Herewith, an excerpt from an A.J. Liebling essay, written in 1942 for The New Yorker, anticipating the coming defeat of Fascism:
The coming victory of the forces of enlightenment “made me personally, extremely and perhaps unreasonably happy. Millions of men meriting better than I have lived and died in humiliating periods of history. Free men and free thinking always get a return match with the forces of sadism and anti-reason sometimes. But I had wanted to see a win, I had wanted my era to be one of those that read well in the books. Some people like to live in a good neighborhood; I like to live in a good age. I am a sucker for a happy ending–the villain kicked in teeth, the stepchildren released from the dark basement….”
And, of course, the defeat of lying, hypocritical elitists posing as populists. So there.
Two images of wealth are currently top-of-mind for much of the U.S. public: One is that embodied by Mitt Romney–a successful and admirable businessman…or a loathsome representative of the parasitical 1%, depending on your point of view. The other is that of the fictional, wealthy, and paternalistic Crawley clan of Britain, protagonists of PBS’s enthusiastically received Masterpiece Theatre series, Downton Abbey.
So the question naturally arises: Would Mitt Romney fit in at Downton Abbey? Should the White House gig not work out, mightn’t he find a suitable situation there?
In one sense, the questions are preposterous. Romney is a very American guy, a fact underscored by even such unusual attributes as his Mormon faith. Although Mitt has ancestors from England—one grandfather hailed from Birmingham and other forebears, from Lancashire—his more pertinent history is strictly Yankee Doodle. For heck’s sake, one great-grandmother was born in a covered wagon during her family’s journey West!
The Crawleys, on the other, hand are the very definition of buttoned-down British aristocracy. Heredity is everything—especially as the series’ main plot turns on an entail, or a restriction on who is next in line to preside over their fabulous landed estate and to inherit the accompanying title of Earl of Grantham. Robert Crawley, a.k.a. the Earl played by actor Hugh Bonneville, would no more know what to do with a balance sheet than with a Fenway Frank.
All the same, Robert and Mitt have a few things in common.
Both are products of dynasties, although Mitt’s is a political one. His father, George Romney, was a three-term governor of Michigan and a 1968 Presidential candidate. Inherited wealth hardly figures, though: Mitt donated the pile he got from George, once CEO of American Motors, to an institute at Brigham Young University. Instead, Mitt’s personal history is all about Harvard Business School, Bain & Co. “growth-share matrices,” and a carnal attitude toward number-crunching. “Pile the budgets on my desk and let me wallow,” he told The New Yorker in 2007. (And you thought Newt Gingrich had unbridled lusts.)
Noblesse oblige is an impulse familiar to both men. The signature achievement of Mitt’s term as Governor of Massachusetts, Romneycare, was inspired by a desire to “do a service to the people,” in the words of the former business ally who encouraged the reform, Staples Inc. founder Thomas Stemberg. At Bain, Mitt was thought to be a very fair and caring manager, one who inspired loyalty and motivation by spreading the takings around.
Bain Capital’s leveraged buyouts did, of course, prompt some firings and loss of jobs. Mitt has even famously admitted that he “likes being able to fire people.” (Yes, yes, he was speaking about canceling his insurance coverage.) This would be a point of contention with the tender-hearted Earl of Grantham, who cannot bear to fire anyone and even suffers remorse when he has an argument with a servant.
But I can easily imagine Mitt energetically sorting out the sprawling and decaying Crawley estate. Those rotting outbuildings would experience the full impact of the Romney paintbrush, powered by the can-do attitude that Mitt exhibited at the 2002 Olympics. And the vast Romney family with its 16 grandchildren could help to fill the doubtlessly underutilized, 60-bedroom Highclere Castle, setting of the Downton Abbey series.
Come to think of it, Mitt has only two houses at the present time, one on New Hampshire’s Lake Winnipesaukee and another fronting on the Pacific Ocean at La Jolla, California. (He also has a pied-à-terre in the Boston area.) For sure, he could use another roof over his head. Two years back, when composer Andrew Lloyd-Webber expressed an interest in buying Highclere Castle, the current Earl said the palace could fetch a selling price of £150 million—doable for Romney, whose net worth was estimated at $250 million several years ago. So let’s get the Romney legal eagles at Patton Boggs LLP to take a close look at that entail thing—maybe, just maybe, the Crawleys could sell the joint after all.
