New York City actually had a larger share of the nation’s automobile producers than Detroit in 1900, but there was an explosion in automotive entrepreneurship in Detroit in the early 1900s. Detroit seemed to have had a budding automotive genius on every street corner. Ford, Ransom Olds, the Dodge brothers, David Dunbar Buick, and the Fisher brothers all worked in the Motor City. Some of these men made cars, but Detroit also had plenty of independent suppliers, like the Fisher Brothers, who could cater to start-ups. Ford was able to open a new company with backing from the Dodge brothers, who were making engine and chassis components. They supplied Ford with both financing and parts.
Gradually, Ford’s cars became cheaper and faster. In 1906, Ford produced his Model N, a 1,050-pound car that he sold for the bargain price of $500, and he sold so many of them (over 8,500) that he leaped into the front ranks of the automotive industry. In 1908, Ford introduced his Model T at the bargain price of $825 (about $19,000 in 2010 currency). Five years later, Ford started producing the Model T on a moving assembly line, which increased his factory’s speed and efficiency. Of course, the process of mass industrialization—dividing complicated manufacturing processes into small, straightforward tasks—long predated Ford. In 1776, Adam Smith was extolling the efficiencies created by the division of labor in a pin factory. Ford simply took this process one step further, using machines to move parts along and making sure that his workers’ actions meshed perfectly.
The last chapter discussed Jevons’s complementarity corollary, according to which more efficient information technology makes information learned face-to-face more valuable, but not all new technologies increase the returns from knowledge. Henry Ford’s assembly lines are an example of that strange creature, the knowledge-destroying idea. While information technology seems to increase the returns from being smart, machines that reduce the need for human ingenuity work in the opposite direction. By turning a human being into a cog in a vast industrial enterprise, Ford made it possible to be highly productive without having to know all that much. But if people need to know less, they also have less need for cities that spread knowledge. When a city creates a powerful enough knowledge-destroying-idea, it sets itself up for self-destruction.
The irony and ultimately the tragedy of Detroit is that its small, dynamic firms and independent suppliers gave rise to gigantic, wholly integrated car companies, which then became synonymous with stagnation. Ford figured out that massive scale could make his cars cheap, but supersize, self-contained factories were antithetical to the urban virtues of competition and connection. Ford figured out how to make assembly lines that could use the talents of poorly educated Americans, but making Detroit less skilled hurt it economically in the long run.
Successful car companies bought up their suppliers, like Fisher Body, and their competitors. By the 1930s, only the most foolhardy and well-financed businessman would have dared take on General Motors and Ford. The intellectually fertile world of independent urban entrepreneurs had been replaced by a few big companies that had everything to lose and little to gain from radical experimentation.
Henry Ford and Industrial Detroit
As the car companies got out of innovation and into mass production, they no longer saw any advantages to locating in the city. Dense urban centers are ideal places to come up with new ideas, but not ideal places to make millions of Model T’s. Ford’s desire for massive scale required a factory too large for any city to accommodate. In 1917, he began building his River Rouge plant in suburban Dearborn, southwest of Detroit. At River Rouge, he erected a ninety-three-building complex with 7 million square feet of workspace. River Rouge had its own docks, rail lines, and power plant. Raw materials could be turned into cars within a single facility.
Ford’s River Rouge plant began the process of suburbanizing manufacturing that would continue throughout the twentieth century. While the car may have been born in the city, it ended up being a very rebellious child. Automobiles enabled Americans to live in distant suburbs away from streetcars or sidewalks. Trucks enabled factories to locate far away from rail lines. The car and the truck both enabled space-hungry people and firms to leave dense urban areas.
