Abstract
Prior to World War II, Phoenix, the Salt River Valley’s largest city, was a “domestic colony” of northern industrialists with an economy based on cattle, copper, cotton, and climate. The collapse of cotton in 1920 led the Phoenix Chamber of Commerce (PCC) to consider new economic development strategies that would attract industry and diversify the economy. To do this, however, required remaking the PCC, reforming municipal government, taming organized labor and pesky small business owners, and creating a powerful statewide Republican Party. Though not without setbacks, this most successful reclamation project unfolded over many decades and reoriented the political economy of the Sunbelt—and the nation—toward neoliberalism.
Sunbelt Capitalism is not a labor history but addresses the working class and unions as groups to be vanquished by business elites. Author Elizabeth Tandy Shermer focuses on the rise of modern conservatism, the origins of which she contends lay not in the South but the Southwest. The book is organized in three main parts. Part 1, “Desert,” covers Phoenix’s colonial roots through World War II. During the interwar period, labor won state constitutional protections until the U.S. Supreme Court declared them illegal. But unions’ growing power united Anglo business elites and civic organizations against them.
New Deal reformers saw both the South and the Southwest as “colonial quagmires” desperately in need of modernization. Phoenix’s boosters opposed the New Deal but supported federal plans for the Valley’s industrialization. A younger cohort inside the PCC, led by retailer Barry Goldwater, supplanted the old guard and sought to usher in an urban, industrial, and modern Phoenix. These Anglo elites (referred to as “grasstops,” sociologist Philip Selznick’s term for local elites whom liberals empowered to oversee the local implementation of the New Deal) were not averse to using federal funds to further their objectives.
During World War II, local business leaders worked with liberal politicians and federal officials to bring manufacturing plants and military installations to the Valley. To prepare for postwar reconversion, the PCC rewrote its constitution to enable it to develop industrial property, hired a salaried manager, ramped up public relations, and became active in politics.
Part 2, “Reclamation,” covers the postwar period through the 1960s. During this time Phoenix’s business elites “had completed much of the ideological groundwork for a homegrown neoliberalism that embraced government power to free industrialists from regulation and taxation” (p. 93). They helped to pass one of the earliest right-to-work laws (1946) and reformed municipal government to disenfranchise the working class.
The PCC and its Charter Government Committee, created in 1949, continued to reform local electoral politics and actively annexed land for industrial recruitment. They employed local government as the “handmaiden of rapid industrialization, but without eroding the labor cost and regulatory differential that had been central to the relationship between the nation’s manufacturing core and its commodity-driven periphery” (p. 143). To recruit mainly high-tech manufacturers, boosters shifted from “buying payroll” to selling a “favorable business climate” to executives looking to escape the taxes, unions, and New Deal regulations.
Sunbelt cities and states competed for outside investment and continually sought advantages that industrialists demanded. Land annexation and business tax cuts acted as lures, but ongoing revenue and water shortages compromised their efforts. A small teachers college was transformed into the employer-directed, engineering-based Arizona State University that developed a (white and conservative) professional and technical class that would appeal to high-tech firms such as Motorola, General Electric, and Sperry Rand. “Hundreds of firms had already relocated or began operations in the Valley by 1960, which made this once colonial outpost an unquestionable epicenter of high-tech engineering and production” (p. 221). To increase revenue to carry out its plans, individuals’ tax burdens were increased, a tactic that eventually backfired by the 1970s.
Part 3, “Sprawl,” addresses a maturing industrial and emerging postindustrial Phoenix, the arrival of its business elite on the national scene and a backlash against them over taxes and other burdens, and the bursting of Phoenix’s housing bubble in 2007. As the Sunbelt flowered, federal policies that encouraged capital flight created a rust belt in older industrial states. When the national economy shifted toward services, boosters encouraged businesses to move their corporate headquarters to Phoenix.
The post-1960 era also witnessed the large role played by Phoenix’s elites in Washington politics, especially Barry Goldwater, who won the GOP’s presidential nomination in 1964. He and likeminded conservatives continued to support hypergrowth, antiunionism, low taxes, and deregulation. They were aided by two fellow Arizonans who became U.S. Supreme Court justices, William Rehnquist and Sandra Day O’Connor, whose votes “further repealed mid-century governmental limitations on business, reoriented the state toward protecting and promoting industry, and helped guarantee that regional industrialization would erode not improve, national living and work standards” (p. 301).
Despite the disappearance of organized labor in the latter part of the book and the overreliance on the term “grasstops,” Sunbelt Capitalism is a solid history that offers labor educators a better understanding of the long game still being played by business elites and their political allies in reconstructing the political economy against workers, unions, and New Deal liberalism.