All across the country, small towns are suffering. Once the heart of the American experience, these places have been losing their populations to larger urban and metropolitan centers for the past several decades. I never consciously chose to be a part of this great migration, but as it turns out I find myself as a case-in-point. I grew up in a small town in Connecticut and I did well in school which meant opportunities to go away to college. Specialized degrees led to specialized jobs located in larger metropolitan areas, until following the natural path of this economy landed me in Austin, Texas, one of the fastest growing cities in the nation and a leading beneficiary of the small town-to-big-city movement.
Yet it hasn’t always been this way. At some point in American history, small towns were the heart and soul of this country and people tended to stay in place. So what precipitated this economic and migratory trend? What could turn an economy based on several smaller self-sufficient local economies into a centralized, more urban, and more global system? Unexpectedly, I found some clues in Doris Kearns Goodwin’s No Ordinary Time: Franklin and Eleanor Roosevelt: The Home Front in World War II, which pinpoints the early 1940s as a major economic turning point.
Goodwin describes America at the dawn of the 1940s as “…predominantly a small-town nation, with the majority of citizens living in towns of fewer than twenty-five thousand people.” As the military crisis in Europe brought war to America’s doorstep, several of the policies implemented to mobilize the American economy for war-time production had profound effects on the structure of the economy. The first was as simple as an amortization tax law which allowed businesses to write off expanded plants and equipment, enabling them to report lower taxable income. Goodwin describes how this policy, important to the mobilization process, concentrated government spending to a few major players:
“But liberals were correct in suggesting that small business would be hurt by the way the tax legislation was structured. As the defense program got under way, military-procurement agencies turned more and more to big business. A study indicated that in the first year of the mobilization fifty-six large corporations accounted for three-fourths of the dollar value of all prime contracts. ‘We had to take industrial America as we found it,’ War Department Undersecretary Robert Patterson explained. ‘For steel we went to the established steel mills. For autos we went to Detroit.’ Large firms had the facilities and experience to handle large orders.”
The second policy change came in the form of incentives for Americans to work in war production factories, including “giving draft deferment to skilled labor in war plants, giving the war industry first call on workers registered with the Employment Service, providing carrots and sticks for peacetime plants to convert to war production.” The result of these policies coupled with heavy government investment led to a population shift:
“Indeed, the great voluntary migration that would irrevocably alter the face of American society had already begun. Since 1940, more than seven million Americans had moved across county and state lines in search of employment in the burgeoning war-production centers. By the end of the war, more than fifteen million civilians would have moved to different counties. The population patterns of the country would be permanently changed.”
The greatest shifts were from the east to the west, from the south to the north, and from the country to the city as people followed the manufacturing jobs.
“…millions of people, drawn by the shipyards and the aircraft plants on the West Coast, flocked to California, Oregon, and Washington. More than half the wartime shipbuilding and almost half the manufacture of airplanes were centered in these three coastal states, whose population would increase by over 34 percent during the war.”
These passages paint a fascinating picture of the extent to which government policy and spending transformed a decentralized land-based economy into the more centralized, production-based economy we are familiar with today. Even now, we can draw parallels between government spending and policy and those communities who are winning and losing in this economy. College towns have a built-in advantage in the form of access to government research grants and student loan funding. In other communities the difference between boom or bust depends on military spending decisions or government contracts. Subsidies for crops such as corn and soy beans greatly influence the economics of farming. Unless these communities are able to build their own internal economic productive capacity, each of them is susceptible to the politics of Washington.
The thing I took away from these passages of Doris Kearns Goodwin’s book is that the decline of the small town is not an economic eventuality. Rather, it’s the result of particular political and economic policy choices. This means that, if the political will is there, the economic trajectory of the small town can be reversed and momentum can swing in its favor. Such a shift would resurrect a debate begun by Thomas Jefferson and Alexander Hamilton at the founding of our nation: What kind of country do we want to be?