Author’s Response

I am tremendously honored by Lane Windham’s, Bill Fletcher’s, Suleiman Osman’s and Michael Kazin’s generous, thoughtful responses to my book, as well as by Joseph McCartin’s introduction to this forum. These are five intellectuals and scholars from whom I have learned much, and whose scholarship and activism alike has been a model for me. I deeply appreciate the time they took to think about Fear City, and I am grateful to the Kalmanowitz Initiative, Labor, Joseph McCartin, and Leon Fink for bringing us together.I am especially pleased that the editors of the journal thought Fear City might have something distinctive to offer labor historians. One of my long-standing interests has been finding ways to write about the history of working-class people and working-class organizations in a way that captures their agency alongside the real constraints and differences of power under which they must operate. In Fear City, one of my goals was to find a way to describe how people in different social positions and different classes understood the same events and problems in radically different ways—to tell the story of the fiscal crisis from above and below at the same time. So Lane Windham’s suggestion that Fear City represents a “history of capitalism” that manages to be at once about finance and labor is very meaningful to me.Sometimes, I imagine, an author will find themselves finished with a topic after completing a book—tired of it, exhausted by it, ready to think about something else. But that has not been the case for me with Fear City; I have not felt entirely done with New York’s fiscal crisis, or perhaps it has not been done with me. This may have something to do with the subject matter of the book: it is a book about the city that I was born in and grew up in, and in which I still live, despite the ways that it has changed so profoundly from the city of my childhood. And the political moment whose emergence it chronicles is that which I have lived my entire life within. It would be challenging to put the topic aside, to see it as completely settled. So I appreciate the many questions raised by the respondents, which echo some of those I’ve been asking myself since the book’s publication.I chose to write Fear City in the framework of a narrative history that would highlight its drama for reasons that were intellectual as well as aesthetic. To under stand why the fiscal crisis had the impact it did, it seemed to me essential to recognize how much suspense and uncertainty it generated, and the sense of panic that engulfed the leaders of the city as bankruptcy neared. Over the course of 1975—as perhaps during fiscal and financial crises generally—a single-minded logic of desperation took over, focusing energy and attention on the narrow question of how to balance the budget.Any broader view of the structural problems facing the city—the ways that the federal government helped to subsidize and facilitate the loss of people and jobs to the suburbs; the trade policies that Windham mentions that made it possible for industries such as garment to depart the city and move production to low-wage regions in the South and overseas; the racial inequalities that still governed the distribution of resources in the city, even at the height of postwar liberalism—disappeared under the immediate pressure of cutting the city’s expenses, especially spending on social programs that in the context of the need to find some way to balance the budget could only be seen as a drain on resources.I continue to believe that the narrative is an important part of the argument of Fear City, and that one of the book’s insights has to do with the political effect of the crisis sensibility. However, one of my own concerns about the book is whether it inadvertently replicates this logic too closely. By focusing so closely on the crisis, did I myself make it difficult to see fully the structures that produced it or to imagine alternatives? My hope is no—that Fear City does give a sense of the pressures that New York faced, especially the impact of federal policies that favored suburbia; the problems of federalism and of the funding structure of programs such as Medicaid that led to New York City being responsible for an extraordinarily high proportion of the cost of the program; and the deindustrialization that affected so many cities at this time (and which, in New York, was driven partly by real estate interests); and changes in the municipal bond market. All of these reflected choices in their own right, not simply inevitabilities. But certainly Windham points to a range of issues that I would have loved to explore more deeply, such as the ways that the resurgence of political activity in the business community at this point might itself have narrowed the options available to public-sector workers as well in the city, as did the right-wing assault on government unions at this time.Suleiman Osman and Bill Fletcher both place Fear City directly in the context of debates about neoliberalism, and how historians might best engage with this concept. There is a long history of thinking about the fiscal crisis in terms of neoliberalism and its rise, one that goes back to the writing of economic journalist Doug Henwood in his book Wall Street and also to David Harvey’s A Brief History of Neoliberalism.1One of the aspects of the crisis that most impressed me during my research was just how removed many of the