Chapter 3: The Foundations of the American Urban System

1. Chapter 3: The Foundations of the American Urban System • Frontier Urbanization: European Colonization to Independence • Mercantile Period (1790-1840) Local Markets and Central Place • Early Industrial Expansion and Realignment (1840-1875) • Industrialization (1875-1920) Uneven and Unstable • Fordism (1920s-1945) Mass production and severe economic depression

2. Frontier Urbanization • Late 1500s, Spain had established towns in Florida and New Mexico. By 1700s, established pueblos, missions, and presidios in U.S. southwest and California. • Dutch established New Amsterdam in the Hudson Estuary (1615ish) • French establish trading posts throughout Canada, Great Lakes, and along Mississippi river system • British Establish a colony in Jamestown, Virginia (1607)

7. Frontier Urbanization Continued • This embryonic Urban System operated as a string of Gateway cities • Assembly of Staple Products for export • Distribution of imported manufactured goods • Civil Admin. Of New territories Entrepots began to emerge. Places with better natural port/trade advantages, and could better coordinate shipping schedules with other ports (ex. New York, Boston, Charleston, Philadelphia, and Newport)

9. Mercantile Epoch (1790-1840) • 1776 American Independence from Britain • US Constitution was written by City dwellers – Placed strong influence on City based manufacturing and trade (Federalist system in terms of money and trade) • Forced cities and regions within U.S. to trade with each other rather than Europe • Investments were financed by American capital rather than European capital. Profits remained in US • Proliferation of local and regional administrative functions – led to small towns, state capitals, and federal capital (Washington D.C.) • Westward expansion led to the development of Frontier towns (ex. Santa Fe, N.M.-local service centers)

10. Mercantile Epoch (1790-1840) • Led to a growth in Gateway Cities situated along rivers and waterways that connected Atlantic Seaboard with western territories (e.g. New Orleans and St. Louis) • Creation of canals that connected east coast merchants to these waterways via Erie Canal along Hudson to the Great Lakes – birth of Buffalo, Cleveland, Detroit, Chicago and Milwaukee became wholesale centers. Also, Cincinnati and Louisville became important Inland Gateways. • Led to Comparative Advantage- Local Conditions allow a city or region to undertake an economic activity more efficiently compared to other possible activities (Cincinnati began to specialized in hog processing, for example). • As well, increased agricultural and farming productivity in addition to rising numbers of immigrants continued to fuel the urbanization process in the U.S.

11. Vance’s Mercantile Model • Depicts the early development of the American Urban System based on the Mercantile model. • He argues that external influences and long-distance trade were most important in the creation of this urban hierarchy via five stages.

12. Five Stages of Vance’s Mercantile Model • Exploration – Search for Knowledge and economic opportunities for the old world • Harvesting of natural resources – Establishment of colonies for procurement and trade of natural resources (timber, beaver pelts)- • Emergence of farm-based staple production-Colonization of land for grain, salted meat, cotton, tobacco – Gateway Cities emerge “Points of Attachment” become focus of emerging system. • Establishment of Interior Depot Center- Towns emerged that served as inland gateway cities/”Deposits of Staples Collection” for the continued demand for staples and interior colonization (Frontier Urbanization) • Economic Maturity and Central Place Infill- Depends on a domestic market economy large enough and affluent enough to sustain the growth of Industry. Gives rise to central place systems with Market towns. Key: Settlements associated with long-distance trade are seen as leading central places of the urban system rather than settlements associated with local markets. Long distance trade, “fixes” the spatial pattern of the cities that come to function as leading central places of the urban system rather than local markets. ***Vance synthesizes elements of staples theory, economic base theory, innovation diffusion theory and central place theory dynamics to account for the history of settlement in North America.

14. 1840s – Transition from a trading economy to a mature agricultural and growing industrial economy in US (Technologies from Europe, improved Ag. Production and immigrants from Europe) New Industrial Technologies had specific location requirements Power Sites – Industries that needed significant amounts of energy (ex. H20). Industrial towns along fall lines of New England and the Appalachians. 2. Mining Towns-Provided coal and ore. Appalachian coalfield towns Norton, Virginia Transportation Centers-Strategic locations made by canals and railroad networks (Roanoke, Virginia) Heavy Manufacturing Towns – Dependent on large volumes of raw materials tie to the source area. Ex. Pittsburgh. Already a river port and wholesaling center. Early Industrial Expansion and Realignment (1840-1875)