By the 1950s, both New York and Detroit started shrinking as the advantages they once got from their ports and rail yards became far less important because other areas had also acquired easy access to world markets. Between 1890 and today, the real cost of moving a ton a mile by rail dropped from twenty cents to two, so it didn’t matter nearly as much whether or not your factory was close to a transport hub. Before World War II, companies put up with high labor costs in Northern cities because the transport network made it so much easier to buy raw materials and ship final products. As transport costs plummeted, it became cost-effective to locate in cheaper places: suburban factories, like River Rouge, Southern right-to-work states, and China. At the same time, the rise of the car made older cities built around trains and elevators seem obsolete.
America’s union movement had grown up in those older cities. Samuel Gompers, the founder of the American Federation of Labor, was a cigar maker from New York City. Tens of thousands of New York’s garment workers organized themselves into unions and forced their employers to raise wages and improve working conditions through massive strikes like the Great Revolt of 1910.
Cities also spread stories of corporate faults that helped build public support for labor in the early twentieth century. On a May afternoon in 1937, labor organizers who had been trying to unionize Ford’s workers gathered on a pedestrian overpass at River Rouge. They were handing out leaflets denouncing Ford and posing for a photograph for the Detroit News. During the photo op, Ford’s security men attacked the peaceful organizers. The Detroit News captured images of these men smashing organizers’ faces against concrete and beating women up. It was a public relations disaster for Ford, and it made heroes out of the union men. It would take another four years, but eventually Ford caved and signed a contract with the United Auto Workers that would usher in a half century of union power in Northern industrial cities.
Around the same time, the federal government also helped strengthen the unions’ hand. The National Labor Relations Act, passed in 1935, made it more difficult to fire striking workers and led to the formation of closed shops, where unions and firms agreed that all workers in a given facility must join the union. In these closed shops, it was impossible to hire nonunion strikebreakers, which gave workers greater power to press their demands on manufacturers. A company that has invested millions or billions in fixed infrastructure can’t easily move if its workers press for higher wages, more benefits, shorter hours, or other concessions. If striking workers take control of that valuable infrastructure, as they do during a sit-down strike, they can cause such financial pain that management will often give in. In the short term, union power meant high wages for New York’s garment workers and Detroit’s auto workers, but those wages ultimately prompted manufacturers to abandon these cities.
The industrialization of the Sunbelt was helped—and Northern cities like Detroit and New York were hurt—by the Taft-Hartley Act of 1947, which allowed states to pass right-to-work laws that forbid the formation of closed shops. In right-to-work states, which were often in the South, unions had much less bargaining power because firms could always turn to nonunion workers. Unsurprisingly, manufacturers have steadily drifted to right-to-work states, away from America’s older industrial regions. One classic paper compared the effect of right-to-work laws on factory jobs in neighboring counties, on either side of a right-to-work border. It found that manufacturing grew 23.1 percent faster between 1947 and 1992 on the anti-union side of the divide.
High union wages didn’t seem like such a drag on Detroit during the first decades after World War II. When the UAW whipsawed the Big Three automakers into raising wages, higher costs were mostly passed along to consumers. The automakers were so profitable that they could withstand some of the most expensive labor costs on the planet. Of course, the c
ar companies weren’t above trying to open new plants in states with lower labor costs, which is why Detroit was losing people even before the car industry began to decline.
Industrial decline ultimately hit every older city. Boston’s maritime industries, which had grown great on the clipper ships and China trade in the first half of the nineteenth century, became obsolete with the rise of steam-powered ships. New York’s garment industry imploded in the late 1960s and 1970s, and the city lost more than three hundred thousand manufacturing jobs between 1967 and 1977. The exodus of urban manufacturing was not inherently a bad thing—making goods in cheap locales made those goods less expensive for ordinary people—but it posed a mortal challenge for the world’s industrial cities.
