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A research paper on the economic sphere of the City of Houston.
Citation preview
Partha P. Choudhury
MLMLA 6393 Houston: The Course
Dr. Jon R. Taylor
August 2, 2012
If ever there were a city more synonymous with the issue of commerce, it is in fact the
City of Houston. Second only to New York City in the aggregate number of Fortune 500
companies in the US, the spirit of business and private enterprise is ever the motif that the city
and its populace are dictated by. Regarded with distinction among major US cities, Houston
boasts itself as the 4th largest metropolitan area in the United States and has already dispatched
Los Angeles, California into becoming second-place in terms of multiculturalism and it being a
chief hub for immigrants to attain a degree of upward social mobility all the while enjoying a
high standard of living at a cost that is proportionately much lower than most other major
metropolitan locales in the US. In its demeanor and pursuits, Houston has outpaced other cities
in terms of laudable achievements in the economic sphere, aeronautical engineering, its Medical
Center, athleticism, the performing arts and music, higher education and diversity in population
that lends itself to the notion that we’re absolutely not backwards in outlook but rather that we
are forward-thinking and progressive; that this city can set a standard for what very well might
become the new societal shifts in the US in terms of a diverse population, economic incentives
for those who want to work hard and the general degree of political ideology that has proved
itself not to be too rigid but malleable whenever there’s a collective will to get behind a
commendable goal.
Houston’s reputation is preceded by the fact that there are just so many issues all at the
same time and much of it very newsworthy. My chief purpose in writing this research paper for
this course is to provide an insight into the economic sphere of the city of Houston by citing
sources that have proved to be emblematic of the economic activities of the city and having
insights into the City of Houston that represent a fair degree of upward positivism in terms of
commerce, but also does provide insights into how a city such as Houston in contrast to other
locales can and ultimately did prove its mettle which has now resulted in its being hailed as a
global city. Using a motley number of sources that attest to the genuine American spirit of
Houston, I’ll go one further and apply an economical measurement that had already deemed
Houston to be a global city even with within the time period of 20 years. In its scope, this paper
takes into account many of the perspectives of economists and academics who have purposefully
written these papers with not only a sociopolitical posturing, but in many instances betray
themselves as having a sociological bent as well.
The context of the economic miracle of Houston is made evident by The Global Context
of Metropolitan Growth: Houston and the Oil Industry, written by Professor Joe R. Feagin of the
University of Texas at Austin. In it, Professor Feagin regards the City of Houston as a case study
and recounts that many of the factors of business bonanza embodied in the success of Houston
cannot be reproduced in other cities due to factors such as geography, climate and also Feagin
provides an adequate commentary on the business-friendly atmosphere of Houston that’s not as
curtailed by regulation of business and in many instances lack governmental oversight that is in
turn deferred by the tacit approval of many sectors of the local and federal government that has
let the growth of Houston go on unabated. Hearkening back to the time of the Allen brothers
from the American northeast who had purchased the tract of land, bayou and swamp and then
called it the City of Houston, Feagin provides enough insight into the spirit of commerce in
Houston that has had its foundations set by the cotton and railroad services in Houston at a time
of American expansionism of the frontier and the American West. From there and onward,
Feagin applies two dual terms in the distinction of Houston that set the tone for the rest of the
paper: “’capital of the Sunbelt’ and the ‘oil capital of the United States’”(Feagin, 1985, 1205).
Even in regards to the antiquated date of publication of this article, the City of Houston had
surpassed many other American cities in terms of size of municipality and population alone.
Feagin says that what makes Houston an outlier when compared to other cities in the American
South is its cosmopolitan appeal in which there’s a steady climate of upward social mobility in
terms of people in its industries, and since the sense of opportunism in the prospect of raking
fortunes surpasses any sort of prejudicial notions, Houston has deftly avoided what many
Southern states had become pariahs to and established a spirit of cooperation with the American
northeast, specifically New York City. And that much is attributed to its oil production and
markets.
