The Industrial “Big City” Hegemonic Classical Era (1870-1975)

The Classical Era has so far proven our longest.

It commences with the Gilded Age (1870-1890’s), proceeds onto the Progressive Age ((1890’s to 1914), WWI and the Roaring Twenties, Depression Years (1930-1939), WWII, and our post-war Wonder Bread Years (1946-1964), and ends with Great Society and Nixonian Thermidor (1964-1969). For those following Three Wave history, this Classical Era includes the first two waves. Why so long? Despite its obvious evolution expressed in very distinctive “Ages” and time periods, and the arrival and departure of many generational cohorts, there was a consistent MED/CD experience which was heavily influenced by several consistent “threads” that persisted until “about” 1970.

The most consistent thread in these very disparate Ages is economic and population growth. The second tread is the primacy of a maturing industrial capitalism. The final consistency is the existence and dominance of the northern industrial hegemony–the South and West grew in the shadows of an economic system largely beyond their influence. Until the last decade and a half, MED was primary, but by the 1970 end of the Classical Era, community development had seized ED’s commanding heights. In the 1970’s, officially 1975, the Classical Era “collapsed”–fell, went kaput. ED entered a new Era, the Transition Era which will be detailed in the next module.

There is an argument that the Classical Era was over with the Depression. From that time on the prospect of some kind of “decline” was evident–almost exclusively, however, within the Big City hegemony. Suburbs or metropolitan “decentralization” was the crisis–and the Age of Urban Renewal the proposed and adopted solution.

The West and South only grew after that period–despite the Great Migration and Southern Diaspora–which obviously meant a ton of people were also leaving the South. The missing southern dynamics are that many Southern Diaspora “whites” moved back to the South–and new population moved in. The “New South” was incrementally taking shape. Everybody knows the western story. In any case, there is a lot going on in the post-Depression to 1970 story–and a great deal of it was shaped by an aggressive federal government that entered into S&L ED in a extremely forceful manner.

Still and all, the old Classical Era ED policy systems and the practice of MED in particular, held together, with increasing turbulence and perceptible, if ill-diagnosed, ineffectiveness. No one had to send out the “memo” announcing the Classical Era’s fall; it was pretty obvious at the time. The literature, for instance, was full of descriptive metaphors, including the “Southern Strategy”, the Second War Between the States, Snowbelt vs. Sunbelt, Rise of the Sunbelt, and a genuine disenchantment with an aggressive federal role in S&L ED.

The Northern Big City Industrial Hegemony

The starting point to understanding the Era is the “northern industrial Big City hegemony”. Rising from the Union’s Civil War victory over the South, a political and economic “hegemony” developed during the Gilded Age and cemented itself in place during the Progressive. For all practical purposes it reigned virtually unchecked by the “turn of the century”. The emergence of “nation-wide industrial capitalism”, housed and headquartered in the economic bases of the Union’s “Big Cities” was arguably its core strength.

Industrial capitalism grew from Big City municipal economic bases that extended itself into every nook and cranny in America. One can easily see that as this so-called industrial capitalism evolved during WWII and after, into national and global markets other than Big Cities–and a logistical and transportation revolution ensued, the Big Cities felt the impact.  Their problems became the nation’s problem because the federal government profoundly sensitive to Big City needs responded with the most famous of all ED programs/strategies in our history: urban renewal.

In the fog of time, there was yet another federal program in operation, little known today, that triggered and prodded industrial capitalism’s spread to other regions: industrial decentralization. It followed an FDR initiative/strategy named “the Second Reconstruction” which finally broke the southern “divided mind” resistance to industrialization and urbanization. If there were to be a truncated Classical Era ending in the Great Depression, then the intervening years might simply be labeled “the Federal Period in S&L ED”. Because my history is so bottoms-up, and there was much continuity of the Classical Era strands during the period of federal intrusion, I rejected that abbreviated Classical Era.

The heyday of the Big City Classical Era were then the Gilded and Progressive Ages, through the Depression. During these years Big Cities in effect, were 19th century national industrial/transportation/ communication Silicon Valleys. The Auto industry, Detroit, and the Great Lakes Auto Alley, and New York city’s financial and media dominance were its functional equivalents. In the gilded Age it was Pittsburgh and Big Steel and Chicago exerting considerable leadership in the evolution of American MED/CD.

