The Battle for Gotham (34 page)

The breadth and diversity of its economy and greatest concentration in the world of manufacturing jobs insulated New York well from the ups and downs suffered by the singular-industry cities. In large measure, it is the reason New York fared better during the Depression than many other cities. New York’s bewildering array of businesses provided entry-level jobs for the steady flow of immigrants, many who eventually opened their own businesses elsewhere in or out of the city, adding to the national economy. The same immigrant absorption and new business creation process is visible today. New immigrant-generated, innovative businesses exist all over the city and since the 1980s have been probably the most unacknowledged source of the city’s regeneration.

The staggering variety of products once made in New York City is long forgotten, and what is made here today is hardly known. Whereas Manhattan was a manufacturing center dominated by the garment, jewelry, and printing industries, Brooklyn probably had the greatest variety of products. Brooklyn was the fourth-largest manufacturing center in the country by the early twentieth century, home to makers of Brillo soap pads, Heinz ketchup, Spalding sporting goods, Eberhardt-Faber pencils, Domino sugar, Pfizer Pharmaceuticals, Pechter Fields Rye Bread, Topp’s chewing gum with its popular baseball cards, Rockwell chocolate bars, Gretsch musical instruments, Corning Glass Works, Esquire Shoe Polish, and Meri-lei’s that were exported to Hawaii to be sold to tourists, many from New York. Coffee, tea, machinery, paint, paper boxes, shoes, soap, and beer added to the variety of goods manufactured there. Queens had Swingline staplers and still has Steinway pianos and knitwear. The Bronx had American Bank Note and Farberware. Harlem had Madame Alexander Dolls, furniture repair, high-end woodworking, and window manufacturing. And the Brooklyn Navy Yard produced an assortment of vessels.

The diversity and number of manufacturers are comparable today. The variety is huge, the individual scale of each often modest. Many big companies that started small and grew large and then left the city did so because at a certain scale, experts note, large companies don’t need the advantages cities offer smaller companies. As Jacobs emphasized, the important point is not how many mature companies leave the city; the important measure is how many new ones grow in their place. That is the measure of a dynamic economy.

From the 1890s to 1950s, the New York City region was the dominant manufacturing center of the country, and the city’s economy was its most robust.
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Industrial production dominated. Then the agenda changed to office and residential priorities, public investment in supportive infrastructure plummeted, and decline set in. All the areas designated for demolition and rebuilding were doomed, no matter how many successful businesses remained and wished to stay. For its two decades of subsequent steady decline, New York still had the nation’s largest concentration of manufacturing jobs. They were not disappearing for natural causes. It is not a coincidence that the decline of industry here, although started before World War II, paralleled the increasing momentum of Urban Renewal clearance projects planned and implemented by Robert Moses. For the century of its economic preeminence, New York’s economy had grown organically with a spontaneity that produced its unpredictable hodgepodge of businesses. This unique economic system remained a national stronghold longer than conventionally believed.

By the 1950s the combination of a technological revolution and low-wage competition from the South or abroad threatened New York’s and the national industrial economy. Many factors were cited, including containerization and cheap suburban land available for the preferred one-story plants instead of the multistory lofts. This was the favored rationale for assuming the inevitability of deindustrialization and planning to make it so. Yet if global competition made it all so inevitable, how is it that in the 1980s, Los Angeles gained precisely the manufacturing jobs New York was losing, especially in the garment industry that doubled there? Some manufacturers moved elsewhere, but there were plenty left behind.

Clearly, attention and investment went elsewhere during the war. A neglected infrastructure made doing business in New York more challenging, while new, cheap suburban alternatives multiplied. Rail freight diminished, while highways multiplied and cheaper truck freight increased. But as has been pointed out in many ways in this book, the answer to neglect and deterioration is not replacement. The assumption that manufacturing was dead, of the past, or anachronistic was as ill-considered as the idea that a financial- and information-based monoculture could fully sustain a “new” economy or that it did not have production needs.

