|Author(s):||Dieterich-Ward, Allen |
|Reviewer(s):||Troesken, Werner |
Published by EH.Net (June 2016)
Allen Dieterich-Ward, Beyond Rust: Metropolitan Pittsburgh and the Fate of Industrial America. Philadelphia: University of Pennsylvania Press, 2016. viii + 347 pp. $40 (hardcover), ISBN: 978-0-8122-4767-1.
Reviewed for EH.Net by Werner Troesken, Department of Economics, University of Pittsburgh.
Over the past 150 years, the population of Pittsburgh has followed an inverted U-shaped pattern. Between 1860 and its peak in 1950, the city’s population rose by a factor of 13.7, from 49,221 to 676,806. Since 1950, however, the city has experienced a steady and largely uninterrupted decline, with population falling by nearly 55 percent. The rise and fall of Pittsburgh reflects a more general process of industrialization and de-industrialization that affected the broader Steel Valley region, including western Pennsylvania, southeastern Ohio, and northwestern West Virginia.
In Beyond Rust: Metropolitan Pittsburgh and the Fate of Industrial America, Allen Dieterich-Ward explores how business leaders and political elites shaped the region’s response to both industrialization and de-industrialization. According to Dieterich-Ward, the experience of the Pittsburgh region is illustrative of a broader national story. “At each stage of its development,” he writes (p. 5), “Pittsburgh served as a model for other metropolitan regions — it was first among large industrial cities, first to face economic collapse, and, perhaps, first to emerge from its obsolescence into a vibrant new form.”
From beginning to end, elites drive Dieterich-Ward’s narrative. In chapter 1, he argues that the ascendancy of Pittsburgh as a steel and iron producer stemmed less from specific geographical advantages, such as access to water, than to the business acumen of Pittsburgh business leaders such as Andrew Carnegie and Henry Clay Frick. Quoting from a letter by a Wheeling attorney written in 1899, Dieterich-Ward explains (p. 44-45) that “Pittsburgh concerns had capital, transportation, business facilities and successful management, which could not be equaled [in Wheeling].” Hence, “when Pittsburgh’s real growth began, Wheeling died.” While this excerpt suggests growth was a zero-sum game, in the broader narrative in this chapter Dieterich-Ward argues that Carnegie and Frick linked Pittsburgh’s success as an iron and steel producer to the broader region through the city’s dependence on coal and other natural resources.
To highlight the environmental impact of industrialization, Dieterich-Ward explains (pp. 47-48) that “a ton of steel required a ton and a half of iron ore, a half ton of coke, and a quarter ton of limestone.” Mining these resources, most of which were nearby, helped build up small towns in the hinterland but also left the surrounding landscape blighted once the resources were gone. Burning coal and creating coke was particularly odious. “Even a well-built beehive oven converted only 70 percent of each ton of coal into coke. This meant that the 30 percent of the suspended carbon particles, tars, hydrocarbons, carbon monoxide, methane, and sulfur dioxide escaped from the ovens in the form of smoke and noxious fumes” (pp. 50-51). Railroads also left an indelible mark on the region, through extensive tunneling (the Steel Valley was and is very hilly) and coal smoke emissions. In an era before meaningful environmental and labor regulations, those most affected by such environmental degradation were the workers themselves. Given this, Dieterich-Ward (p. 52) concludes that the “integrated system of coal, steel, and rail that formed the basis of the region’s economic life thus imperiled the lives of its inhabitants even as it generated enormous [financial] wealth.”
Industrialization, however, did not only impact the physical environment; it also shaped social and political relations as business elites used their clout to manipulate the system to their favor. Dieterich-Ward argues, for example, that for much of the nineteenth and early twentieth century business leaders fostered a fragmented and highly decentralized political system that limited the power of voters and politicians to effectively regulate their activities (pp. 62-63). Progressive-Era reforms failed to improve the situation.
By the early twentieth century, industrialization had ravaged the region’s countryside and river, and left cities like Pittsburgh with a serious smoke control problem. Dieterich-Ward’s narrative suggests that while Pittsburgh’s business elites played a central role in generating and creating these environmental problems, they also had a vested interest in controlling such problems in large part because of their extensive real estate holdings in the city. He gives particular attention to the Mellon Family and the creation of the Mellon Institute, which produced some important early studies on smoke in Pittsburgh. Concerns about smoke and other environmental problems led to the first Pittsburgh Renaissance, and the revitalization of the city’s downtown through the Golden Triangle Project and the construction of the Civic Arena in the 1960s. Park creation in and around Pittsburgh was also seen as a central component of making a still heavily industrial city more livable.
In the second half of Beyond Rust, Dieterich-Ward gives much attention to the history of smaller cities and metropolitan areas in the Steel Valley and how they responded to the process of de-industrialization. He discusses, for example, how in Wheeling, West Virginia, effective smoke control came later and was probably less successful than in Pittsburgh. Similarly, as the steel industry struggled to survive in Weirton, West Virginia, workers and politicians united to create the Steel Mill of the Future, which at least for a few years, was something of a success. Following the lead of many politicians and insiders in the broader region, Dieterich-Ward sees highways and transportation hubs as key to the survival of the smaller towns in the face of economic decline. In this regard, he cites the experience of Martins Ferry, OH, where he claims the construction of a river front highway fostered city growth (or at least slowed its decline). Similarly, he attributes at least part of the success of Monroeville (a Pittsburgh suburb) to the fact that it is an access point to the Pennsylvania Turnpike. The same holds true for municipalities surrounding the original Pittsburgh international airport.
