Of American Prosperity and Failing Villages

The Internet has been a boon for small businesses.  No longer is the market of the small business limited to the local community.  The Internet—together with an efficient system for making payments— allows customers to find the business and do business from near and far.
 
I am thinking at the moment of the used and rare book trade, although I have frequented other lines of small businesses via the Internet, including finding hard-to-get plumbing parts.  I love to walk into a book store, especially a used book store, and more often than not I leave with a new acquisition or two in hand.  I recall not very long ago buying a set of the debates surrounding the ratification of the Constitution.  As the bookseller rang up my purchase he asked whether I had found what I was looking for.  I told him no, that I had found what I was not looking for.  That is the way it usually is for me and a book store, the surprise and wonder of it, the discovery of things of which I had not before been aware or did not know were available to me.

It is a problem that there are not that many small bookshops around, maybe at most one in a town, two or three in a city.  I understand that it is a tough business.  You have to be willing to let musty old volumes sit around on your shelves for a long time, and those books are costing money while they sit there.

The Internet helps solve that.  You can search for a title or an author and find perhaps several sources of the book, long out of print, in bookshops scattered around the country, in towns and villages where you may have never been and would be unlikely to visit.

I have remarked how much I loved a couple of readers we used in grade school.  I could not even remember the names of the books or their authors, but I cherished them for the enthusiasm that they taught me for economic growth and development in America.  I learned a lot more than reading from those books.  I learned that America was a growing and developing country, always becoming more, richer, grander, harnessing the optimism of its people who came from many places but found in America a place where there was joy in the hard work of the present because you owned the results of what you did and what you did was build a more prosperous future that you passed on to your children and their children, who built on it in their turn.

Through the Internet I discovered that the books were written by Mabel O’Donnell, entitled Singing Wheels and Engine Whistles.  They told of the fictitious town of Hastings Mills built in the early nineteenth century on an Illinois prairie, a town that grew to become the prosperous city of Hastings by the early twentieth century.

The town and characters were a literary fiction, but they captured the real spirit and efforts of what happened all over America at that time.  Elsewhere I have quoted a passage from the first book, Singing Wheels, in which the founder of the town, then numbering but a few dozen cabins occupied by hardworking people with dreams, shared with his son the dream of how the town would grow, transforming the surrounding prairie into prosperous farms and the town into the prosperous center that would serve them all.

In the second book, Engine Whistles, the grandson of that founder is chatting with a train engineer about what made the town into a thriving city of 12,000 inhabitants, and growing.  The engineer proudly tells the boy, Tom, that it was the railroad that put Hastings on the map, and the vision of the men—including his grandfather— who brought the railroad to Hastings.  At first Tom agrees, but on second thought Tom argues that there was more to it than that.

“A railroad doesn’t make a town,” he said with a thoughtful look in his blue eyes.  “The railroad didn’t make Hastings.  My grandfather did.”

“Come, now, lad,” boomed engineer Bill, a note of amused disagreement in his voice.

“Yes, he did, too!” insisted Tom, hurrying on and allowing no time for argument.  “He came west in a covered wagon when there wasn’t even one cabin in the valley of the Big Turtle.  He knew it was a good place for a town, and so he built a lumber mill.  Then he cut down trees and sawed lumber so that other people could build homes, too.  He’s the one who made the town!” (Mabel O’Donnell, Engine Whistles, p.37, 38)

As a child growing up in south Florida, I saw that story playing out around me, as each year new homes, businesses, churches, highways and much else were built.  Economic development was the way of life.  When I was a teenager my family moved to western New York, to a much older village, much like Hastings, built in the early nineteenth century by men of vision, a village that thrived into a bustling business, industrial and even cultural center of some 10,000 people. 

But I arrived in the village’s twilight.  It still numbered 10,000 people and still retained something of its old spirit, with several manufacturing and business establishments and even a college.  By the time I and my schoolmates left—and it seemed that most of us did leave—the college had folded up, as had all but one of the manufacturing firms and many of the businesses.  I understand that the biggest employer now is the local hospital system, a close second being the ugly sum of the various state and local government agencies.  People were very happy to get a new state prison built nearby.  The heavy taxation and regulations emanating from Albany made business too expensive and leached away the village’s future.  Just recently, driven by tax burden, the remaining inhabitants of the village voted to give up their village charter.

