Diversity, Tolerance, and Success in the Global Economy
Last week, New York Times reporter Andy Newman published an excellent piece on the revival of the neighborhood surrounding Brooklyn’s Gowanus Canal. The canal is a toxic Superfund site, at the start of a ten-year clean-up effort, and the scent of gentrification has already begun to mix with the canal’s toxic fumes. According to Newman:
“The future is flowing in fast on the sleepy little canal, where the wilderness of urban decay that sprouted artists and then artisanal ice cream shops is being tidied and tamed. Stroller traffic on the bridge to Whole Foods grows thick, and the sliding crunch of the concrete factory conveyor belt is falling silent. But as much as the canal zone has been remade already, the next few years promise, or threaten, a different magnitude of change altogether.”
Next year a zoning change will be proposed to permit luxury apartment development in exchange for a significant set aside of “affordable” housing units. Under the proposal, 25% of the units built will be “affordable”. Luxury units will carry rents over $5,000 a month while affordable apartments will rent for $900 a month. These numbers will probably change in the coming years, but in an era when no new public housing is being built, the only way to maintain an economically diverse city is to have wealthier residents directly subsidize the housing of less well-off residents. Some would argue that New York’s housing market has been distorted by subsidies, and that may well be true, but deregulating this city’s housing market is politically infeasible. As a matter of public policy, New York City’s objective of maintaining economic, racial, national and ethnic diversity is an important goal, supported by most New Yorkers.
Trump’s America doesn’t recognize the value of diversity and his political base would like to wish it away, but New York City has an opportunity over the coming decades to both bridge the tale of two cities that Bill de Blasio campaigned against and demonstrate the value of economic, racial, ethnic and national diversity. Trump and his folks are not the only fundamentalists in town. There are many scattered throughout the world. From the right wing in Europe to Isis in the Middle East, they prey on fear and insecurity, and sadly there will always be a market for their services. They misunderstand the forces of technological, economic and social change sweeping the world, but correctly understand that they are victims rather than beneficiaries of that change. Trump’s strategy to resist that change is to try to block trade and people at America’s borders. But he will come to learn that the forces of modernity cannot be stopped. They can be channeled and nations can develop strategies of adaptation. But like the great firewall of China, designed to keep western websites away, there is always some smart kid who can figure out a way to get access to the New York Times and Google when in Beijing. Governments have difficulty influencing the behavior of global corporations and can’t control the forces of technology and economic change.
It is a little odd that our businessman president doesn’t understand the economic, social and political force of global capitalism, but the logic of the global economy, and the efficiency and effectiveness of global supply chains seems to be beyond him. New York City’s 21st century revival is based on an inadvertent and almost accidental accommodation to the emerging global, brain-based economy. When our manufacturing businesses collapsed in the 1960s and 1970s, and suburban flight went into full swing, we nearly went bankrupt. But our ability to welcome immigrants and our reinvestment in mass transit in the 1980s and 1990s, combined with a culture of edgy tolerance, somehow seeded our comeback. Out of necessity, all our mayors since Ed Koch explored and became sophisticated at public-private partnerships. Times Square and Central Park came back from the dead, and the High Line and soon Gowanus was repurposed.
We also developed a culture that managed to attract the artists, scientists, doctors, tech entrepreneurs and media mavens that built our post-9/11 revival. Our home-grown health, education and cultural institutions expanded, built global boards, and recruited talent from every nation. New York City’s diversity and tolerance is far from perfect, but it is one of the city’s most important assets. The success of New York is that people from Kansas and people from China can each find something familiar and something foreign in this place. The chain restaurants common in the Midwest can be found behind huge neon signs in Times Square, and students from China can find low-priced food from home in trucks by Columbia’s campus or in cafes on Northern Boulevard or Main Street in Queens.
While New York made the painful transition from a small manufacturing and commercial port city to a post-industrial, information age powerhouse, many parts of America have not yet been able to adapt. Manufacturers in the Midwest have moved factories abroad and America’s government did nothing for the workers left behind. As elements of manufacturing left the Midwest for nations that allowed lower wages, no strategic and sophisticated effort was made to attract higher value-added business that might profit from the work ethic, ability to learn on the job, and quality orientation of American workers. Loyal workers were left unemployed, insecure and open to the xenophobic rhetoric of Donald Trump. His effort to shut out foreigners and shut down global trade will make things worse for the Midwest, not better. America’s future will not be found in the factories and mines of the past, but in new businesses ranging from Amazon to Google, and from Apple to Zappos. These new businesses need trained workers and government needs to partner with workers, communities and the private sector to attract businesses to places where workers have been left behind and to pay workers living wages while businesses train them for the work that is best undertaken here in America.
The secret to success in the global economy is not to resist it, but to adapt to it and carve out a niche that works for both people and business. New York couldn’t rebuild its ancient port and outmoded factories, so we reinvented ourselves as the multi-cultural capital of the global economy. We built on our ability to attract immigrants, the U.N., our universities, the finance business, high end retail, entertainment and hospitals. We abandoned the “rag trade” and the other mid-twentieth century businesses that once defined us. We didn’t do this according to any plan, we simply stumbled from crisis to opportunity and from disaster to reconstruction. We didn’t blame our troubles on people who didn’t look like us or speak like us. We tried to figure out a way to get them to visit, stay and spend money. During this transition we were lucky that all of our mayors put aside ideology and were pragmatic problem-solvers trying to make the city safer and more attractive to people and business.
The Midwestern workers are not as fortunate. Their institutions and elected officials seem determined to somehow turn the clock back to an era that is not coming back. American manufacturing will be far less labor intensive in the future than it was in the past. Foreign trade and workers are an asset, not a threat. America will not be made “great again” by putting America first, but by ensuring that America’s unique culture, history, values and abilities are rewarded by the global economy. That requires strategy, flexibility, investment and a sophisticated public-private partnership. Instead, we get Trump, Bannon, twisted logic, tweets and slogans.
New Yorkers are always more generous than people think they are. They help each other and welcome strangers. In the past, Middle America was known for a culture that welcomed strangers and helped those in need. As a nation, our people are well equipped to engage with the global economy. It would be a shame if that critical American cultural trait were destroyed by the manipulative politicians running many states and running our national government.