A Capsule Restatement of the Chapter One Model

The basic elements of our Chapter One Model include: the policy system hierarchy, the political culture of policy systems and component EDO/CDOs, the role of political structures in establishing processes and parameters critical to state and sub-state economic development (state constitution, judiciary and judicial precedents, and regulatory entities). The key drivers of ED policy in state and sub-state policy systems, besides culture and policy structures, are: the economic base of the policy system, the emigration/migration and immigration of people into the policy system, and the three competitive hierarchies (among cities/states. within a community policy system (suburban-central city-rural-unincorporated), and global, international. Sneaking into our history are two dynamics associated with population movement and demographic change: the impact of generational cohorts, and the geographic “Big Sort” (shared values, religion, race, and class) residential settlement.

In its application over our two-hundred and fifty years, American economic development has exhibited several defining characteristics or key conceptual dynamics that have left deep and fundamental marks on the history and explain or describe the engines of its growth and decline. In particular the “regional” fragmentation of economic development has created enormous diversity, multiple goal, strategy tool and policy differentiation, time lines, lags, performance, and rivalries and competition among states, cities, communities and even the regions themselves. This history makes the argument that American ED as a whole can best be view from a bottom up view which reveals most vividly the impact of regions and variation in performance, operations, and goals relevant to ED.

Also of fundamental import was the development of the “Northern/Midwest Industrial Big City Hegemony” which developed after 1870, and which continued through 1975. A very important benefit of our bottom-up historical approach is to identify, define and trace, the unacknowledged existence of two very distinct, mostly contradictory y approaches to American economic development: Mainstream Capitalist ED, and Community People-focused ED. The later was a reaction to the rise of manufacturing and finance capitalism and urbanization. While Mainstream ED has been dominant through much of our history, the rise of CD since the Great Society has been transformative. It can be argued the two are roughly equal in their impact on policy-making, but the reality is they are at war. The synergies of each approach cooperating and inter integrating their perspectives into a coherent policy may be the Holy Grail of this history.

This Big City Hegemony hugely shaped, in some measure caused, the further regionalization of American ED. The breakup of the Hegemony after 1975, and the Rise of the Sunbelt, has probably evolved into our Contemporary Era Red State-Blue State dichotomy. This dichotomy has also be shaped by the mechanizations of the capitalist system “industry-sector profit cycle” and its effect on the composition, viability and competitiveness of the economic bases of policy systems. Deindustrialization, Gazelles. Clusters and Agglomerations, Innovation, and Hollowing Out are just some of the dynamics that draw from the industry-sector life cycle.The interplay of the life cycle with the three competitive hierarchies may arguably be the most important intersection of drivers of change in American (and anybody’s) economic development. The reaction to this interplay has consumed many policy systems, and has done so since day one of our nation.

A final dynamic which has played a major role throughout our history is subsumed under War and Economic Decline (Panics, Recessions, and Depression). However, one classifies these events, they can be transformative, ending cities, regional hegemonic dominance, and instigating across the nation policy system change. Beyond the control of any policy system, they are black swans that create or destroy–and their effects are long-lasting. The War of 1812 and World War II–obviously the Civil War–marked the end of Eras. So did the Great Recession of 2007-9, although less impactful than the Panics of 1893, 1873, and maybe 1819, they all pale when compared to the Great Depression, and the chain migrations it accelerated and prolonged.

Political Culture

Which brings us to political culture. Both settlement (and urbanization), the path to statehood, and the writing of state constitutions, the framework of all future state policy system and those of the “creatures” (local jurisdictions) they allowed to form, were partially determined by the values and the desire to create or preserve economic advantage of different ethnic, religious, and the bias of original state-origin played a dominant role in the writing of state constitutions. Kentucky and Tennessee are examples of what today we call “chain migration” or internal migration over time through several American geographies. A goodly number of their new residents were foreign-born and perhaps most were second generation refugees of some sort. Their value preferences, often rooted in their distinctive religions and family socialization patterns, were the still-open wounds of their past. The Revolutionary War was barely a decade previous, and George III still ruled through the entire of this Chapter. Culture and Ideology were as vivid and as fundamental as anything that is going on as I write in 2019–that is why this period is the period of American history most comparable to our present day.

In any case, the different configurations of these population movements, when combined with different elite-leadership personalities and styles, produced different results. These laid the foundation for long-term structural/constitutional and cultural differences. Said and done, the reader will discover the policy system set up in Tennessee differed radically from that set up in Kentucky, which also differed from its mother-state Virginia. That the policy system of each state incorporated the values and desires of these different population groups into key structural institutions and relationships between branches and levels of government may seem to some as so subtle as to be unimportant, but the decisions made and structures created strongly biased whose approach to economic development would be advantaged, and, accordingly who benefited/disadvantaged from it. Let me make it clear, then, at this point that I see political culture, actually the study of political culture, in ways significantly different (hopefully more useful) than usually presented to the reader.