Seventy-one years ago this week, U.S. President Franklin Roosevelt articulated four fundamental rights that he believed all peoples should enjoy. The Four Freedoms, said FDR, should be goals for every post-World War II society: freedom of speech, freedom of worship, freedom from want, and freedom from fear.
His analysis was the hallmark of that year’s state-of-the-union address–and later, of the Atlantic Charter forged with British Prime Minister Winston Churchill.
So perfectly had Roosevelt captured the U.S. public consensus that the Four Freedoms became the subject of an iconic series of paintings by Norman Rockwell, the most popular commercial artist of the mid-20th century. Rockwell’s artwork, which first appeared in consecutive issues of The Saturday Evening Post, made each of the four ideals seem like accomplished facts of American life.
Today, no U.S. politician would openly reject the first two of these–why, freedom of speech and freedom of worship are enshrined in the Constitution! But what about the last two–freedom from want and freedom from fear?
Forget about it. Instead, we are told we should want individual liberty–i.e., the right to be hungry, lonely, and poor if you’re not one of the fortunate few. And freedom from fear? Why, there’s nothing to fear but unemployment, sickness, and discrimination. Best to change the subject…particularly if you are a politician.
Don’t expect the GOP presidential candidates to mention the Four Freedoms as they court voters in New Hampshire. They never will. But what about Obama? We should only be so lucky as to have a president who forcefully articulates ideals that seemed like accomplished facts a mere 71 years ago.
Who can stand the city? It’s all noise, dirt, and hassles. In 1942, the Bell Labs division of American Telephone & Telegraph Co. declared it had had enough and was relocating to the suburbs. Over a few decades, this path-breaking move would set off a corporate stampede.
Purchasing 213 acres of rural land in Union County, New Jersey, the AT&T unit hired the architectural firm of Voorhies, Walker, Foley, and Smith, along with the renowned landscape architecture firm of Olmsted Brothers, to design what would be the U.S.’ first true corporate campus. The corporation rationalized the move by saying that employees were increasingly repelled by the area around its lower Manhattan offices. Moreover, Bell Labs said, vibrations and electrical interference made research work in urban settings a challenge. Better to have the placid and sylvan surroundings available only 25 miles away, in the area near Summit, N.J.
The rationale would be much repeated in years to come, as one corporation after another—including notably, General Foods, General Motors, Connecticut General Life Insurance, Deere & Co., and General Electric–removed to similar pastoral locations.
But by 1988, long after the quiet corporate exodus had become a mad dash, a reconsideration of the companies’ logic was overdue. William H. Whyte–a former editor at Fortune who’d become well-known first for his book probing corporate mores, The Organization Man, and later for his investigations of urban life–considered the business-relocation trend in his book City: Rediscovering the Center. Corporate campuses, he declared, were employee-unfriendly and pharaonic manifestations of the sprawl-inducing “car culture.” Many were fortress-like, as if intended to discourage visitors, and all were inhospitable to the “unplanned, informal encounters” upon which spontaneous creativity depended. Most significantly, he charged that the relocations were not motivated by workforce wishes: Rather, the true reason for the removal of corporate headquarters to such campuses was their proximity to CEOs’ homes, which in every case proved to be no more than 20 minutes away.
Enough said, one might think, writing off the entire trend as a part of the deluded and self-defeating post-War suburbanization impulse. And anyway, with visionaries as Richard Florida today celebrating urban revitalization and the accompanying desire of the hip, young, and tech-savvy to live and labor in such areas as New York’s DUMBO or San Francisco’s Mission district, isn’t the day of the suburban corporate outpost all but done?
Well, hardly: Only a year ago, Google announced it would be building a new, 1.2 million-square-foot corporate campus on NASA’s Ames, Calif., base. And earlier this year, Facebook announced it would take over and refurbish the former Oracle-Sun Microsystems campus in Menlo Park, Calif. Pastoral development, it seems, is alive and well in the 21st century.