This lends itself to the article written by Igor Vojnovic, Laissez-Faire Governance And
The Archetype Laissez-Faire City In The USA: Exploring Houston. Houston, as the archetypical
city in which business interests are given deference rather than scrutiny sets the template for this
article. In spite of the electoral lead that the Democratic Party holds in the City of Houston, the
platform of the party which dictates so much of the political culture in Democratic strongholds in
the Pacific Northwest as well as the American Northeast aren’t applicable to Houston in terms of
the clout that specifically moneyed interests have here. This is buoyed by the dissimilarity of the
state at large which is Republican and thoroughly pro-business. And Vojnovic attributes this to
the stature of the established Republican influence of the state which permeates itself through to
Houston, Democratic though it may be. He recounts the incentives with which politicians will
attract corporations to Houston and specifically the embracing of corporate culture. With
powerful lobbyists on hand, this entails quite a bit of nepotism in the economic sector to the
detriment of the public services and welfare system in a state such as Texas which has an affinity
for less government and more emphasis on society at large to have a private initiative whenever
it comes to welfare assistance. “The minimum government philosophy in Houston is supported
by strong cultural beliefs in self-reliance and individualism” (Vojnovic, 2003, 19). Since
Houston, with its oil industry in production and trade commodities, had established itself as not
needing the sort of dependency upon governmental assistance during the greater part of the Great
Depression, the repudiation of state-assisted funding goes against the very ethos of the state with
a tradition of self-reliance. Seemingly that goes beyond partisanship. In states that stigmatize
unionists and collective bargaining from unions, the “right to work” state nomenclature is
evident in the designation that Vojnovic is willing to do. In a state without a corporate or income
tax, the act of comity with business interests has attracted sizeable attention from various sectors
of corporate society who wholeheartedly agree with low taxes and still maintain a record of
commendable local civic and philanthropic activities in a region that is grateful just to have their
business. And seeing the fact that Houston is second only to New York City in the number of
Fortune 500 companies who are headquartered here, the perks of corporate citizenship are apt to
be less cumbersome in a city that insists upon the essence of laissez-faire. With the oil industry
looming large in Houston, Vojnovic prophetically declares that without the oil and petroleum
market, Houston’s significance and prestige would take a huge dive and its distinction among
other major US cities would no longer be a rallying point for the political and business elites to
vouch for Houston’s free-market enterprise principles. With enough revenue collected from
corporations that do business here, and despite the relatively low cost of it, this in turn again
recalls Feagin’s analysis of Houston as a case study that is an exclusive outlier in which
enterprise has graciously shined here and will thrive here specifically for the reason of the energy
trade.
In Energy and Urban Growth: A Comparison of Houston and Chicago, Professor Harold
L. Platt delineates to the reader the extent to which finding a fuel source and the adequate
marketing, production and the propagation of uses for it led to Houston’s ascendency from a
frontier market of fuel to a pioneer market which he attributes to the invention of the automobile
as well as better refining methods and innovations in technology that had provided a momentous
change in the output of oil. In Chicago’s still enviable occupation of it being a more significant
financial epicenter in the US, hence the world, its position had largely been beset by its
geography and the fact that its insular. The trade, extraction, delivery and transportation of coal
headquartered in Chicago provided a huge percentage of revenue for this city and its proximity
to the Midwest United States made it a chief economic hub where people had achieved a
respectable livelihood. Platt says that cities that had the distinction of being producers and
conveyers of the energies commodities market are able to have burgeoning growth and cites that
it was coal in Chicago and oil in Houston that provided a historical picture of how it is that cities
experience rapid growth and don’t have periodic stagnation. A historical narrative of the city of
Galveston being washed away and devastated by a hurricane in 1900 had ultimately set the tone
and diminished the rivalry between Houston and Galveston in terms of the sociopolitical and
economic contesting from these two cities. Also another bonus for Houston in the energy market
was the ready depletion of coal and the advent of oil and gas as the next wave of production.
With the invention of the automotive industry, incentivizing this market involved quite a bit of
federal governmental subsidies which Houston had been privy to, much to its benefit.
