This impressive book, written by geographer Scott W. Anderson, centers on the rise and eventual fall of Auburn, New York, from the late eighteenth century to the present. While Auburn is the primary focus of the book, the heart of this volume is a discussion of the entrepreneurs who helped build this great city but who eventually “passed accumulated wealth to their heirs … who were wealth-holders and managers and not visionaries.” When this new “privileged class” turned its attention to global markets and investments in stock and bonds, a “long process of stagnation and decay” began.
This shift from the visionary, risk-taking entrepreneurship of young America to the safer wealth accumulation through investment in the expanding global economy is a cautionary tale not just for upstate New York but for the nation as a whole.
Although Auburn, New York is organized—more or less—chronologically, this broad story of vigorous entrepreneurial growth and subsequent abandonment and decline is rooted in economic theory. Three theories inform his work. The first is “staple theory,” developed by Harold Innis in the late 1930s. Innes argued that vigorous economic growth often stems from the exploitation of staple resources. Anderson devotes his early chapters to the formation of a class of entrepreneurs who speculated in land when the New Military Tract opened in 1790. These entrepreneurs recognized that Auburn was located near the great water power source of the Owasco Outlet that promised abundant power for mills and later factories. It was also situated along the “ancient Genesee Trail”—later to become the route of the Seneca Turnpike. These two great resources would shape the city of Auburn and allow its successful development.
The first generation of prosperous land speculators in Auburn included such figures as Hardenburgh, Seymour, Fitch, Case, and Seward. These individuals effectually developed the land in and around Auburn and helped attract new settlers and other entrepreneurs. They solidified a strong “upper class” through intermarriage and their wealth formed the basis of later entrepreneurial ventures.
Once economic growth became “self sustaining” in the early nineteenth century, Anderson turns to “linkage theory,” developed by Albert Hirschman in the late 1970s, to explain the vigorous growth of Auburn during this period. Linkage theory asserts that a dynamic economy develops when a number of entrepreneurial activities are spawned as a result of staple resources. The linkages between these entities provide a network of commercial activity in a community.
Anderson argues that the first wave of successful entrepreneurs—beyond the great land speculators—were “purveyors” and included professionals, artisan-based manufacturers as well as the all-important merchants. The goods and services provided by these “purveyors” met the growing material needs of consumers and solidified the economic base of Auburn and the surrounding hinterland.
In addition to discussing successful economic linkages between commercial, artisanal, and professional purveyors, Anderson also devotes considerable attention to the importance of the “laissez-fare” economy of Auburn. He argues that in nearby Seneca Falls the monopoly of ownership of water power resources retarded its economic development while the relatively competitive environment in Auburn allowed continued growth.
While linkage theory provides Anderson with a useful model to help understand the growing economic base of Auburn, he turns to sectoral articulation (and disarticulation) theory to understand the sustained growth of the city. Sectoral articulation theory was developed in the early 1980s by Alain de Janvry and Dieter Senghaas. It argues, in essence, that the more complex and diversified the economy of a community, as well as the greater level of skills developed by entrepreneurs and workers, the more resilient that economy will be and the more likely it will provide benefits to greater numbers of individuals.
By examining home ownership in Auburn as a proxy for “well being,” between 1840 and 1878, Anderson argues that the diversified economy of Auburn allowed wealth to “trickle down” to the broader working class population. He notes that this economic phenomenon probably could not be replicated today because “… the Auburn area prosperity relied increasingly on industries that required well paid skilled labor” (p. 181). He notes that the skilled labor pool in Auburn helped to attract industries and business to the community that demanded these skills. And as other skilled workers recognized the market for their skills they migrated to Auburn thus enriching the labor pool and partaking of the “modest prosperity” of the community.
My only minor critique of this analysis is the missing element of education in Auburn and surrounding communities. The educational revolution that was taking place during this period certainly played a role in the enrichment of human capital in places such as Auburn.
I thoroughly enjoyed this book. It adds a great deal to our understanding of sustained economic development and eventual stagnation. It is firmly based on economic theory. It demonstrates the importance of new techniques of economic analysis such as GIS while relying heavily on traditional primary historical sources such as local histories, pamphlets, newspapers, manuscripts, court and government documents, laws and statues as well as other archival materials.
