Thanks for this piece Pete. To your point on the comparison between how Black communities are distributed throughout the Chicago and New York metros, I think you are correct. Today there are sizable concentrations in all five boroughs and all directions from the city proper except south.
the normalization of trade relations with China in 2000. A friend of who worked for a Fortune 500 company headquartered in Milwaukee and lived in China for 5 years helping to establish and expand their manufacturing footprint in China, noted that there were numerous investment opportunities they could have made during this period in the US, but which they did not make because their available capital for these types of investments was limited and the investments in China were the better bets at the time.
My points would be that it’s difficult to find solutions for problems if you don’t understand the root causes. Segregation in the industrial centers of the Midwest has many causes but was definitely exacerbated by the loss of access to the manufacturing jobs that used to exist in or near these neighborhoods. These job losses weren’t due to some policy failure at the community level but to the prevalence of Friedman’s theory, followed by the policies championed at the national level by Reagan and Clinton.
David, very interesting analysis and insight here. I've heard some variations of the argument you make that in the 1970s corporate attention and responsibility shifted to performing for its shareholders. Prior to the '70s there was a greater sense among locally founded corporations that its leaders had a trustee-type relationship with the community it came from, and the community benefitted from that relationship. Corporations did take their eyes off of the communities they came from as the potential of globalization increased. That greatly weakened the Midwest manufacturing economy and calcified segregation patterns.
But I have a couple of counterpoints to that. First, corporate community stewardship of the sort you mention took place only briefly in American history, perhaps the 50-60 years that led to the Friedman-led shift to focusing on shareholder wealth. That's also the rise and peak of unions in the US, where workers not only forced corporations to raise wages and improve benefits, they forced corporations to engage with their communities. Unfortunately, management and labor both lost their way. Management by focusing on lowering costs while exploiting global profit potential, and labor by focusing on higher and higher wages and benefits in an increasingly competitive global economy. That created the Rust Belt we know today.
But that did not create the legacy of segregation in the Midwest. That started even earlier, at the turn of the 20th century. In fact, I contend that manufacturing in Northern cities and the need for labor led to a new kind of segregation that had previously not existed in America (https://petesaunders.substack.com/p/thoughts-on-boston-and-northern?utm_source=publication-search). Northern cities established a new way to get the labor needed to fuel economic growth but without living next to people they didn't want to live next to. Southern cities had a long-held social hierarchy that separated whites and Blacks; Northern cities established a spatial hierarchy.
Today the spatial hierarchy has become a social one, as migration and settlement patterns stretch beyond city boundaries and into suburbia. Over time spatial segregation has been found to be effective in deepening differences in wealth, income, education and more. And it's most prominent in Midwestern cities that gained hundreds of thousands of Black residents during the Great Migration.
The social-spatial hierarchy is something I admit I need to further study to improve my understanding of the demographic and economic evolution of Milwaukee, and the decisions that individual corporate leaders made in their capital investment decisions during and following the Great Migration.
I’ll focus my comments on the economic function of cities which I agree is a better framework for an urbanist trying to understand and improve the function of cities. A challenge is that there is fundamental disagreement on the appropriate function of companies in cities and our society with Milton Friedman having launched in 1970 and later successfully championing the idea that companies only responsibility should be to generate wealth for their shareholders. I think that the negative impact of this belief on the great industrial centers of the Midwest has been vastly underestimated, as these companies shuttered their factories first for nonunion new plants in the southern states, and later plants in Mexico, China, and elsewhere.
