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The Tragical History of New York

Inevitably the reformers of the Regional Plan Association were joined by developers and other promoters, and by the construction trades which, by the end of World War Two, were organized within a politically irresistible Trades Union Council representing nearly 125,000 construction workers who voted as a bloc. Soon Moses and a group of politically connected contractors, engineering firms, and developers, encouraged by the press and various betterment groups, were rearranging “the hodgepodge” by replacing one industrial or working-class neighborhood after another with federally funded highways, housing projects, and other development schemes.

In the 1920s the Regional Plan proposed a crosstown highway linking the Holland Tunnel and the Manhattan Bridge as a way to relieve traffic created by the newly built tunnel. The scheme to “relieve congestion on the lower east side and provide more space…for parks and playgrounds…”22 was absurd on its face. No matter how broad the highway might be, it would be choked at either end by the narrow entrances to the bridge and tunnel. The expressway and its access roads would, however, destroy the thriving and diverse industrial neighborhood now known as Soho, as well as the Chinese and Italian working-class neighborhoods to the east. A spur joining the Williamsburg Bridge would uproot the largely Jewish working-class neighborhood to the north.23 The proposal languished until 1941, when Moses presented it to Mayor La Guardia, to whose tidy instincts it immediately appealed. But funds would not become available for the Lower Manhattan Expressway until 1956, when the road became eligible for federal funding as an interstate highway under the National Defense Highway Act. Washington would pay 90 percent of the costs. Since the other 10 percent would come from the state, the city could demolish a major industrial neighborhood free of charge.

As the Expressway was eventually conceived, it would extend for six lanes with service roads at either edge and destroy much of the industrial and working-class residential area between Houston and Canal streets, forming a barricade between lower Manhattan and the northern part of the island. It would be the Manhattan counterpart to the disastrous Expressway that Moses, following the Regional Plan, had built in the Bronx. Moses claimed that the Expressway would create 2,000 construction jobs, but neighborhood opponents of the road said that it would destroy 10,000 existing jobs and displace 1,500 families. Had it been built, it would have done far greater damage. The Expressway would also have destroyed what Moses’s engineers called old “buildings constructed before the turn of the century [and] dangerous for occupancy,” but which the city’s Landmarks Commission called some of “the best cast iron architecture in the United States,” and which now comprise the expensive and fashionable loft buildings of Soho, a major tourist attraction whose design studios and art galleries are a large component of New York’s export economy.

Thirteen years after it was proposed, this scheme to destroy one of Manhattan’s great industrial neighborhoods—part of the same industrial area which the Regional Plan had compared to a fetid slaughterhouse—was abandoned under pressure from the local residents. Today, like the emigrants from Bushwick forty years ago, most of the Italian families who had once lived in the path of the proposed Expressway have moved away, leaving only a few old people and the tourist area known as Little Italy behind. But some 100,000 Chinese immigrants have moved in, and their expanded China-town, which embraces much of the old Italian neighborhood as well as the once Jewish neighborhood to the east, is now a self-supporting industrial, residential, and tourist area with hundreds of garment factories, food wholesalers, metal fabricators, printers, and innumerable restaurants, food stores, and other retail businesses, a vibrant example of the hodgepodge that the Regional Plan had yearned to rearrange. The prosperity of this area is reflected in several new banks that have recently been built along Canal Street. In 1990 their deposits totaled $3.2 billion, slightly more than was deposited in the thirty-four banks that serve the Asian population of Flushing, the neighborhood in Queens to which Chinatown’s immigrants move as soon as they can afford it.

But for all their enterprise and the stability of their family life, most of these Asians, like most of the West Indian and other third world immigrants who have also settled in New York, work in restaurants and garment factories for low wages, or sell vegetables and other neighborhood goods at retail and novelty goods at wholesale, much the same kind of work that New York’s immigrants were doing a century ago. So far few of them have found in New York the fertile entrepreneurial soil upon which to create the products and enterprises of the future, as some of their ambitious counterparts in Hong Kong and elsewhere have been able to do or as earlier generations of New York’s immigrants did when the most enterprising of them moved up from their sweatshops and pushcarts to help build the industrial economy that has now all but disappeared. Despite their hard work, the educational success of many of their children, and the formidable accounts on deposit in Flushing and along Canal Street, enhanced no doubt by flight capital from Hong Kong and drug money from Chinatown’s wholesale heroin trade, most of these immigrants have improved their incomes or their prospects little more than the southern blacks and Hispanics did who settled in Bushwick.

