Myths and Conclusions
Without gainsaying my own potential culpability, I have to admit that a recent business-section column by URI business administration professor Edward Mazze left me confused. He asserts five myths of varying persuasiveness, but his explanations don’t consistently jibe.
He and I agree on the first myth, which he states as follows:
First, without financial incentives or tax subsidies companies will not relocate to Rhode Island or stay in the state.
Rhode Island’s ostensible leaders spend too much time trying to be micromanagers of the state’s economic success, and Mazze is precisely correct in his explanation:
Taxes and incentives are important if they fit into a plan that targets specific geographic areas, population groups and industries for economic growth. … We need to move from Rhode Island being the “let’s make a deal” state to the right climate for business to succeed state.
His second “myth,” however, he treats as ambiguously mythical:
Second, we need to have infrastructure for economic development.
He argues that, in reality, “the infrastructure develops as a result of economic progress,” but then he concludes that Rhode Island should “rethink our priorities and make sure that infrastructure investments receive top priority from the governor and legislature.” It seems to me that, rather than attempting to adhere to a rigid structure of supposed myths, Mazze would have done better to argue for economic holism. In this case, infrastructure and progress represent a self-reinforcing cycle, whereby each makes more of the other possible.
In the case of his third “myth,” Mazze slips such a large consideration bearing on unionization under the table that he comes close to contradicting himself:
Third, the unions make it impossible to do business in Rhode Island.
He argues that “unions are the greatest supporter of economic development since it leads to jobs,” but in failing to emphasize the qualifier that unions support jobs for union members, he misses the underlying relevance of the burden of “legislation [that] is often introduced that adds new rules, regulations and fees for businesses”: those rules, regulations, and fees build protective walls around the state’s powerholders, including established unions. Mazze doesn’t even draw the obvious connection of unionization with a necessity that he rightly declares:
The state needs to make tough decisions regarding the consolidation of services and departments and restructuring education, police, fire and other services on a county basis.
What do public education, police, fire, and other services all have in common in Rhode Island?
With myth number 4, we’re back to agreement:
Fourth, projects that create large numbers of jobs such as the expansion of the airport, the location of a port and the building of a resort casino are not the types of jobs Rhode Islanders need.
I differ with respect to the advisability of Rhode Island’s getting into the casino business, but the broader point that our leaders’ (again, micromanaging) tendency to seek just the right economic development ultimately hinders progress. Young workers need education as well as the financial stability provided by working parents. If a carpenter cannot find work in Rhode Island, he can’t lift his children toward more lucrative careers; if families cannot find regular ol’ work in this state, they’ll bring their children elsewhere. If adults cannot make their livings with less glamorous occupations, leaving sufficient time for independent pursuits, they cannot develop new skills (e.g., by attending night school).
Myth #5 is another with a point well taken, but perhaps without the mandate that it be cast in terms of popular error:
Fifth, economic development is a government responsibility.
I’d posit that economic development is a government responsibility, but it is one answered by getting out of the way. If it is not a government responsibility, then one cannot blame the government for its insidious and disruptive meddling. Our “leaders” responsibility requires them to cease behaving as if they’ve the wisdom and experience to guide our economy toward the sort of businesses that they’d prefer.