Within the context of these articles, a composite of Houston as an American test case and
a city that is worthy of being comparable to other major US cities is conveyed in Economic
Restructuring And The American City, written by Professor Saskia Sassen of Columbia
University in New York. Setting the tone for this article, the exclusive sectors of the US
economy makes for what every specific major US city is distinguished by. Distinction among
major cities in the US is concentrated largely by what niche market these cities practice in the
US financial market, thus setting the standard and the precedent in which very little room is
made for outside markets and niches. New York City’s distinctions are its legal and banking
sectors as well as it being the center where stocks and commodities are traded in the New York
Stock Exchange. Boston is distinctive because of its insurance industry and risk management
firms and services and Houston is regarded as the energy capital of the US. Within the symbiotic
nature of the US economy in which the whole is an aggregate sum and the fact that many of
these industries are interdependent upon each other, Sassen applies it to the disparity of wages
and earnings distribution and cites often throughout this article the disenfranchisement of
minorities concentrated in large cities. Taken from the viewpoint of an urban sociologist, this
article also hinges upon precedent reforms in employment such as worker’s rights and unions in
procuring for them and other workers the inherent rights that contribute to security and an
adequate amount of proportionate representation. In the article, Sassen cites Houston as having
an overrepresentation in the oil and gas industry as well as the real estate market but lags behind
other cities when it comes to industries that draw quite a bit of water in those cities. Rather ever
in tandem with the trend of a globalized economy, Houston reaches out to other cities and
expedites these services over to them. As it relates to the societal impact of restructuring the
economy to meet this trend, immigration to hubs such as Houston ensure that there’s a bit of
deference given to disenfranchised minorities who might be more productive in manufacturing
jobs, establishing an adequate revenue for the city that just can’t disregard them utterly.
Taken from the context of a globalized economy, one can infer that during a time when
much of governance is dictated by the needs and necessities of the market, Sassen asks the
question of whether local politics matter in a time when markets produce political outcomes. In
the end of this piece, Sassen sees not only local governments providing security against certain
industry initiatives and practices that might be harmful to workers, but makes it a point to
include third party representatives and government oversight who provide at least a modicum of
regulation. In Houston, despite trending towards the Democratic party which usually provides
the ideological precedent of these notions, it is largely industry that has won this debate.
A political ambiguity of Houston, despite its being one of the bastions of the Democratic
party in Texas, is that in spite of this affiliation, a great degree of conservative nostalgia is
evident as a result of being in the state of Texas. And in a state where conservatives deride the
notion of compromise in the face of core conservative principles and tenets, Texas has in its
governorship a more rigidly partisan Republican tenure in Rick Perry. In Governance In
Houston: Growth Theories and Urban Pressures by Igor Vojnovic, the fervor with which the
Republican party had stipulated its principles had been delivered at the 2000 state convention. In
it, “the five principles outlined were”:
1. “The least government is the best government”.
2. “The environment is best served by individuals working in their own best
interest”.
3. “Abolish the income tax and the IRS”.
4. “Repeal minimum wage laws”.
5. “Phase out the Social Security system in favor of private retirement” (Vojnovic,
2003, 590).
With a conservative electorate that’s bent upon the implementation of these values at a
national level and the Republican supermajority in the state legislature in Texas, by no means is
the City of Houston impervious to these precepts. And with a “business climate” that’s
conducive to pro-growth and the hosting of corporations here, Vojnovic who was previously
cited by me in regards to Houston having a laissez-faire disposition when it comes to business, is
further vindicated here upon more acute inspection of the case study. As a result of this
nepotism, “In 1999 Houston was ranked fourth by Site Selection in its survey of US cities
attracting most foreign investment during the 1990s…In the same year Houston was ranked
second (behind Chicago) in industrial importance by Industry Week…Other recognitions in 1999
included Newsweek’s second ranking in its survey of fastest growing job centers in the US…and
a number one ranking by CorpTech for jobs in bio-tech and advanced materials” (Vojnovic,
2003, 590).
According to Vojnovic, the landed moneyed interests that have set up shop in Houston
have been here for a considerable period of time and these elites are tied into local economy to
the degree of maintaining a monopoly in which they’re able to exert quite a bit of influence and
authority. Since corporations are also part of the historical landscape of Houston, the prospect of
being subjugated by an ideology that runs counter to that of the business interest in which they
haven’t got the same ability to run their affairs in the same way is exceptionally blasphemous.
“Free enterprise is still the gospel” (Vojnovic, 2003, 519) and the political climate in Houston
specifically owes its lucrative potential to industry.