A different story, that one, but one that has its echoes in too many places.  I wonder whether that was the America that the Dutch, Germans, Italians, Irish and others who built the village had in mind for their descendants. 

I am very glad that I found Mabel O’Donnell’s books through the Internet and was able to buy them and read them again.  You will have to get your own copies, though, as I am passing mine on down to my grandchildren.

Of Wet Wood and Government Jobs Programs

At best, it is like putting wet wood on a fire: the wet wood may eventually burn, but it takes as much or more energy from the fire to dry the wood out enough for it to be flammable. In the meantime, it creates a lot of smoke and hissing and fizzing, and you run a real risk of subduing the fire if not stifling it entirely. This is what government job creating programs are like.

Outside of very narrow exceptions government itself does not create jobs. It shifts jobs. That is because outside of its basic purpose of enacting and maintaining laws and providing for the common defense, government does not provide a new good or service that the private sector cannot do better. The chief reason why the private sector does better is that private activity is governed by market mechanisms. People can say no to your good or service if they do not want or like it and go to the business that does a better job. So people who stay in business are under constant pressure to do better in their business, or they eventually see their business decline or even disappear. Government is not subject to such a demanding disciplinarian. If you do not like the process for getting a driver’s license, where else are you going to go?

At least someone wants the driver’s license, and the program of screening out unqualified drivers—however imperfect it may be—is a service that people want. Very often, government job creation programs put people to work doing things that we would be better off not having done.

One of my favorite examples is the Roosevelt Administration’s Depression era jobs program, paying people to plant kudzu all over the South. They did that for years, until they realized that kudzu is an uncontrollable pest plant that grows and spreads and smothers every other plant and tree around it and is very hard to get rid of. It is sort of a metaphor for government jobs programs.

An additional problem with government jobs programs is that the government has to pay for them. Where does the government get its money? It gets it from the people who already have jobs. Those people will no longer have that money to spend at the store or for remodeling the house or going on a vacation or gaining an education or the million other things that people do with their money to put other people to work. You might call all of that private sector spending the people’s jobs programs. To get $50,000 to put people to work on a government jobs program you have to take at least $50,000 away from the people’s jobs programs. In practice, you usually have to take several times more than $50,000 away from the people’s jobs programs, because the government programs are run so inefficiently.

So when the government announces that its new jobs program is “creating” 100,000 new jobs, it does not report the 200,000 jobs that were displaced to pay for those new jobs. When you see those government jobs announcements, remember the wet wood on the fire and ask how much energy is being lost to make that new log burn?

Of Watermelons and Conservationists

Notice how the prescriptions of the radical environmentalists trend in the same direction: more government controls over private life. Certainly the global warming agenda is all about how government needs to control numerous aspects of our lives, from the way we travel (cars bad, public transportation good), what we eat (meat bad, vegetables good), the comfort in our homes (warm bad, cold good—except in the summer, when it is the other way around), to family size (three children bad, no children good).

If these people just limited themselves to preaching their ideas we could debate them and let people make a choice—which invites the risk that these proposals would be exposed as being irrelevant or even counterproductive to the achievement of the environmental purposes in which they are wrapped—but instead these environmentalists loudly call for elaborate government programs to force compliance with their schemes. It seems that it is the solution, the governmental mandates and controls, that matters far more than the real environmental issues. The enviro-advocates routinely reject better solutions that do not involve government intrusion. For good reason such state controllers in environmental clothing have earned the nickname, “Watermelons”: green on the outside, but red on the inside. These are not seedless Watermelons, as I would add that the Watermelons’ solutions rest on the seedy old notion that government knows best—the monarchist worldview that the American Revolution resisted and that the American experiment has in practice so often refuted.

I suppose that these environmentalists are eager to rely upon the force of government, because they seek to inhibit some very basic human endeavors, such as earning a living, bearing children, and breathing. The radical enviro agenda destroys jobs, sees people (and their offspring) as the source of all environmental problems, and has named the chief gas people exhale as they breathe—carbon dioxide—public pollutant number one. Only the coercive powers of government could hope to curb action that is such a natural part of life and living.

