Foreign visitors tend to compare the poor in Rio with other people they’ve seen, perhaps poor residents of America’s ghettoes, who are almost invariably better off, but that’s a mistake. The favela’s residents don’t usually have the option of living in Los Angeles, and they should be compared with the people, largely unseen by foreign eyes, living in the poor rural areas of Brazil. Rio has plenty of poverty, but it’s nothing like Brazil’s rural northeast. One recent study reported that while 90 percent of Rio residents earned more than $85 a month in 1996, only 30 percent of people in the rural northeast were above that poverty line.
Even when compared with the most dire urban poverty, conditions in rural areas are usually worse. Lagos, Nigeria, is often depicted as a place of profound deprivation, but in fact the extreme-poverty rate in Lagos, when corrected for higher prices in the city, is less than half the extreme-poverty rate in rural Nigeria. About three quarters of Lagos residents have access to safe drinking water, a proportion that is horribly low but that is far higher than anyplace else in Nigeria, where the norm is less than 30 percent. Kolkata is also considered a place of great deprivation, but the poverty rate in that city is 11 percent, while the poverty rate in rural West Bengal is 24 percent. In recent years, more than 10 percent of West Bengal’s rural residents have faced food shortages; the comparable figure for urban residents is less than 1 percent.
Cities and urbanization are not only associated with greater material prosperity. In poorer countries, people in cities also say that they are happier. Throughout a sample of twenty-five poorer countries, where per capita GDP levels are below $10,000, where I had access to self-reported happiness surveys for urban and nonurban populations, I found that the share of urban people saying that they were very happy was higher in eighteen countries and lower in seven. The share of people saying that they were not at all happy was higher in the nonurban areas in sixteen countries and lower in nine.
And unlike the hinterlands, urban slums often serve as springboards to middle-class prosperity. The Lower East Side of Manhattan, for example, despite high levels of poverty, produced a string of dazzling successes. The Jews who settled in the Lower East Side came from a culture with a long devotion to learning and lived in a country that was rapidly expanding its commitment to schooling. The situation for Brazil’s slaves and their descendants was less promising. They went for centuries without schools, and Brazil has been bad at investing in human capital. Still, the favelas have produced some remarkable success stories.
Leila Velez, a janitor’s daughter who grew up in a Rio favela, was working at a McDonald’s when she was fourteen. She and her sister-in-law, a hairdresser, were determined to find a way to make their hair less frizzy. They understood the size of the market for such a product; they were surrounded by people who wanted frizzless hair. The two budding entrepreneurs lacked any scientific background, but Leila’s husband let his hair be used to test many strange concoctions cooked up by his sister and wife. He repeatedly went bald, but eventually trial and error produced an effective hair straightener.
Velez patented the concoction and sold her Volkswagen Beetle for $3,000 to get the capital to open a salon. They knew their customers, and the product sold well. From there, she expanded the number of salons, generally hiring former customers as employees. Her firm currently sells $30 million a year of beauty products. She is in some ways a modern version of the early twentieth-century entrepreneur Madam C. J. Walker, whose “wonderful hair grower” brought her out of poverty and made her the most successful African-American businessperson and the world’s most successful female entrepreneur of her time.
The occasional success story doesn’t mean that urban poverty isn’t awful. It is. Few readers of this book would want to spend a week, let alone a lifetime, in a favela. Yet urban poverty, despite its terrors, can offer a path toward prosperity both for the poor and for the nation as a whole. Brazil, China, and India are likely to become far wealthier over the next fifty years, and that wealth will be created in cities that are connected to the rest of the world, not in isolated rural areas.
It is natural to see the very real problems of poorer megacities and think that the people should go back to their rural villages, but cities, not farms, will save the developing world. Many poor nations suffer from poor soil quality—that’s one reason why they’re poor—so it’s unlikely that they’ll ever be leaders in global agriculture. Improvements in agricultural productivity typically involve new technology that reduces the number of people working on farms. That fact alone makes it unlikely that better farming will deliver widespread prosperity. And developing rural areas of poor countries is inherently difficult because it’s so expensive to provide infrastructure across large distances.
