The city and its power to change

by Barbara Black

A recent symposium on "The Metropolis and Globalization" held out both inspiration and caution for Montrealers.

The day-long event was held March 31 in the downtown Faculty Club by Concordia's Political Science Department in conjunction with GIRE, the Groupe International de Recherche sur l'Emploi. The participants included a number of Montreal administrators and politicians, as well as academics.

Jacques Girard, head of Montreal International, a three-year-old private, non-profit organization, made a vigorous pitch for Montreal's economic and cultural viability. After a history of resource-based industry and manufacturing, he said, the city has become "a great technopolis," a world contender in aerospace (after Seattle), biotechnology and telecommunications (40 per cent of the Canadian industry), and is rapidly growing in multimedia, e-commerce and the logistics of transportation.

Cities have what it takes to determine their own destiny, Girard said. With their concentration of population, power base, educational institutions and services infrastructure, they are the focus of change, and with its sensitivity to both Europe and North America, Montreal is ideally placed to be a cultural innovator.

A note of caution was sounded by a visitor from New York. John Tepper Marlin is chief economist in that city's office of comptroller, and he has seen first-hand the fall, rise, and recent slippage of New York's economy. In 1975-76, New York hit the wall of insolvency, and had to be rescued by the federal government. The problem was a massive accumulated debt, partly due to the rising price of oil. Servicing that debt cost 40 per cent of the city's budget.

New York climbed painfully out of its black hole by raising tax rates, a highly unpopular move that drove already recession-plagued businesses away forever. "People lost confidence and left, and those jobs never came back," Tepper Marlin said.

Taxes were eventually reduced while Edward Koch was mayor, then rose again during the era of David Dinkins, who had been elected on a strong union ticket. Now, tax rates are going down again, but Tepper Marlin feels this may simply feed the artificially high economic boom. Local governments should be acting "counter-cyclically," he said; in other words, against the trend, rather than with it.

"Setting aside money for a rainy day doesn't work," he added. Any surplus should be used to pay down the debt. That reduces interest payments and frees up your budget, and by lowering the debt below the limit, you give yourself room to borrow more, if necessary.

Like Girard and others at the conference, Tepper Marlin emphasized the power that cities have to determine their own course for good or ill. "New York was much less affected by the federal government than by its own decisions," he said.

This was the fifth such symposium for GIRE, but the first to be held at Concordia. The main link between the sponsors is Professor Harold Chorney, who is vice-president of GIRE and was among the speakers.

He warned the audience that Montreal has a "triadic" economy, in which about 10 per cent are working hard and doing well. There's a large middle segment, including the unemployed (6.8 per cent in Montreal, roughly similar to the rate in Toronto) -- and then there's another, forgotten group who are virtually excluded from our notice. These are the fitfully self-employed and the chronically unemployed, not to mention the panhandlers we see going to and from our offices.

The challenge posed by Chorney and others at this symposium is how to transfer the bright shiny benefits of e-commerce, high-tech and globalization (if, indeed, globalization exists -- some participants weren't so sure) to these marginalized citizens.