With an expanding and cheap workforce, provided by a half-century of immigrants, Big City firms and the Big Cities themselves forged American economic development during the Gilded Age (1870-90) in particular–driving underground in the West and South the different forms of American ED (MED and CD) that would later emerge. The Classical Era is characterized by “growth”–or in the case of the South and West, the quest for it. In the South during the Gilded Age, the first stirrings of a relevant Black approach to American community development was debated by W.E.B. DuBois and Booker T. Washington.

Classical Era policy systems/ED strategies reflect the primacy of growth. Hegemonic chambers competed against each other–New York vs. Chicago for example–not for jobs, but status and population growth. Economic developers chased people. Size, not jobs, for status/prestige, local economic diversification/ security in a turbulent and disruptive Era, was  Big City ED’s principal objective. Big City economic and population growth was almost spontaneous (although volatile). Competition among cities was intense, but usually expressed by its industrial technological successes.

An “Exhibition Movement”, bleeding into a series of World Fairs, were a “debutante-like coming out” for each Big City. The “WAVE” history is correct in that regard; the urban competitive hierarchy injected itself into S&L ED–but business attraction per se–and incentives– were used, certainly not to the extent they are today but more defensively to retain firms leaving because of the fed’s industrial decentralization strategy for the suburbs and other regions.

Not appreciated at the time, but like hypertension the silent killer, the maturing of increasingly aged manufacturing sectors into the later phases of the profit life cycle, meant production investment in new processes, facilities, and market areas in order to control costs and preserve an economic system that was increasing concentrated in a few large firms. Unions played a role in this scenario. In short, by the end of WWII and certainly by the 1950’s Big City industrial behemoths were both stressed, and turning their attention elsewhere in a world dominated by a struggle against communism led by America the Great.

Chambers and Classical Era EDOs

WAVE history is also correct in asserting Gilded Age chambers were the Big City’s lead EDO–but Big City chambers did a lot more than incentives and boosterism. Chambers dominated Big City policy systems. They usually contested–checked the power–of ethnic political machines in a sort of bimodal policy system shared by business and ethnic elites. In some cities unions entered into the policy mix, in others (Minneapolis comes to mind) they were contested bitterly. Chambers advocated for infrastructure, tourism, export, municipal home rule, increased government capacity and national business regulation. Hegemonic Big City Chambers by the turn of the century were surprisingly Progressive (Boston, Cleveland, Detroit are excellent examples), led by one percenters and professionals and the engine behind the municipal-relevant Progressive Movement.

Parks, utilities, recreation, and neighborhood subdivisions within city boundaries were important aspects of MED/CD. Water, fire protection, and the provision of enhanced urban services were important. Nothing was more critical to Inward-MED during these years than access, pricing, safety, and comfort of intra-municipal transportation infrastructure. The rate of innovation in that sector was simply incredible and it sucked the air out of Inward-MED. By the Progressive Era, as early as the first decade of the 20th century, cars competed with subways and electric streetcars.

In the latter Gilded Age, a Neighborhood-Parks-Planning–and CBD-focused MED urban policy congealed into what was euphemistically called the “City Beautiful. City Beautiful was the first national comprehensive urban economic development policy in our history. It crystallized under Daniel Burnham and the 1893 Chicago World’s Fair, spread across the nation, to all regions and cities–and lasted well into the 1920’s. It changed character materially from the 1890’s after 1910–when it focused on the CBD, and watched its pennies. Chambers played a huge role in this strategy, as did other new EDOs and planning agencies.

Lost in the hustle and bustle was the emergence of a rival to the chamber as the Progressive Era’s chief EDO: the modern port authority. Copied from England, the hybrid public-private port authority diffused to many cities with ports, both ocean and river. Indeed, several states with river ports utilized these new-fangled authorities–and still do so today. Port authorities oozed from maritime into aviation by the 1920’s, and then into regional planning and metropolitan transportation.

Today many economic developers do not think of these authorities as ED–they are of course–and in port authorities we have our first major instance of “siloization” or the tendency of our EDOs to detach themselves from a comprehensive urban ED strategy to pursue more limited functions/strategies. Until 1970, however, they were clearly EDOs, so important and so successful, that their structure was copied during the Age of Urban Renewal, first to form housing authorities, than later redevelopment or community development authorities. Inward-MED from the 1930’s on was dominated less by chambers, than by hybrid public-private port, housing, and even redevelopment authorities.