With Houston as a cosmopolitan and metropolitan locale, the influx of immigrants who
contribute a lion’s share to the economy is conveyed in Ethnic Places, Postmodernism, and
Urban Change In Houston by Jan Lin of Amherst College. Written from the viewpoint of an
urban sociologist, Lin dispels the stigma many would associate traditionally ethnically distinct
areas of Houston with social pathology. With Houston ambitious for distinction among US
cities, the fact that this city has surpassed Los Angeles in terms of the heterogeneous mix of
diversity is a strong factor of desirability in a city rather than a deal-breaker. With its capacity to
embrace the outside masses who at one point came to Houston in a mood to make a transition
elsewhere, the issue of “group identity” (Lin, 1995, 633) was something of an anomaly in
Houston due to the vast income disparities and employment potentiality that many minorities
lacked. But nestled in a part of the country that has a border with Mexico and the “Freedmen’s
Town” given to liberated African-Americans, the proclivity to be racist and always insist upon
Anglo nostalgia was something that had been satisfactorily dissuaded in this city. And with the
US quotas on immigration no longer being distinguished by race after 1965, the ability to thrive
went against the usually more stick-to-itiveness of the much more segregationist South at large.
With the Voting Rights Act full in force, insisting upon the usual politics of exclusion no longer
seemed necessary and was seen as a detriment. It is our distinction in Texas to be more inviting
despite the hackneyed attitudes that many people have about the American South. Once ossified,
retraction of the emancipation of minorities can no longer be tenable nor is it any longer
desirable. And that is emblematic of Houston, Texas. As it relates to the issue of economics in
the city, with the diversity of tastes and perspectives, the economy of Houston has its niches of
catering specifically to an audience who clamor for authenticity and who’ve got an affinity for
their land of origin all the while being in the confines of a thriving metropolitan city such as
Houston.
At a time of partisanship and the year 2012 being an election year, the citizenry of US
cities have a bit of mulling to do and consider their options. This onset of partisanship can be
attributed to the economy and what party will be the decider when it comes to possibly
ameliorating the US economy and making it optimum again. Since Houston is the city that has
been deemed the “oil capital of the US” and carries quite a bit of traction globally, Richard C.
Longworth of the Chicago Council on Global Affairs writes in Urban America: U.S Cities In The
Global Era some of the maladies that might be intercepted in US cities due to the globalization of
the economy and cites Houston as having a formative part in the interdependent economy. Since
globalization entails a steady movement of people as well as having business and financial
overtones to it to keep it fresh, Longworth chides other cities in the US for not acclaiming their
piece of the globalized economy and says that they stand a good chance in being outside of the
periphery of this new era. Since all cities look for a general degree of relevancy, clout and
recognition from their peers, Longworth sees past the fashionable sentiment of globalization and
deems it wholly necessary to be a viable economy at all in the first place. Instinctively, he likens
survival of cities in the US to be accomplished by globalization. Houston, which is one of the
chief proponents of free-market capitalism, is privy to the globalization phenomenon and is
playing an active role in nurturing it outside of its own peripheries to oil production throughout
the world, and further playing host to it as a center of commerce and business that is engendered
by the prospect of accruing business. The attraction of Houston, with its high standard of living
without raising the cost of these services, is bound to attract not only investors but also people
who are looking for a respite in terms of enjoying the amenities of a better life without
incrementally raising the cost.
In The World City Hypothesis by John Friedmann, a city’s affinity to be characterized by
the perception that people elsewhere in the world may have about it is a point of distinction when
it comes to the issue of global cities. In the spirit of free inquiry, Friedmann links urbanization
processes which have set the standard in cities as playing a pivotal role in ascendency to
becoming global powerhouses. In the developed first world, Houston is deemed as a
“secondary” global city that is in the chief core country of the US. Only three other cities in the
US are deemed “primary” which include New York City, Chicago and Los Angeles. It worth
noting that a distinctive quality of these aforementioned cities are not only their histories but
their relative size and cumulative populations. In a succinct statement by Friedmann, that being
“[w]orld cities are major sites for the concentration and accumulation of international capital”
(Friedmann, 1986, 73), sets the tone for the City of Houston as being home to a generous number
of multinational companies who specifically come here for the energy sector. In these US cities,
enough space, industry, and capital (human and financial) has been amply given to them and
these cities are ahead of their competitors in the rest of the world due to the fact that acceptable
modes of production happen in these cities, the yield of the products are commendable and there
are enough established business elites to generate money which will in turn yield profits.
Houston doesn’t need a reminder to tell it that anticipating the next fuel of the 21st century will
be incredibly lucrative; it knows that. The fact that it will have a say in the energies
commodities market is something that we should always come to expect from it. So, as the
world gains consciousness about global warming and inclement weather, for anyone to
dismissively say that fossil fuels are going away soon have Houston to deal with.