But if New York City has lost its capacity for industrial renewal, the once powerful forces that had for years frustrated this vitality are themselves now dying or dead. The construction trades unions, their numbers depleted, their industry moribund, and their leadership in disarray, have now lost their political power. In the past thirty-two months 26,000 construction jobs have disappeared, a 20 percent reduction. When a phalanx of construction workers marched on City Hall in the winter of 1991 no one listened to them.

Meanwhile the Regional Plan Association, along with the class that had promoted it, has lost its political power to the largely black and Hispanic municipal unions and to community groups which, following the example of the coalition that defeated the Lower Manhattan Expressway, now successfully oppose almost every scheme that threatens the integrity of existing neighborhoods. When the Lower Manhattan Expressway was finally defeated, its backers, determined to find another use for the federal highway funds which they were now in danger of losing, proposed instead to build Westway, an equally preposterous highway, along the Hudson River waterfront.24 Its estimated cost, to be provided mostly by the federal government, was $4 billion. It would be the most expensive highway, mile for mile, ever built.

The ostensible purpose of Westway was to replace the existing West Side Highway, a lightly traveled and usually uncongested road, with an unnecessary multi-lane highway, much of it underground. The actual purpose was to use the construction debris as landfill to create several hundred new acres of Manhattan real estate along the Hudson for high-rise residential and commercial construction. But Westway and its access roads would devastate several existing middle and working-class neighborhoods. Though Westway was supported by The New York Times, Governor Cuomo, Mayor Koch, and remnants of the old Regional Plan coalition, the absurdity of the project was presumably evident to most New Yorkers, who offered no objection when it was defeated by a community group much like the one that had defeated the Lower Manhattan Expressway. The old Regional Plan coalition that had done such damage to the city began to die when Westway did.


With the collapse of the high-rise ideology that once dominated the city and the sharp structural decline of its financial services economy, New York City’s leadership, if there is one, faces an opportunity and a dilemma of the sort that only great emergencies provide. New York City is at risk of becoming the fortified island of opulence within a sea of misery and violence that many of its patricians now fear as they, along with the majority of New Yorkers polled by the Times, contemplate their escape.

The usual response to an emergency is to deny that one exists, and when denial fails, to hope that someone will think of what to do. This is what happened during the fiscal crisis of the 1970s, when Governor Carey, Felix Rohatyn, the investment banker, and the labor leader Victor Gotbaum conceived a plan to restructure the city’s debt and discipline its politicians who had recklessly been borrowing to meet the city’s operating costs. Their plan worked long enough for the artificial prosperity of the Eighties, based largely on borrowed money, speculative profits, and foreign capital, to provide the illusion of recovery, provided one ignored the homeless in their cardboard tents amid the glitter of Fifth and Madison avenues.

Rohatyn’s Municipal Assistance Corporation, or MAC, as it came to be known, might have been a permanent solution had New York’s crisis in the 1970s been merely the result of temporary fiscal irregularities to compensate for a cyclical dip and not the symptom of a long-term decline, measured by hundreds of thousands of jobs permanently lost. But MAC was not designed to rebuild the city’s shattered economy. Can New York City now create a new industrial economy upon the wreckage of the old one? Can Bushwick, for example, regenerate the positive balance of payments that it lost forty years ago?

In the 1950s, when New York City’s work force dominated world markets for countless products including Hawaiian leis, world population was just over 1.5 billion, much of it without capital, industrial skills, or access to distant markets. World population now exceeds four billion people and in thirty years may exceed eight billion. Most of this growth is concentrated in the southern hemisphere where many poor, overpopulated countries now manufacture simple goods for themselves and for export. Some have learned to export sophisticated components and even finished products to world markets. Low-wage Filipino auditors in Manila, for example, now work by fax and satellite for New York accounting firms. Unemployed New York City computer programmers drive cabs, while programmers in Calcutta, who earn less than cabdrivers in New York, transmit their programs back to the New York firms for which the cabbies once worked.

But most of this third world population is unemployable at home and armies of them will continue to drift northward to the great cities of the developed world, as New York City has already begun to see. Like their predecessors, many of these immigrants will be eager to work for low wages. But no matter how low their wages, they will never be as low as the wages at home. Can New York City’s entrepreneurs create a competitive economy in which these immigrants and the existing populations of places like Bushwick can earn their livings, raise their children, and pay their taxes?