This Watermelon formula is no accident. The more common the activity that must be controlled, the more sweeping the governmental controls that are called for. And, the more undefined—or even indefinable—the problem, the easier it is to justify nearly any governmental action served up as a solution. Global warming serves the pro-government agenda of the Watermelons very well.

This is by no means an argument to ignore the environment. Care for the environment is as old as the Garden of Eden. It was one of the first commandments given to our first parents. “And I, the Lord God, took the man, and put him in the Garden of Eden, to dress it, and to keep it.” (Moses 3:15) Such counsel has been echoed through modern prophets. In 1833 the Lord revealed that the earth’s resources are “to be used with prudence and thanksgiving.” (Doctrine and Covenants 89:11)

This was not, however, man-is-the-problem environmentalism. Man is the focal point of the world, the reason for its creation. The Lord’s counsel is make the most of the earth and do not pollute your nest. This concept lies at the heart of what has been called conservation. Conservationists recognize that the world is a stewardship entrusted to man to be used for man’s best advantage. Again, as the Lord has revealed to modern prophets,

all things which come of the earth, in the season thereof, are made for the benefit and the use of man, both to please the eye and to gladden the heart; yea, for food and for raiment, for taste and for smell, to strengthen the body and to enliven the soul. And it pleaseth God that he hath given all these things unto man; for unto this end were they made to be used, with judgment, not to excess, neither by extortion. (Doctrine and Covenants 59:18-20)

The difference is that to the Watermelons, people are a problem, and the fewer the better. The conservationist sees the environment as a treasure house to be managed for the benefit of man, and when subjected to the creativity and wisdom of the mind of man can become an inexhaustible source of increasing wealth and benefit.

The Malthusians and their modern disciples have been predicting the environmental doom of mankind for centuries, and those unlucky enough to have followed their prescriptions have found doom and destruction. Whenever we have trusted instead to the creed of the conservationists who would manage the world’s resources in line with human incentives and martial them for human benefit, the result has been increasing wealth and welfare, just as God intended for His children.

Of Incentives and Jobs

Weird things happen when we decide by law who should have jobs and who should not and we order how people and businesses should spend money. I am not referring to the legality of telling people who receive money from the government how to live their lives and run their businesses. I am referring to the wisdom of it. And by "weird" I really mean "bad."

On Friday a press release came across my desk, issued by seven travel-meeting-event industry trade associations. Their basic message was that the public beating up of companies over the meetings they hold and the incentive programs that they have for employees is killing the travel, tourism, and meeting industry and the people who work in it. They estimate that 200,000 jobs were lost in that industry in 2008, and a larger number of job losses are predicted for 2009.

Even the old communist governments figured out that workers respond to incentives. Under the power of incentives people work harder, smarter, and more creatively. They may even enjoy their work more. Sometimes incentives that take the employee out of the normal routine can be very powerful. If left to their own devices, businesses will experiment with different packages of incentives to guide their employees into the most efficient ways to accomplish company goals and objectives. Will they get it right? Often they will not. When they get it wrong, they try something else.

What is the best set of incentives, and should the incentives include travel and recreation programs? I do not know, and neither do you. No one has enough information, smarts, or involvement to know. You may know what works for you, but are you willing to say that others should be offered the same rewards or that you should be given the same incentive program designed by someone somewhere else or in some other line of work? Everyone meeting company goals gets a set of golf clubs. That may work fine for Harry, but how about for you?

While it may be lots of fun to rant about businesses sending employees to Florida for a weekend, do we have any idea how that might figure into the incentive programs in those businesses? If you take that option away, what other option will work as well or as efficiently? Again, I do not know, and neither do you.

Up until recently, I did not have to know or pretend to know. We left it for businesses and their employees to figure out. In view of the efficiency of our businesses--which efficiency continued to improve and lead the world even in 2008--American businesses have been getting the incentives much more right than wrong. When we decide to make those decisions for other people, especially when we try do so through government force, we can be pretty sure we will get it wrong. Who wants to explain to the 200,000 travel and tourism industry people who are in danger of losing their jobs why businesses should not be holding meetings in Williamsburg or San Antonio or Nashville? Step up now; a frozen turkey if you get it right.