Are We Witnessing the Return of the Company Town?
Up until the early 20th century, it wasn’t uncommon for entire towns to be founded, owned, and governed by private corporations. They were known as company towns, and at their peak, there were around 2,500 of them in the United States alone. While they were often built to house and feed people labouring in resource-based industries such as coal mining, some were established based on more utopian ideals to create model communities that provided working class folks with a high standard of living.
Mining corporations in particular were known to take advantage of their monopoly over the local economy to exploit their workers. Many of them distributed wages in the form of non-cash vouchers that could only be redeemed for products at the company store (which often charged a premium simply because it could). Not only did this arrangement prevent employees from accumulating wealth, but it also restricted the market for competitors who might have been willing to sell their wares at lower prices.
Even company towns founded with more altruistic intentions often operated under paternalistic systems. In a practice that became known as welfare capitalism, corporate leaders began to sponsor a wide range of services intended to benefit their employees, from sports teams and social clubs to educational activities and recreational facilities. A prime example is Milton S. Hershey, of Hershey Chocolate Company fame, who developed a community for his employees and their families featuring attractive housing, schools, and an amusement park.
While these programs and policies were all well and good, they were often implemented in a manner that stripped people of the power to make basic decisions that affected their lives and communities.
William Hesketh Lever, owner of the British soap manufacturer Lever Brothers, embodied the corporate attitude of the time in his comments about the investments he made into his employees’ wellbeing:
“It would not do you much good if you send it down your throats in the form of bottles of whisky, bags of sweets, or fat geese at Christmas. On the other hand, if you leave the money with me, I shall use it to provide for you everything that makes life pleasant - nice houses, comfortable homes, and healthy recreation.”
Lever provided his workers with a decent standard of living, but in exchange, they were expected to sacrifice their freedom of choice.
According to an entry in the Encyclopedia of U.S. Labor and Working-Class History, several factors led to the decline of the company town:
The rise of the labour movement.
The passage of new legislation, such as the Roosevelt Administration’s New Deal, which curbed the power of corporations over their employees
The accessibility of private transport, which provided working class people with the mobility to go elsewhere in search of employment.
Nearly a century later, with further advances in mobility and educational attainment, one would think that we had seen the end of company towns, yet they appear to be experiencing a resurgence among some of the world’s biggest corporations.
Silicon Valley giants Google and Amazon have already made forays into urban development, and Facebook recently announced its plan to create “an integrated, mixed-use village that will provide much needed services, housing and transit solutions as well as office space” in Menlo Park. While the visions they’ve put forward are more in line with communities like Hershey than the indisputably oppressive mining towns, cities today would do well to pay attention to the issues that arose in even the most well-intentioned company towns.
Renowned urbanist Jane Jacobs put it best in her landmark book The Death and Life of Great American Cities: “Cities have the capability of providing something for everybody, only because, and only when, they are created by everybody” (238).
Company towns of the past did not heed this message, choosing to consolidate power in the hands of their corporate leaders, rather than enabling civic participation among everyday residents and employees. It looks like the company towns of the present and future are poised to operate in a similar manner.
The much-hyped coworking company WeWork, which has since expanded into fitness (Rise by We), education (WeGrow), and housing (WeLive), makes for an interesting case study. While branding itself as a corporation that empowers creativity and fosters collaboration, recent articles have shown that it carefully curates the way in which this is done, retaining ownership over the infrastructure that powers its community. Sure, WeWork’s services are geared towards well-educated entrepreneurs as opposed to working class employees, but the people who choose to live, work, and play within its ecosystem are still expected to abide by lifestyle choices made for them by the company. While people who opt into WeWork do so freely (in contrast to workers in company towns of old), there is a very top-down nature to the “community as service” model it promotes.
When private companies extend the scope of their work to urban development, there are concerns not only for the autonomy of their employees, but also for local residents of the cities in which they’re based. Last year, Google reportedly used its influence to put pressure on Mountain View City Council. Because of a housing shortage in the area, Google had agreed to include almost 10,000 new units on its new “Charleston East” campus, but then threatened to renege on its promise unless city officials agreed to approve an additional 800,000 square feet of office space for the company.
While Google is strong arming Mountain View, its sister company, Sidewalk Labs, claims to offer a new way forward using high-tech urban design. In developing a vision for the Quayside neighbourhood of Toronto, it has invested significant time and money into engaging city residents and community organizations in the process, but has thus far been lacking in terms of transparency.
So what does the resurrection of company towns mean for the future of cities?
Corporations will always act in their own best interests - and insofar as they align with those of everyday citizens, there are many opportunities to collaborate on new models of urban governance and design. It’s for when these interests diverge that we need to have structures in place to preserve democratic processes and economic resilience. Otherwise, we risk creating cities by and for big businesses, instead of cities by and for the people.
Header image courtesy of Jimmy Emerson.