The negatives impact of Friedman’s ideas were further compounded by Reagan’s strong dollar policy in the 1980s, which won the war on inflation and helped bankrupt the Soviet Union, but cost 50,000 manufacturing jobs in Milwaukee alone. The strong dollar policy was also the key to vast generation of wealth in NYC (and extraction of wealth from other areas of the US) with the financialization of the economy. The next blow (and round of massive factory closings in the industrial Heartland) was dealt by President Clinton and
Thanks for this piece Pete. To your point on the comparison between how Black communities are distributed throughout the Chicago and New York metros, I think you are correct. Today there are sizable concentrations in all five boroughs and all directions from the city proper except south.
the normalization of trade relations with China in 2000. A friend of who worked for a Fortune 500 company headquartered in Milwaukee and lived in China for 5 years helping to establish and expand their manufacturing footprint in China, noted that there were numerous investment opportunities they could have made during this period in the US, but which they did not make because their available capital for these types of investments was limited and the investments in China were the better bets at the time.
My points would be that it’s difficult to find solutions for problems if you don’t understand the root causes. Segregation in the industrial centers of the Midwest has many causes but was definitely exacerbated by the loss of access to the manufacturing jobs that used to exist in or near these neighborhoods. These job losses weren’t due to some policy failure at the community level but to the prevalence of Friedman’s theory, followed by the policies championed at the national level by Reagan and Clinton.
David, very interesting analysis and insight here. I've heard some variations of the argument you make that in the 1970s corporate attention and responsibility shifted to performing for its shareholders. Prior to the '70s there was a greater sense among locally founded corporations that its leaders had a trustee-type relationship with the community it came from, and the community benefitted from that relationship. Corporations did take their eyes off of the communities they came from as the potential of globalization increased. That greatly weakened the Midwest manufacturing economy and calcified segregation patterns.
But I have a couple of counterpoints to that. First, corporate community stewardship of the sort you mention took place only briefly in American history, perhaps the 50-60 years that led to the Friedman-led shift to focusing on shareholder wealth. That's also the rise and peak of unions in the US, where workers not only forced corporations to raise wages and improve benefits, they forced corporations to engage with their communities. Unfortunately, management and labor both lost their way. Management by focusing on lowering costs while exploiting global profit potential, and labor by focusing on higher and higher wages and benefits in an increasingly competitive global economy. That created the Rust Belt we know today.
But that did not create the legacy of segregation in the Midwest. That started even earlier, at the turn of the 20th century. In fact, I contend that manufacturing in Northern cities and the need for labor led to a new kind of segregation that had previously not existed in America (https://petesaunders.substack.com/p/thoughts-on-boston-and-northern?utm_source=publication-search). Northern cities established a new way to get the labor needed to fuel economic growth but without living next to people they didn't want to live next to. Southern cities had a long-held social hierarchy that separated whites and Blacks; Northern cities established a spatial hierarchy.
Today the spatial hierarchy has become a social one, as migration and settlement patterns stretch beyond city boundaries and into suburbia. Over time spatial segregation has been found to be effective in deepening differences in wealth, income, education and more. And it's most prominent in Midwestern cities that gained hundreds of thousands of Black residents during the Great Migration.
The social-spatial hierarchy is something I admit I need to further study to improve my understanding of the demographic and economic evolution of Milwaukee, and the decisions that individual corporate leaders made in their capital investment decisions during and following the Great Migration.
I’ll focus my comments on the economic function of cities which I agree is a better framework for an urbanist trying to understand and improve the function of cities. A challenge is that there is fundamental disagreement on the appropriate function of companies in cities and our society with Milton Friedman having launched in 1970 and later successfully championing the idea that companies only responsibility should be to generate wealth for their shareholders. I think that the negative impact of this belief on the great industrial centers of the Midwest has been vastly underestimated, as these companies shuttered their factories first for nonunion new plants in the southern states, and later plants in Mexico, China, and elsewhere.
The negatives impact of Friedman’s ideas were further compounded by Reagan’s strong dollar policy in the 1980s, which won the war on inflation and helped bankrupt the Soviet Union, but cost 50,000 manufacturing jobs in Milwaukee alone. The strong dollar policy was also the key to vast generation of wealth in NYC (and extraction of wealth from other areas of the US) with the financialization of the economy. The next blow (and round of massive factory closings in the industrial Heartland) was dealt by President Clinton and