The same forces that decimated America’s manufacturing cities created similar Rust Belts in Europe. In 1937, three years before John Lennon was born, Liverpool had 867,000 residents. Liverpool had been, and is, a great port, linking England with the rest of the world. The raw cotton used in Manchester’s giant textile mills was shipped into Liverpool, and finished cloth left England through the same port. Just as in New York, and for the same reasons, sugar refining was once a booming business in Liverpool. But since 1937, like Detroit, Liverpool has lost about half of its population. Labor-saving technologies like containerization put thousands of stevedores out of work. Lower transport costs enabled industry to move to less expensive areas. Labor unions in Britain were more powerful than even the UAW, and the cost of running a factory there is a lot higher than in China. London reinvented itself, with the help of idea-intensive sectors like finance, but goods-producing areas, like Liverpool and England’s old industrial north, remain troubled.
After centuries spent in rural somnolence, Spain was among the last European nations to industrialize, but even there, the age of the industrial city is over. In 1959, Franco belatedly empowered a new technocratic economic team that opened up the Spanish economy. From 1960 to 1975, Spain rapidly urbanized, and its GDP grew faster than that of any country in the world except Japan. Low wages and proximity to European markets made its ports, like Bilbao, natural places for heavy industries like steel. But just like Detroit, Bilbao suffered in the 1970s as oil prices spiked, the world went into recession, and other, lower-cost countries began competing with its industries. Bilbao’s population fell by 14 percent between 1981 and 1995.
Why Riot?
Cities suffer from economic downturns directly, because of the loss of jobs and decline in wages, but negative shocks also have indirect consequences, like social upheaval and falling tax revenues, that can be just as harmful. The collapse of the industrial city was the backdrop for the crime waves and riots of the 1960s, and for an increasingly impotent public sector that was just trying to stay solvent. In the bright, optimistic days of the early 1960s, many American cities turned from old-style machine politicians to young, charismatic leaders. In Detroit and New York, an alliance of liberals and African Americans elected Jerome Cavanagh and John Lindsay respectively. While his predecessors had been seen as abettors of police brutality, Cavanagh promised fairer law enforcement. He launched affirmative-action programs and marched with Martin Luther King Jr. John Lindsay also fought police brutality and supported affirmative action. Lindsay’s finest hour may have been in the after-math of King’s shooting, when he walked the streets of Harlem and cooled tempers with warmth and compassion.
But ultimately neither mayor could control the forces that were convulsing his city. Neither can be blamed for failing to halt the manufacturing exodus from his city—the economic headwinds were just too strong. Neither can be blamed for the social unrest that erupted in America’s cities during the 1960s, in the wake of economic distress, expanding but unmet expectations, and a breakdown in traditional means of social control. But both mayors made mistakes that contributed to their cities’ distress.
Lindsay’s besetting sin was his inability to rein in costs, especially when faced with tough municipal unions and transit strikes. Lindsay, initially a Republican, hoped to limit union pay raises, but his background as the congressman from Manhattan’s silk-stocking district hardly prepared him to win a brutal street fight with the transit workers. He ended up preferring pay raises to strikes, and the increasing costs of city government were then hidden with increasingly creative bookkeeping, which led straight to New York’s near bankruptcy in 1975. Cavanagh’s fatal flaw was his penchant for razing slums and building tall structures with the help of federal urban-renewal dollars. Detroit’s housing market had peaked in the 1950s and was already depressed when Cavanagh took office. The city was shedding people and had plenty of houses. Why subsidize more building? Successful cities must build in order to accommodate the rising demand for space, but that doesn’t mean that building creates success.
Urban renewal, in both Detroit and New York, may have replaced unattractive slums with shiny new buildings, but it did little to address urban decline. Those shiny new buildings were really Potemkin villages spread throughout America, built to provide politicians with the appearance of urban success. But Detroit had plenty of buildings; it didn’t need more. What Detroit needed was human capital: a new generation of entrepreneurs like Ford and Durant and the Dodge brothers who could create some great new industry, as Shockley and the Fairchildren were doing in Silicon Valley. Investing in buildings instead of people in places where prices were already low may have been the biggest mistake of urban policy over the past sixty years.