16. Early Industrial Expansion and Realignment (1840-1875) • Railroad network (1886) enabled continental Economies of Scale (regional economies grew into national economy). • NY, Buffalo, Detroit, Chicago, Milwaukee, Philadelphia, Pittsburgh, Cincinnati grew (wholesale economies that took advantage of competition between waterborne and RR transportation). • Most early industrial growth occurred in largest existing towns and cities. • 1875 – Urban system had expanded to more than 15 cities over 100,000 people (New York-1.3 million; Baltimore, Chicago, Philadelphia, Pittsburgh & St. Louis – 350,000-450,000 people; Athens, Boston, Buffalo, Cincinnati, Cleveland, Detroit, Manchester (NH) New Orleans, Providence, Rochester, and Syracuse - 100,000-150,000 people

17. Reason for growth in these cities included the idea of Initial Advantage: Capital and Profits from craft and Wholesaling were reinvested into factories and machineries Knowledge and Tradition of entrepreneurship, investment & lending supported industrial development Largest Pools of Labor Largest and Most Affluent local and regional Markets Initial Advantage special case of an External Economies – Cost advantage that accrue to firms because of their locational setting Local specialized labor, pools of capital, accessibility to specialized business services More traditional factors include physical infrastructure such as roads, harbors, RR, and utilities. External Economies derives from any advantage that stems from the COLLECTIVE, rather than the EXCLUSIVE use of any of the elements necessary for profitable activity. Often referred to as Agglomeration Economies or Urban Economies Localization Economies include only certain types of firms being able to benefit from external economies (ex. Shipwrights, research institutes, legal services, entertainment production) Explains Economic Specialization in Cities Ex. Seattle-Airplanes, LA - Film Some Principles of Urban Growth

18. Trade and marketing in 1800s allowed for development of regularities in spacing and patterns of towns and cities Settlements evolved to match distance that could be covered by river, canal or turnpike within a day’s travel Gave rise to Cities and Towns serving as Local Service Centers, or Central Places Brought a logic or order to the spatial distancing of towns and cities based on the variety of services they provide Beginnings of Central Place Theory

19. 1930s, Walter Christaller observed striking regularities in size and spacing of settlements in S. Germany Accessibility of settlements is based on Distance. Foundations of Central Place is a dependent on the principles of “range” and “threshold” of goods and services. Range of a particular project is the max. distance a customer will travel for a product High Order Goods-Might have a range of several hundred miles (Medical care, specialized equipment, professional sports teams) infrequent need/travel Low Order Goods-Perishable or required at large amounts frequently (saloons, bakeries, hair salons, post offices) Threshold – Minimum market size required to keep product on offer (minimum distance necessary to secure a hinterland with enough potential customers to keep an enterprise profitable - Hospitals needs thousands of people whereas a grocery store needs a few hundred) Central Place Theory

20. Christaller developed a hinterland hexagonal pattern (competitive zone at margin of each hinterland) Led to a Nested Hierarchy of City-Town-Village-Hamlet Using a market principle, all service providers profits would be kept to a max if central places were kept to a minimum (k=3) So, 1 City = 3 Towns = 9 Villages = 27 Hamlets Used still in consumer behavior and distance travel for site selection of stores, used to plan new settlements in the Dutch polderlands and new settlements in Israel. Drawbacks- Does not focus on manufacturing and long distance trading functions, also a static model that is not responsive to pop. densities, spending power, transportation technologies or communication Central Place Theory (Continued)

22. The Polders in the Netherlands

23. Industrial Capitalism in full swing; RR allows urban places to serve as regional center (e.g. Birmingham, Jacksonville, Memphis and Houston to emerge as central places and with regional status); pop. Expanded – natural increase and immigration (12 million immigrants arrived in US between 1890-1910) (Saw Economies of Scale actualized – Ag. In California and west, minerals in central west, coal in Southeastern US) Fueled urban growth – NY-4.75 million; Boston. Chicago, Philadelphia, & Pittsburgh - ~1.5 million; LA, San Francisco, Seattle, Dallas, Kansas City, Milwaukee, St. Louis, Baltimore, Providence – 500,000 people The Organization of Industry (1875-1920)

24. Logic of Industrial Location influenced patterns of urban growth Manufacturing belt was consolidated due to Initial Advantage @ a Regional Scale. Had large markets (growing consumer base), advanced transportation networks, & coal reserves Efficiency of telegraph services, postal service, rationalization of banking, reduced energy costs The Organization of Industry (1875-1920)

