Ultimately, a State Is Not a Business
Even though they occasionally express a worthy idea, articles such as this long Sunday front-pager convey the wrongheadedness that plagues this state:
Another of Carcieri’s major, second-term priorities is building a “green” economy. The concept is sometimes vague, and like biotechnology, every state is chasing it. And yet, going green could be the key to rescuing Rhode Island’s blue-collar laborers from the dying manufacturing industry.
That can only happen, however, if Rhode Island focuses on its obvious advantages and develops training programs to prepare workers to build these industries. …
Still, if it’s not careful, Rhode Island can miss its window. Though there is a scarcity of wind power nationally, New Jersey and Delaware have dived into the mix and are poised to outpace Rhode Island if the Ocean State gets too distracted or settles for too slow a pace.
“You can’t be good at everything,” said Atkinson, the former economic-development head. “You’ve got to be somewhat specialized.”
Put aside the union hand behind the “green” movement. States shouldn’t operate as businesses when it comes to selecting industries and trying to compete with other states. We don’t run on venture capital. We can’t all declare bankruptcy, fold the state, and create an other one. We can’t, in specific, invest in retraining people and recasting our regulations in order to attract a narrow industry only to find that another state beat us to the punch, or technology has obviated our intended product, or any of the various things that can change does change.
The article is about fostering, attracting, and keeping innovators, but the principle that is missing from the entire discussion is that innovators innovate. That’s what they do. And we’ll increase our likelihood of benefiting from their efforts if we eschew the advice of former Economic Development Corp. (and current think tanker) Robert Atkinson to specialize.
We need a generalized improvement of the methods by which innovators can work their magic.
Actually, you’re both right.
Governments need to create a healthy environment in which entrepreneurs and innovation can flourish. In turn, entrepreneurship will often produce a clustering phenomenon — that is, a certain degree of specialization will naturally develop. In RI, one needs to look no further than the history of the textile industry, the jewelry industry, the machine tool industry, boatbuilding, or the specialized high tech cluster that has developed over the years to serve what used to be called the Naval Underwater Systems Center. To be sure, bad business decisions and/or unavoidable changes in customer needs, competitor offerings and technology can destroy a cluster (and there are plenty of examples of these in the histories of the above clusters). But those usually aren’t the government’s problem. This is not to say that the government can’t screw up an economy — and again, RI provides plenty of examples. In recent years, our poor public education performance (especially in light of what we pay for it, and what Mass produces next door), poor infrastructure, underfunded public colleges, high taxes, pro-labor regulations, and global reputation for corrupt politics have certainly hurt the growth of the RI economy. But to blame government for not picking winners is putting the cart before the horse.
The idea that Rhode Island could somehow “miss out” on wind power makes no sense. We will never suffer from a surplus of energy; if wind power were truly competitive with other sources of energy, there would always be space for more suppliers. The only sense that we could miss out is if the building of turbines was heavily dependent on some other factor (lack of aluminum would work, for instance). In this case, that factor is government subsidies, because all proponents of wind power know that it is highly unlikely that, absent strict government mandates, wind power will never be able to compete with real energy sources.
>>it is highly unlikely that, absent strict government mandates, wind power will never be able to compete with real energy sources
1. Build windmills.
2. Clone Barney Frank.
3. Install photos of Justice Scalia behind the windmills.
4. Install one BF clone in front of each windmill.
Problem solved.