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Cities of the West: An American Success Story

Part two of two: America’s most modern region emerges.

(Julien Hautcoeur/Shutterstock)

Part one of this essay showed how the political tradition of Alexander Hamilton, Henry Clay, and Abraham Lincoln gave rise to the successful spread of American civilization into the forbidding region between the 98th parallel and the Pacific Coast Ranges. Part two of this essay will bring the story of America’s western cities up to the present, looking at how federal policies combined with the West’s distinctive form of capitalism to create the nation’s most modern metropolitan megaregion.

Federal water “reclamation” activities started small, based on the premise that Washington, D.C., would only pursue projects that could recoup their construction costs through water revenues from local farmers. It soon became clear that the premise of quick payback wasn’t going to work, and Congress amended the law to widen the range of federal activities in 1910 and many times thereafter. The fast-expanding Bureau of Reclamation shifted to paying for dams through electricity sales and, when those proved insufficient to support America’s burgeoning ambitions in the West, through appropriations from the Treasury’s general account.


After seven Western states agreed on how to apportion the Colorado River’s water in a 1922 compact, Congress authorized the Hoover Dam, the largest dam in history to that time. Under Franklin Delano Roosevelt, another Hamiltonian, the bureau entered a golden age lasting until the 1970s. Its initiatives included more than a thousand major dams in the Missouri and Columbia River watersheds, along the Colorado, in California’s Central Valley, and in central Arizona.

Building the West’s hydraulic infrastructure was a remarkable technical achievement. Among the many wonders achieved by the Bureau of Reclamation was lifting water more than 3,000 feet over the Tehachapi Mountains to support Los Angeles and diverting all the Colorado’s water to human uses.

But, perhaps ironically, the federal campaign to promote agriculture in the West was at best modestly successful. Federal irrigation projects never supported more than a small number of farmers, even though agriculture came to take up more than 80 percent of all diverted Western water by the 1970s. And the Bureau had to sell its water far below cost to make even these tenuous farming beachheads viable.

One problem: There simply wasn’t enough surface water in the West to fulfill America’s agricultural dreams. John Wesley Powell, explorer of the Grand Canyon and father of federal engagement with Western water challenges, had warned as much in the 1880s, but Western boosters had ignored him.

To make matters worse, irrigation invariably increases the salinity of surface water over time. More and more Western acreage has gone out of production for this reason despite enormous federal investments in desalination infrastructure.


The greatest achievement of federal investment has not been Western agriculture, but the rise of a great urban civilization, an outcome few anticipated. Western city-building experienced stupendous growth after the 1870s. Before long it started to crowd out agriculture in the allocation of scarce resources.

The most infamous instance of urban water diversion was Los Angeles water chief William Mulholland’s takeover of the Owens River Valley’s water in 1905 with the aid of subterfuge and corruption. But there are plenty of less lurid examples. In Colorado, engineers dug a tunnel under the Rocky Mountain Front Range to divert water to Denver from the Blue River, a Colorado River tributary. In Arizona, the 1980s saw the emergence of a lively trade in water rights, mostly transfers from farmers to suburban developers.

The modern West has emerged as an “oasis civilization,” in the words of the Western author Wallace Stegner. Metropolitan areas occupying miniscule shares of the West’s vast land mass account for 84 percent of total population in Arizona, Colorado, Nevada, New Mexico, and Utah.

Federal power contributed additionally to the West’s growth after World War II by building defense facilities throughout the region. In Utah, the Pentagon built or expanded 10 installations and supported the growth of multiple private-sector arms factories. San Antonio’s large military presence has played a vital role in the city’s growth since the late 19th century.

The West’s success is not a product of federal action alone. It has also relied heavily on corporate capitalism to a greater degree than the regional economies of the East. In this respect, too, it was in the West that the modernizing vision of Hamilton, Clay, and Lincoln saw its fullest realization.

Together with the federal government, large railroad firms, real estate developers, and industrial firms built the cities of the West. By contrast, northeastern and midwestern cities mostly came into being before the rise of large corporations. Railroads and developers also had to work hard for decades to attract people to these cities, in contrast with the peopling of Eastern cities.

Large-scale firms heavily influenced the development of leading Western cities from their founding. In Denver, early businessmen such as city founder William Larimer Jr. and a series of immigrant entrepreneurs initially came to “mine the miners,” but before long launched flour mills, meatpacking companies, and banks.