city’s leaders were from the political and intellectual debates roiling conservative circles at this time. Nowhere in my reading through the minutes of the Emergency Financial Control Board, for example, did I find any citation of Milton Friedman. Nor were the city’s elites consistent. Some of the key leaders who pressed for budget cuts (such as Lazard Frères banker Felix Rohatyn) also lobbied the federal government for increased aid for New York to avoid bankruptcy, for greater federal spending on welfare and public infrastructure. There certainly were hard-line market ideologues in the Ford administration (most notably the chair of the Council of Economic Advisers, Alan Greenspan, and Treasury Secretary William Simon). But they had to share space with Vice President Nelson Rockefeller, who early on broke from the president to advocate aid to the city, and in the end, they lost—New York did not have to declare bankruptcy.In short it seems to me in looking back at the fiscal crisis, that the rise of what we think of now as “neoliberalism” was a much more tentative process than we see it being in retrospect—“bumper cars,” as Fletcher puts it. What happened in the fiscal crisis had more to do with raw power than it did a complex or well-conceived set of ideas about the free market. The confusion and uncertainty of the crisis made it possible to attack and undo a set of arrangements in the city that had for some time troubled significant parts of the city’s elite, but it did not lead immediately to any clear agenda for what should come after. The ideology was only developed and elaborated later.This is not to say that the responses to the crisis were neutral. New York’s economic and political elites quickly moved to blame social spending, public sector unions and, in some cases, poor people themselves, for the city’s fiscal difficulties—a response so rapid that it seems almost automatic. But it is to suggest that the crisis came first, the rise of a clear policy agenda later. This may, in a way, have been true for the country as a whole in the 1970s: perhaps the confused, harsh response to the economic slowdown of this time should be separated from the emergence of “neoliberalism” as an intellectual and political program later on. As Bill Fletcher puts it, there was no clear plan that existed a priori.Osman makes great points about the “do-it-yourself” city, and I appreciate his examples of the politically heterogeneous skepticism about public services that was emerging at the ground level well before the beginning of the fiscal crisis. (His article in the Journal of Planning History is also excellent.2) Certainly the city’s public sector was deeply troubled by the late 1960s. One does not want to idealize the mid-century city, even while admiring its accomplishments. There were deep racial inequities in public schools, higher education, and hospitals, even at the height of the postwar liberal years. Many of these problems got much worse as funds ran low in the late 1960s and early 1970s. Many activists were already profoundly critical of the city’s public sector, calling on it to be more democratic, efficient, representative, liberatory. As Osman puts it, the city was “already in a state of revolt” against New York’s liberalism before the crisis began, the “New Deal order already coming apart at the seams.”Nonetheless, while I am drawn to the vision of New York in the late 1960s as a city teeming with challenges to the ideals of liberal modernism, I think that the experience of the fiscal crisis mattered greatly for what came afterward. While it is true that the city’s public institutions were fraught, the activists seeking to challenge and improve them were often stunned when they were closed outright. The crisis, and the powers that it helped bring forward in the city, gave a particular form to a much broader antistatist critique—one that turned it toward the market and toward private-sector corporations as the repository of these values, rather than anarchist or communitarian institutions. That these different community experiments—some radical, some not—were ultimately marshaled against an expansive vision for the public sector has everything to do with the way that the crisis was held up as proof positive of the failure of the state.In certain ways, the same might be true for the country as a whole during the 1970s and early 1980s: the radical and diverse challenges of the New Left, the anti-authoritarianism nurtured by Watergate, the sense of the entire Establishment as politically complicit and corrupt, ultimately became channeled toward a promarket politics that no longer possessed a critical edge. Osman is right, I think, to see the story of the New Deal order not only in terms of its collapse but the rise of an alternative ethos. But while this ethos had a variety of sources, it also took shape in a particular way, one that was far less open than it had initially seemed to be—and the fiscal crisis is an inextricable part of that story.Kazin and Fletcher raise another important question, one linked to Osman’s concerns: Why did the Left have so much difficulty countering austerity politics in the 1970s with a persuasive alternative narrative or political vision? Why did the neighborhood protests over the closure of particular institutions fail to coalesce into a broader challenge capable of changing the direction of the city as a whole? If “social democracy in one city is inherently