Balkinization: City Power: The Bankruptness of the Local Economic Development Orthodoxy

City Power: The Bankruptness of the Local Economic Development Orthodoxy

Guest Blogger

Audrey McFarlane

For the Symposium on Richard Schragger, City Power: Urban Governance in a Global Age (2016).

When Gallileo Gallilei first concluded that the earth did not circle the sun, he was jailed by the Catholic Church as a heretic. His observations contradicted not only the authority of the Bible but what could be plainly seen, admittedly imperfectly, by any casual observer. The sun changed position in the sky every day. So it is with local economic development. To question local economic development and whether it leads to economic growth and improvement in economic well-being for a city’s residents is to be branded a heretic. The strength of the orthodoxy is hegemonic. When new development happens, any casual observer can see that impressive new buildings are built, corporate headquarters take up residence, there’s hustle and bustle as chain stores move in, coffee shops and boutique shopping thrives, salons and day spas abound. Some people get construction jobs, others are barristas, janitors or pet groomers. Others get web design gigs, real estate sales jobs or a key to the C-suite. Through these and other impressive changes in the built environment, there’s visible change, a public demonstration of progress.

Yet, it is only whispered or murmured in some circles that these changes in economic activity don’t necessarily amount to much cumulatively. Even when uttered aloud, the questions about local economic development remain unheard. Once jobs are offered as a justification, all thinking stops. Many cities turn over their significant amounts of their budgets to supporting the direct and indirect costs of development without much to show except for vanity projects meeting the needs of the affluent. Consider what’s fully accepted and unquestioned about sports stadiums: they do not lead to an increase in economic growth, yet cities and states fight over sports teams and build expensive, publicly funded stadiums to house the new teams. Notwithstanding the faithful application of huge public subsidies, with no change in a city’s economic condition, the practice continues. And just as in other types of development, there is still a perception of progress. The city looks better…kind of…mostly in a monumental, symbolic kind of way. These grand projects are very important, however. They and their corporate sponsors show that the city has been adopted by the mainstream economy, validated as a place that has passed the test as being habitable, business-friendly and full of affluent social opportunity. So, if tax incentives, rezonings, other subsidies don’t seem to lead to overall growth what else can or should be done?

City Power allows us to consider how to begin to answer the question by decisively daring to refute the local economic development orthodoxy. The book marshalls all of the latest evidence that shows that local economic development does not necessarily lead to growth. Once freed of the orthodoxy, the book leads us to consider what is currently impossible to conceive: cities can do whatever they want to do. Legally, that is. Politics and grassroots organizing are required to operationalize that insight into action but by providing examples of ways in which cities have acted creatively to secure the public welfare by addressing the interests of the non-affluent the book exhaustively leads the way in allowing those who take cities seriously to see there may be another way to define city priorities.

But having refuted it and showing the ways it can be transcended, City Power also challenges us to understand that if it does not meet or serve its stated purpose, what purpose does it serve? Certainly not its stated purpose which is to lift all boats with the metaphor called growth. Instead LED seems to be entirely about something else. However, after using local economic development as a point of departure, City Power turns to the city’s formal authority to make a very important point: cities can actually do very much more than our current neoliberal ideological blinders allows us to see. Thus a city is neither incapable nor dangerous if it attends to social welfare. Yet it is the turn to formal authority that allows City Power to miss yet another but important corollary point – local economic development is about capital accumulation for some at the expense of others, deliberately so. Thus local economic development is about trickle down, resource allocation for the most powerful in a community and challenging that orthodoxy at the local level is not without significant political consequences. It is still a valuable first step, however, that this book joins the voices questioning local economic development in a way that at least clears away the mythology and allows the opportunity for fresh and not lazy thinking.

This has significant implications both nationally and locally. Nationally, we need to look at the use of tax credits as hobbling government, creating shadow government where the only publicly subsidized people are the poor who are made to receive and utilize their benefits in public. The truly subsidized are the affluent where often incentivizing affluent people is a subterfuge for regressively distributing wealth and the control of wealth to those who need it least but demand it the most.

City Power is an excellent step in the right direction of beginning to bring these important questions to the table. By making the debunking of the local economic development orthodoxy as its central axis it opens up long overdue possibilities for examining the true capabilities and possibilities for local government. Perhaps it’s time to look anew at the topsy curvy quilt of constitutional limitations conceived of during the 19^th century and the accepted and openly endorsed doctrinal exceptions and end runs around likely outdated methods of controlling local governmental power. Perhaps also, we should reconsider the decentralization v centralization binary as a central concern for how local government actually operates. The federal government plays a huge role in what goes on the local level. Perhaps people just figure at what level the policies and resources they want will be the easiest to obtain and use limited government and local control as a way to get what they want or protect what they already have. These are just some of the musings made possible by this excellent, exhaustively well-researched and argued book.

In my writing, I’ve observed a number of times that capital is mobile and cities are geographically fixed. City Power took up the mantle of taking that claim seriously, interrogating the assertion and clarifying where it claims too much. By doing so, the book liberates the city from those who would limit it from being creative and responsive to social need. City Power leads the way in getting us to think anew about possibilities.

Audrey McFarlane is Dean Julius Isaacson Professor of Law at the University of Baltimore School of Law. You can reach her by e-mail at amcfarlane at ubalt.edu

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