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Ronald W. Coan

The chapter opens by contrasting Penn’s Privatist Pennsylvania and Philadelphia with Winthrop’s Progressive Massachusetts and Boston economic development (ED) evolution through 1820. The importance of political structures (such as state/colonial constitutions, corporate charters, principles of administration and relationships between state and municipality) and how each is shaped by the values of its elite cultures is discussed. From the beginning, ED displays a division between two macro cultures/approaches, each with its own priorities, goals, tools and programs. The chapter’s second theme is the interaction of population mobility (a driver of economic development policy) with economic development structures and cultural values/priorities of migrants. Migrations discussed include the Yankee Diaspora, Scotch-Irish, and Deep South planter/Cotton Belt. Irish and German immigration is also considered. The impact of cultural migration on ED-relevant structures such as form of government, propensity to urbanize, sector/industry innovation and policy priorities are stressed. The reader is introduced to the importance of initial city-building to economic development. By 1850 it is clear that three distinct regions exist (North/Midwest, South and West), and each displays its own shared patterns and goals. From the foundation of the American Republic the practice of economic development reflects the region in which one works and lives. Each region possesses its distinctive cultural values, demographic composition, jurisdictional economic base configuration and period of initial settlement. Each region demonstrates different styles of city-building; produces different jurisdictional policy systems/outputs; and different actors participate in policy-making.

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Ronald W. Coan

This chapter’s subtitle is the “The short story of American economic development.” It is a review of the more prominent themes and developments described in our history. It harkens back to the Chapter 1 model, the drivers of economic development policy, the characteristics of economic development, and the two ships, Progressivism and Privatism, that each launched an approach to economic development that has continued from 1789 to twenty-first-century contemporary economic development. From the diffusion of political cultures, through population mobility to the formation of jurisdictional economic bases, the development of three distinct competitive hierarchies—to the arrival of a polycentric post-suburbia, a 50-state competitive systems, a global comparative advantage hierarchy and an incredibly politicized contemporary economic development. It’s all there. The chapter ends with a challenge. What emerges to the author is a need for mainstream economic development and community development to come together, sing a few bars of “Kumbaya” and recognize, if nothing else, that both face a common enemy: decline—chiefly in the form of a competitive global comparative advantage hierarchy that renders the concept of a geographic fixed asset meaningless. The mission of economic development in a developed nation as the United States seems more to cope with the vicissitudes of Schumpeter’s creative destruction. Economic development’s ultimate task today is no longer producing pure growth, but managing and coping with opportunities and threats unleashed by creative destruction. Mainstream economic development and community development each cope better with one of the two sides of creative destruction. The need is, somehow, to find a way to blend each other’s strengths to face a common enemy.

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Ronald W. Coan

The Depression overwhelmed anything it touched—it broke Big Cities, rolled over chamber-style economic development, brought the West a Dust Bowl and crushed the South. Big Cities under mayors like Detroit’s Cavanaugh and NYC’s La Guardia, with a little “help” from a guy named Robert Moses, took advantage of the war relief, infrastructure development programs of FDR’s New Deal. Chambers fought Roosevelt tooth and nail. The New Deal, as far as cities went, wasn’t all that it is cracked up to be today, but still the feds launched several important sub-state economic development-related initiatives—workforce being one. During the Depression the suburbs were still debated and we contrast Le Corbusier with his helpmate Moses, and Frank Lloyd Wright with his proponents Catherine Bauer and Rexford Tugwell. The idea of a “multi-nuclear metro area” results in several FDR “New Town” initiatives. During the Depression and War Years, however, neighborhood-focused community development confronts the formation of new black migrants from the Great Migration. A new CD wing unfurls, under the leadership of Saul Alinsky playing reveille for radicals. But then Pearl Harbor. World War II turns American economic development upside down and inside out. Building factories and war contracts, the Fortress strategy leaves the Pacific Coast and becomes the normal chamber strategy across the nation. War production, however, spawns suburban industrial growth. The requirements of war production gives rise to a new, and generation long, federal policy called industrial decentralization. Industrial decentralization may have been the most important federal economic development policy—ever!

