Rise of The Global Capitol

Walking down Broadway, one will feel an overpowering sensation of wealth, power, and grandeur that emanates from New York City. With skyscrapers surrounding on all sides, many of which will have scaffolding and lifts filled with construction workers continuing their construction or applying maintenance, it obvious to see the sheer amounts of labor and investments that went into constructing these modern pyramids. One will notice small differences on the path down Broadway however. First passing through the garment district, one will see the see husks of large factories accompanied by tenement buildings nearby which used to house thousands of seamstresses of yesterday. Continuing onto Wall Street where tall glass towers rise from the earth to house the bankers and stock traders of today. The history of New York City’s rise to wealth and power can be seen in a leisurely stroll, but one question remands unanswered, why.
From its inception, New York City was established as city of trade and wealth. The island of Manhattan was intended to be a trading post by the Dutch to partake in the trade of furs and wampum between the local Native Americans, colonists in Albany, and with Europe. The location of Manhattan contributed to this idea of a central point, as it sat in the Hudson river only 20 miles from the ocean and the river itself was wide, deep, and ran inland much farther than the rivers at most other American ports. The land in New York was exceptionally fertile, allowing for outlying hinterlands beyond the island to feed the settlement’s population. Finally, the irreligious nature of settlement, being established solely for trade purposes rather than religious or political ones, set the tone for a more diverse and accepting settlement compared to the rest of early North America. (Glaeser) However these initial traits did not immediately launch New York City into the largest economic center in the world as we know it today. Rather these traits simply proved more useful as time went on, due to advances in technology and with various political events.

When the English conquered New Amsterdam and renamed it to New York, the original Dutch population was allowed to stay which combined with the influx of British immigrants resulting in 5,000 citizens over time. New York’s dual identity of English and Dutch allowed it to trade favorably with the other English colonies, as well as with the Caribbean which was still under Dutch control. The colony’s economy relied on profitable trade with the Dutch West Indies, for New York would sell food and basic goods to the Caribbean in exchange for cash crops to be sold at a profit to Europe and the English colonies. (Glaeser) At the time however, it was still only about the third largest port.
After the French and Indian War, New York grew in value to the British. They saw it as a way to easily reach Canada so that they may trade with the French colonies there, and it allowed the colony to supplement its income earned through its trade with the Dutch. During the American Revolution, New York’s importance grew as the British armies held it desperately for the majority of the war. (Fischer) They chose New York above all other American ports due to its easy ocean access and the large Hudson River which could accommodate larger navies, and because New York was a docile trade city that was more focused on profits than on revolting. Despite losing the war, the British almost exclusively traded in New York City after the United States of America was established. (Glaeser)
At this time, New York finally began to dominate other cities in terms of trade volume and size. Due to its previous occupation by the British military for most of the Revolutionary War, it was chosen as the sole American port that they would trade through. Not only had this set a precedent for other countries when trading with the United States, but it made the most economic sense because it was the largest port at the most central location in the young country at the time being between northern Maine and southern Georgia. Should a merchant want to sell wares throughout the United States it was easier to go through New York for lower transportation costs throughout the country. (Glaeser)
Secondly, trade was far easier and profitable to be done in bulk from the central location, rather than from traditional “point to point” methods. Areas producing raw goods and staple commodities often did not import enough to warrant a trip directly to them, so instead raw materials would be sent in bulk to New York, which traded them for manufactured goods from Europe, and New York would redistribute these goods back throughout the colonies. Overtime the effect of this grew, as New York City was the first port to establish and maintain this role as a connector with the rest of the world. In addition, its harbor was the only one that even could handle the large trade volumes in the first place as ships began to carry millions of tons of cargo in the 1800s. (Glaeser)
The massive volumes of trade and contact with other cultures throughout the world brought many immigrants to the city over the years. This pattern became even more exaggerated with the advent of manufacturing, as it allowed for ever larger economies of scale. Sugar refining was the first major industry in the city as building the refineries were so expensive it made sense to only have a few of them near the major port of transport so as to cut costs as much as possible. The immigrant population benefitted from the jobs these refineries offered, and the refineries could easily expand over time to allow for more workers at a consistent profit. (Glaeser)