I think most of the classic texts in American political culture–on which I build–defined the elements of several political cultures–and then traced their movement into “the West”.  In superimposing political culture on any given geography (state, for example), the more sophisticated of these studies recognize that clash of different cultures, in politics and in the writing of state constitutions, and even the formation of the initial economic base. That is a large part of what you see in Chapter 3. Tidewater Virginians, Scots-Irish, Quakers and Huguenots, and their derivatives we have seen saw things differently and that is apparent in these modules. Beginning in our first chapter, however, I have superimposed yet another layer onto political culture–elite vs. masses–which I have subsumed under a rubric or label, Federalists versus Populist. I did this because it is obvious from my research that this is what was going on the ground floor of the politics and policy-making of the time. What is somewhat apparent in Chapter 3 is that Tidewater Federalists/Anti-Federalists ran afoul of a rising coalition of populists left out of the Federalist Tribe consensus. Seemingly, as we leave them, the two states are locked solid in the populist, Jeffersonian D-R Tribe, and firmly at odds with the coastal northern Federalists. We have seen hints, thus far hints only, that they have different views and priorities on economic development.

Not only did this elite-mass distinction tap into the more conventional ethnic-religious conceptions of culture, but it expanded it to include power, status, and wealth–economic class. It also accommodated my research reality that the clash of cultures that occurred in this period of time, generated coalitions of different cultures with distinctive views, strategies, goals, and value perspectives/priorities, and these coalitions inevitably developed their distinctive “elites”. With election turnout and political mobilization in a dispersed hinterland agricultural economic base, at very low levels in these periods, elite conflict became the critically important to policy system formation and subsequent policy-making. Economic development, which as our Chapter One Model posits, tends to a closed, more restricted, policy area than others–elites are more important to an EDO and parents to a K-12 school, or criminal justice/policing, for example.

Elites of different cultures approached and conducted ED policy-making that created much of this economic development history. These elites both reacted to their congruent cultural non-elites, and in turn developed their own sense of how the goals and values of the culture could effectively be translated into politics and policy-making. In both instances gap and tensions between each cultural elite and its mass base developed, and that, as we shall see, greatly affected their economic development policy-making. That will be important, vitally important in future chapters as we try to understand Henry Clay, Daniel Webster, Sam Houston, Thomas Hart Benton and Abraham Lincoln from Andrew Jackson, John Calhoun, James Polk and eventually Stephen Douglas, and Jefferson Davis. These notable names did possess a substantial and influential impact of the economic development of the periods that follow and they serve as proxies for the large number of lesser elites at the state and local levels that shared similar views of how to approach economic development. If so, these macro and micro elites are our first “Deep Swamp” of ED policy-making.


Hierarchy of Policy Systems

The Chapter One Model rests upon the assumption that the unit of analysis is the policy system. The most fundamental influence on a community policy system and the EDO-specific policy system is the state’s policy system. The fifty state policy system nexus offers the best single view of the decentralized sub-federal economic development system of American ED. Whatever level it works out, it is the home state constitution, political institutions and various economic bases that define the parameters, the rule of law, and whose past heritage and experiences created the “stories”, the narratives salient to formulating and implementing ED policy and strategies.

The basic or fundamental element of American ED, its unit of analysis, is the individual EDO/CDO, which itself constitutes the bottom level of ED policy-making. EDOs must find their way through their home state policy system if they are to function effectively, if at all. What an EDO/CDO does, the content (strategies, tools, and programs) ultimately is approved or permitted by the policy system in which it operates and by the sovereigns who govern and make policy decisions for the EDO/CDO. EDO/CDO decision-making elites/ especially its sovereigns,  are obviously the focus point of its decision and policy-making. Besides governance, perhaps the most critical element of EDO/CDO policy-making is its core “tools”, and its past repertoire of strategies and core occupations.

The most interesting, heuristic, and the work-horse policy system of American ED is the community/jurisdictional policy system. Composed of a larger than appreciated number of individual EDOs, private non-profit, public, hybrid/quasi state and federal, as well as local community and jurisdictional-bound EDOs and CDOs. Each community/jurisdictional policy system includes, potentially, at least three levels of: county, legal jurisdiction, and sub-municipal–generally defined in terms of its geographical service area. The county level usually includes multiple jurisdictions, and unincorporated areas usually considered as directly serviced by county-level EDO/CDOs and EDOs of higher-level policy systems. The jurisdictional policy area includes all EDOs whose service area is restricted to the legal boundaries of an incorporated unit of municipal government, but its active EDOs, of course, include EDOs of higher-level policy systems and potentially county as well. Sub-municipal policy systems sre usually dominated by CDOs, but of course are within the scope of service of both county and community-level EDOs. Housing, ethnic/racial group mobilization, and neighborhood level CDOs are the most common.