The creative spirit of capitalism, especially in America, is notoriously ego-driven, rebellious, and often childishly resistant to discipline. Attempts to create master plans for American industry either come to nothing or depress economic development, as the Regional Plan’s attempt to move New York’s industry to the suburbs did, because they tend to encourage a particular form of growth at the expense of all others. A new Regional Plan for New York, devoted this time to industrial development within the five boroughs, would probably complete the destruction that the original one had begun.

Meanwhile a mayoral commission has recently proposed a fund for economic development which would invest $500 million a year, raised partly by a new bond issue, in large public projects such as industrial parks and supply additional sums to small businesses and cultural institutions. Since political factors invariably influence the distribution of such largesse, the chances are poor that this plan, if it is ever implemented, will succeed. Investments shaped by the political interests of democratic governments are as likely to fail as those sponsored by Marxist governments. But this does not mean that government can do nothing to revive industrial work in New York, provided the primary goal, as in Asian economics, is the success of the enterprise and not the political advantage of a particular administration.

The flourishing Asian economies that have largely surpassed New York and other American cities as world production and commercial centers—as American cities a century ago surpassed the cities of Great Britain—did so mainly on their own. After infusions of foreign aid in the postwar years, they grew without the help or hindrance of larger political units. Singapore, Japan, Hong Kong, Taiwan, and even South Korea, isolated at the end of its peninsula, are self-contained, insular economies, in charge of their own affairs, jealous of their autonomy, and more interested in making money than in propagating ideologies, becoming superpowers, or convincing other countries to follow their moral example. Before the 1930s Manhattan itself had been such a secular island economy. Then it became the beneficiary or victim of federal largesse and would later be fully integrated within federally designed and funded programs governing everything from monetary, defense, and trade policy to day care centers and medical treatment of the elderly, whether or not these programs furthered New York’s own interests or reflected its cultural style.

The reasons for New York City’s economic decline are complex, and it may be only coincidental that chronologically the city’s deterioration accompanied its increasing integration within an ever expanding federal system with costly worldwide commitments. But it is a commonplace to observe that the postwar economies of West Germany and Japan have flourished, compared to America’s, perhaps because they are not subservient to large, militarized systems motivated more by ideological than by commercial interests.

This is not to say that New York City would necessarily be better off economically as a separate country—an Atlantic Hong Kong—though perhaps it would be if secession were possible. But recent federal policy can be reversed so as to return a larger share of federal revenues to the cities and towns, from whose taxpayers these revenues had been extracted in the first place. Though some New Yorkers may eventually benefit from the exploration of Mars, a more urgent need is funding for technical training as an alternative or supplement to the present public school system. Of the 930,000 students served by the city’s public schools from kindergarten to twelfth grade, only 6,337 in 1990 met the statewide standard for graduation with a Regents’ diploma. On the assumption that New York City’s teenagers need usable skills more than a voyage in space, a reduction in the federal space program might release funds to provide technical training for those students who failed to graduate but who want to try again, or for young convicts and parolees who might want to acquire legitimate skills rather than commit further crimes.

A prudent federal government, looking for ways to shorten the current recession by investing in public works, might leave the costly defense of prosperous South Korea to the Koreans themselves and spend the money thus saved to repair bridges and roads and rehabilitate housing in cities like New York: projects that might employ these technically trained graduates and parolees as well as the able-bodied homeless and veterans returning from garrison duty in South Korea and elsewhere, if the unions agreed. The political mechanisms by which such resources might be reallocated are no doubt complicated and slow, but if the federal government can contemplate costly loan guarantees and outright grants to foreign governments, perhaps this or a future administration will eventually consider some such arrangement for New York and other American cities, following the example of Japan, which, like the United States a century ago, has no interest in supplying foreign aid but invests heavily where its own economic advantage is at stake.

Until such a reallocation occurs, New York will have to find its own solutions without Washington’s help. This will not be easy, especially if the Times poll is correct and most New Yorkers have already decided to move away rather than put up further with their beleaguered city. Yet New York retains some of the advantages that it neglected to exploit forty years ago when Asian entrepreneurs were first planning their successful attack on American markets. Though the public school system performs poorly, despite the addition of some 16,000 employees since 1980, there are still some superior high schools in New York and it may not be impossible even for a child born in Bushwick to find his or her way, with luck and talent, into such a school and beyond. This year students from a single New York City high school won four of the forty national Westinghouse Fellowships. Rockefeller University, Columbia, and NYU attract and train superior scientists, especially in microbiology, presumably the science of the future, as physics and electrical engineering had been a century ago. New York’s investment banks still assemble large amounts of capital and generate enormous profits. The partners of Goldman, Sachs, for example, earned one billion dollars in 1991. New York is still a world center of innovation in marketing and design.

