5 Questions for Daniel Wortel-London, the author of “The Menace of Prosperity”
Many local policymakers make decisions based on the belief that what’s good for the rich is good for cities. But this wasn’t always the case. Between the 1870s and the 1970s, a wide range of activists, citizens, and intellectuals in New York City connected local fiscal crises to the greed and waste of the rich. These figures saw other routes to development, possibilities rooted in alternate ideas about what was fiscally viable. In The Menace of Prosperity, Daniel Wortel-London argues that urban economics and politics are shaped by what he terms the “fiscal imagination” of policymakers, activists, advocates, and other figures. His survey of New York City during a period of explosive growth shows how residents went beyond the limits of redistributive liberalism to imagine how their communities could become economically stable without the largesse of the wealthy.
Read on for an interview with Wortel-London about the book.
Let’s begin with the term “fiscal imagination.” How do you define it?
I define fiscal imagination as the set of ideas people use to define what the economy is, how it works, and what it’s for. At its broadest—drawing from thinkers like Karl Polanyi—the economy encompasses all the ways in which people meet their material needs: through barter, mutual aid, cooperatives, care work, or conventional for-profit enterprise. Each strategy has different implications for equity, efficiency, and sustainability.
But we foreclose these alternatives when our fiscal imagination is narrow. This is true across the political spectrum. Liberals and conservatives might disagree on how much corporations should be taxed, for example, but they often share an assumption that only an economy built around large-scale corporations can deliver material well-being. Similarly, YIMBYs and NIMBYs disagree on whether growth is positive or negative, but their debates often ignore alternative ways of delivering abundance (as in the title of Derek Thompson and Ezra Klein’s new book), such as through nonprofit enterprises or social housing.
Historians can use the concept of fiscal imagination in powerful ways. We can trace how different communities have defined economic life—what counted as productive, what counted as waste—over time. We can explore how social movements tried to expand (or in some cases restrict) the economic possibilities available to them. And we can examine the consequences these efforts had on policy, inequality, and governance over time.
Your book looks at the century that predated New York City’s notorious fiscal crisis in the 1970s. How did conventional growth strategies undermine the city’s finances during that period?
Elite-driven growth strategies imposed deep and recurring costs on New York’s public finances. From at least the late nineteenth century onward, city officials subsidized private development by building infrastructure to raise land values, floating bonds to underwrite speculation, and restructuring land uses and public services to serve corporate offices over working-class neighborhoods. This locked the city into a cycle of debt and dependency, making it increasingly vulnerable to economic downturns.
When those growth strategies faltered—as they often did—it was the public who paid. This happened in the 1870s, when economist Richard Ely observed that cities had been “embarrassed by expenditures made at the solicitation of landowners” and not the “moneyless rabble.” It happened again during the Great Depression, when public finance experts traced local collapse to “municipal credit in aid of real estate speculation.” And it happened again in the 1970s, when the city’s budget imploded under the weight of both accumulated public subsidies for corporate gain and welfare spending on behalf of those left out of the city’s unequal economy.
What alternative economic strategies did New Yorkers propose during this time? And why weren’t these ideas adopted?
A wide array of alternative strategies emerged over the decades. Henry George called for a land-value tax to reduce land speculation and fund public needs. Others proposed public ownership of utilities to ensure affordable services and stable public revenue. In the 1930s, housing reformers advocated for publicly built, permanently affordable homes—not just as shelter, but as an economic development strategy. And by the 1960s and ’70s, neighborhood organizers were fighting for community-controlled development rooted in local ownership and needs.
But these alternatives rarely gained lasting traction. By the mid-twentieth century, the costs and failures of elite-led growth had become more opaque: buried in debt, disguised as technical necessity, or framed as the price of modernization. Meanwhile, the city’s budget was weighed down by the sunk costs of past infrastructure projects and development decisions, making the possibility of economic pivots more difficult. Postwar liberal policymakers prioritized expanding social services over rethinking the economic base that funded them. And while New Left intellectuals offered incisive critiques of corporate power, they were less confident in promoting alternative development models of their own.
But the legacy of past movements for local economic alternatives still echoes today. When figures like Zohran Mamdani challenge the idea that we must rely on luxury development or speculative capital to solve our housing crisis, they are not just proposing different policies—they’re invoking a different fiscal imagination, one that centers justice, stability, and democratic control. But as in the past, such visions face deep structural resistance.
Who are some of the figures central to these more democratic initiatives?
There’s a long tradition of alternative economic thinkers and organizers. Henry George envisioned public revenue rooted in land’s unearned value. Lewis Mumford championed regionally balanced, ecologically grounded development that prefigured today’s sustainability movements. Jane Jacobs, though often claimed by market urbanists, grounded her vision in neighborhood-scale economics and a suspicion of what she called “cataclysmic money.” Robert Allen and other Black activists advanced models of community ownership that fused economic development with political empowerment. And figures like Rexford Tugwell imagined a robust, publicly accountable state capable of managing the true costs of economic speculation.
Their politics were diverse, but they shared a common conviction: that prosperity didn’t require catering to the powerful.
What can we learn from these proposals today? What makes them more sustainable, other than more conventional strategies?
Their key lesson is this: you can’t rely on a regressive economy to finance progressive social policies. Depending on speculative real estate and mobile capital to fund social needs has repeatedly led to crisis, inequality, and austerity in our communities. It’s not a matter of taxing the wealthy a bit more. It’s a matter of questioning whether the economic activities generating elite wealth are viable—or desirable—for our communities in the first place.
These campaigns also remind us that cities have alternatives. Some involved higher taxes or outside funding, but many focused on redirecting existing subsidies—from speculative, extractive development toward locally grounded institutions: community land trusts, cooperative enterprises, public banks, and public housing. These models circulate wealth locally, create economic stability, and reduce the city’s exposure to financial shocks.
Finally, their proposals are more sustainable because they are rooted in people, not in profit alone. Corporate firms are not loyal to cities—they are loyal to markets. They will leave when profits fall or incentives dry up. But communities don’t pick up and leave. When we center economic policy on the needs and capacities of ordinary residents, we build something more resilient, more equitable—and far more imaginative.
Daniel Wortel-London is visiting assistant professor of history at Bard College.
The Menace of Prosperity is available now. Use the code UCPNEW to take 30% off at checkout when you order from our website.