Cities of the West: An American Success Story
Part one of two: Westward expansion and the American System’s unexpected triumph.
America’s western cities are booming. The major metropolitan areas of the West—defined as the vast region west of the 98th parallel and east of the Cascade and California Coast Ranges—have far outperformed most other U.S. metros over the last several decades in attracting people and businesses and creating opportunity for their residents.
The continuing growth of America’s western urban civilization is an undertold success story. A unique mix of historical forces has shaped the cities of the West, despite the many differences among them. One central fact is that the West’s cities were late to develop relative to other U.S. cities. Another is that when they did, a distinctively modern form of American capitalism fueled their growth.
But a third force also made a decisive difference in the success of America’s western cities: aggressive federal policies that promoted the region’s economic growth. The policy program that helped build the West reflects a tradition closely associated with the thinking of Alexander Hamilton, Henry Clay, and Abraham Lincoln, but which only saw its full flowering in the West in the decades following the Civil War and continuing today.
There are 63 metropolitan areas between the 98th parallel and the Pacific Coast Ranges, based on U.S. Census Bureau definitions. These include seven with more than a million residents: Phoenix, Denver, San Antonio, Las Vegas, Salt Lake City, Tucson, and Fresno. It also makes sense to include the Fort Worth side of the Dallas-Fort Worth metro, despite its location a fraction of a degree east of the 98th parallel, in view of Fort Worth’s heavy emphasis on its western heritage and its motto, “Where the West Begins.”
Total population in these 64 metros, including the Fort Worth-Arlington metro division but not the eastern side of the Dallas-Fort Worth area, grew 14 percent from 2010 to 2021, compared with 9 percent for America’s 385 metro areas as a whole. But this growth reflects a wide range of experiences, with tepid growth in the struggling metros of California’s Central Valley and the Lower Rio Grande Valley and rapid expansion in the largest urban areas.
In the six largest areas—Phoenix, Denver, San Antonio, Fort Worth, Las Vegas, and Salt Lake City—plus smaller nearby metros within commuting distance of these places such as Tucson and Provo, Utah, population grew 19 percent between 2010 and 2021. These six areas are home to 24 million of the 37 million people living in the West’s metros, or 7 percent of America’s population.
The chief driver of the region’s growth is migration from elsewhere in the United States. For the 64 metros as a whole, net migration added more than 6 percent to growth from 2010 to 2021. Domestic migration added 13 percent to growth in the Phoenix metro, 12 percent in the San Antonio and Las Vegas metros, and 8 percent in the Denver metro—placing each of these cities among America’s most powerful magnets for domestic migration over the last decade, alongside Dallas-Fort Worth, Austin, Houston, and several Florida metros.
This influx of people is reshaping the region’s demographics, as it includes tremendous in-migration by groups that until recently constituted small shares of the population. The black and Asian populations in the 64-metro region rose 21 percent and 37 percent between 2010 and 2021, respectively—far more than these groups grew in metropolitan America overall. The Hispanic population of the region grew 22 percent, slightly faster than for metropolitan America, and now makes up 35 percent of total population in these metros.
The West’s dramatic scenery and outdoor recreation opportunities are strong draws. But economic opportunity is an important factor as well. The region was poorer than the Northeast and Midwest during its first century in the United States, since it was slow to build population and industrial centers, but it has proved successful in catching up.
Income levels in Arizona, Colorado, Nevada, New Mexico, and Utah are about 1 percent above the U.S. median today (calculated as the population-weighted average of median income levels in each state), up from 10 percent below the national median in 1950. Income levels in the Phoenix, Denver, San Antonio, Fort Worth, Las Vegas, and Salt Lake City areas are now more than 10 percent higher than the U.S. median, compared with a 3 percent advantage in 1990.
Since 2010, incomes for Hispanic, Asian, and white populations in the 64-metro region have grown significantly faster than national averages for each group, while black incomes have grown in line with averages for black households nationwide. Notably, Native Americans—the most mistreated demographic group in western history—earn 5 percent more in the West’s cities today than the national average for Native Americans.