Later, aerospace, auto, and electronics manufacturers played key roles in building Fort Worth, San Antonio, and Phoenix. Salt Lake City was an exception, as the Mormon Church’s emphasis on economic self-sufficiency caused the city to lose ground to other cities until the late 20th century. But then it too emerged a national center for technology and finance firms. Big enterprises played outsized roles even in Western agriculture: the largest owners of Central Valley farmland through much of the 20th century included Chevron and Prudential Insurance.

All the major Western cities have long histories of aggressive salesmanship to attract people and businesses. Colorado’s first territorial governor William Gilpin, appointed by Lincoln, was one of the most effective early propagandists pitching the West as a “promised land” of opportunity. Mormon officials sent missionaries throughout the United States and Europe not only to win converts but to attract migrants to Salt Lake City. Phoenix business leaders have always focused on population growth numbers with an intensity that can be shocking to Easterners.

Western cities also led the nation in developing modern sensibilities and policies in many respects. Early Denver residents rejected a proposal by Congressman Alexander Stephens—soon to become the Confederacy’s Vice President—to name their future state “Jefferson” because of Thomas Jefferson’s association with slavery. Colorado became one of the first states to repeal its poll tax, limit workdays to eight hours, ban child labor, institute compulsory elementary education, and outlaw racial discrimination. Phoenix integrated its schools from the start. And Colorado and Arizona established what became major universities early in their territorial periods.

Western states, moreover, were leaders in extending the vote to women. Wyoming became the first state to grant women suffrage in 1869. Colorado approved suffrage in an 1893 referendum and became the first place in the world where democratic elections put women in elective office. Of the fifteen states that approved suffrage before passage of the 19th Amendment in 1920, thirteen were fully or partially west of the 98th parallel.

Western cities were far ahead of Eastern peers in instituting Progressive Era reforms to clean up corrupt governments and build reputations for competent, pragmatic administration. Local governments, pressed by powerful women’s organizations, were national leaders in building parks, planting trees, and otherwise beautifying their cities. Salt Lake City invariably impressed newcomers with its thoughtful urban planning and cleanliness. Phoenix was far ahead of its time in acquiring the South Mountains area in 1930 and setting it aside as a nature preserve.

Santa Fe built a reputation as a Western art mecca starting in the 1920s, ahead of all but the wealthiest Eastern cities. Fort Worth business leaders started building an arts district in the 1950s well out of proportion to the city’s size as of that time.

Historian Donald Worster writes that, by the mid-20th century, the West had emerged as “the most thoroughly modern of American regions” and “a far more serious rival to northeastern hegemony than the South had ever been.”

The building of the American West has also entailed profound injustices and costs. First of these was more than a century of atrocities against the Native people, from Colorado’s Sand Creek Massacre in 1864 to a long train of legal maneuvers to seize Native lands in the 20th century. Federal land and water policies have also given rise to substantial crony capitalism, particularly in the agriculture sector—an inevitable side effect of the American System’s emphasis on cooperation between big government and big business.

And, most existentially, intensive development has come to threaten the spectacular but fragile natural world that attracts people to the West. One stark example: Federal waterworks so effectively harnessed the Colorado River that by the 1960s no water reached the river’s mouth at the Sea of Cortez, leaving only a sandy wasteland where there was once a dazzling ecosystem of sea birds and plant life. Songwriter Don Henley captures this critique in the Eagles’ song “The Last Resort”: “They call it Paradise / I don’t know why / You call someplace Paradise / Kiss it goodbye.”

Cities prosper when they are more successful than others at creating what economists call “agglomeration economies”—the innovation and productivity benefits that arise when large numbers of diverse people and firms interact in close proximity. Agglomeration economies in turn depend on attracting people, particularly high-skilled entrepreneurs and workers, and providing commerce-friendly institutions and infrastructure allowing firms to operate efficiently.

Natural geography, late development, and enlightened federal policies have combined to create favorable conditions for attracting people and businesses to the leading cities of the West. Consider five distinctive advantages benefiting these cities.

First, the West’s spectacular scenery and outdoor amenities have become an increasingly important calling card. Americans have long migrated westward for quality-of-life reasons. The early Phoenix newspaperman Dwight B. Heard came to Arizona to address respiratory ailments, while painter Georgia O’Keefe came to Santa Fe for the desert light and colors.

But in today’s knowledge-centric economy, people are more likely than ever to choose where they want to live on quality-of-life grounds, and employers follow. Federal power plays a vital role in preserving and managing the West’s natural amenities, as Washington has shifted away from dam-building and toward stewarding national parks and other public lands.