Sub-state or metropolitan policy systems operate in a nether-land since they frequently do not possess any tangible element of sovereignty, no formal elected governance. Coordination, planning, and occasionally some regulation Perhaps the most common EDO of that policy level is the Hybrid, quasi, public-private partnership that services the metro area infrastructure and utilities. States may establish regional planning/economic development, climate-environmental-pollution and other special districts to perform key functions (water/sewers, pollution-control), and in recent years private nonprofit, some multi-county, marketing, advocacy, sector-based planning and coordination, and cluster-development are common. Depending upon the strategy, entities from other policy areas such as education, finance, real estate, and target private companies in key sectors may also be involved in ED policy-making.

Most state-level policy systems are dominated by governmental and hybrid EDOs, with a horde of private and community development advocacy entities attached and involved. Privatization to non-private but privately-managed EDOs is increasing. Some state governments assume great responsibility for sub-state ED/CD, although they usually work through and with community-level actors. Other states prefer to empower community policy systems to deal principally with economic development.

The Federal Policy system by definition is the highest level policy system in a nation-state. Logically, it cannot help but be a vital actor in sub-national economic development policy. How it does so, however, makes all the difference in how federal policy system actor participates in sub-national policy-making. The active involvement of national-level EDOs in the implementation of direct federal programs, with federal-national goals/perspectives and constituencies, the activities and operations of federal institutions in fundamental policy areas such as finance and law are of course essential preconditions and fundamental to the practice of economic development across the nation. T

he role of the federal government in national defense and foreign and economic policy inevitably and naturally can involve the federal government, consciously or unconsciously in sub-national economic development. Tariffs, Keynesian economic, foreign trade, and fiscal decisions, transcontinental highways, railroads, and airports are all core areas which greatly overlap, occasionally redefine sub-national ED strategies, tools and programs (Kilo Supreme Court decision, for example). Grants, regulations and financial incentives are also other forms of federal involvement in sub-national economic development. There is a strong historical and cultural tradition which makes federal involvement in sub-national economic development a very controversial fault line in our politics. A great deal of our history is consumed with this fault line and the impact it has had on sub-national ED.

Policy System Change or Realignment

Explaining Variation among Policy Systems, Policy Outputs and Policy Goals-Constituencies: “Style”

We started this Chapter with the seemingly simple, obviously common-sense question as to why “states differ”. That California is not Michigan, and Massachusetts is not Mississippi might have caused the reader to wonder why such a truism would have to be “proved”. Answering in part at least why the truism is true, however, is key to our Chapter One Model which asserts that American economic development varies and is applied differently, for different reasons by each of our fifty states. It uncomfortably believes that programs called by same name, urban renewal, business development, and even the implementation of community development strategies differ by state because of the history and the bias of each state’s policy systems. Variation in American ED is more easily observed through historical evolution of economic development in the state or community system and its comparison to other states and communities and other regions of the nation. While strategies, tools and goals-objectives are seemingly common, pervasive and similarly named throughout the nation, the actual management, performance, and goals, priorities, procedures, beneficiaries, and relevant constituencies vary rather dramatically among and sometimes within regions, states, communities and even municipalities.

To put it in a nutshell, if you want to understand a particular policy system’s current ED. That examination should include its evolution over time. Past policy decisions accumulate a “heritage or legacy” of policy-relevant structures, expectations, performance, outputs, feedback, legal, economic base and electorate that feed into any contemporary policy-making process and seriously affect its processes, stories, expectations and goals.

Timelines are important. The settlement nexus clearly creates its own economic and political dynamics–particularly when linked to conflict with Native Americans as discussed below–and the overlap with statehood and the “initial policy systems” of Kentucky and Tennessee–and to our critical state-building and institutionalization as preconditions to economic development policy-making–firmly guide us to an important observation: the policy system, and state/city-building are too closely tied to the settlement nexus to be anything other than reflections of them. Moreover, this phase last for decades, well into the second decade of the nineteenth century. If one looks elsewhere, Georgia/Florida, for example it extends a generation more into the 1830’s.

The assumption that statehood led to a viable policy system and economic base is a poor guide to what went on in these states. One might assume more development is occurring than actually did, or could. This is what I call the “lag effect”–while new states are in their “infant” settlement phase, more established states are able to move more rapidly into state-building and institutionalization, and then onto building their economic base and moving into more recognizable economic development strategies. These established states have a potential head start that (1) made their policy systems and ED policy-making different than that of brand new states carved out of the wilderness.; and (2) the settlement nexus phase, which includes statehood and state/city-building institutionalization coexists and/or competes with economic development strategies that dominate the settlement nexus phase. What happened in Kentucky and Tennessee happened in all new states during these years–from Alabama to Illinois and Wisconsin. When it ended in 1837-44, the impact of dealing with the mess the settlement nexus has left behind “bent the economic development tree” so fundamentally, that things have never since been the same. We need therefore to better understand this 1790-1836 settlement nexus phase of economic development to understand what went wrong–and why.