Poor rural villages can seem like a window into the distant past, where little has changed for millennia. Cities are dynamic whirlwinds, constantly changing, bringing fortunes to some and suffering to others. A city might bring a bullet, but it also offers a chance of a richer, healthier, brighter life that can come from connecting with the planet. Life in a rural village might be safer than life in a favela, but it is the safety of unending poverty for generations. The status quo in the world’s poorest places is terrible, which is why the urban roller coaster has so much to offer, especially because cities can transmit the knowledge countries need to take part in the global economy.
The vast flow of migrants to cities certainly stresses urban infrastructure; that’s one of the familiar arguments against allowing the growth of megacities. But while an influx of new migrants worsens the quality of roads and water for a city’s longtime residents, the new arrivals go from having virtually no infrastructure to enjoying all the advantages that come from access to decent transport and utilities. It is wrong to keep the quality of urban infrastructure high by preventing people from enjoying that infrastructure. It’s more ethical—and more economically beneficial for the country as a whole—to invest more in urban infrastructure so more people can benefit from it.
Traditionally, governments have done more—if not always enough—to address urban poverty than rural poverty. This pattern has held true in Brazil for more than a century. After all, Rio was the nation’s capital until 1960, and the favelas are still close to the mansions of the country’s elite. Starting in the early 1900s, Brazil began a public health campaign to make Rio’s favelas healthier.
The government began with a vaccination campaign and eventually brought schools and some health care to the favelas. The “City of God” that inspired a movie about Rio’s poverty was a governmental attempt to improve housing quality for favela dwellers. Policing has been a trickier problem, but at least crime in the favelas is viewed as a national problem to be addressed by the national government. As a result, some resources get targeted at improving the lives of the urban poor, while the rural poor, who are less visible, get less.
The ironic result of attempts to improve life for Rio’s poor is that still more poor people come to the favelas, which is the urban poverty paradox in action. If a government provides health care and education in the city but not in the countryside, then those services will attract more poor to urban areas. Any attempt to fix the poverty level in a single city may well backfire and increase the level of poverty in a city by attracting more poor people.
Moving On Up
Americans who are shocked by the favelas’ squalor have forgotten their own urban past. Such extremes of wealth and poverty were standard in nineteenth-century American cities. Irish immigrants who fled starvation often lived in shantytowns like New York’s Hell’s Kitchen, the area of far western Manhattan from Thirty-fourth to Fifty-ninth streets, which has since become a trendy, sought-after neighborhood. The Upper East Side of Manhattan, stretching from Fifty-ninth Street to Ninety-sixth Street between Fifth Avenue and the East River, now includes some pricey real estate, but was also full of Irish shanties in the nineteenth century. The Upper East Side Armory occupies its incongruous location, surrounded by
tony apartment buildings on Park Avenue, because its bourgeois soldiers were originally meant to protect urban elites from unruly immigrants.
Even more than New York, Boston is considered the mother city of Irish America. New York actually received more Irish immigrants than Boston did during the 1840s, but New York’s Irish were later swamped by vast numbers of immigrants from Eastern Europe and elsewhere. Boston received a large influx of Irish during the potato famine, but much smaller numbers of the different ethnicities that dominated later immigrations. Boston’s Irish character is essentially a gift of its strength during the era of sail. In the 1840s, during the famine, it was still faster, if not cheaper, to get to Boston than New York. If you were a poor Irish family, short on food, it often made sense to just get to Boston and stay there. Thirty years later, when steam had replaced sail, relatively fewer ships were coming to Boston, and late-nineteenth-century immigration came overwhelmingly through New York. The absence of those waves in Boston meant the city would be defined for decades by the conflict between Yankees and Irish.