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Ronald W. Coan

The primary theme of the chapter is “First Wave” chambers as the municipal lead agencies of economic development. The post-Civil War rise of modern chambers—their “one-percenters” governance, primary strategies of attraction/promotion, tourism, tax abatement and deal-making and “exposition competition”, and their subsidiary EDOs (industrial bureaus and industrial parks)—were core to the development of mainstream, classic economic development. Gilded Age city-building is discussed, with privately led “planned communities” such as company towns and Garden Cities as new forms of suburbanization. The turn of the century professionalization of chambers and chamber secretaries, using Ryerson Ritchie as an example, led to the establishment of modern chambers across the USA. A discussion of the usefulness of the First Wave chambers concept follows. The chapter’s second theme is the modernization of municipal government to develop sufficient capacity to conduct meaningful public policy implementation. Home rule, charter reform and the early twentieth-century victory of business “structural reformers” installed strong mayoral, commission and city-manager forms of government. The role played by municipal one-percenters in municipal research bureaus, the formation of the US Chamber of Commerce and the injection of responsible and professional management into municipal government are considered. A final section presents a little-known early municipal strategy—“selling frozen water”—as an example of Dillon’s Law in operation.

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Ronald W. Coan

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Ronald W. Coan

The Truman and Eisenhower administrations inherited a strong and intrusive federal government and a totally changed international and global system. Truman had his urban and social ambitions, but a hostile world, the Korean War, put them off to the side. A skeptical Eisenhower took his foot of the federal gas pedal, but still Congress pushed him into creating the Small Business Administration (SBA), and the lobbies pursuing a national interstate highway system put a bill on his desk. He signed it, engendering perhaps the most destructive phase of urban renewal as Big Cities dug up their neighborhoods for highways and bypasses to connect to suburbs—which were exploding. The white middle class was heading out to the “burbs” and the Age of the Leave it to Beaver sitcom suburb had begun. Cities responded, developing plans by the new leader of CBD-focused urban renewal, Victor Gruen. Public housers built huge high-rises for residents of the Second Ghetto. Now in a permanent war with Russia, and leader of the free world, the United States occupied a unique and quite beneficial position in the world’s economy. American prosperity resulted, a prosperity that would mask changes in Big Cities that transformed dry rot into outright full-scale decay by the beginning of the 1960s. But you would never have known it at the time—except in the New England textile mills, which were going down for the last time. A disease appeared in New England’s manufacturing base that tossed textile workers onto the streets in tens of thousands. Industry demanded action; so did unions—but little happened at the state level, however, despite active new governors like Muskie and Herter. The “disease with no name” had struck, and the only visible source of destruction was southern governors with IRBs in hand to steal the mills and move them down South. The shadow war intensified. Finally, port authorities became transportation behemoths, developing a metro presence and freeing themselves from Big City constraints. The NY–NJ Port Authority innovated and a logistical revolution in ports followed. Containerization hit in the mid-1950s, and within the decade most major ports were relocated to vast suburban expanses able to accommodate intermodal transportation. Big City waterfronts had lost a major player in their jurisdictional economic base. Economic development had its first major example of onionization.

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Ronald W. Coan

This chapter reviews the Early Republic federal government and its relationships with sub-state economic development. Clay’s American Plan,” the reaction of Jackson and the controversial history of Early Republic strategy for “internal improvements” are considered. Early “tools of the trade,” tax abatement and eminent domain, are discussed. The crisis need for transportation and urban infrastructure, as well as fostering banking/finance and manufacturing firms, required the development of our first hybrid public/private EDO (HEDO): the corporate charter. The strengths and weakness of the corporate charter as hybrid EDO and its eventual rejection in the 1840s exerted a profound impact on contemporary economic development in the form of state (and local) constitutional gift and loan clauses. Within a decade a second HEDO, the publicly empowered modern corporation (railroads), was utilized. The construction of roads, steamboats, canals and then railroad transportation infrastructure is examined, with emphasis on the importance of competition with other cities. The importance of railroads as an Early Republic EDO and their innovation of modern strategies of economic development (tourist, industry and people/homesteading attraction and city-building). The chapter concludes with a description and explanation of the 1868 Dillon’s Law decision which to this date has ruled city–state relationships.