An insightful, comprehensive guide to the suburbanization of Corporate America can be found in Louise A. Mozingo’s just-published Pastoral Capitalism: A History of Suburban Corporate Landscapes(MIT Press). The author, a professor of landscape architecture at the University of California at Berkeley, has dug deeply into the historical record and provided a handy categorization of the widely varying corporate projects. One shortcoming: She’s sometimes too accepting of companies’ justifications for the relocations, often repeating organizational puffery about just how delighted employees were with their leafy new surroundings. Moreover, Mozingo is an all-but-slavish devotee of what might be termed the gospel of Alfred D. Chandler, Jr., the Harvard Business School professor whose works declared the triumph of meritocratic “managerial capitalism” over outmoded, family-centered enterprise. Surely, the exacting, scientific outlook of such ideal executives could never be subverted by mere fads or the self-serving ploys of upper management!
Bell Labs' park-like campus in Summit, N.J., constructed in the 1940s.
Mozingo discerns three distinct traditions in the corporate exodus: research campuses, corporate estates, and office parks. The research campus as pioneered by Bell Labs, GE, Johns-Manville, and GM, led the way. Recruitment of skilled researchers and technicians away from universities seemed to require construction of similar facilities: a bucolic university ambiance complete with, in Bell Labs terms, “an atmosphere of freedom and an environment stimulating to scholarship and scientific research interest.” Indeed, judging from photographs, the three-story Bell Labs complex with its Princeton-stone exteriors, shaded lawns, courtyards, and ample windows, does seem to make for an appealing environment. Less alluring today is the futuristic, World’s Fair-glitzy General Motors Technical Center, erected near Detroit in 1956 under the guidance of architects Eliel and Eero Saarinen. Hyped as a “historic symbol of today’s industrial progress, also of tomorrow’s ambition,” the 25-building home to the carmaker’s engineering, styling, and product-development departments would be a natural fit for the likes of George Jetson.
It was perhaps only a small step from such think-tanks to the construction of what the author terms “corporate estates”—the lavish suburban corporate headquarters that appeared in increasing numbers during the 1960s. Low-rise, modernist edifices set on at least 200 acres and equipped with grand entry drives, prominent lakes and fountains, opulent gardens, and all-but-invisible parking lots, these complexes were thought to be appropriate for what one architectural journalist called “the Medici of our time.” The prototypes for such developments included General Foods’ headquarters near White Plains, N.Y.; Connecticut General Life Insurance’s offices in Bloomfield, Conn.; and the Saarinen-designed Deere & Co. Administrative Center in Moline, Ill. The author terms the last of these “the definitive estate,” taking note of its many architectural awards and of the way in which it won over diverse audiences, from cultural critics and hard-headed capitalists to wary employees and area farmers.
The stepchildren of the corporate-development trend were the office parks that speculative developers began building in the 1950s. These would first house lower management and the vast numbers of clerical workers that businesses required for record-keeping and providing services to far-flung customers. (Office parks were modeled on the factory-filled industrial parks that, for want of urban space, began emerging in the 1920s.) Soon, office parks would come to include such celebrated high-tech outposts as the Boston-area’s Route 128 research parks and North Carolina’s Research Triangle Park, a product of a Duke-University of North Carolina-North Carolina State consortium. Less-worthy office parks proliferated through the 1980s and ‘90s, many extending over hundreds of acres.
In recent years, the distinction among these types of developments has been breaking down, the author points out. Microsoft, for example, first leased buildings in a Bellevue, Wash., office park, then bought existing structures and built new ones, eventually occupying an area of 10 million square feet. Effectively, Microsoft has built “an estate-scale campus on the installment plan.” Google’s famous campus, too, is a hybrid: “a corporate campus abandoned by its original occupants [Silicon Graphics], reused as a suburban corporate headquarters within an office park.”
