Sun, Sand and Economic Development
There are “real” cities.
And then there are tourist cities.
During North
American summers, the tourist cities thrive. In Michigan, I drove
through Charlevoix, Petoskey and Mackinac City – tourist cities all,
blessed with sandy beaches and cool breezes, and legions of fresh-faced
kids working their way through college as servers, dishwashers and
manual laborers.
The real cities
were hurting. Manistique, on the Upper Peninsula of Michigan, had
boarded-up motels and cottages – and the chain hotels had only a few
cars parked in their parking lots. Nobody was building anything; in
Boyne City, half of the carpenters who lived there year around were
unemployed. But the city itself still seemed to thrive. With a bustling
downtown, well-kept homes and gardens, and flourishing summer camps and
resort hotels, Boyne City is a real city.
To an economist, it
is not enough to read papers and reports, or study economic data from
the usual sources. Alfred Marshall, the great English economist,
visited factories to see how work was performed, walked the docks to see
if trade was flourishing, and looked at shops for trends. Economic
development is a tricky thing. It requires risk-takers, and faith in
the future, and very hard work. When money and credit are easy and
plentiful, more risks are taken until old lessons about thrift and
caution need to be relearned. There were plenty of unsold condos along
the sandy shores of Lake Michigan, plenty of boarded-up shops in the
small towns, and yet the U.S. overall economy showed low unemployment,
low inflation, and high consumption. But what I saw, was
low growth, a pessimistic reading of the state economy’s ties to the
faltering auto industry, and less risk taken. That picture did not
change as Wisconsin unfolded in front of me – the farm fields were
parched from drought, roads were not well maintained, and “For Sale”
signs dotted the landscape. Small towns seemed to have lost their
allure, and Main Street looked a little shopworn. Even Minnesota has
fallen behind the U.S. average in growth and employment this year — for
the first time in a generation.
The town of Leland
is a summer city. People there are concerned that the picturesque “Fish
Town” will yield to luxurious condos overlooking the Lelanau River and
Lake Michigan. They are worrying about the only active fisheries in
town selling out to developers for the cost of the real estate that now
is used to dock the fishing fleet, dry the nets, and prepare the fish
for sale. A summer city longs for what is real and eternal: Sound jobs,
good schools, safe roads, and a main street that provides the
necessities for such town living.
Where is the energy
coming from to build a better future? It is coming from the same place
as in the 1920s. Then, Leland was settled by the sailors and fishermen
who knew how to make a good living from the lake; by the craftsmen from
the old country, who knew how to design and build. Then came the farmers
and the tradesmen, and everyone pulled together to build schools and
churches and the town of Leland. They also brought with them a
tradition of good government. That is the intangible but indispensable
social capital that causes communities to thrive, and people to stay.
New energy and new
skills come from education, from the realization of unique talent that
creates unique opportunities, from a vision that sees a common future
that everyone would like to help build. That future vision requires
leadership and a “Can-do” mentality, and a belief in the future that is
strong enough to overcome the obstacles that will surface. |
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Are
there resources available to develop such a future? Just
think about this: If everyone does what they are now doing –
using only half of their joint resources – the other half
could be invested in what lies ahead.
That means a
productivity improvement of 100%. More, if the freed resources are put
to such good use that they yield even higher returns than before.
I’ve yet to find a
place or a situation in which productivity could not be
improved by more than 100%. It can be done, and it can be done
quickly.
Jean Baptiste Say,
a student of Adam Smith, once said that to break the back of economic
stagnation, productivity must increase, so that wages can go up, and so
that people will increase their demand for goods and services. Prices
must go down, so demand can increase even more; and return on investment
must go up, so that investors will put their money to work again.
Only productivity
improvement can accomplish all these objectives at the same time.
It’s a pretty
place, Leland. The original settlers created a jewel between two lakes
that attracts people from all over the U.S. every summer. But in the
winter, powerful storms and prodigious snowfalls whip the entire
peninsula. And while that makes for a dramatic theater for all seasons,
only a handful of people stay behind when the brilliant colors of autumn
fade.
Yet, it is possible
to embrace winter for what it is: A season of unsurpassed beauty and
calm, and a season in which each and every one feels the need to watch
out for and care for the others. Winter is also a time for reflection
and thought and, paradoxically, “Unfreezing”: The phenomenon we see in
Silicon Valley when brilliant engineers figure out a way to double the
number of transistors on a chip (in other words, they are looking to
improve performance by 100%).
That spirit and
that reflection made the small coastal villages of Iceland and Norway
thrive, and eventually caused their inhabitants to enjoy some of the
highest incomes in the world. I know. I came from one of those towns.
During the month and a half of Arctic nights, we prepared for the
fleeting Nordic summer when everything grew twice as fast under the
midnight sun. In a way, that is also a 100% productivity improvement —
if you are in the business of growing things.
So, I look forward
to revisiting the Bluebird Restaurant and the Cove, and staying at the
Falling Waters Lodge. And buying fish, as fresh as that morning’s
catch, at the Carlson Fish Shop. And late in the day, walking that
perfect Leland beach to see the sun set into the mighty Lake Michigan.
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If You Would Like to See Tor
Dahl in Full Flight . . .
Tor will be keynoting the
Annual Conference of the World Future Society at a luncheon
in Minneapolis, Minnesota on Tuesday, July 31st.
His topic will be “The Knowledge Economy: Peace and
Prosperity through Productivity.”
Overview: Our economy
divides into three parts: the transformational economy,
which includes producing finished goods from raw materials;
the transactional economy, where human beings do routine or
machine-like work; and the knowledge economy. In principle,
there is no ceiling on the productivity of knowledge
workers. Knowledge is abundant, not scarce, and doubles
every five years. It is virtually free of pollution, it
shows increasing returns to scale, it is accessible, and it
pays its practitioners well. It does not respond to the
theorems of the production economy, which is ruled by
scarcity. Rather, it carries its own laws, which will
transform the future of nations — and the world.
Date:
Tuesday, July 31st.
Time:
12:15 – 1:45 p.m.
Cost: $59.00
(includes lunch)
Location:
Minneapolis Hilton, 1001
Marquette Avenue, Minneapolis, Minnesota 55403
To register online, go to
http://www.wfs.org/2007main.htm.
Click “Register Now” in the left column and select
Tuesday’s luncheon |
