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Pittsburgh: Rises from the Ashes

By Shlomo Maital  

Pittsburgh

In today’s International New York Times (July 3), David Brooks makes an important observation. The political battleground in the U.S. and other countries has until now been: big government? Or small? Too much government? Or too little? This is changing, in the wake of Trump and right-wing nationalist parties in Europe.

   The core issue, he says, in the coming decade, will be: open or closed? Open society, to trade, ideas, immigrants, information? Or closed society, with a big wall, protectionism, tariffs, and ‘immigrants not welcome’ signs?  

     Globalization began with the fall of the Berlin Wall, Nov. 9 1989. The unification of the two Germanys accelerated the European Single Market and boosted global trade. But the benefits of free open trade, which have been enormous for Asia, accrued mainly to the wealthy and better off, who make money from money. Blue collar workers in the West lost their jobs, as manufacturing migrated. This silent majority is no longer silent. And their pain has become a central issue in politics, in the post-Trump era.

       Brooks, like all good columnists, leaves his office and goes out into the field, to see first-hand. He visited Pittsburgh. My sister lives in Pittsburgh, and I’ve been visiting her regularly since her marriage to Chuck, my late brother-in-law, a Pittsburgh optometrist, in 1952. I saw first-hand the smoky steel mills along the Monongahela River and saw the terrible pollution that coated Pittsburgh with a layer of dust. I saw them disappear, as Pittsburgh reinvented itself to become today’s modern high-tech city, financial center, healthcare center and home to a great university, Carnegie-Mellon. As Brooks observes, Pittsburgh today is amazing, with sparkling clean air, great restaurants, cultural events, an old train station rezoned into restaurants and shops…   a stark contrast to many other rust-belt cities, like Cleveland, OH and Gary, IN, which have not done the same.

     But nonetheless, Pittsburgh too has its community of losers, those who lost high-paying steel jobs in the heyday of U.S. Steel.   Globalization may have produced net gains for Asia, and even for the U.S., but those gains were very very unevenly distributed, and the winners did not in the least compensate the losers.   After a long delay, the losers are now generating a political reaction and near-counter-revolution.

     It would be a shame if the benefits of globalization were reversed, simply because our political system was too lazy, stupid and short-sighted to realize that somehow, we have to find a way to help those who lose from it.   Maybe a good place to start is Pittsburgh, as Brooks notes, which lost thousands of steel jobs and eventually created thousands more of service jobs.

     I think we should recall China and its amazing Great Wall, stretching for some 13,000 miles (21,000 kilometers),  completed around 1400-1600.   The Great Wall kept out the Manchus and kept China whole and safe, at least in part. But it also kept out the world and led to 500 years of stagnation in China’s economy.   Modern China has been a huge winner from globalization, because it has been smart enough to know how to reap the benefits.   We should challenge other countries, especially the U.S. and Europe, to state: What is your strategy for evening the playing field, NOT globally but WITHIN your own country, to help those who have lost well-paying jobs to free global trade?   Because if you don’t shape such a strategy quickly, you may find that politically globalization is no longer viable and is replaced by protectionism and modern Great Walls.   Trump’s “build a wall and make them pay for it” will replicate itself elsewhere, if we do not act soon and wisely.

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Pittsburgh:  Last Great Undiscovered American City

By Shlomo Maital

UPMC

                              

  On Wednesday I was in Pittsburgh, Pa., and gave a talk at Carnegie-Mellon Univ.  Pittsburgh is perhaps the last great undiscovered American city.  Once a grimy steel town, with steel mills spewing pollution on the three rivers that merge in downtown Pittsburgh (Allegheny, Monongahela, Susquehana), Pittsburgh once saw the mighty United States Steel building tower over its skyline. (Its NFL football team, Pittsburgh Steelers, gets its name from that era).  In the 1950’s, I visited the steel mills that employed thousands of Pittsburgh workers.

  No longer. The steel mills are long gone.  Grimy Pittsburgh is now squeaky clean.  And the steel jobs have been replaced by health care jobs.  In place of the US Steel sign,  UPCM (University of Pittsburgh Medical Center) towers over the skyline.  Pittsburgh has become a health care center, with two great universities at its core, University of Pittsburgh (Pitt) and Carnegie Mellon.  Pitt is unusual; it is one of the only universities in the world whose core building is a skyscraper, the 40 story Cathedral of Learning. 

    Nearby cities, like Detroit, and Cleveland, are in desperate trouble. Detroit has declared bankruptcy.  Detroit lost its auto jobs, Cleveland lost its heavy industry.  Somehow, Pittsburgh fought back and found something to replace the steel jobs.  What we learn from this is simple:  Every individual, organization, city and country needs to ask,  what is it that I can do, to create value for others,  that is done better, faster, cheaper, than others?  What is my ‘differentiator’?  Every company, every city, every country needs one.  Some cities never bother asking that question, and they sink.   Of course, you need to do more than ask the question – you need to answer it wisely and then implement the answer.  Pittsburgh has done that. It is a thriving vibrant city, with a vigorous cultural life,  many young people who flock to the high-quality universities and stay after they graduate, and strong political leadership.  

   

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
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