Another recent development: the globalization of suburban-office developments, beginning in the 1970s. England, France, Australia, Ireland, South Africa, and India all sport a variety of office parks and corporate campuses. This means, oddly enough, that developments across the planet “look the way they do because of the preferences and prejudices of postwar American corporate leaders, thoroughly steeped in a deep cultural fount of pastoral ideology.”
But all is not to the good, Mozingo concludes: Once corporations moved away from urban centers, they lost all incentive to agitate for cleaner, better cities. “The separatist enclave of corporate management in the suburbs” frees executives from any such concerns. Moreover, she asserts, the prettified corporate landscapes operate as a salve on the bruised body politic: They “suspend our lurking misgivings about the avid purveyors of global capitalism with a steadying pastoral sheen.” Should PepsiCo, for example, be pushed to become a better corporate citizen? Why, that company has a vast, 122-acre park just north of New York City, where members of the public can wander about, marveling at exotic trees and grasses and celebrated works of art by the likes of Alexander Calder, Henry Moore, and Isamu Noguchi. It’s the perfect tonic to take your mind off of the global economic meltdown.
Firefighters at a burning store in South London. Courtesy AFP
There’s a temptation to see a simple correlation between the recent riots in Britain and high levels of youth unemployment and lack of economic opportunity. A recent Guardian books blog, for example, takes note of how the rioters showed no interest in looting vulnerable Waterstone’s bookstores–reflecting the fact that bookstores are full of stuff that appeals only to “white, middle-class people.” In other words, the rioters were drawn from society’s lower orders.
Compare that assumption with reporting from an August 11 article in The New York Times. “One surprise was the presence of young men and women with regular jobs among the riot suspects lined up in police wagons outside courthouses in London and other cities,” wrote reporters John F. Burns and Ravi Somaiya. These included a graphic designer, a postal employee, a dental assistant, a teaching aide, a forklift driver and a youth worker, the article said. It also reported the presence of a 19-year-old female resident of “an upmarket area of rural Kent that is part of what Londoners call the stockbroker belt.”
O.K.–so maybe the events weren’t totally a result of social deprivation. Perhaps we should have guessed that from the fact that the looters apparently kept in contact via their ubiquitous Blackberries.
But what else would account for the wanton destruction of property and mass involvement in looting at electronics, clothing, and cosmetics shops? Bad parenting, as Prime Minister David Cameron would have it?
Here’s another idea. The recent News of the World scandal has revealed Cameron and much of the Establishment to be a clannish, money-grubbing group of cynics. Rupert Murdoch, his “favorite daughter” Rebekah Brooks, Metropolitan Police officials including Assistant Commissioner John Yates, and on and on have shown themselves to believe in nothing other than feathering their own nests. “Yes, I believe we paid the police,” disgraced ex-News International CEO Brooks blurted out before Parliament, as if there could be nothing in the world wrong with such a practice.
If the leading figures in society are openly broadcasting that the only thing that matters is getting ahead–and scoring that BMW or luxury townhouse–well, why not just smash a few shop windows and grab that iPod or wide-screen TV as soon as cutbacks in police provide an opportunity?
The consent of the governed and legitimacy accorded such institutions as the Fourth Estate have long depended on a belief that officials have the broader interest of society at heart. Once it’s been made perfectly clear that they have no such concerns…well, why should anyone else?
The 1920s’ Italian Communist theoretician Antonio Gramsci believed that unmasking what he called “capitalist cultural hegemony”–or the control of a society’s values–might lead to a socialist revolution. In this case, however, such an unmasking has led merely to imitation. “Hey, Rupert and Cameron have theirs–why shouldn’t I get mine? Let’s smash some windows!”
Slow food, microbrewing, real simple living: Call it the rebellion of the hipoisie. Young Urban Professionals with a Won’t Be Fooled Again agenda.
And now comes the investing counterpart, locavesting. “Across the country people are figuring out ways to invest in their local businesses and communities. In the process, they are rebuilding economies, revitalizing downtowns and rural Main Streets, and establishing a sense of shared purpose and wealth,” writes Amy Cortese.
A former BusinessWeek colleague, Cortese has just published an authoritative catalog of this trend, Locavesting: The Revolution in Local Investing and How to Profit From It (Wiley, $22.95), with loads of “imagine that!” examples from across the United States.
