the first President of the American Historical Association. We do not believe him to be related to Leonard D. White an early founder of American Public Administration.
[11] Benjamin Kleinberg, Urban America in Transformation: Perspectives on Urban Policy and Development (Thousand Islands, Sage Publications, 1995), p. 68.
[12] Theodore Lowi, Machine Politics: Old and New, The Public Interest, Volume 25, p. 86. See also Kleinberg’s Urban America, chapter 3 for an overall treatment of this period and its future policy implications.
[13] Dennis R. Judd, The Politics of American Cities (2nd Edition) (Boston, Little, Brown & Company, 1984), p. 94.
[14] Dennis R. Judd and Todd Swanstrom, City Politics: Private Power and Public Policy, 3rd ed (new York, Longman, 2002), pp. 99-101.
[15] David A. Morgan, Robert E. England, and John P. Pelissero, Managing Urban America (Washington D. C. , Congressional Quarterly Press, 2007) p. pp. 63-64.
[16] Mohl, op. cit. p. 118.
[17] Bradley R. Rice, Progressive Cities (1977)
[18] Mohl, op. cit. p. 119.
[19] Sumter South Carolina (1908) and Staunton Virginia (1908) also claim title to be first. It may be more correct to assert that Dayton is the first “large” city to adopt the city manager form of government.
[20] Mohl, op. cit. p. 120. Richard S. Childs, the father of city manager system, played an aggressive role to ensure that cities adopted the city manager approach as opposed to the structurally weaker commission form. He also linked the city manager form with the non partisan and at large electoral reforms and the short ballot reform as well.
[21] See in particular, H. George Frederickson, Gary A. Johnson, and Curtis H. Wood, The Adapted City: Institutional Dynamics and Structural Change (Armonk, New York, M.E. Sharpe, 2004)
[22] Hays, op. cit, pp. 121-124.
[23] Altshuler and Luberoff, Mega-Projects, op. cit. pp. 10-11.
[24] Mohl, op. cit. p,57ff
[25] An interesting treatment of Taylor is included in Page Smith’s, America Enters the World: A People’s History of the Progressive Era and World War I (Volume 7) (New York, Penguin Books, 1985) pp. 376-378.
[26] See Michael Brick, Forum and Focus for the Junior College Movement (New York, Bureau of Publication, Teachers College, Columbia University, 1964); Steven Brint and Jerome Karabel, the Diverted Dream: Community Colleges and the Promise of Educational Opportunity in America 1900-1985 (New York, Oxford University Press, 1989; and Thomas Diener, Growth of an American Invention: A Documentary History of the Junior and Community College Movement (New York, Greenwood Press, 1986).
[27] Sam Bass Warner, Urban Wilderness (1972)
[28] Mohl, op. cit. p. 60.
Ron W. Coan 