Do cities control their economic destiny?


I often hear people living in prosperous cities say that other metropolises should copy their economic policies. Examples? Be more business-friendly. Keep taxes low. Showcase your city’s unique assets. Foster an entrepreneurial culture. Make your city a more affordable destination. Make your city a more exclusive destination.

Yet, living in a part of the country that has seen better days, I am well aware that economic success can be transitory, even fleeting. Today’s winners may want to think more carefully about the merit they can claim for their success.

Do cities really control their economic destiny? Or are they the pawns of larger forces? Was the decline of the Rust Belt, for example, the result of bad policies or fundamental economic trends?

Certain cities can certainly claim to be self-made, their fortunes built on hard work and visionary policies. It could be argued that Los Angeles, blessed with beautiful weather but far from natural water sources, should never have become the metropolis it is today. Similarly, one could say that Las Vegas should never have existed. The two cities capitalized on their initial advantages – sunshine for Los Angeles, games for Las Vegas – to impose themselves. Then they actively turned into top destinations.

What I like to call windswept cities, on the other hand, find themselves buffeted by outside forces. Perhaps Detroit and Cleveland, or Orlando and Tampa, could have reached their maximum size if broader economic changes had not favored them, but that is unlikely.

It can cut either way. Some windswept cities are lifted by global forces such as the rise of manufacturing or technology. Smaller but no less significant changes – air conditioning, improved road systems, increased tourism – can have an equally large effect.

Other windswept cities are being hit by change. As the broader economy evolves, they find themselves stuck with an infrastructure and workforce better suited to an earlier era. Most Rust Belt towns have suffered this fate, struggling with an inventory of outdated manufacturing plants and uneducated and untrained workers to seek jobs in the new economy.

I would say that the most prosperous American cities have been those that have benefited from changing economic trends, but have also improved their advantages through smart policy measures. Compare Seattle with Detroit. At the end of the 19th century, the two cities were in similar positions. Detroit was the busiest port on the Great Lakes and one of the busiest in the country, shipping millions of tons of cargo. It was a national leader in shipbuilding and a major center for the manufacture of cast iron stoves, earning it the title of “America’s Stove Capital.”

This put Detroit in an enviable position when the automobile was invented. The town was filled with skilled, mechanically-inclined laborers. Going from shipyards and stove factories to automobile factories was not a big step for them.

Detroit, whose factories had been a key part of the “arsenal of democracy” that won World War II, could have gone on to develop a booming defense industry. In fact, the federal government was looking for large automobile manufacturers to create armament manufacturers. However, these companies declined and once again focused on cars. By contrast, Seattle made a smart move from shipbuilding to commercial aircraft production after World War II, led by local aircraft manufacturer Boeing, then relied on its engineering workforce to develop a thriving tech industry.

However, success stories like Seattle’s are rare. More often, cities have experienced something akin to dumb luck. The concentration of elite educational institutions in Boston facilitated its transition from port city to center of knowledge. Other cities have taken advantage of their status as state capitals, home to a major university, or host to educational and medical institutions to do the same. Atlanta, Austin, Nashville and Phoenix seem to fit this bill.

No one wants to believe that the aphorism, “stand on third base and think he’s hitting a triple” applies to them. We all want to be recognized for our efforts that lead to success. But the saying correctly applies to many cities as well as people. While some metropolises have benefited from excellent political decisions, many others – perhaps most – have simply fallen into good economic shape as the winds of economic change changed direction.

The next “big thing” could easily disrupt these economic successes. They probably won’t be very happy when the cities that supplant them start offering advice on how they too can revive their fortunes. The one skill all city leaders would be wise to learn is a little humility.

More other writers at Bloomberg Opinion:

• Michelle Wu of Boston is mayor of many firsts: Matthew Winkler

• How to reverse the West’s creativity crisis: Adrian Wooldridge

• Floating cities can be an answer to rising seas: Adam Minter

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Pete Saunders is Director of Community and Economic Development for the Village of Richton Park, Illinois, and an urban planning consultant. He is also the editor and publisher of Corner Side Yard, a blog focused on public policy in America’s Rust Belt cities.

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