Before it was anything else, the future metropolis was a trading center. Its first permanent resident, Jean Baptiste Point du Sable, was partially of West Indian and African descent, and operated an elaborate fur-trading post during the two decades before his departure in 1800. The federal government erected Fort Dearborn three years later to protect the mouth of the Chicago River, a strategic spot on what was the most direct water route between the Great Lakes and the Des Plaines-Illinois river system that flowed to the Mississippi. After the defeat of the native residents in the Black Hawk War of 1832 opened the area to white settlement, the rich farmlands of Northern Illinois began to produce bountiful harvests of grain. Hundreds of wagons a day were soon descending on Chicago, which built grain elevators and docks to facilitate loading lake ships bound for New York. This exchange function reinvented itself when waterborne routes to eastern markets gradually gave way to railroads. The mid-19th-century frenzy of rail construction created an iron spiderweb with Chicago at the center of some 30 interstate lines. This hub, in turn, absorbed mountains of new raw materials that triggered the first stage of Chicago's industrialization. These materials included wood for a thriving millwork and lumber business, as well as livestock that was transformed into meat that was preserved in salt and shipped east.

The demand for military supplies during the Civil War became the catalyst for the second stage of Chicago's rapid industrialization. The city lacked much of an industrial past, allowing it to emerge by the 1880s with the newest cutting-edge technologies and largest factory buildings. Railroads gave it ready access to almost every industrial raw material, and the range of products shipped included heavy machine tools, printing, foodstuffs, and chemicals. The manufacture of electrical and communications goods made Chicago the Silicon Valley of its day. While its traditional trading function did not disappear, the city was also transformed into the national epicenter of the commodities trading and mail-order industries.

The resulting demand for labor was an irresistible magnet for immigrants and small-town folk. The population, which could have fit into a single room when the first charter was issued in 1833, exploded to a million by 1890. Chicago reflected the predominant trend of industrial cities. Once a somewhat chaotic mixture of homes, stores, and small factories, the cityscape began to divide itself into specialized areas based on social class, land-use, race, and nationality. An ethnic structure once dominated by Irish, German, and Scandinavian immigrants saw a new influx of diverse groups from southern or eastern Europe. The leadership of the more impoverished of these enclaves, in turn, fell into the hands of what might be called "industrial politicians." These aldermen transformed political support into a tangible "product" in the form of a drink on election day, a city job, or a variety of welfare-like benefits that competed with the offerings of church charities and especially the burgeoning settlement house movement led by Jane Addams. The very poor remained trapped in obsolete neighborhoods encircling the downtown, but those with a little bit of money could escape with the aid of cheap land, abundant suburban railroad service, and a tradition of inexpensive balloon frame houses.

Meanwhile, demographic and economic growth pushed everything outward, with industry stretched out along the river branches and rail lines. Superimposed over this was a pattern of neighborhood-building that vaguely resembled circular waves created by a pebble dropping in a still pond. The city reached out and annexed 125 square miles of suburbs and farmland in 1889 and became the second largest city in America. With the World's Columbian Exposition of 1893, the brash self-promoting ("windy") city had reached world-class status.

Chicago's ability to attract all types of new industries led to further growth, and the city's population jumped to two million in 1909, and three million in 1923. Then came the Great Depression, and despite the rail network that delivered an influx of the nation's jobless, the population declined and Chicago's politics also changed. Although bosses had thrived for decades on the ward level, Chicago's Democratic pols finally overcame neighborhood divisions to create a cohesive citywide organization just as many cities were ridding themselves of political machines. Ironically, one of the catalysts for this political process was part of the heritage left from expressway planning during the prosperous 1920s—the belief that it was not only possible but desirable for government to flatten whole neighborhoods in the name of progress. The New Deal spending during the Great Depression provided the money and the jobs to attempt to rebuild the city from the inside out. The failure of the private housing market to deliver adequate shelter to the poor brought Chicago its first public federally financed slum-clearance and public housing projects. In some ways, this ability to destroy and rebuild itself became the epitome of the industrial city—what better "product" could "industrial politicians" produce than a new city? After World War II this thinking translated into a public-housing frenzy, especially after the introduction of high-rises in 1950. For the next half-century these tall towers would allow Chicago to absorb thousands of African American migrants from the South with a minimum of disruption of older ethnic neighborhoods. Nearby expressways provided additional walls between classes and cultures.