The West’s income edge reflects educational attainment levels that are now equivalent to national averages and rapid growth in the region’s high value-added industries. Numerous companies have relocated from coastal cities in recent years, such as Palantir and The North Face in Denver and DoorDash and Align Technologies in Phoenix. Semiconductor giant Taiwan Semiconductor, moreover, is building what will be one of the world’s largest chip facilities in the Phoenix area.
Meanwhile, growth-friendly land-use policies have allowed rapid housing development in most of the region’s cities, which has kept housing prices modestly below national averages. The share of families who are housing-cost burdened, based on federal standards, remains below overall levels for metropolitan America, despite substantial home price appreciation over the last decade.
The western metros also have an edge in upward mobility for people growing up there, based on studies by Harvard University economist Raj Chetty and colleagues (comparing population-weighted averages for the western metros and for metropolitan America as a whole).
The success of the West’s cities is due in part to their distinctive economic model, arising from a history very different from that of the East’s major regions.
Standard narratives generally agree that economic debates from the Washington administration to the Civil War centered on two competing visions for the nation’s future. On one hand, a strand of thinking running from Hamilton through Clay to Lincoln emphasized active federal action to promote economic growth. The main policy tools these leaders favored were infrastructure investments (“improvements,” as Antebellum Americans called them), modern finance (centered on the Bank of the United States), and promotion of modern industry and innovation (through tariff protection of “infant” industries in addition to education and the patent system).
As readers of this series know, Henry Clay called this program “the American System.” Lincoln enthusiastically championed it throughout his career. The program’s supporters from Hamilton on embraced modernity in economic matters, including modern cities and markets.
In opposition to the Hamilton-Clay-Lincoln vision was a radically different program advanced by Thomas Jefferson and his Virginia Dynasty successors. Jefferson’s program envisioned an economy almost entirely agricultural. It preached hostility to federal power as well as to cities, finance, and industry. In rhetorical terms, Jefferson fused this backward-looking economic vision with expansive views on political liberty. In practice, the Jeffersonians, once in power, dedicated themselves with steady purpose and great ruthlessness to expanding the slavery-based plantation system as far as they could, to the Gulf of Mexico and potentially the Pacific Coast.
Westward expansion was imperative for the Jeffersonians because soil erosion in Virginia and the Carolinas meant plantation owners in those states could only preserve their wealth by moving on to unspoiled western lands or selling their slave labor force to western buyers. Meanwhile, the industrial revolution in Britain and Eli Whitney’s cotton gin seemed to create vast opportunities to expand the South’s Cotton Kingdom throughout the continent.
The nation was enormously successful in expanding westward, with the Hamilton-Clay-Lincoln model predominating north of the Ohio River and the Jeffersonian model triumphant south of the river as far west as East Texas. The stunning success of westward expansion had many causes, including the political and economic vigor of the new nation, surging immigration, and economic integration made possible by the world’s best system of navigable interior waterways.
One of the key realities of Antebellum America is that Jefferson and the Virginia Dynasty were the main winners throughout the formative years from 1801 to 1861. Jefferson and James Madison succeeded brilliantly in building a durable coalition committed to advancing their program while looking after the parochial interests of allies in New York and other northern states. The Democratic Party continued to install presidents ferociously faithful to Jefferson’s program after he was gone, including Jackson, Van Buren, Tyler—strictly speaking a Whig but a loyal Virginian on policy matters—Polk, Pierce, and Buchanan.
The Jeffersonians and the reactionary slave oligarchs they represented got virtually everything they wanted before 1861, from the Fugitive Slave Act and slave constitutions in every contested western state to shutting down the Second Bank of the United States and blocking most internal improvements favored by Clay and his allies.
But then something unexpected happened. Westward expansion of American civilization crashed into an invisible but formidable barrier at the 98th parallel, or the 100th according to some accounts. One problem was that the climate becomes much more arid as one moves westward across these lines. Between the 100th parallel and the Pacific Coast ranges, rainfall is generally between 10 and 20 inches a year—less than 5 inches in some places—compared with 40-plus inches throughout the East. Agriculture without irrigation is difficult or impossible in these conditions.
