Abstract: The Rural Roots of Urban Deindustrialization, 1955-1970

Keith Orejel


This paper examines economic developments within southern Iowa in order to shed new light on the relationship between capital mobility, deindustrialization, and agricultural transformation within post-World War II America. While most studies portray corporate relocation as the product of regional competition or metropolitan expansion—North vs. South, Rust Belt vs. Sunbelt, urban core vs. suburban fringe—this paper argues that a major feature of postwar capital mobility was the decentralization of industry to rural and small town communities throughout the American heartland. In southern Iowa, the rapid decline of agricultural employment, caused by mechanization reducing demand for farm labor, produced significant outmigration as inhabitants fled these depressed economies. This mass exodus caused schools to merge, churches to close, and businesses to fold. In response, rural small-town business people—primarily bankers, real estate agents, and utilities representatives—formed industrial development corporations to lure manufacturing firms away from urban centers to their local communities. During the 1950s and 1960s, rural areas helped to plant the seeds of urban deindustrialization by quietly siphoning manufacturing firms from major cities, such as Detroit and New York. As this paper shows, "the origins of the urban crisis," to use Thomas Sugrue's phrase, were located in the countryside.