Under Chamber-dominated Big City Inward-Mainstream ED (MED) jelled. The earlier fascination with External-MED, and connecting the urban dots, faded into the background. If anything the central task of this Inward-MED was to block and tackle for the installation of modern infrastructure: gas, lights, highways, roads, streetcars, subways, pollution abatement. The CBD, after the City Beautiful period, became the heart, if not the soul, of the Big City metropolis. The battle for urban competitive status was more waged in the CBD–skyscrapers, parks, subways, shopping, HQ, and innovations of all kind, not in business attraction. All roads lead not to Rome, but to the CBD where shopping, office, large firm HQ, entertainment, and culture were headquartered. This world persisted under tremendous pressure through the Depression and into the 1950’s. The 1960’s would prove to be another matter.

What was true for the hegemonic North/Midwest, was not true for the remainder of the nation. the South and West pushbacked–with western “boosterism” and a subtle strategy to attract branch facilities from the Hegemony. Expanding markets (and railroad access) and population growth made this possible. for the much-smaller cities of the South and West. To the hegemonic Big City firms and industries, these regions were markets to be exploited and/or places to reduce the cost of production. Regional “boosterism” heralded by Third Wave really is characteristic of non-Big City chambers who were attempting to grow, jumpstart their economic base, and find some niche for it in an economic system dominated by the Big City hegemony. It proved surprisingly effective.

But southern chambers and states took this to another level entirely. New South economic developers took over southern chambers determined to grow their cities in large measure by copying Big City industrialization. Bring in Big City branch firms through incentives, business climate, and business promotion campaigns. While some southern cities/states were lackadaisical, Atlanta led the pack Florida tourism jelled into a formal local and state strategy. Texas cities, competing amongst themselves, lived in their own world–attracting whomever they could. By the 1950’s, much sooner in Pacific Coast cities, it was also evident the South and West had assembled a critical mass of population, infrastructure, political/ED capacity, and a young vibrant economic base that has forever altered the ED landscape of America.

Things got so bad that by the mid-1920’s the first and second formal professional economic development association were formalized by the U.S. Chamber, intended, to professionalize chamber management, and the second to do the same for chamber industrial bureaus. Economic development was now a profession. That was the good news. The bad news was that a “shadow war” between southern ED manufacturing attraction EDOs subsidized with state-supported tax-exempt bonds commenced against the Big City industrial firms. things got worse when the third phase of the Textile War between New England and the Carolinas (and Georgia) erupted–fought not only between the states but in the halls of Congress.

In the midst of that shadow war, in fact probably its most outstanding innovation, the state (and local) issued tax-exempt bond, with federal income tax exemption tossed in, became the chief strategy-tool of MED ED. It was in the course of establishing EDOs empowered to issues such bonds, loans, guarantees, and facilities that American ED rediscover the old gift and loan provisions of the Early Republic and Gilded Ages.

Metropolitan Decentralization and WWII War Production

During the 1920’s, Big Cities recognized the long-term implications of suburbanization–so did CD and MED. Experimentation, debate, and path-breaking programmatic initiatives resulted–only to be halted by the Great Depression. The policy arena shifted to the Federal Government, and counter-suburbanization effort took the form of a physical upgrading of distressed urban neighborhoods by outright demolition and the construction of new public housing. American ED had entered into its “Age of Urban Renewal”–an Age that persisted until the mid-1970’s.

Urban Renewal passed through six identifiable phases, each distinct, but which in retrospect have been aggregated into a heavily-biased destructive, catastrophic racial war conducted by politicians and the “growth coalition”. As Two Ships devotes several chapters to this crucial period in our history. Between 1920 and 1970, hegemonic Big City MED and CD was tasked to counter this “decentralization” by capturing for the Big City the benefits of suburban “growth”. Without fully realizing it, however, northern hegemonic Big City ED strategies were dealing, for the first time, with decline. In this early period, suburbs never had a chance–hated and disparaged by anybody and everybody–especially planners and the ED Policy World. Suburbs eventually won, of course, but not until the mid-Transition Era.