The other factor blocking westward expansion was the fierce Native peoples of the Great Plains: the Comanches, Apaches, Navajo, Cheyenne, Sioux, and others.
For almost 300 years, aridity and hostile peoples largely stopped Imperial Spain from colonizing what became the American West outside a handful of tiny settlements. In New Mexico, the Spanish started retreating in 1610, falling back to Santa Fe from settlements further north. Likewise, Spain was generally in retreat in Texas after the 1690s. From then until the 1840s, the missions at San Antonio, Santa Fe, and along the California coast remained remote, beleaguered outposts hundreds of miles beyond the line of permanent Spanish settlement.
Major Stephen Long, sent by James Monroe to explore the Rocky Mountains, found no reason to believe U.S. civilization would do any better than the Spanish in the drylands and coined the term “Great American Desert,” which remained on American maps for decades. Oregon Trail pioneers pointedly traveled 2,000 miles to get across the Plains and Rocky Mountains to more appealing areas west of the Cascades, rather than settling in the western interior. In the South, aridity largely blocked the expansion of plantation agriculture after the 1846-48 Mexican War, according to the great western historian Walter Prescott Webb.
America failed to replicate its earlier successes when it first tried to expand past the 98th parallel. The frontier of settlement in Texas actually fell backwards from the 1850s until the U.S. Army’s final defeat of the Comanches in 1875. The northern Great Plains frontier retreated hundreds of miles in the wake of terrible droughts in the 1880s and 1890s, with massive depopulation of the Plains states.
Successive enterprises celebrated in western mythology failed one after the other. Gold miners mostly returned to the East or drifted into western towns penniless. The western cattle drives, a temporary expedient to connect excess beef supplies in Texas with booming Midwest demand in the 1870s, came to an end the next decade. Farmers following the fraudulent theory that “rain follows the plough” often lost everything in the West.
America finally reversed this long record of European-American failure in the West through a massive exercise of federal government power. In the decades following the Civil War, the U.S. Government implemented the Hamilton-Clay-Lincoln program far more thoroughly than it had ever managed to do in the East.
Federal initiatives in the West started, of course, with the conquest of the Native peoples in the 1870s and 1880s and their removal from most western lands. But three pieces of legislation passed by Congress at Lincoln’s urging in 1862 made a decisive difference in shaping the modern West: the Pacific Railroad Act, which put the government’s power and resources behind transcontinental expansion of the railroads; the Homestead Act, which together with the 1877 Desert Land Act enabled small farmers to acquire cheap western land; and the Morrill Act, which created land-grant universities in every state, jumpstarting western education systems. Each of these were expressions of the American System, and they became possible only because Southern Jeffersonians were no longer present in Congress to block them after 1861.
But the most transformational initiative in the West was federal investment in water infrastructure, creating the greatest hydraulic civilization in history. Federal engagement in western water challenges began with John Wesley Powell, who famously explored the Grand Canyon in 1869 and went on to become the founding head of the U.S. Geological Survey. Powell reported that agriculture would only work in the West with irrigation, and that even then available surface water would only allow settlement in small portions of the region.
Most privately financed irrigation efforts in the late 19th century failed, due to inadequate funding and technical expertise. A notable exception was the Mormons, who started irrigating Salt Lake Valley drylands within days of arriving there and, as of 1900, accounted for more than half of the irrigated farmland west of the 98th parallel.
The turning point came with passage of the Reclamation Act of 1902, committing the federal government to western dam-building and irrigation. The Act’s chief architect was Theodore Roosevelt, heir to the Hamilton-Clay-Lincoln tradition, who championed federal support for western settlement to advance both national economic growth and U.S. geopolitical power in the Pacific.
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Over the next seven decades, the federal government would build more than a thousand dams, completely transforming the West. Federal investment in waterworks and other infrastructure made American civilization in the West possible.
In one of history’s profoundly consequential ironies, however, policies to promote western agriculture were at best a modest success. The main achievements of these policies, it turned out, were the West’s cities. The American System gave rise to what western author Wallace Stegner called an urban “oasis” civilization in the West. And this civilization grew larger and more successful than virtually anyone had imagined in the 19th century.
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.