Take Cops & Doughnuts, for example, a popular bakery on the main drag of Claire, Michigan (pop. 3,300). When local officers Greg Rynearson and Al White became aware that their 111-year-old hangout, Clare City Bakery, was about to close, they and seven other colleagues chipped in to buy the place. The result: a highly successful, bricks-and-mortar running joke about the Man and his love affair with sinkers. The bakery now employs 19, draws scads of tourists off the interstate, and has helped to revitalize the downtown. Customers can pick up not only a “squealer,” or a maple doughnut topped with bacon, but also T-shirts bearing such slogans as “Don’t Glaze Me, Bro.”
Bookstores are frequent beneficiaries of this sort of local largesse. The failing Tsunami Books in Eugene, Oregon, was bailed out in 2005 by a group of investing professors; The Community Bookstore of Brooklyn, N.Y., was saved in similar fashion in 2007.
But Cortese makes clear that such second chances do not altogether depend upon the good-spiritedness of friends. Rather, there are an emerging group of small institutions that are active players in locavesting. In Hardwick, Vermont, the private equity team of Merritt & Merritt & Moulton has helped provide capital to such outfits as heirloom-seeds seller High Mowing Seeds and organic farmer Pete’s Greens. “Crowdfunders” including Kiva and Kickstarter have backed any number of improbable entrepreneurs. There are even “do-it-yourself public offerings,” Cortese tells us, in which outfits like mac-‘n’-cheese maker Annie’s Homegrown sell shares to the public.
None of this, of course, is likely to shake the foundations at Citicorp. “Locavesting is in its very early days,” Cortese tells us, and “the regulatory challenges cannot be overstated.” Nevertheless, it’s an interesting trend that may help save the free market from itself…or at least from some of its excesses. Marx and Engels once wrote how capitalism “left remaining no other nexus between man and man than naked self-interest.” Perhaps locavesting can help rectify that brutal tendency.
Last night, I spoke at the Roebling Museum, a history museum dedicated to preserving the memory of the town where steel for many of America’s architectural wonders was produced. Here is a shortened version of my remarks:
A promotional poster for the steel town of Roebling, New Jersey
In 1895, George M. Pullman was called to testify before a federal commission investigating the causes of the huge railroad strike that had become indelibly tied to his name.
Pullman had erected a model company town in the 1880s–Pullman, Illinois, to house the works for his luxurious “sleeper” railroad cars. The town became a showplace for the company, complete with a handsome hotel, parks and playing fields, block upon block of well-appointed row houses for workers, and a large market complex known as the Arcade Building.
The houses were not offered for sale to workers—they were only rented. And there, arguably, was the rub: For when hard times hit in the 1890s there were layoffs and wage cuts at Pullman. Within a year of the 1893 panic, wages at Pullman had been reduced by 28%. Meanwhile, the company refused to lower rents, which were generally higher than rents paid by working people elsewhere.
This was a main cause of the 1894 strike, which led to a boycott of Pullman’s cars and a nationwide walkout involving some 50,000 members of the National Railway Union.
So what did Pullman tell the strike commission about his policies, when called to testify in 1895? He insisted that the company simply had two businesses, railroad-car production and real estate. “The renting of the dwellings and the employment of workmen at Pullman are in no way tied together,” he claimed.
It was an unusual—and, in fact, unbelievable–assertion. For if you consider its implications, you could logically conclude that Pullman might just as well—and perhaps just as profitably—have built the city alone, forgetting about the railroad-car works.
Few other company-town builders would have dared to make such an assertion. In textiles, many firms provided rudimentary but cheap housing. In the steel industry, many companies tried to stay away from home-building. “We are manufacturers, not real estate dealers,” one Pittsburgh steel baron haughtily announced in 1908, and in refusing to build housing he seemed to be speaking for the industry as a whole.