an unstable, vulnerable phenomenon,” as Kazin writes, why did a national politics not emerge to defend New York?The problems in the city articulating a new vision for the public sector, the degree to which resistance to austerity was framed mostly in terms of attempting to protect what existed already (as flawed as it may have been), seems linked to the fundamental defensiveness of much Left politics in the years after 1980. As the New Deal order came under attack, people on the left found themselves defending a welfare state and a labor movement that were flawed and inadequate even when they were stronger. The political imagination of the civil rights movement and the radical politics of the 1960s and early 1970s gave way to a more pessimistic, reactive frame. Could the Left in the 1970s have put forward a vision of a transformed public sector, both in New York and for the country as a whole? Why did this not happen? This is, of course, connected to the larger question: What alternatives were available, for New York and for the country as a whole?While I am especially intrigued by Windham’s suggestion about international comparisons, it was not my goal, in Fear City, to make a case about what the city should have done instead (although I will say that I do not think there is much evidence that bankruptcy would have been better for New Yorkers in the end or that it would have rescued more services). At the time, politicians and activists in the city observed that New York paid more in income tax to Washington, DC, than it received back, and that changing this might help the city’s finances; that a federal rescue agency for troubled municipalities could lessen the political power of private financial institutions; that reconfiguring the boundaries between cities and suburbs to shift the tax base would go far toward addressing the inequalities that had emerged; that changing the city-state or state-federal split for Medicaid could lift pressure off the city’s budget.Of course, none of these options were politically feasible during the 1970s. The reasons for this have to do with the deeper crumbling of the New Deal order, thanks in part to the kinds of ideological challenges that Osman points to, as well as the growing counteroffensive of business and conservative politics more generally that Windham observes. But that they were politically off the table does not mean they were economically or technically impossible—it suggests, instead, the way that fiscal crises are politically determined. The story is closer to a tragedy than a narrative that permits easy resolution.While this may seem cause for despair, I don’t think that it has to be seen that way. In truth, many of the trends that I describe in Fear City were pushed much farther in other cities and in later decades than in New York. The fiscal crisis helped to set New York City on the path toward the real estate–driven development strategy that now makes it far more difficult a place for even middle-class families to live. It changed institutions; never has anyone seriously moved to end tuition at CUNY. Today, crises of the transit system and mass homelessness driven by spiraling rents roil the city. The city’s schools remain heavily segregated by race and income, with wealthier schools able to accumulate far more donations from parents to fund enrichment programs that should really be the prerogative of the city. All of these are in a sense crises of austerity in that they reflect sustained disinvestment in public infrastructure and the social safety net. But at the same time, the public sector could not be demolished entirely, and in many areas, although it took a long while, city spending ultimately recovered from the cuts of the crisis period. New York’s public sector is far more extensive even today than those of other municipalities (Mayor Bill de Blasio’s recent “universal pre-kindergarten” programs being one example among many). The city’s unions have never been threatened with right-to-work as in Michigan or with a substantial contraction of bargaining rights as in Wisconsin.By contrast, the process has gone much farther in other American cities, where basic emergency services such as fire have been subcontracted out to private companies. Libraries have been closed. Public-sector unions have been hobbled. As the spring 2018 teacher strikes in West Virginia, Oklahoma, and Arizona have showed, in many states public schoolteachers have seen pay cuts so severe that they can no longer make ends meet without picking up additional work, while school boards recruit overseas to find teachers who will take the jobs. All of this is often justified by budget shortfalls that are the inevitable result of generations of antitax and antigovernment politics.Fear City evokes a different vision of the public sector, and of the importance of investment in public services as a way to nurture a democratic culture. It suggests that something which might seem as humble as city spending on parks, schools, public pools, day care, libraries, transit systems, and public hospitals can be a way to encourage egalitarian values, that these institutions can embody and instantiate a set of hopes for a different collective future for us all

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• Brief History of Neoliberalism

  Desley J Harvey, David Harvey et al.•BRIEF HISTORY OF NEOLIBERALISM.•2005

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