25. Led to: (1) Local Specialization directed to National rather than local markets – Brewers in Milwaukee and St. Louis took advantage of refrigerated rail cars and mechanized production techniques; Chicago took advantage of meat packing, printing and furniture making; Boston took advantage of musical instruments and men’s clothing. Smaller cities became even more specialized (signature boutique production) (2) Specialization provided the foundation for Increased Commodity Flows between towns and cities of the Manufacturing Belt Bound the region even more tightly together. With a combination of $, commercial linkages, and technical expertise – region was attractive to new industrial activity with large or national markets. Thus, other cities could not compete @ this scale or intensity. Other cities and regions could not attract manufacturers of mass-produced goods for the national market. The Organization of Industry (1875-1920)

26. Uneven Development

28. Modifying Processes to UI Growth • Spread or “Trickle-Down” effects – Peripheral regions provide agriculture and support to core (e.g. California in early 1900s). A. O. Hirchman as opposed to Backwash effects (G. Myrdal) • Import Substitution – Local markets in periphery provide their own goods – depends on local entrepreneurs to adopt (and further develop) appropriate innovation. • Agglomeration Diseconomies – Over saturation point of a mature urban region. Cost to companies of inflated land prices, traffic congestion, crowded ports and RR facilities, high cost of waste disposal, higher taxes. Costs go to consumers eventually. • Kondratiev Upswing –Lead to new industry not tied down to existing industrial complexes. Using innovations in transportation and communication creates Windows of Locational Opportunity. Results in new industrial complexes being formed. • Tilts balance of existing comparative advantage. Eventual shift of periphery becoming new core. Old Core becomes deindustrialized. New $ is reinvested into new ventures in other regions. Called Creative Destruction. (Inherent to the dynamics of Capitalism)

30. Rise of the internal combustion engine & Fordism post WW I – Great Change Auto competes w/ transit Continued mechanization of farm equipment “Great Migration” of Americans of African heritage to northern cities 1916-1918 Decline of small towns and communities dependent on coal and RR centers Development of satellite cities and “bedroom communities” led to Regional Decentralization (signature process of US cities) Rise of large companies through Horizon Economic Integration – cutting out similar smaller firms via price reduction Vertical Economic Integration-Taking over companies that provide inputs/purchase outputs Diagonal Economic Integration – Purchasing profitable companies that have activities unrelated to original firm. Resulted in loss of local ties to companies situated in many cities Early Fordism, the Auto, the Suburbs and the Great Depression (1920-1945)

31. Late 1920s, economy took a downward slide of the third Kondratiev cycle – October 1929 Stock Market Crash! Followed Price Deflation (type B economic growth) “Roaring Twenties” Resulted in Ag. Being a victim of its own success (Bushel of Wheat fell from $1.80 in 1920 to $.50 in 1930 Smoot-Hawley Tariff Act-led to recession of world wide trade Industrial and financial markets were over-speculated Led to unemployment rates rising from 3% in ’29 to 25% by 1933! Heavily industrial cities like Pittsburgh & Detroit were around 50% Seattle and Philadelphia were more diversified-Unemployment between 20%-30% Overaccumulation Crisis – Surplus labour, surplus production capacity, surplus capital or “underconsumption” insufficient demand in relation to capabilities of economic system Circuits of Capital Investment into Secondary Circuits (machinery equipment & buildings) could not absorb surplus capital. The Depression and Macroeconomic Management

34. The calamities of the Great Depression led to increased government intervention in the economy Taxes were used to channel capital into Tertiary circuit (R&D, education, health, and welfare)-Maintain economies productivity and healthy workforce Know as Keynesianism-Increased public expenditures used to stimulate demand, provide public employment – absorb surplus labor Ideology of “Free Enterprise” or Competitive Capital was severely shaken FDR was elected in 1932 on a platform of government intervention that provided relief, reform, and recovery. Increased role of government Had great effects on notions of urbanization Also gave rise to a pact between government, big business, and organized labor – Established the foundation of the era of Organized Capital The Depression and Macroeconomic Management

35. Era of Post Post WW II – Current -Advanced or “Disorganized” capital began to dominate in latter portion of era Economic Recovery and Growth (1945-1972)-Rise of Service Economy Economic Crisis and Reorganization (1972-1983) - Led to uneven Deindustrialization 1983 – Current – Sunrise Industries High Tech and Telecommunications Chapter 4 – Urban Systems in Transition

36. Rise of interstate highway system and a network of regional and subregional passenger airports Led to both Regional Decentralization & Metropolitan Consolidation Region Decentralization Allowed cities in the South and West to grow rapidly since not heavily unionized. Benefited from 4th Kondratiev Upswing (high tech - electronics, aerospace, and petrochemicals) Cities in Manufacturing Belt were suffering from Agglomeration Diseconomies Metropolitan Consolidation – Rise in HQ firms and R&D Laboratories became increasingly organized in larger metropolitan areas. Due to corporate mergers and acquisitions Differing growth and changing pattern of economic specialization within urban system Control Centers (HQs) emerged in LA, Dallas, Houston and Atlanta, whereas Cincinnati, Detroit, Philadelphia & Pitts. declined Freeways, Regional Decentralization, and Metropolitan Consolidation (1945-1972)

