The Rise of the Industrial Metropolis: The Myth and the Reality

The conventional explanation of the rise of the industrial metropolis in the nineteenth century focuses on large-scale urban-industrial growth processes, including specialization, technological change, interregional transportation and communication improvements, and agglomeration economies, but this explanation is improperly specified. An alternative explanation is proposed based on the pivotal role of metropolises as controllers and coordinators of exchlage. Manufacturing concentrated increasingly in metropolises because thiey dominated regional markets. Metropolises specialized in some national market itidustries, but their industrial growth based on these industries simply kept pace with national growthi. New empirical evidence supporting the alternative explanation is presented for metropolises (n=28) for the 1860-1920 period, with a focus on the 1860-1880 period; manufactures were given two-digit SIC codes. The findings imply that explanations of the urban-industrial growth process need to focus on the early stages of the process. The large concentration of the nation's manufacturing in metropolises and their specialization in national market industries is considered a momentous outcome of urban-industrial growth in the United States. Beginning in the 1950s and building on earlier studies (Gras 1922; Haig 1926; McKenzie 1933; Weber 1899), researchers codified an explanation for the rise of the industrial metropolis that remains unchallenged (Duncan & Lieberson 1970; Gordon 1977; Klein & Kantor 1976; Lampard 1955; McKelvey 1963; Perloff et al. 1960; Pred 1966; Wamer 1972). They focused on the dramatic changes in cities and manufacturing during the period of large-scale urban-industrial growth from 1860 to 1920.1 By the latter date, the American economy had completed a transformation from rural to urban and from agriculture to manufacturing: the percentage of the population that was urban first passed 50.0 percent (51.2%), and the percentage of the labor force in manufacturing peaked at 26.9 percent (Lampard 1968:107, Table 1; Lebergott 1966:119, Table 2). Prior to 1860, it was argued, the industrial sectors of metropolises were small-scale and nationally unimportant. Manufacturing consisted of (1) a few mercantile manufactures (entrepot, commerce-serving) related to the role of metropolises as controllers and coordinators of exchange; and (2) a small sector serving local industrial and consumer markets. Manufacturing concentrated in metropolises and they specialized in national market goods during large-scale urban-industrial growth, according to the conventional explanation, because of new or dramatically altered versions of *1 thank Isaac Eberstein, John Kasarda, Martin Martel, Judith Meyer, Dietrich Rueschemeyer, Franklin Wilson, Basil Zimmer, and the referees for their comments on drafts of this paper. At an early stage, Beverly Duncan and Stanley Lieberson generously provided encouragement about the theme. This material is based upon work supported by the National Science Foundation under Grant SES-8319058. Direct correspondence to the author, Department of Sociology, Box 1916, Brown University, Providence, RI 02912. o The University of North Carolina Press Social Forces, March 1990, 68(3):731-752 This content downloaded from 157.55.39.30 on Fri, 27 May 2016 06:26:57 UTC All use subject to http://about.jstor.org/terms 732 / Social Forces 68:3, March 1990 earlier processes. An increase in the division of labor within and among factories raised labor productivity, and technological change, resulting in new and improved machinery for producing goods, enhanced this productivity. The expansion of transportation and communication systems to national scope, improvements in the quality of service, and cost reductions in these systems made large production feasible. These factories located in metropolises, it was argued, because metropolises had three agglomeration economies: economies of scale, localization economies, and urbanization economies. The northeast quarter of the nation, the earliest large market, formed the manufacturing belt consisting of metropolises and other cities. This explanation for the concentration and specialization of manufacturing in metropolises remains unchallenged after three decades. First, this study demonstrates that metropolises were at or near their peak relative importance as industrial centers in the nation before large-scale urban-industrial growth occurred. Rather than national market manufacturing concentrating increasingly in metropolises, their industrial growth simply kept pace with national industrial growth. Because the empirical evidence fails to support the conventional explanation, it is reassessed and concluded that the explanation is improperly specified. An alternative sociological explanation for the concentration and specialization of manufacturing in metropolises is proposed. The pivotal role of metropolises as controllers and coordinators of exchange, it is argued, gave them early advantages as locations for manufacturing related to exchange. Furthermore, as the cities with the largest populations an outcome of their exchange role (finance, wholesaling, transportation, warehousing) metropolises had large consumer markets served by local factories. Both the exchange-related and local consumer manufactures also required intermediate goods that were supplied locally. These manufactures concentrated increasingly in metropolises as their dominance of regional markets grew with intraregional transportation and communication improvements. In contrast to the conventional explanation that discounted their importance, the proposed interpretation claims that these manufactures were the basis for the high concentration of the nation's manufacturing in metropolises. Metropolises also grew because they acquired national market firms, including producers of intermediate goods, but these factories also located outside metropolises. The manufacturing belt included the metropolises that acquired large industrial sectors before national market manufactures became important. Previous research findings support this explanation, and new supporting evidence is presented for the 1860-1920 period, with a focus on the 1860-1880 period.