Boston’s fame as an Irish-American city is particularly associated with a single family, the Kennedys, whose story shows how urban poverty can beget opportunity. Patrick Kennedy was born in 1823 in Ireland’s County Wexford. He got little schooling. Poor rural areas have generally offered little education, and when he was born, rules preventing Catholic education in Ireland were still in force. Young Kennedy worked on his older brother’s farm, planting potatoes and harvesting grain. The one nonagricultural skill he acquired came from a more urban friend, Patrick Barron, who worked in a brewery and taught him how to make barrels.
The potato famine hit the Kennedys’ meager farm hard. Facing the prospect of starvation, Patrick Kennedy followed Barron to Boston, where Barron got him a job as a cooper in East Boston. Boston offered economic opportunity, because it had a market where Kennedy could sell his labor to an employer who had capital. Boston provided a ready market for barrels because of its role as a center for transportation, and of course brewing.
Just as in Rio’s favelas, in East Boston the density that enabled poor people to sell their labor enabled bacteria to flow, and Patrick Kennedy died of cholera. Kennedy’s son, however, also named Patrick, thrived. He started off working on the docks and saved enough to buy a saloon. He soon owned a second and then a third drinking establishment, catering increasingly to wealthier Bostonians. He vertically integrated his business—by importing whiskey.
Patrick Kennedy followed the example of former Massachusetts governor Sam Adams, combining alcohol and politics. He was first elected to the Massachusetts legislature in 1884 and served several terms as a state representative and then state senator. In 1888, this son of a poor immigrant rose high enough to give a speech at the Democratic national convention. His growing wealth enabled him to send his bright son, Joseph, to Harvard. Patrick Kennedy’s political connections made it natural that his son would marry the beautiful daughter of Boston’s mayor John F. “Honey Fitz” Fitzgerald. Joe Kennedy started out working for the government as a bank examiner, then took over a bank in which his father had substantial holdings. He made a fortune on Wall Street in the 1920s, by more and less savory means. Just as important, he got out in time and found other lucrative pursuits, like investing in real estate and importing British liquor. His sons, of course, became America’s great political dynasty.
Cities have an enduring attraction for immigrants like Patrick Kennedy; as of 2008, 36 percent of New Yorkers are foreign-born, and 48 percent speak a language other than English at home. The comparable numbers for the United States as a whole are 13 percent and 20 percent. Just as cities are good for immigrants, immigrants are good for cities. Boston owes much to the Kennedys, as New York does to immigrants ranging from Andrew Carnegie to Al Jolson to Zubin Mehta. Indeed, for all but 12 of the 118 years between 1891 and 2009, the New York Philharmonic has depended on foreign-born music directors. Needless to say, more populist elements of New York culture, like bagels and pizza and Kung Pao chicken, are also the gifts of immigrants.
America and its cities have benefited enormously from the influx of immigrant talent. German Americans, like Dwight Eisenhower and Chester Nimitz, led the war against Germany and Japan. Scots, like Andrew Carnegie and Andrew Mellon, helped build our industry. Irish Americans, like the Kennedys, Al Smith, and Chicago’s Daley dynasty have been important political leaders. The son of a Kenyan sits in the Oval Office. America is not an Anglo-Saxon nation but an agglomeration of people from around the globe who’ve made their contributions primarily in our big urban areas.
And America is hardly the only country whose immigrants have made fortunes. Robert Cain and his family left poverty in Ireland for Liverpool when he was a young child, and as a young man he went to sea working as a cooper. In the 1840s, he settled in Liverpool and used his savings to open a modest brewery. He made millions, and his son ended up in the House of Lords. Carlos Slim, who may be the world’s richest man, was the son of a Lebanese immigrant to Mexico City who started out running a dry goods store. As these and many less famous examples attest, cities everywhere allow people to move from destitution to phenomenal wealth—and to any number of promising points in between.
Urban labor markets have long made it easier to work without owning a farm or animals or equipment. The Kennedys were on both sides of this bargain. When penniless Patrick Kennedy arrived, he could sell his labor to people with capital. His son did the same thing when he was young, but as he aged and saved, he could switch to the hiring side of the model. Capitalists and workers are often seen as enemies, as they are, for example, during a strike. But more generally, capital increases the returns to labor, and it is urban capital that made cities such magnets for the poor.