Second, the West’s late development meant it didn’t have to cope with large legacy manufacturing bases from the 19th century, unlike northeastern and midwestern cities. Meanwhile, the newer industries that have arisen in the West—notably aerospace and electronics—have benefited from federal defense spending and industrial policies.

Third, late development has shaped the physical form of Western cities in economically beneficial ways. With a handful of exceptions like downtown Santa Fe, the West’s cities were built to operate efficiently in the automobile age. At the same time, physical constraints like nearby mountains, Native reservations, and federal lands mean Western cities are not as sprawling as outsiders sometimes imagine. The Phoenix area was a national leader in building dense, walkable suburban “edge cities,” according to author Joel Garreau. Leading Western cities are denser and more polycentric than most cities in the midwest and southeast. One result: Average commuting times are considerably shorter than in metropolitan America overall.

Fourth, the West’s unique environment and history gave rise to institutions conducive to economic growth. Walter Prescott Webb famously argued that the West’s forbidding environment and the way Americans settled it engendered institutions celebrating individual initiative, pragmatic problem solving, and light-touch regulation. “Practically every institution that was carried across [the 98th meridian] was either broken and remade or else greatly altered,” he wrote.

But the federal government’s outsized role in the West also shaped the region’s institutions, through a distinctively Western body of water law and a tradition of large-scale public-private collective action. And crucially, Western cities built institutions aimed at attracting migrants, including women. By contrast, southeastern institutions were the product of a hierarchical society obsessed with holding down its captive labor force, while Northern institutions evolved in the context of yawning income inequality, surplus labor, and overcrowded cities. Consequently, urban politics and policy were more pragmatic and egalitarian than in the East.

And fifth, history has bequeathed Western cities some broadly shared, growth-friendly cultural characteristics, despite the wide differences separating, say, Santa Fe and Salt Lake City. Relative newness in itself has promoted attitudes that are more open, hopeful, and uninhibited in Western cities compared with their Eastern peers, in Stegner’s view. The West, he writes, “is still nascent, and this is where most of its excitement comes from: It has a shine on it, it isn’t tired. Even the sometimes-dubious activities of the boosters reflect an energy that doesn’t know what it means to be licked or to give up.”

These speculations point to a question this essay has so far sidestepped: Why are the politics and culture of the West as defined here so different from those of the Pacific Coast, when the two regions’ histories share many commonalities?

Analyzing the cities of the coast is beyond the scope of this essay. But history suggests that they were culturally similar to interior Western cities until as recently as the 1980s, even if they didn’t have to work as hard to attract migrants in the 20th century. After the 1980s, West Coast cities rapidly diverged in a less growth-friendly, less pragmatic, more ideologically charged direction. One reason for this may be that West Coast metros, home to 42 million people living in a far smaller area than the 37 million of the West’s interior metros, have become high-density megacities featuring America’s starkest wealth divides.

The story of America’s Western urban civilization is unfinished. The young cities of the West still haven’t caught up with the wealthiest cities of the Northeast and West Coast, or even leading Sunbelt metros like Atlanta and Dallas, in educational attainment levels or innovation ecosystems. Like cities elsewhere, they are becoming less development-friendly and are at risk of becoming unaffordable for more middle-class Americans. They show signs of importing political and cultural tendencies from the Pacific Coast, with uncertain implications for their continued growth.

The most pressing question today is whether the massive hydraulic system supporting the West’s cities can be sustained. The good news: It seems to be sustainable in financial terms for the time being. The Bureau of Reclamation, largely out of the dam business, runs a profit selling electricity and underpriced water to Western cities and farms.

On the other hand, the 40 million people who rely on the Colorado River are pulling more water out of the system than the river can replenish, causing unsustainable declines in the main reservoirs of the system. The Colorado River Compact states haven’t been able to agree on how to allocate supply cuts. And the water-guzzling industrial farms of the West show no sign of embracing greater conservation.

But it would be unwise to bet against the West’s cities. America’s urban civilization in the West, the most modern of U.S. regions and apogee of the American System, is a towering achievement. For the foreseeable future, Americans are likely to keep following journalist Horace Greeley’s famous advice: “Go West!”

This article is part of the “American System” series edited by David A. Cowan and supported by the Common Good Economics Grant Program. The contents of this publication are solely the responsibility of the authors.