POSTWAR OPPORTUNITIES MISSED

Three directions were possible after the war. One focused on nurturing the strengths of an innovative entrepreneurial class and the workforce behind it. The second focused on replacing it with a real estate- and service-based economy. The first valued the tradition of individual innovation and entrepreneurial instincts; the second valued the city’s real estate almost like a natural resource to be mined into a shining replacement. A third possible direction would have been to balance the first two, providing for the survival and strengthening of the old economy and recognizing its contemporary value and emergence and growth of the new economy. Under this direction, neighborhoods would not have been replaced wholesale. New housing would have been fitted in where opportunities allowed. Small numbers of businesses would have been forced to relocate, but appropriate neighborhoods would still be available to locate in. But that third option is not what happened.

“Information-” or “knowledge-based” jobs, in the FIRE sectors, so the conventional rationale went, were the wave of the future. Thus, a carefully planned, neat, newly created city to house a financial-based, information-age, and service-based economy would purposefully replace a messy, organically grown, unpredictable, and fundamentally flexible economy that had evolved according to no imposed plan. For this scenario, growth of the city economy was overly dependent on leveraging the value of real estate instead of the entrepreneurial spirit and energy of people whose innovative ideas create the new businesses, jobs, and meaningful expansion and growth. This scenario is also heavily dependent on public funds or incentives of all kinds, what many call “corporate welfare.” This distorted economic policy at best leaves the city vulnerable to economic shifts that would be mitigated with a more balanced and diverse economy in place. Instead, the current overdependence on Wall Street evolved.

In the 1980s, for example, white-collar jobs on Wall Street and in other FIRE sectors proliferated with head-spinning growth. Proponents of this “new economy” strategy patted themselves on the back. Then in the late 1980s, the stock market took a nosedive. Jobs were lost with the same head-spinning velocity they had grown. According to the Federal Bureau of Labor Statistics, Manhattan, where most FIRE-economy jobs take place, lost 149,000 jobs between March 1989 and April 1992. This equaled the entire gain since 1980. In other words, by the early 1990s, all the job gains of the 1980s were lost. Considerable revenue was lost, too, due to all the corporate tax breaks given to businesses to remain in the city and create jobs.
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Even more jobs were lost during a period of heavy mergers and consolidations. Of course, jobs in this sector multiplied again in the boom of the late 1990s. A bigger loss occurred in 2008. If, however, New York had nurtured its multiple economic assets, tumultuous ups and downs in one dominant sector might have been balanced by sectors experiencing less dramatic shifts.

Also during the 1980s, as city policy and investments were focused on nurturing this white-collar economy, industry experienced insult upon injury. Developers were getting tax breaks, subsidies, and cheerleading from all city agencies. But industrial districts were suffering service cutbacks and infrastructure neglect. Gratz Industries experienced periodic break-ins in the 1980s. When Donald sought some police assistance, he was told there was one patrol car for the entire district. When it rained, the street in front of the shop flooded due to a clogged drain that caused long-lasting backup. All pickups and deliveries occurred at this frequently flooded entrance and were made exceedingly difficult. I remember Donald’s innumerable frustrating attempts to call one city agency after another, over and over again, pleading for relief. It took years.

FALSE GOD OF EFFICIENCY

The 1929 plan of the Regional Plan Association (RPA) first reflected in a formal way the emerging disdain for the messy, difficult to define, individualized assortment of industries and the similarly varied residential neighborhoods. While this view of urban life already had been growing, it was codified in the 1929 Regional Plan and embraced and implemented enthusiastically by Robert Moses.

Here was the first potent articulation of the view still in force today that the city’s major asset was not its pulsating, complex industrial economy, its diverse entrepreneurs, its patterns of innovation and new start-ups, its energetic immigrants, and its skilled and semiskilled workers but its residential and corporate real estate. Rearranging the city’s built form to be more orderly, less congested, and cleaner was the goal. Real estate became the resource of choice to effect the change.