Cities don’t just connect capital-less workers with capital-rich employers; they offer a huge variety of job opportunities that allow poor people (indeed, everybody) to find talents they might otherwise never know they had. The great University of Chicago economist George Stigler once wrote that “in a regime of ignorance, Enrico Fermi would have been a gardener, von Neumann a checkout clerk in a drugstore.” Stigler’s vision of two of the finest minds of the twentieth century working dead-end jobs is frightening. Luckily, both men grew up in large cities and came from relatively privileged backgrounds, and their mathematical and scientific talents were spotted at a young age. Similarly, Boston brought forth Patrick Kennedy’s talents in a way that rural Ireland could not.
Richard Wright’s Urban Exodus
The great swaths of America’s cities that are almost entirely African American and almost entirely poor illustrate what can go wrong when neighborhoods get cut off from the economic heart of their cities. But even those neighborhoods should be viewed in light of the even worse conditions endured in the rural South. The great African-American writer Richard Wright was born in Natchez, Mississippi. He and his mother moved north, first to Memphis and then to Chicago, seeking to escape Jim Crow laws as much as to find economic opportunity. As Wright wrote in his autobiographical Black Boy, “I headed north full of a hazy notion that life could be lived with dignity, that the personalities of others should not be violated, that men should be able to confront other men without fear or shame, and that if men were lucky in their living on earth they might win some redeeming meaning for their having struggled and suffered here beneath the stars.”
Wright’s northern exodus may have freed him from the harsh racial laws of Mississippi, but it didn’t immediately bring him “redeeming meaning.” In Chicago, he started off working as a porter, then an errand boy and a dishwasher. Like Coleman Young and thousands of other talented African Americans during that period, he sought a better life by working for the post office, but malnutrition had left him 15 pounds below the government’s 125-pound minimum. Finally, in the spring of 1929, he made weight and got a full-time job working the night shift at Chicago’s central post office, then the world’s largest.
The job was a good o
ne that allowed him to do some writing. Even more important, it connected him with a left-wing literary salon. He was brought into a group of ten in the South Side of Chicago that met to argue current events. As Wright recounts in a brilliant and funny memoir, “I Tried to Be a Communist,” he “was amazed to discover that many of them had joined the Communist Party.” Soon enough, “Sol” asked Wright to come to a meeting of the Moscow-affiliated John Reed Club. Wright responded with a certain amount of cynicism: “I don’t want to be organized.” Sol dangled the bait Wright craved most in the world: “They can help you to write.”
Wright was laid off when the Great Depression drastically reduced the business of Chicago’s mail-order houses, and he began a peripatetic stream of jobs, selling life insurance on commission, cleaning streets, digging ditches, and eventually working for the Michael Reese Hospital. He apparently got that job because he had caught the eye of the wife of the great urban sociologist Louis Wirth. She also got him work writing the history of Illinois for the New Deal Works Progress Administration. He moved to New York in 1937, working on the WPA publication New York Panorama, which remains a wonderful description of big-city living.
In 1938, the year after he came to New York, he won a $500 prize for a short story. His first book, a collection of stories called Uncle Tom’s Children, was published by Harper and Company. He won a Guggenheim Fellowship to write Native Son, and with that, he became a literary lion. In nine years, Chicago and then New York had brought him from struggling porter to successful writer during the depths of the Great Depression. Talent and the urban ability to match talent to task won out.
Richard Wright’s move north made him part of the vast exodus of African Americans who fled the Jim Crow South. The economic advantages that came from moving north were immense. A Southern sharecropper in the 1920s would be lucky to earn $445 a year. A black worker in one of Henry Ford’s plants would earn $5 a day, more than three times that income. Yet like Richard Wright, the African Americans who came north found more than just higher incomes. They found freedom.
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