The Road through the Rust Belt: From Preeminence to Decline to Prosperity

2 - Midwestern Urban and Regioinal Responses to Global Economic Transition

7 2 Midwestern Urban and Regional Responses to Global Economic Transition William M. Bowen Kelly L. Kinahan Cleveland State University Midwestern industrial cities continue to cede ground to low-cost, overseas competitors in the increasingly global economy. Yet transitions present opportunities and Rust Belt regions can experience prosperity despite losing the market dominance in manufacturing that they once enjoyed. Human urban and regional settlements have existed within a system of economic expansion and contraction that may be traced back continuously at least to the development of Afro-Eurasian interregional trade in the Bronze Age (Frank and Thompson 2005; Smith 2009). The characteristic structure and cycles of this system have included coreperiphery divisions of labor, alternating periods of rivalry and hegemony , and economic periods of upswing and downswing. The characteristics of the total system at any given time have strongly influenced local economic activities and overall levels of prosperity (Frank 1993). Today’s midwestern industrial cities are in some ways similar to other cities throughout history. Their local economies are parts of a larger, continuous system of economic expansion and contraction. They are driven by forces of innovation and entrepreneurship, capital accumulation , division and specialization of labor, and changes in demand and market sizes. Yet they are somewhat different from many other cities in that they originated roughly during the latter part of the industrial revolution and came to economic preeminence during the first half of the twentieth century, at which time the population not only in the United Bowen.indb 7 Bowen.indb 7 12/16/2013 2:13:36 PM 12/16/2013 2:13:36 PM 8 Bowen and Kinahan States but in the world was larger than ever. These cities developed when transportation and communication technologies were advancing to previously unimaginable power and influence. Today, midwestern industrial cities face a new economic world order, with more competition from around the globe than ever before (Bair 2005; Ducruet and Notteboom 2012; Gereffi, Humphrey, and Sturgeon 2005; Henderson and Nadvi 2011; Henderson et al. 2002; Winters and Yusuf 2007). To understand any system, one must understand the larger one within which it is embedded. Thus, this chapter starts with a brief overview of the evolution of the economic world system within which midwestern industrial cities attained world-scale economic dominance in the late nineteenth and early twentieth centuries. This gives perspective on why these cities achieved such preeminence, and helps provide insight as to why they cannot reasonably expect to reclaim it today. Next, the chapter briefly reviews some recent scholarly literature describing the technological, industrial, and political-economic changes during the early twenty-first century. These shifts seem likely to continue and possibly even to accelerate the long-term evolutionary trends from smallerscale , simpler sociotechnical and trade systems to larger-scale and more complex ones. The chapter then considers some of the implications of these trends for the renewal of prosperity in midwestern industrial cities . We conclude by suggesting that the idea of prosperity needs to be reframed relative to the previous concept, which was centered on economic world dominance. However, on the basis of the reframed idea, renewed prosperity is well within reach for large segments of the population in midwestern industrial cities. MIDWESTERN INDUSTRIAL CITIES WITHIN THE ECONOMIC WORLD ORDER THROUGH THE TWENTIETH CENTURY Trade and investment across borders began long before the rise of modern capitalism (Muller 2009). However, there is little doubt that global economic transition intensified during and after the Industrial Revolution (More 2000). Some of the major underlying factors included the use of fossil fuels, the development of textile technology, the factory Bowen.indb 8 Bowen.indb 8 12/16/2013 2:13:36 PM 12/16/2013 2:13:36 PM Midwestern Urban and Regional Responses 9 system, the growth of the human population and its concentration in urban areas, and the modernization of agricultural, mining, and metallurgical production processes. Other factors driving intensification and diffusion included the expansion of transportation through newly created and developed railroads, canals, macadamized roads, steamships, and refrigerated railway cars. Much was also promoted institutionally by radically reduced tariffs, designed to induce international trade, and the practice of pegging national currencies to gold, so as to have a common unit of exchange, especially in Europe. Industrial Growth in the Midwest As the Industrial Revolution diffused from Great Britain and Europe to the United States, midwestern cities were well-poised to take advantage of the...