One of my great-great-grandfathers was a minor St. Louis robber baron whose investments included the dance hall where Johnny did Frankie wrong back in 1899, a German-language newspaper and telephone company felled by World War I anti-Hun sentiment, and a bank that, ironically, his own son held up. He also owned a quarry in Southern Illinois. Before the Civil War, when the railroad stopped at the Mississippi, westbound settlers would mine rock at the quarry in exchange for room and board in wood-frame barracks and a bit of company scrip, which they’d save up to buy equipment for the remainder of the journey. The operation wasn’t nearly as big as company towns like Pullman and Fordlândia, but the underlying impulse was the same: to profit from employees, in the name of serving them.
Today, we’re seeing a revival of the company town concept, on a scale unimaginable to a George Pullman or Henry Ford. Of course, everybody knows those Silicon Valley corporate campuses, with their dry cleaners, foosball tables, and free meals intended to keep staff at the office. But why stop at the property line? On Jan. 16, Microsoft announced a $500 million plan for middle- and low-income housing in Seattle. Five percent of the money will go to charity. The rest is allocated to for-profit development. So this isn’t altruism, exactly.
The tabula rasa creation of entire corporate communities, housing and all, has become a rare phenomenon outside of authoritarian countries. (Think of Foxconn City in Shenzhen, China, with its notorious suicide-prevention nets.) Instead, at least in the United States, companies with the will and the requisite means prefer political influence instead of direct ownership of a neighborhood or town. Who needs all that responsibility anyway, when you can just dominate an existing city? The old paternalistic pretense has given way to the overt exercise of coercive power, putting local governments in thrall to private business interests.
All too often, corporations use strong-arm tactics to wrest preferential legislation, tax breaks, and other perquisites from governments desperate to gain or retain jobs. Professional sports franchises have a particularly bad track record, using relocation threats to get public money for new stadiums and often unabashedly decamping for more lucrative markets. My hometown, St. Louis, has had terrible luck with the NFL in this regard, losing the Cardinals to Arizona in 1988 and the Rams back to Los Angeles in 2016.
Amazon’s become the poster child for the new-model company town, having used last year’s search for a second headquarters location to pit some 200 municipalities against one another in a race to the bottom. Around the same time, back in its hometown of Seattle, Amazon stopped working on a new office tower—an unsubtle threat to leave town altogether—unless the city council agreed to drop a business tax that supported low-income housing. The city acquiesced. (A few months later CEO Jeff Bezos made a $97.5 million pledge to 24 nonprofits to help fight homelessness, which hardly makes up for it.) This is a dangerous game. That the current political climate allows corporations to treat cities like wholly owned subsidiaries may be great for shareholder value, but it’s a lousy deal for the rest of us.