This transfer of economic priority was not a natural market shift but one of official policy. The RPA, the establishment’s favorite nongovernmental voice, led the chorus for this refrain, supported by “The Plan.” City officials, financial leaders, corporate heads, newspaper editorial boards, unions, architects, and the emerging profession of city planners embraced it wholeheartedly from 1929 forward. The appeal of this strategy was strengthened by the federal funding that would fuel it.

The broad acceptance of this urban strategy in effect gave Robert Moses carte blanche to pursue his vision of the efficient city of demolished, replaced neighborhoods connected by an efficient spaghetti network of highways. Under the skillful direction of Moses, the master builder who could get things done, all things would be put where they belonged. Productive efficiency would be the result, so the thinking went.

Cities, however, cannot be reduced to an efficient order like a machine, as Jacobs has taught. Efficiency stifles innovation and a diverse economy, as one learns well from her book
The Economy of Cities
(1969). In this, Jacobs’s second and probably most important book, she shows in several ways how “efficiency fails to make a city prosper.” In her chapter “The Valuable Inefficiencies and Impracticalities of Cities,” Jacobs describes how Manchester, England, stagnated due to its “efficient specialization,” becoming an “obsolescent city” and “the very symbol of a city in long and unremitting decline.” The economy of Birmingham, on the other hand, “did not become obsolete, like Manchester’s. Its fragmented and inefficient little industries kept adding new work, and splitting off new organizations, some of which became very large but were still out-weighed in total employment and production by the many small ones.” The key measurement of the economic rate of a city, Jacobs points out, is “the addition of new work to . . . older work” in which Birmingham excelled.
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Her analysis of efficient and stagnant Manchester contrasted to fragmented and diverse Birmingham remains instructive.

The efficiency that has great value, Jacobs also shows, is the efficiency of density, what she calls the “concentrated market.” That concentrated market “is, in itself, an efficient thing. And its chief characteristic, that it is concentrated, makes it possible for small, fragmentary, exceedingly special, weak or much-duplicated enterprises to operate with considerable inefficiency and yet often get away with it. But apart from this, as far as I can see, the conditions in a city that promote efficiency of operation are in conflict with the conditions that promote development work.”
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Economist Sandy Ikeda provides a similar take on this idea:

The modern demand to rationalize the city and to make it ‘more efficient’ is misplaced. A living city cannot be efficient. Efficiency, in the economic sense, presupposes an overarching plan against which measured outcomes can be evaluated. A living city, however, follows no such plan. It is itself the unplanned, collective result of the countless individual plans executed continuously in it day after day.

Neither can it be inefficient, because that too presupposes a system-wide plan. Both efficiency and inefficiency presume that we know how things ought to be, what success and failure look like, and that’s impossible in the urban dynamic. Instead, . . . a living city is a ‘dynamically stable’ process . . . [that] generate[s] order through time. It embodies trial and error, surpluses and shortages, apparently useless duplication, conflict and disappointment, trust and opportunism, and discovery and radical change. These are in the nature of the living city.
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The valuable economic density that Jacobs refers to, fostering new business formations and breakaways from existing businesses, is what is being eroded as the city’s industrial neighborhoods are purposefully transformed into high-end residential communities, erroneously labeled “mixed use” because some retail and commercial space is included. This continues the never-ending search for order. Overdesigned order represented by large-scale redevelopment projects inhibits new patterns of activity. It stifles the fundamental DNA of the New York economy, which is more complex, unpredictable, fluid, and diversified. The result is a monoculture revolving around financial and related services—in other words, Moses’s sterile vision of efficiency.

Thus, in the name of rational planning for the efficient service and financial economy, many of New York’s industrial jobs were deliberately and needlessly lost, an occurrence still happening in twenty-first-century New York. City officials boast of a much diminished rate of displacement from renewal-type projects since the days of Robert Moses. Maybe the loss is less, but, of course, what’s left is already diminished considerably. And maybe it is more scattered around the city. But it is like being a little bit pregnant: first month or ninth, you are still pregnant. Displacement is displacement at any rate. The loss continues to be unnecessary and avoidable, given available alternatives. The pursuit of oversized replacement projects continues to cause needless disruption and economic and social loss.