Both mayors also failed at fighting crime. New York’s murder rate quadrupled between 1960 and 1975, and Detroit experienced a similarly disturbing trend. But racial discrimination and police brutality in both cities led both mayors to emphasize accountability more than enforcement. African Americans were no longer willing to take abuse from white thugs, whether in or out of police uniform. In Detroit, a 93 percent white police force didn’t seem all that integrated in a city that was close to 50 percent black. While later mayors, like Rudy Giuliani, would reduce crime with rigorous policing, in the 1960s, it wasn’t obvious that aggressive enforcement could keep the peace.
Less than a mile down Rosa Parks Boulevard from the Elmhurst Street corner, a dilapidated park occupies the corner at Clairmount Street. This is the site of an event from which Detroit has still not recovered almost half a century later. In the wee hours of Sunday morning, July 23, 1967, a club on that corner was hosting a party for some returning veterans, when Detroit’s police department staged a raid. The vice squad, which had a robust reputation for brutality toward the city’s blacks, took a while to cart off the eighty-five partygoers. A jeering crowd of two hundred gathered and began throwing bottles at the cops, who fled. The mob grew and grew, and soon Detroit was ablaze.
Riots are a classic tipping-point phenomenon. Being one of three rioters is dangerous business—the cops are likely to get you—but the chances of arrest are far lower if you’re one of three thousand rioters. In Detroit, over a thousand police officers failed to control the thousands of rioters who burned and looted. Cavanagh completely lost control of his city. The riot didn’t end until after Tuesday, when thousands of paratroopers from the 82nd and 101st airborne divisions showed up with armed vehicles. By the time this surge quelled the violence, there had been forty-three deaths, 1,400 burned buildings, 1,700 looted stores, and seven thousand arrests.
It’s easy to see why Detroit’s African-American citizens were moved to riot. They’d been brutalized by a police force full of whites recruited from the South. They’d been systematically excluded from white jobs in the auto industry for decades, and the jobs they did get typically either paid lower wages or offered worse working conditions. Statistics show that Detroit was hardly the only city that had fomented this sort of black anger, and riots were most common in those cities with larger numbers of young, unemployed African Americans.
Cities with more cops actually had smaller riots. Unfortunately, draconian enforcement seems to be the only effective way to stop a riot once it starts.
Three of the great experts on civil unrest summarized their research on the link between dictatorship and rioting with the pithy phrase “repression works.” Brutal regimes that severely punish rioting have fewer riots, which may explain why democracies see more rioting than dictatorships, and the more progressive cities of the North had far more riots than the Jim Crow South.
Riots are one example of the collective action enabled by cities that may seem to be an unmitigated urban curse, but riots near Steenvoorde began the Dutch Revolt that led to Europe’s first modern republic, and unruly mob action in Boston was a critical part of America’s road to revolution and republic. Thomas Jefferson wrote that “I view great cities as pestilential to the morals, the health and the liberties of man,” but his own liberties owed much to urban agitators like Sam Adams and John Hancock, who succeeded at creating conflict with England precisely because the great port of Boston enabled them to conjure up a mob.
Just like King George III, the leaders of America’s cities in the 1960s had two plausible responses to rioting. One was to beef up law enforcement and make the streets safer by locking people up. The other response was to empathize with the rioters and to try to create a more just society. There’s much to be said for the second approach, which attracted both Lindsay and Cavanagh. In the 1960s and 1970s, many reform-minded leaders strove to bring greater racial and social equality to their cities. Unfortunately, those leaders only showed how hard it is to right great social wrongs at the city level.
The awful history of American racism helps explain why so many African Americans felt like rioting in the 1960s, but that history doesn’t change the fact that those riots did tremendous harm to America’s cities, especially to their African-American residents. After all, the rioters weren’t burning the homes of prosperous white suburbanites. Those riots and rising crime rates helped create the sense that civilization had fled the city. As a result, many of those who could leave Detroit did.
Triumph of the City: How Our Greatest Invention Made Us Richer, Smarter, Greener, Healthier and Happier Page 7