37. Rise of R & D facilities – traditionally tied to the location of the parent company R&D became more critical to conglomerate companies – R&D facilities began locating close to HQ and also centralized laboratories. Led to a centralization of R&D in large Metro areas Rise of “Innovation Centers” – Places with strong university research centers, Federal science presence and cultural and recreational facilities(Silicon Valley, Route 128, Research Triangle) Freeways, Regional Decentralization, and Metropolitan Consolidation (1945-1972)

38. 1973 – Due to Arab-Israeli conflict, Arab nations imposed embargo on shipments of oil to US and Europe OPEC then quadrupled oil prices Rising oil prices and US economic structural problems plunged the US into Stagflation-falling demand and rising inflation Foreign competition from Japan, Germany and NICs (4 Asian Tigers & Mexico) Shifting to Fifth Kondratiev cycle (Informational Economy) – The new type of economy needed a new setting Led to massive deindustrilization in manufacturing belt Keynesian approach to macroeconomic management began to fall out of favor. Led to neoliberal macro economic policies (tax payer revolts-less taxes and privatization) President Regan began retrenching US government – Federal responsibilities were decentralized to State and City governments (cut funding by 33%) between 1978-1974 Economic Crisis and Neo-Fordist Urban Restructuring (1972-1983)

39. Traditional manufacturing sector hit hardest – Cities that had specific manufacturing specialties hit even harder (Youngtown, Ohio) Detroit lost over 166,000 jobs by 1980 Led to Cumulative Causation in Reverse “Will the Last Person Leaving Seattle Please Turn Out the Lights?” -Sign posted at the City Limits of Seattle in 1982 Urban Distress

41. Oil companies made massive profits during this time Overaccumulation Crisis-Surplus labour, surplus $, & idle production capacity Circuits of capital moved into secondary circuit of capital (buildings in metro areas & tertiary sector R&D) Large quantities of excess capital was also invested offshore Led to rise of an “Informational Epoch” and increasing separation between domestic capital and US residents (Global flows of $) Urban Distress: How did it happen the early 1980s ?

42. Since 1970s three kinds technologies were crucial to rise of Informational Economy Production Process Technologies -Have increased the separability & Flexibility of production processes (offshoring) Transactions Technologies –Firms can be locationally and organizationally flexible (Just-in-manufacturing) Circulation Technologies- Reduced the time & cost of communications & distribution. Led to a wider geographic market Led to reorganization of US economy Transformation of relationship between corporate capital & labor. Mechanization, Offshoring, women & immigrants, decline of strength of traditional unions (End of Organized Capital) New role for State & Public sector – shifted away from collective consumption (tax & spend on schools, hospitals, and community services) to public/private partnerships, deregulation, $ into high technology & DEFENSE New International & Intermetropolitan Divisions of Labor Greatest proportional growth of professional & business services has occurred in midsized metro areas Boston, Washington DC, San Jose, Austin, Raleigh-Durham, Colorado Springs Neo-Fordist Economic Restructuring & Rise of Informational Cities (1983-Present)

43. Source of productivity lies in the quality of knowledge (essential to the new production process) New urban system based on “Spaces of Flows” rather than a relative location (distances does not matter) What is now crucial for an urban system is to be “hooked in” to the flow of ideas, capital & people Can lead to a Rise of an Informational City – Manual Castell’s term for a city that is a focus for info. And depends on high tech networks to create new knowledge (outputs) New Informational Mode of Development

44. Globalization and the Urban-an increasing interconnectedness of people and places around the world via economic, political, and cultural change and exchange. The tendency towards a global culture (most pronounced in World Cities) Major urban centers become a microcosm of what is happening globally. Now, transnational corporations drive the “means of production – information and communication technologies” in urban systems. TNCs drive, finance, and operate this infrastructure (and labor) according to global market standards (and demands) Problem – TNCs are detached from local processes of urban development, critical network infrastructure is highly uneven in its access, serving only certain neighborhoods, cities, and metropolitan areas –called Splintering Urbanism – Extreme Geographical differentiation between different cities and within cities regarding uneven evolution of networks of information and and communications technologies. Both propels the economy forward, but further divides the urban rich and poor. Globalization, Splintering Urbanism, & Uneven Urban Development