I travel around the country a lot, and for a couple of years now I've thought I've been onto a part of our national culture that's nearly totally a fraud. But I haven't said so, thinking that it couldn't really be so, that so many people couldn't possibly have embraced something so wrong, that in the next town it would fi be clear that the emperor's clothes did in fact exist.
But none of this ever happened. Now I am ready to speak out. The fraud I'm talking about is "economic development."
Now you may think that as far as gigantic frauds go, I might have come up with something a little more glamorous, but believe me, this one has by now worked its way into every fiber of American life. As a widely shared faith, it's gaining fast on religion, with less proof that it works.
Obviously there is such a thing as economic development. What I'm talking about is belief by numbers of states and cities that they can create it by pure force of Chamber of Commerce boosterism -- or by that and throwing around a lot of public money, which is called "creating incentives for business." The phony kind of economic development is at a high-water mark right now: mayors and governor are duking it out over General Motors' new Saturn division; the never-ending drama of the possible re- location of professional sports teams keeps city councils and legislatures in midnight session; and no self-respecting town isn't trying to become a high-tech mecca.
Why? Because it fits exactly the mood of the '80s, which admires capitalism but wants to be sheltered from its adverse consequences. We all realize now that private-sector growth is the best way to achieve our social goals, from lower unemployment to greater opportunity for the poor. The problem is that when growth comes, it turns out to be messy and disruptive. It pops up in unpredictable places; industries die and dislocate tens of thousands of people; once-peaceful areas become unruly boom towns. Incumbent politicans are especially sensitive to these problems because they mess up the composition of reliable constituencies.
The dream of getting the growth without the disruption, the economic up side without the social down side, is incredibly sweet -- the rising tide could lift all boats while leaving them moored in the same place. It doesn't hurt that the pursuit of it is pretty sweet too. It's fun to take out ads saying "Michigan (or Wyoming, or Florida): A Great Place to Do Business!" and to fly around the country making fancy presentations.
The great fallacy underlying these efforts is that prosperity can be imposed on a place from on high. Usually prosperity correlates with the presence of natural resources, or some great historical shift -- things over which economic development commissions have no power -- or sometimes with a truly open class system, in which human capital is used with maximum efficiency. When governments have generated prosperity, it has been through huge public works projects, like the Erie Canal, rather than whiz-bang public relations. Next time you hear about a place's impressive efforts to bring in, say, high-tech business, ask how many jobs have actually been snared, and notice the long throat- clearing that follows.
By now, though, none of this matters because economic development has become a gigantic game of chicken. Every place has to have an economic development commission because every place else has an economic development commission; like a rain dance, it seems a small expense if it works.
But because every place has a commission, they cancel each other out, rendering moot the questions of whether they work. This is just fine with the fast-growing brotherhood of economic development specialists, whose members can move up the ladder -- this year Brattleboro, next Charlotte -- without ever having to deliver the goods.
It might be argued that economic development is at least fairly harmless, that it's cheaper than a full course of psychotherapy for each of America's civic leaders would be, and that, like all great frauds, it has entertainment value. But there is a danger to it: it takes governments away from what they're supposed to do.
Quite often the tax breaks, free land and other concessions that economic development commissions offer companies turn their new plants into actual financial drains. Even absent that, though, the cult of economic development turns heads. It causes the people who should be thinking about delivering the garbage and making the schools good to concentrate their mental and emotional energies on that big trip to Silicon Valley instead. Providing basic service is what local governments are supposed to do, and it's also probably the best way to encourage true economic development. It's fine to be a great place to do business, but it won't get you very far if you're not a good place to live too.