It would be contrary to the spirit of capitalism as well as common sense to expect a handful of civic-minded Goldman, Sachs partners to form a partnership with Columbia, Rockefeller, and NYU to sell shares in a biotechnology company intended to operate mainly in New York City. No one would buy shares in a company bound by such a foolish geographical restriction. But if the city government agreed to meet or exceed the benefits provided to new industries by other areas, and assuming that New York City is not intrinsically inappropriate as the site of a biotechnology industry, perhaps a well-promoted stock offering would find a few buyers, especially if the universities, which are in need of money, confirmed their commitment to the success of the business by buying some shares themselves, and identifying a few promising students and teachers with likely products in mind who might be looking for capital.

Such arrangements may raise legal questions, but New York is not without lawyers to solve them. According to the Deputy Mayor’s Report, 25 New York City has failed “to generate a vibrant biotechnology industry, despite the…presence of…the necessary elements, [because] market forces alone are not enough to generate successful startups,” and state and city economic development policies, “particularly in the area of of financing programs, are geared to established firms…with a substantial history and available collateral.” This suggests that an opportunity may exist for private investors to create a new and profitable industry in New York if the state and city change their development policies, a remote possibility but perhaps less remote than the prospect of greater fiscal autonomy for American cities.

The Genzyme Corporation, which makes two widely used biogenetic drugs, recently chose to build a new plant in Boston rather than Cambridge. Though both these cities are nearly as run down as New York, both have “international reputations as scientific centers,” the president of Genzyme said, but Boston “could offer a larger, state owned parcel that could be quickly developed.” According to a report in The New York Times, Boston also agreed to supply all necessary approvals by April, to help prepare the site and provide discounted utility rates as well as an agreement on property taxes. Genzyme, whose sales have risen from $9.7 million in 1985 to $110 million in 1991 and which expects to double these sales by 1995, also liked Boston’s proximity to highways and the Logan International Airport. If Genzyme can grow in Boston presumably a similar business can grow in New York, which also has highways, an international airport, and great or greater universities.

If the hypothetical venture of the Goldman, Sachs partners with the three universities were to succeed miraculously and create the greatest concentration of biotechnological employment in the world, the effect on Bushwick and similar neighborhoods would still be negligible, for New York may soon be a city of eight million people, as new waves of immigrants arrive and technically skilled workers in developing countries continue to produce routine goods more cheaply than New York City workers. Nevertheless, if one high value added industry can be made to flourish here, so can others, as yet undreamed of, for in a developing economy one product leads to another. The Japanese entrepreneurs who saw the commercial possibilities of transistorized circuits forty years ago could hardly have fore-seen camcorders and walkmen, but had they not taken the first step, they could never have taken the subsequent ones. With its anti-industrial ideology exhausted and with markets in the former Soviet Union and Asia still unexplored, New York City, for all its current misery, may now be facing even greater opportunities than Japanese and other Asian entrepreneurs saw when they rose up from their own rubble forty-five years ago to plan the industries of the future, and to capture what were for them at the time great but unexplored and mysterious markets in the United States.

Meanwhile, if New York fails to retrieve a larger share of federal revenues to invest in its own needs and should its entrepreneurs do nothing to revive its industrial economy, then there is probably nothing left to do but join the majority of New Yorkers who are already planning to leave. For in the absence of countervailing pressure from a growing economy, Bushwick and similar neighborhoods will expand until there is nothing else left.


How New York Fell’: An Exchange June 11, 1992

  1. 22

    Adams, Planning the New York Region, p. 54.

  2. 23

    The engineering drawings prepared for Robert Moses and showing the proposed routes are reproduced in Rebecca Shandor’s The City that Never Was (Penguin, 1988).

  3. 24

    The Regional Plan had opposed the West Side Highway for which Westway was to be a more elaborate replacement because it would obstruct access to the Hudson River waterfront. The original planners would probably have opposed Westway too. But by now the aesthetic goals of the Plan had long been forgotten.

  4. 25

    p. 108.

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