Although Beyond Rust is an important work of scholarship that is sure to interest urban planners and historians, I am less sure of its relevance to economic historians and the readers of EH.Net. My concerns begin with what might seem like a quibble: the definition and usage of the word “neoliberal.” Much of Beyond Rust is dedicated to understanding the role of neoliberal policies in reshaping and redefining Steel Valley cities in the wake of de-industrialization. As Dieterich-Ward explains, neoliberal is a vague and ill-defined term used by non-economists to refer to ostensibly free-market economic policies said to be inspired by Friedman and Hayek (p. 297, note 13). In his narrative, Dieterich-Ward frequently uses “neoliberal” to refer to policies that used public funds to foster private economic development (e.g., pp. 187-91, 211-12, and 257-61). Ironically, Friedman and Hayek (or any economist even loosely committed to classical liberalism and market-orientated policies) would have opposed, in no uncertain terms, the use of taxpayer funds to subsidize specific business enterprises in the absence of clear evidence of externalities or natural monopoly.
There are three potential problems with using targeted public subsidies as was done throughout the Pittsburgh Renaissance. First, such subsidies distort relative prices and thereby lead to a misallocation of resources. If relative price changes are telling workers and capital to flee a region or industry, public subsidies can do little to prevent that, nor should they. Second, proponents of these so-called neoliberal policies typically ignore the fact that targeted subsidies do nothing but move resources and employment from point A to point B, and do little to stimulate new activity. It is well known, for example, that the billions of public dollars used to build new sports arenas have done almost nothing to promote overall growth in metropolitan areas but have only succeeded in moving economic activity from one part of a city to another (see, for example, John Siegfried and Andrew Zimbalist, 2000, “The Economics of Sports Facilities and Their Communities,” Journal of Economic Perspectives, 14 (3): 95-114). Third, targeted public subsidies, especially when they are engineered and pushed by the same business and political elites who will be the primary beneficiaries of those subsidies, will often represent nothing more than crony capitalism masquerading as philanthropy. Any book that seeks to assess the impact of the public-private partnerships associated with the various incarnations of the Pittsburgh Renaissance needs to confront these issues head on. Beyond Rust does not.
Whether we are talking about shopping malls, downtown revitalization projects in smaller cities in the Steel Valley, or the $90 million in taxpayer subsidies the City of Pittsburgh gave to Lazarus and Lord & Taylor to open downtown department stores (stores that survived only a few years) the elite driven rebirth of cities in the Steel Valley often looked a lot like crony capitalism, disproportionately benefiting a few relatively wealthy individuals at the expense of the many. In one of the few triumphs of the ordinary taxpayer, voters in Wheeling, West Virginia managed to block the construction of an expensive downtown revitalization project, and instead, pursued a much less expensive mall project seven miles outside of town (pp. 194-97). In evaluating this outcome, Dieterich-Ward seems to quote with approval a business owner in Wheeling who called popular opposition to the downtown revitalization efforts “hubris.” I fail to see how taxpayers objecting to having their money taken and then used by a much wealthier individual for his own ends is hubris. Dieterich-Ward concludes this section by arguing that the failure of Wheeling to pursue this expensive downtown revitalization project left the city “unprepared for the economic cataclysm of the 1980s.” The evidentiary basis for this interpretation is not clear. Wheeling did no better or worse than any of the other small cities in the Steel Valley. Population losses decimated everyone, regardless of how many millions of dollars they spent trying to mitigate and control such losses.
Perhaps the clearest example of crony capitalism in the Pittsburgh Renaissance was a massive North Shore revitalization project that included the construction of PNC Park and Heinz Field. The total cost of this project was around 1.4 billion in today’s dollars, which translates into a large tax burden for a metropolitan area with fewer than 700,000 residents and even fewer taxpaying households. Pittsburgh-area residents repeatedly voted down this plan as too expensive in local referendums, but the Pittsburgh elite and Mayor Tom Murphy got the plan funded using mechanisms that did not require taxpayer approval. Dieterich-Ward says very little about this sordid episode (see p. 263). Given the magnitude of this project and the duplicitous way that it was imposed on the region, that is unfortunate.
Elsewhere, Dieterich-Ward seems happy to assess the success of such public-private partnerships by simply recounting the rhetoric of the politicians who sponsored them, or by a naive accounting of jobs. For example, in describing the effects of two taxpayer subsidized industrial parks, he explains that the parks “accounted for 10,000 jobs” (p. 162). The notion that the $28 million in taxpayer subsidies that helped underwrite these projects did not create new jobs, but merely moved them from one location to another, does enter the discussion, here or anywhere else in the book.
Werner Troesken is the author of Why Regulate Utilities? (1996), Water, Race, and Disease (2004), The Great Lead Water Pipe Disaster (2006) and The Pox of Liberty: How the Constitution Left Americans Rich, Free, and Prone to Infection (2015).
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|Subject(s):||Economic Planning and Policy|
Urban and Regional History
|Geographic Area(s):||North America|
|Time Period(s):||19th Century|
20th Century: Pre WWII
20th Century: WWII and post-WWII