Do the Hustle: Municipal Regulation of New York City's Underground Economy, 1965 to the Present

Abstract

Beginning in the late 1960s officials in New York City faced a growing financial problem. Revenues collected did not add up to meet the city’s budget. In 1975, that problem became a crisis when the city could no longer meet its debt obligations. On the precipice of bankruptcy, a city once known for its generous welfare state, adopted austerity and structural readjustment in order to access federal aid and stave off collapse. Historians have examined the political and economic causes and social consequences of the fiscal crisis as well as the ways in which the city rebuilt itself as a playground for visitors and through the actions of the city’s financial elite. Do the Hustle: Municipal Regulation of New York City’s Underground Economy, 1965 to the Present, examines the ways in which officials rebuilt and reorganized New York City through revenue. Using New York City as a case study of state development I argue that the state rebuilt and reoriented itself around extracting and protecting revenues through regulation in the final decades of the twentieth-century. City officials rebuilt New York by creating new licensing requirements, offering generous tax incentives to businesses, and instituting regulations that protected what officials considered to be the most important sources of revenue – the financial industry, real estate, and tourism. Beginning with the Lindsay administration and ending with Giuliani’s two terms as mayor, this project traces the ways in which city officials attempted to extract new revenues from previously untapped sources in the city’s informal and semi-formal sectors while simultaneously working to protect revenues generated by finance, development, and tourism from nuisance businesses that might affect their bottom line and thus, municipal revenues. In their pursuit of revenue, officials actively constructed a new New York City that courted business at the expense of average citizens. That transformation has not been limited to New York as other municipalities have also shifted focus to revenue extraction and protection. By the twenty-first century, the extraction and protection of revenue through regulation had resulted in high levels of income inequality, aggressive policing, and a growing homeless population in cities across the country.