In 1906, the giant new United States Steel corporation began constructing a new works on 9,000 acres just across the Indiana state line from the city of Chicago, Illinois. At first, the US Steel executives figured that they could simply build their factories, lay out the grid for the new city of Gary, Indiana, supply a sewer system and gas lines, and let real-estate development take care of itself. But the heavily-advertised, undeveloped lots failed to sell particularly well—and in the end the corporation was compelled to build many residences. In the words of one writer, the company ultimately built “half a city.”
So it’s important to see the town of Roebling, New Jersey, in this context. When, around the turn of the 20th century, high prices for imported steel prompted the Roebling family to decide to build new capacity, they realized there was insufficient land near their existing Trenton, New Jersey, works. They were looking to build a line of open-hearth furnaces, a billet mill to roll ingots into billets, a rod mill, two wire mills and lots more—all somewhat close to Trenton in a site equipped with water transportation and a railroad connection.
The Roebling site—at first called Kinkora–met these qualifications, being at the Delaware River and close to the Camden & Amboy Railroad.
Roebling's substantial brick houses are very much in use today.
But there was a complete absence of residences—so the company decided to erect a model town to house the complex’ workers. Nevertheless, Washington A. Roebling wanted it known, “we are certainly not posing as idealists or reformers.” It was “plain business necessity” that prompted the town’s construction.
Nevertheless, unlike Pullman, and despite an assertion that the town was expected to pay its own way, the Roeblings would not attempt to gouge their workers as Pullman had. In fact, houses seem to have been rented at below-market rates.
In 1904, the company bought 250 acres and set to work. The project proved more complex than first imagined. It meant erecting buildings for a number of stores, constructing a water system, paving streets, and laying on gas and electricity. There would also have to be a police force and a jail, and public schooling. Reflected Washington Roebling: “The man who owns a town often wishes he had never been born.”
750 houses were built of brick, equipped with gas and electric utilities provided at minimum cost. There were also two workingmen’s hotels.
Wages were to be paid in cash and credit made available at the general store. But, the company insisted, workers had “no obligation to purchase there.” (In coal towns, there was often a requirement to buy at the company store.)
It was common for the men who built company towns to train a watchful eye on those who lived there. Milton Hershey personally rode around his town, Hershey, PA, making notes about which houses were poorly maintained and having detectives report on the drinking habits of his workers.
In many towns liquor and saloons were barred, not to mention bawdy houses. Coal towns paid local sheriffs to keep an eye on any strangers in the area—and to rough up and evict any perceived “union organizers.”
The Roeblings denied any such watchfulness, and went so far at to install a bar at the town’s inn. It was a dictum of the company that town residents “would be under no obligation to us nor we to them as far as life in the city is concerned.”
In some company towns, the watchful role was turned over to clergymen, who were paid by the companies. In early Lowell, Mass., for example, church attendance was required of the workers. But in Roebling the company neither built nor gave land to churches—all that existed were built outside the village limits.
It was also common for there to be various classes of houses—bigger, more luxurious places for superintendents; less ostentatious cottages for workers of lesser rank, all with appropriately varying rents. This was true in Roebling, as it was in the much larger Bethlehem Steel town of Sparrows Point, Maryland, to which it bears some resemblance.
In Roebling, hourly workers lived in row houses near the plant, skilled workers got semi-detached houses further into town, and managers received larger houses facing the river. All buildings were maintained by the company, as were lawns and the park.
In all company-owned towns, Sparrows Point and Roebling included, if you lost your job, you were evicted from company housing. (Roebling leases allowed eviction on one week’s notice if a man “got out of line.”) And at Roebling, as in the rest of the steel industry, working hours were 12 hours a day, 7 days a week, moving to a 3-shift day in the 1920s.
The Roebling "Blue Centers" football squad.
It was common for company-town builders to include a variety of cultural institutions and recreational facilities in their town plans. Roebling, too, had a post office, a hospital, a bank, a library, an auditorium, a Boy Scout hut, and a baseball field. And in Roebling there was a football team known as the Blue Centers (for the Roebling wire rope), basketball, bowling, tennis, and quoits teams.
