There are cows all over the streets of Chicago, hundreds of them. Made from fibre-glass at three-quarter scale, they stand or sit on the sidewalks, each one making its own artistic statement in colour, theme and sheer wacky humour.

"Cows on Parade" is a remarkably engaging public art project that recalls the era when Chicago had all the beef, with a vast area of the city given over to cattle stockyards and their associated abattoirs, meat factories, tanneries and charnel houses - the "empire of blood", as one writer called it.

But that was in the past. What rules this archetypal American city these days is the empire of capital. Its dazzling monument is Chicago's stupendous skyline, an eclectic and greedy agglomeration of high-rise buildings, including some of the tallest and most majestic skyscrapers in the world.

A boat trip on the turquoise Chicago River is a mesmerising voyage through this canyon of architecture, one that everyone attending this year's RIAI conference will never forget. The view from Lake Michigan is equally awe-inspiring, with all the tower blocks seemingly jostling for attention.

Chicago is, of course, the home of the skyscraper. A decade after the disastrous fire which destroyed four square miles of the city centre in 1871, its architects and engineers developed steel-frame construction and perfected the elevator, thus making tall buildings a feasible proposition. Since then, Chicago's skyline has been continually changing: the city I last visited in 1973 is unrecognisable. It's hard to credit now that the superb Hancock Tower, marked out by its dark tapering form and muscular cross-bracing, once stood alone as proudly as a sentinel.

Its architects, Skidmore Owings and Merrill, went on to build the beautifully modelled Sears Tower, which was the world's tallest building when it was completed in 1975. Designed to cock a snook at New York's World Trade Centre, it has since been surpassed by the twin Petronas towers in Kuala Lumpur, Malaysia.

Earlier skyscrapers, dating from the 1920s, are characterised by the historicist approach of their designers. The Chicago Tribune tower, for example, is Gothic Revival in style, its stone filigree crown - spectacularly floodlit after dark - derived from the 13th century Butter Tower of Rouen Cathedral in Normandy.

Across the street, the Wrigley Building is clad in terracotta and its picturesque top is modelled on the Giralda tower of Seville Cathedral. Others are neo-classical in style, such as the tall-domed Jewellers Building where it used to be possible for the occupants to drive in and park on the same floor as their offices! Directly opposite are the much-photographed twin towers of Marina City, a very mid-1960s vision of urban living. Built of cast concrete, they resemble two giant cobs of corn - the architect, Betrand Goldberg, believed in following the forms of nature - with the gently-ramped lower floors given over to car parking.

By contrast, the 50-storey R.R. Donnelly Building on West Wacker Drive - another of Chicago's riverfront skyscrapers - is simply inane. Designed by the once-trendy Catalan architect, Ricardo Bofil, it comes with abstracted neo-classical pilasters and pediments and is apparently inspired by Giotto's campanile in Florence.

Nearly next door and rising to the same height is a 1980s post-modern tower by Kevin Roche John Dinkeloo Associates, architects for the controversial Spencer Dock development in Dublin. Another disappointing building with clip-on neo-classical references, it is a far cry from the inspiring work they once produced.

According to Stanley Tigerman, one of the "Chicago Seven" group of architects who adopted an influentially critical stance on modern architecture, the 1920s buildings and their successors in style all represent an attempt by "free-base capitalism" to acquire legitimacy by recycling architectural images from Europe.

Speaking at the RIAI's half-day conference, Mr Tigerman described Chicago as "a blue-collar, anti-intellectual city" and too many of its skyscrapers were "crassly commercial, terrifying". Even public projects such as Helmut Jahn's ghastly jelly-mould Thompson Center, with its huge and hideous atrium, can be equally crass.

TOM BEEBY, another of the conference speakers, was responsible for the city's new public library, named after its first black mayor, Harold Washington. Designed in the Beaux Arts style, with huge arched windows recalling New York's Grand Central station, its glazed pediments are topped by gigantic aluminium gargoyles.

What shines through is the honesty and elegance of much earlier modern works, such as Mies van der Rohe's Federal Center, a balanced composition of two dark curtain-walled towers and a pavilion for the US Post Office, set in a plaza with a red steel sculpture by Alexander Calder; it is like the Bank of Ireland on steroids.

Nearby, on State and Dearborn, a whole city block is currently being excavated for a 35-storey groundscraper office block which will have floor plates of up to 60,000 sq ft. After a frenetic boom in the 1980s and early 1990s, which left Chicago with a mixed bag of new buildings, it is one of the few such projects under construction.

North Michigan Avenue is the city's showpiece. Broader than Fifth Avenue in New York (it just had to be), it has generously wide sidewalks lined with Belle Epoque lamp standards and stone planters brimming with lush foliage and colourful Mediterranean flowers; Mayor Richard M. Daley is big on beautification.

The avenue is one of the most impressive legacies of Daniel H. Burnham and his visionary Chicago Plan of 1909. Though his motto was "Make no little plans; they have no magic to stir men's blood", he could never have imagined that it would become a stage for soaring skyscrapers and glitzy vertical shopping malls.

And yet, the Magnificent Mile (as it's called) is not much more than a facade. Behind it on both sides lie vast swathes of urban dereliction - vacant lots, surface carparks, restaurants trading in single-storey shacks and streets that have more gaps than buildings. They are all, presumably, high-rises waiting to happen.

The really surprising thing about Chicago is that so much of it is flat. Beyond the massed skyscrapers in and around the Loop that delineates the central business district, mostly low-rise housing stretches out to the horizon - including some of the worst slum areas any of us had ever seen in a city of such obvious wealth.

These slums reflect the fact that segregation, by race and income, is on the increase. The city's richest communities, in areas such as the Gold Coast, have per capita incomes 10 times higher on average than its poorest. And 80 per cent of blacks, who account for two-fifths of Chicago's 2.8 million people, still live in the ghetto.

Another astonishing statistic quoted by the Chicago Tribune is that at least 440 square miles of farmland to the north, west and south have been gobbled up for low-density Edge City development of business parks and the like since 1970 - including a stray skyscraper, 31 storeys high, built in 1986 some 25 miles from the city centre.

One hopeful note is that Chicago will have an estimated 300,000 new residents in its central area in 10 years time. Some have already moved into twee town houses by the river, but the bulk will live in new high-rise apartment blocks or renovated warehouses and office buildings which have outlived their function.

This influx should help to restore some of the street life and rich diversity of uses which were sacrificed for the sake of "progress". The city also needs to renew its ramshackle infrastructure if it is to become "one of the leading global cities of the 21st century".

John Graby, the RIAI's director, summed up the true nature of Chicago in his very informative conference guide when he wrote that it was "not a beautiful city in the European sense, preserved or frozen to reflect some idealised moment in the past, but an unfinished, provisional, unruly, energetic and distinctive city".

What lessons can be learned? That architects can design high-rise buildings of every shape, size, finish and hue - but that it doesn't necessarily work at street level, where urban life happens.