In the midst of all that we fought WWII.  One can argue, with some conviction, the direct and indirect effects of WWII, including our eventual victory, assumption of Free World leadership and the development of a new world economic and political order, were the most important factors in 20th century American ED. It begins with federally-mandated war production which dramatically reshaped the manufacturing sector, huge expansion of capacity mostly in undeveloped Big City suburbs–and the West and South. Called “industrial decentralization”–a policy that continued well into the 1960’s–the Federal Government subsidized new manufacturing facilities, encouraged population movement, and financed new infrastructure, that laid the foundation for, and probably made inevitable, regional change that today we call the rise of the Sunbelt. In the short term, hegemonic Big Cities did well–but it didn’t last.

Amazingly, hidden in the fog of federal and local policy-making, a new technology-driven economy was emerging in the folds of the Route 128, the Silicon Valley, and central Texas/Florida. In these little-noticed geographic cribs, breast-fed by the military war machine and the Cold War, young sector-babes flourished–developing the proverbial radar systems that ought to have picked up the threat to ,and the future evolution of, the northern industrial order. Magically, they reached public consciousness just in time for the collapse of the northern industrial hegemony in the 1970’s.

In retrospect, after the 1920’s hegemonic Big City Classical Era was slowly unraveling. Industrial decentralization gave way to firm deindustrialization, and hordes of Americans, white and black were on the move across regions. Factories closed, jobs were lost forever, and people moved. Through most of the Classical Era, however, growth, however, was sustained by Cold War and the American “Free World” economic and political “order”. Big City economic/community developers still fought the pre-WWII war, against metropolitan decentralization, suburbanization. MED and CD each pursued their own version of urban renewal–to the delight (it was quite popular at the time) and destruction of all it touched. Hegemonic Big Cities from this point on were in trouble. They entered into a nadir that “stabilized” only in the 1990’s.

the Rise of Community Development

Big City ED had taken its eyes “off the prize”–its jurisdictional economic base–when it focused on neighborhoods, housing, and suburbs. Combined with urban renewal, the very first signs of creeping deindustrialization, and the cumulative impact of Great Migration/Civil Rights Movement (and Puerto Rican) population shifts, it was very clear by the mid-1950’s that Big Cities were stressed. And then the War on Poverty and Great Society descended on urban America, but most of all on northern Big Cities. The integrity/cohesiveness of Classical Era urban policy systems, increasingly living on borrowed time, shattered.

In the last stages of this turmoil, CUED was born and government ED/CD departments pushed chambers off center stage. From this point on, state-level ED picked up momentum. So did cohort generational change. In 1968, this author turned twenty. The first-wave baby boomers had reached their majority. By 1978, the blue-collar author of this history, a veteran, was Truman College, Chair of Urban Studies and part-time Assistant to the City Manager. The times were a’changing.

It had really started in the early 1920’s. In 1920 the nation became more urban (51%) than rural. Immigration was stopped by federal law, and a massive internal migration, the Southern Diaspora and Great Migration, replaced it. Creeping decline, in the form of metropolitan decentralization (suburbanization) also appeared in the 1920 census. In that year 17% lived in “suburbs”. That proved to be the statistic worth watching.  By 1960 31% lived in suburbs, only 32% in the Big City. By 1970, 36.6% lived in suburbs and only 31.4% in the central city.

These forces–the wars, depression, and suburbs–combined with a host of important other factors (Cold War, deindustrialization, Southern Diaspora/Great Migration, Great Society for example)–to form a 1960-1975 “perfect storm”. At that pivotal point, the Federal Government began to pull back from direct programmatic involvement in S&L ED/CD, and shifted instead to environmental regulation and global free trade. That perfect storm generated a second, urban-based, professional association (Council of Urban Economic Development).

The forces unleashed on Big Cities by this perfect storm, however, were not easily confronted. Symbolically, in 1975-6, the largest of the industrial hegemonic Big Cities, NYC, entered into fiscal default, taken over by its state. The industrial Big City Hegemony was revealed to be an “emperor without clothes”, an urban cemetery, or a playground for the unfortunate. The Hegemony simply imploded in a spasm of regional warfare–the Second War Between the States had started. Chambers were pushed aside by new mayoral government EDOs. American ED landscape witnessed an earthquake; shifting tectonic plates, our old Classical Era was toppled and replaced with an Era so unstable, experimental, multi-polar, and innovative, that it is called the Transition Era.

The Hegemony passed into history–taking the Classical Era with it.

the Transition and Contemporary Eras (1975-the Present)

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