Presiding over the heyday of two decades of urban renewal, expressway, and public housing construction was Mayor Richard J. Daley. He delivered services to those who returned the favor with votes and money. Such projects as the Robert Taylor-Stateway Gardens and Cabrini-Green projects not only gave the appearance of doing something about the ghetto, but also provided thousands of jobs and millions of dollars of contracts to allies of the machine who then became major contributors. But the Daley organization could do little to prevent the hemorrhage of some half-million industrial jobs to the suburbs, the Sunbelt, and overseas. While Chicago's industrial diversity meant that workers from any industry that declined could find employment elsewhere in town, there was a downside to this. The decline of almost any industry resulted in some job loss in Chicago. One example of a boom industry that was eventually lost was that of consumer electronics (most of the television sets and record players sold in America during the 1950s were Chicago products). Meanwhile, many neighborhoods sank into neglect as the wave of urban decay worked its way outward from downtown and tens of thousands of former Chicagoans moved to the suburbs. The boss who was elected as a man of the industrial neighborhoods responded to these changes as he knew best by doing everything he could to promote a revival of downtown building. The Sears Tower, completed in 1975, was his monument.

Daley ruled the city tightly, examining every patronage case and turning the city council into a trained animal act. But, always fearful that a designated successor might betray him, Richard J. Daley died politically intestate in 1976. A city that had known only three mayors (Edward Kelly, Martin Kennelly, and Richard J. Daley) in the previous 43 years saw five people (Michael Bilandic, Jane Byrne, Harold Washington, Eugene Sawyer, and Richard M. Daley) take office during the next 13. In the process, restless Chicago voters saw the first woman and the first two African Americans hold the mayoralty. The newcomers all found that the mayor's charter powers were weak and it was difficult to govern without the kind of control over the city council that Daley I had enjoyed. Also the so-called "Shakman decree" from the federal courts all but ended the patronage system and the machine's ability to turn out the vote.

In 1989, Daley's son, Richard M., began what has become a period of political stability. In another year, only his father will have served longer. But the younger Daley is not his father, nor does he preside over a city that is much like that of the 1950s. While the Democratic organization is weak, Daley II won control over the city council with no effort because he got to replace many veteran aldermen who ended up in federal prison for taking bribes. Just like old times, there are few dissenting votes. But Rich Daley is perhaps more of a manager than a politician, and that may fit the requirements of a post-industrial city. Image and livability are now more important than the old industrial-style delivery of tangibles. Planters have sprouted in median strips and flower baskets from utility poles. State Street was elegantly restored, and for the first time acknowledged its architectural heritage with descriptive signs. Even major road projects get their own names, attractive posters, and informational pamphlets. Daley's crowning achievement has been the relocation of Lake Shore Drive to create the "Museum Campus." Some of that luster has been tarnished by the controversial remodeling of Soldier Field by building in its center a new seating structure that resembles an oversized toilet bowl.

The new Chicago in some ways approximates a full-cycle return to the preindustrial trading center that it once was. Goods are sold (now and in futures contracts), financed, insured, invoiced, audited, publicized, warehoused, marketed, and moved in containers in Chicago, but they are probably made elsewhere. Out-of-towners continue to make the city one of the nation's top tourist destinations, a fact demonstrated by the fiberglass cow fetish of 2001; every street corner had someone from someplace else posing for a snapshot with one of the brightly decorated bovines. The lakefront, one of the longest expanses of shoreline parkland in the world, is the scene of an unending schedule of music and food fests. Meanwhile, announcements for the new expansion of convention facilities are made before work on the last addition is completed. Daley has also remained determined to keep expanding O'Hare International Airport to the saturation point of the skies around it, even though three of every four landing passengers are just changing planes. And urban cultural amenities are important in new ways. When Boeing was relocating its headquarters and weighing the lucrative incentive offers from various cities, Chicago reportedly won the prize because its Lyric Opera and sailing opportunities could not be matched by its rivals. This is an urban economy that the elder Daley would not have understood.

Meanwhile, like their counterparts of 150 years ago, the battalions of paperworkers who fill the downtown offices increasingly live near the Loop. They have taken over old ethnic neighborhoods and industrial lofts that have now been converted into pricey residential units. The industrial-era separation of land-use into mercantile, manufacturing, and residential functions is also eroding in the new economy. Gentrification is the new wave that is working its way out from the center, but it may be pushing out the middle class and the poor in front of it. New residential structures are sprouting in the old Black Belt, as well as Daley I's beloved Bridgeport. Daley II lives in a luxury townhouse development where an industrial-era rail depot once stood.

The signs, so far, remain optimistic. The 2000 census total of 2,896,016 reversed a population slide that had seen the 1950 peak of 3,550,912 fall to 2,783,726 in 1990. Many of the older ethnic neighborhoods, whose residents left for suburbia, have been revived by the influx of immigrants from Asia, Latin America, and Africa. Their vibrant entrepreneurial spirit can be found in dozens of places. Daley has had the good fortune of presiding over a docile city council in a fortuitously located city during a time of unprecedented prosperity. But what will the next reinvention of Chicago require?

—Perry Duis, a member of the Local Arrangements Committee for the 2003 annual meeting, is professor of history at the University of Illinois at Chicago.