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Ronald W. Coan

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Ronald W. Coan

In Bluestone and Harrison gave the disease with no name a name: deindustrialization. The concept, following closely community development principles, arose out of the Great Reindustrialization Debate which had been raging through the seventies and which would continue well into the nineties. The debate revolved around our third competitive hierarchy: global comparative advantage/free trade. In many ways the debate attempted to reconcile place-based economic development with a capitalism whose capital was mobile and whose firms, sectors and industries seemed locked into the profit cycle. Foreign competition and the rise and fall of sunrise and sunset industries demanded state and sub-state policy response. The incredible and diverse strategies (ranging from clusters, small business, entrepreneur, innovation and knowledge-based economics, and corporate strategy and others) that emerged from the debate transformed economic development and developed its agenda for contemporary economic development. The long-neglected jurisdictional economic base was finally getting some attention it needed so badly. The chapter takes a final look at the federal government, reviewing the Clinton’s administration’s awkward dance with community development, and the development of new approaches such as New Market Tax Credit. It also looks again at regional change and the arrival of the New South that demonstrates the reality of a “vanishing Sunbelt” as each region moves along its own economic development path. Strategies such as these pushed the States into State and Sub-State economic development. A major characteristic of contemporary economic development is the powerful, often lead role of the state in sub-national economic development. Indeed, one could say we have developed into a 50-state American economic development system. It hasn’t been all good, some would say. The states have brought with them a steroidal “let’s make a deal” approach to attraction and recruitment, along with arguably their most commonly used economic development strategy: casino gambling (along with other forms). Using Massachusetts as a case study, this chapter demonstrates how states responded by innovation and sheer politics to form hybrid economic/community development policy systems. With new approaches to capital formation, reliance on distressed geographic targeting, pioneering innovation with Centers for Excellence, skills-based workforce systems and support for sunrise sectors, Massachusetts had it all in place by 1985. The final and concluding theme is Big Sort population mobility which, when combined with attitude and culture change of generational cohorts, has created more or less homogenous policy systems composed of a majority of like-minded and economically similar voters that has frozen in place a polarized, politicized new world of economic development. Big Sort population mobility has produced the underlying basis for our contemporary economic development Blue State/Red State politicization. Exploring the dynamics of each of those topics, the chapter uses the example of San Francisco’s hyper-pluralism as a Weberian ideal type to expose the elements that have politicized contemporary economic development.

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Ronald W. Coan

This chapter is a series of case studies that contrast the implementation of urban renewal during the 1950s and 1960s. They vividly demonstrate its variety and the complexity of the policy systems that used this economic development strategy. They reveal what went wrong and, more importantly, what went right—in the West, where it was used (or not used) for an entirely different set of goals by an entirely different type of policy system. So the tale of Boston’s Mayor Collins and economic development’s first “czar,” Ed Logue, is related, followed by Philadelphia’s notably different policy system and its own urban renewal dynamics. Philadelphia sees the dramatic splitting off of a CBD-focused economic development from the initial planning leadership of one of planning’s greatest, Edmund Bacon. A separate set of EDOs followed, and the governmental branch of mainstream economic development had arrived on the 1950s scene. In the Sunbelt, starting with California urban renewal was used by central cities and suburbs—a consequence of the Sacramento Plan which refocused it away from slum clearance to tax-exempt bond issuance for Greenfield development. Called tax increment financing (TIF), with an empowered redevelopment agency, suburbs could go mall and sales tax chasing, and central cities could modernize their CBD as the East had done with the City Beautiful movement nearly a half-century previously. The case studies of Atlanta and Norfolk provide examples of southern urban renewal, which were mostly congruent with western City Beautiful, save for the role of chambers and the business community in coping with southern school desegregation—which emerges as the most important priority of southern economic development. Western CBD modernization is looked at through Oklahoma City, led by possibly the most “aggressive” economic developer ever, Stanley Draper; and San Diego’s urban renewal, the dog that didn’t bark, was (but not for lack of trying) entirely a private affair rather than governmental—again along City Beautiful lines.