Textiles and ready-made clothes soon overtook sugar refining as the largest manufacturing business in the city. Once again it benefited from the ease of access to the largest port in the country and from large numbers of immigrant workers. Textiles proved to be more profitable however, as it matched up with the skill sets of many of the immigrants entering the United States through New York, and required less space or power than other industries. Many immigrants simply plugged in their own sowing machines and worked from home. (Glaeser)
Finally, there was the publishing industry. The United States had not yet recognized foreign copyrights, so merchants often smuggled popular titles abroad into the city so that they may print and distribute them in America for a larger profit. (“International Copyright”) English novels were the most popular, and easiest to retrieve at New York due to the city’s frequent trade with Liverpool in England. It also hints towards the rise of New York as an information economy, for the second portion of the publishing industry was centered on newspapers. With the sheer volumes of trade occurring in the city, whoever had the best information, first, stood the greatest chance to profit. As a result, the demand for newspapers soared as several news companies offered different and accurate information on a variety of business topics. This portion of publishing is still prominent in the city today due to the maintained importance of timely information. (Glaeser)

In the 1920s and 30s major cities lost a great deal of importance due to the inventions of the automobile and truck. The existence of these machines made it possible for people to travel more quickly and cheaply between two points, reducing the need for concentrated populations in the cities and allowing for lower density zones to achieve similar levels of prosperity. Throughout the 20th century, a mass exodus began in all American cities as their population and manufacturing jobs moved out to distant suburban or rural areas. New York City was able to avoid severe depopulation, especially with the inclusion of the other boroughs, but the loss of manufacturing jobs was permanent. (Glaeser)
In order to provide employment for its millions of citizens, New York City’s economy reinvented itself during this time to become more service oriented rather than manufacturing centric. At this time, the iconic associations of Wall Street and corporate finance became synonymous with the city’s growing skyline. Securities and commodity contracts, banking, and business management all became the largest employers in the city during the 20th century and launched New York to being the financial capital of the world for reasons embedded in its history. (Glaeser)

Ever since New York City became an international port, it was natural that most major business activities would be centralized there. To receive the best information the fastest, one would have to be in the Big Apple in order to learn and profit from it. Overtime, the city’s population naturally grew into the megalopolis it is today, giving it its final economic boon, its people. Major business deals are primarily done face to face, and no technology in the 1900s challenged this fact. With most of the world’s business having some connection to New York City, it was natural that it would centralize business services and clerical activities once manufacturing had become obsolete. With major business decisions being made on its streets every day, the city still holds its appeal as an information center necessary for one to get ahead in global business. This situation became more encroached with the development of communications technology. (Glaeser)
Waking in the modern day, New York City still holds its title as a financial and information capital of the world, but once again this is being challenged due to new technological advancements. Communications technology and artificial intelligence continue to improve, allowing people to communicate seamlessly across the planet, and automating many processes originally deemed too complicated for machines. (Moore) Even the services industry is being shrunken by these changes and it is becoming more feasible to move away from population centers.
In face of these changes, New York has experienced large expansions in its health care and education sectors while the now traditional commerce and banking jobs slowly dwindle. (Ehrenhalt) The future of the city is unknown, as there appear to be no more geographic or natural resources left to exploit. Unless a major change is brought about in the city, it is very likely that it will finally slow its expansion as more people and jobs move away from its renowned districts. The glass towers of Wall Street may be the final addition to the epic history of this once all powerful city.

Citations

Glaeser, Edward L. “Urban Colossus: Why Is New York America’s Largest City?” FRBNY Economic Policy Review (2005). Newyorkfed.org. Web. 9 Apr. 2016.

Ehrenhalt, Samuel L. “Economic and Demographic Change: The Case of New York City.” Monthly Labor Review (1993). Bls.gov. Web. 9 Apr. 2016.

Fischer, David Hackett. Washington’s Crossing. Oxford UP, 2004. Print.

“International Copyright.” Copyright.gov. U.S. Copyright Office, Nov. 2009. Web. 10 Apr. 2016. http://www.copright.gov/fls/fl100.html.

Moore, Gordon E. “Cramming More Components onto Integrated Circuits.” University of Texas, Jan. 1998. Web. 10 Apr. 2016

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