Such amenities were part of what became known as “welfare capitalism.” The phenomenon was common among steel companies, at least in part as a means of maintaining the “open shop,” or nonunion production. Several companies had so-called “employee representation plans,” otherwise known as company unions. These provided elected worker representatives to discuss with management such matters as safety and “industrial conciliation” but unlike real unions, they had no leverage to get things done.
Roebling’s welfare capitalism included a pension plan and group insurance, and in 1925 a profit-sharing plan for salaried workers. Rather late in the day—1937—the company initiated a company union known as the Roebling Employee Association. This gave way to the CIO’s Steel Workers Organizing Committee in 1941.
As most of you know, the Roebling company became the world’s leading producer of wire rope. But in 1953, the family sold its company to the Rockefeller-owned Colorado Fuel and Iron, which continued operations in the town until 1974. The houses and commercial buildings had been sold by the Roeblings in 1947, with tenants and other employees getting first dibs.
So what is the takeaway? I have tried to suggest that there are many similarities among company towns—and many particularities. Perhaps surprisingly, it was not unusual for company-town builders to express idealistic motivations for building their towns; nor should we be surprised when, as with the Roebling brothers, town-builders pooh-poohed any such motivations, effectively saying, we’re just doing this out of necessity and have no intention of coddling our workers.
All the same, I suspect that the Roeblings—and many town residents–were proud of their little town, and clearly they took pains to ensure that it would be no Gary-like slum or even a gray, purely utilitarian settlement.
Today, you cannot visit the town of Sparrow’s Point, Maryland. It no longer exists. As Bethlehem Steel expanded the plant in the 1950s, until it became the largest steel mill in the world, the company demolished most of the town to allow for factory expansion. But Roebling, N.J. is still here—and in many ways, that fact speaks for itself.
Business travel is in long-term decline. Rather than holding meetings at the Best Western in Kansas City, business has turned to teleconferences, Webinars, and facetime on Skype. IBM staffers conduct virtual-reality work meetings via Second Life, with avatars taking the place of people who’ve never actually seen each other.
So who could believe that the City of the Future—and of the moment—is the “aerotropolis,” an urban development built with an airport at its center? It’s in such currently existing aerotropoli “where we can see how globalization will reshape our cities, lives, and culture,” says John Kasarda, a business professor at the University of North Carolina and the preeminent visionary of this trend.
It sounds a bit like a Jules Verne-like fantasy, penned by some wannabe flyboy or coulda-been cosmonaut.
But, no, it turns out: As Kasarda tells us in his new book Aerotropolis: The Way We’ll Live Next (Farrar, Straus & Giroux, $30), written with journalist Greg Lindsay, such places exist. One such real city is New Songdo, a metropolis built around an airport on a man-made, Korean island, just a two-hour flight away from China’s commercial, political, and manufacturing hubs.
When Kasarda first began articulating his vision of such places, he referred to them as “global air-cargo-industrial complexes.” Imagine a runway lined with factories turning out iPods and computers, and you begin to get the idea. “A large and growing proportion of these goods moves internationally…by air either because there’s an emergency, because it’s too valuable to sit in a warehouse, or because it’s perishable, like flowers, fish, and pharmaceuticals,” he explains.
China, which Kasarda says intends to double-down on its export-led economic strategy, has plans to move its coastal manufacturing cities inland, to new cities built around a hundred new airports.
Another exotic iteration of the idea: Dubai, “the world’s first aerotropolis nation—an airline and an airport with a city attached.”
In fact, the authors say, aerotropoli designed according to Kasarda’s principles “are under way across China, India, the Middle East, and Africa.”
The authors’ paradigm is even sufficiently elastic to include the part of Memphis, Tennessee inhabited by the city’s airport and mammoth Federal Express facility. In 2008, researchers discovered that FedEx was “indirectly responsible for nearly half of the local economy,” the authors say, and for one out of every three jobs in the region. Memphis is “America’s Aerotropolis,” according to the town’s chamber of commerce.
Uh-oh. Did you notice the telltale use of the word “indirectly” above—as in George Steinbrenner won seven World Series, albeit indirectly? And did you notice the authors’ drawing upon chamber-of-commerce hype to back up their thesis? Does that make you worry that just maybe they are stretching this stuff a tad too far?