In summation, Houston as a center which will have clout for the foreseeable future is a
given. This city in which four million residents call home has the distinction of livability,
comfort, thrift and amenities that establish it as relevant whenever people decide to sprawl
outside of their confines and seek to live elsewhere. In the lauding of Houston, much of it is due
to the economical cunning and guile it has managed to generate much to its benefit. With
corporations and multinationals from outside of the US look to conduct business in the US, the
choices are made to relocate to a locale which will have a well enough business climate to let
them conduct their affairs in a sovereign fashion, the costs and benefits of doing business will be
weighed in comparison with other cities, and as many corporations, multinationals and the
countries that represent them have consulates in Houston, the degree of reciprocity with which
these entities have given back to the Houston community is taken into account. There’s
conspicuous language in the charters, decorum and mission statements of companies in Houston
that imply that corporate citizenship necessitates a giving back to the community and fostering
relationships that go beyond mere employment. One can only hope that there’s a hearkening to
the maladies of the city can be addressed jointly with corporations playing an active role. The
philanthropic vein of Houston is accentuated by the spirit of initiative and taking the onus upon
oneself to establish venture and make a name for oneself.
In the pursuit of making and delivering quotas in terms of the economy, Houston is by no
means a sidelined actor but often many policymakers throughout the US have considered the
economical entailments of Houston into perspective before making a decision. At a time when
the US is making the decision to subsidize renewable fuels, a Houstonian’s hope is that in the
spirit of commerce that established markets won’t be the only factor coming into play but also
the factor of environmental stewardship should be considered in the back of one’s mind. With
the possible degradation of the environment, eyes are on Houston to make a decisive decision
regarding investing in future renewable energies. As it is advantageous to be an influence in this
certain market, one can hope that this prospect is lucrative enough to be a new standard.
Aside from industry, Houston has many qualities about it that are sweetened by the
economic incentives of living here. Whether it should be the cultural significance of the arts,
humanities, music, aeronautical and space program (NASA), or the Medical Center, the
likelihood of Houston being privileged to have distinction exclusive to that of the oil and energy
industry is established among Houstonians.
But it definitely has its shortcomings as well. With rampant crime being on the incline,
developmental programs much to be desired in various parts of the city, inclining poverty rates,
high school dropout rates and substandard testing among schoolchildren, the hope is that there
are enough Houstonians who have a generous degree of affability, education and altruism to pick
up the slack. With nonprofits and volunteerism on the rise, the sense of community and helping
the disenfranchised is in the spirit of Houston and one can sense that these attributes often come
into focus whenever it comes to the civic culture of the city.
But gauging the problems involves the knowledge that these aren’t at all spontaneous
occurrences that have happened overnight, but in terms of addressing the societal impact of what
these issues, if left to go on unabated, will have in store for Houston is still yet to be determined.
Houston is emblematic of America, specifically despite its proximity to the South and its
attached ruralism, is a test case for other US cities in terms of what luck, perchance and will can
do. In its designation as a global center of commerce, one can expect that it should exceed
expectations and that the soft bigotry of low expectations is not at all applicable to the City of
Houston. American in its character, it offers promise in the future and viability to go one further
and set the standard for what’s to come in the future.
Works Cited (APSA Format)
Feagin, Joe R. 1985. “The Global Context of Metropolitan Growth: Houston and the Oil
Industry”. American Journal of Sociology. 90: 1204-27.
Vojnovic, Igor. 2003. “Laissez-Faire Governance And The Archetype Laissez-Faire
City In The USA: Exploring Houston”. Geografiska Annaler. 85: 19-37
Platt, Harold L. 1987. “Energy and Urban Growth: A Comparison of Houston and
Chicago”. The Southwestern Historical Quarterly. 91: 1-18
Sassen, Saskia. 1990. “Economic Restructuring And The American City”. Annual
Review of Sociology. 16: 465-90.
Vojnovic, Igor. 2003. “Governance In Houston: Growth Theories and Urban Pressures”.
Journal of Urban Affairs. 25: 589-624.
Lin, Jan. 1995. “Ethnic Places, Postmodernism, and Urban Change In Houston”. The
Sociological Quarterly. 36: 629-647.
Longworth, Richard C. 2012. “Urban America: U.S Cities In The Global Era”. Journal
of International Affairs. 65: 97-108.
Friedmann, John. 1986. “The World City Hypothesis”. Development and Change. 17:
69-83.
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