Several U.S. cities are discussed in Aerotropolis, including Louisville, Dallas-Ft. Worth, Los Angeles, and Detroit. None of these seem to me to qualify as urban developments built with an airport at their center. But, the authors say, such places wish they were like that—or, perhaps, that they are beginning to evolve toward that model.
Another odd touch: Kasarda is listed as the book’s primary author–but in the text, profiled as a subject and treated as a source. It seems clear that the book was really written by Lindsay, but that Kasarda got author credit since he had greater name recognition. Sloppy, that–and not very convincing.
Nevertheless, even if Aerotropolis overstates its case and has other problems, it’s a provocative, unexpected volume that merits a broad readership and further discussion.
From "The Company Men": Phil joins the queue, waiting for an interview. Copyright: 2010 Folger/Weinstein Co.
There’s a theory that family-run businesses have inherent limitations: If a modern company is to attain any measure of “scale and scope,” the theory says, control by owners has to give way to decision-making by a cadre of trained and experienced professional managers. “Personal” management by original entrepreneurs and their too-often-incompetent relations often results in stagnation: there’s a reluctance to take risks or expand into new areas.
These notions, surely oversimplified here, are associated with economists Adolf Berle and Gardiner Means and business historian Alfred D. Chandler. Economist John Kenneth Galbraith went so far as to say that in the modern corporation, even top professional managers surrender almost all authority…to the “technostructure,” or the planners, product developers, and merchandisers who must make real, daily decisions.[i]
Meanwhile, the idea persists that such profit-maximizing corporate bureaucracies are less humane than family firms. Yes, in family-run outfits, key decisions may border on eccentricity, the vision may be limited, and technical expertise may be in short supply, but such organizations seem to be more caring towards a “family” of employees and other stakeholders.
The current movie The Company Men makes its own statement about these ideas.
Bobby (Ben Affleck), Phil (Chris Cooper), and Gene (Tommy Lee Jones) all work at corporate giant, GTX—and one after another, each gets laid off. Under threat from a corporate raider, GTX has to take serious measures to get its stock price up, and that means wave after wave of firings.
Younger workers may be the first to get the ax, but soon, human resources targets those over 50 since they have higher salaries. They also have the hardest time finding a new position: Middle-manager Phil, gray-haired and pushing 60, is Company Men’s representative of this generation, and to its credit the movie pulls no punches about the age discrimination now rampant in the U.S.
The youthful Bobby is most optimistic about his job prospects, but soon is forced to take a low-paid construction job with his brother-in-law, Jack (Kevin Costner). Residential construction is hardly a means to great wealth, and it becomes clear that Jack is putting in a lot of unpaid labor on a house-renovation project in order to meet his budget. He’s even losing money on the job. But he manages to put an extra $200 into Bobby’s paycheck. They don’t like each other much, but they are, after all, family.
So these are the two primary models of capitalist organization in the movie: The uncaring, almost dysfunctional corporation that seems to have lost its bearings if not its very reason for existing; and the marginal family firm that still has a heart but few earnings.
Near the movie’s end there appears yet another model of organization: the idealistic, even visionary entrepreneurial startup. Gene, who was in top management at GTX before getting his pink slip, has stock options worth millions. His belief in the possibility of making something you can see, not just numbers on a spreadsheet, prompts him to take a flyer on reviving a now-decrepit shipyard. Several of the laid-off GTX workers—Bobby included—throw their lot in with Gene.
Perhaps the movie is right in suggesting that this kind of enterprise is the one that embodies the ideals of recession-hammered Americans today. But it is significant that the movie ends before it becomes clear whether this startup will survive or fail.
Just as many unemployed folks have gone home to live with their parents, so it is that the tiny family firms often prove to be the last economic refuge.
[i] Adolf Berle and Gardiner C. Means, The Modern Corporation and Private Property (New York: Macmillan & Co., 1932); Alfred D. Chandler Jr., Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge: Belknap Press, 1990); John Kenneth Galbraith, The New Industrial State (Princeton, N.J.: Princeton University Press edition, 2007).
