Ideologues tend to place a great value on economic laws. I started out my undergraduate career hoping for a double major in political science and economics. My goal was to administer a breadline and to understand why it was necessary. I was doing very well in political philosophy and public administration, but lagging a bit in economics. One day, in a microeconomics course, after seeing lots of really nifty charts and graphs, I innocently inquired of my professor where the data were for the axes of those charts and graphs. He replied that there weren’t any; these charts and graphs were conceptual in nature. I responded that it seemed strange to base a true science on pure conjecture, without resort to experimental evidence. He looked at me as if I were speaking Martian. When he recovered, he suggested that I seek another major.
I learned from Murray Rothbard that it was crucial in economics to see what people actually did. (I have found Rothbard’s advice to be of very good use in political science, too.) The first known book on economics, Xenophon’s Oeconomicus, is based on anecdotal evidence and does not include a single chart or graph. But since it is hard to apply calculus to real evidence, that is a minority view in the field.
Realizing right at the beginning of my Ph.D. program that there was no way for a Vietnam combat infantry veteran like myself to get a tenure-track job in any Cultural Marxist-controlled university (which is almost all of them), I decided to employ my talents in municipal management. So I took an internship, which is a very uncommon thing for Ph.D. students to do, and wound up in a small manufacturing town in north-central Illinois. Luckily for me, their city manager, who has since become a very good friend, specializes in such places. He is sometimes referred as the Saint Jude of city management. With him as a mentor, I learned a huge amount regarding the challenges faced by small-town Illinois—challenges that afflict most of the smaller towns and cities in the Midwest.
To those who only see the Midwest from 35,000 feet, the heartland consists mostly of farm fields. They don’t see, nor do they care much about, the people down here. We are merely Flyover Country. But on the ground, much of Illinois has long been home to heavy industry. The small city where I interned was founded to work the coal seams in the area, and has never had a grain elevator. Now it produces beer bottles, sewer-cleaning equipment, and snowplows. Galena, Illinois, was first associated with lead mining, and later with river transportation. Now it is a tourist town infested with yuppies. The Quad Cities, both in Illinois and Iowa, have long depended on heavy industry. John Deere had his first workshop in Grand Detour, on the Rock River. He later moved his firm to the Quad Cities, where Deere & Company is still headquartered. Rock Island Arsenal, also in the Quad Cities, has been justly renowned for building everything from 1903 rifles and cavalry equipment to the carriages of heavy artillery. Caterpillar has long been the anchor for Peoria, on the Illinois River. For many years, the towns in between have been filled with industrial factories supplying parts and other items to these big firms.
After a year of my internship, my mentor moved on to a different city, and I wrote my dissertation and graduated. I started looking for jobs in city management, preferring more rural municipalities. Eventually, I was interviewed by a town I shall call “Swedeville” (population 2,800), out west in Henry County, Illinois. It was surrounded by farm fields but had a history of heavy industrial manufacturing. I arrived after the foundry closed, putting more than 300 people out of work. Outsiders had moved in and bought up the Victorian mansion that was once home to the foundry’s founder; then they started complaining to the Illinois EPA about all the smoke, noise, and dirt coming from the foundry. The EPA began hassling the owners, who finally concluded that the most valuable part of their firm was the mold patterns. So they sold them, and closed the foundry down.
There had been a factory that plated conduit hardware but now made demolition-derby racers, including school buses and combines. The paper-cup factory had also closed, but we still had a sausage plant and a pet-food plant. We also had a factory that made fixtures for displaying items like clothing in stores, and a concrete plant. The schools were still good, and the Swedes placed a high value on education. There was a veritable pipeline from the local high school to the University of Illinois and to Augustana College in Rock Island. One of the people I worked with to bring in an ethanol plant had a BSEE from the University of Illinois, and an MSEE and an MBA from MIT. He was just your typical Illinois Man of the Soil. Most of the kids moved out of town to go to school, and few ever came back. This is a real problem for small towns that no longer have much to offer in the way of economic opportunity.
We did not have close access to interstate highways, but we were on the main line of the BNSF Railroad. Since we desperately needed jobs, I followed up on my predecessor’s efforts to build an inland grain terminal in the town. This was a large circle track that could be switched in and out of the BNSF tracks. The local co-op built the necessary grain-storage facilities, and the terminal would fill a unit train with corn, up to 425,000 bushels, in about 14 hours, and send it back out onto the main lines. We were competing with the barge terminal at Hennepin, Illinois, on the Illinois River. It was a few cents cheaper per bushel of corn to ship via our terminal instead of using the river route. That minor difference netted us some decent-paying jobs.
Then our mayor—one of the best salesmen I have ever known—talked some local people into rebuilding in Swedeville a foundry they had owned in the Quad Cities that had burned down. We gave them the land for a dollar, lots of gravel for their driveway, and some money toward their electrical service. This brought in about 20 well-paying jobs. Things were looking better for the town.
Then disaster struck. We were about 25 miles away from Galesburg, Illinois. Galesburg has good interstate-highway access on I-74 and is a major hub for the BNSF. The town of about 12,000 people had Knox College, a large Maytag factory and warehouse facility, and a factory for Butler Buildings. Thanks to NAFTA, GATT, and, to a much lesser extent, labor unions, Maytag closed down. Butler Buildings was bought out by an Australian concern, which announced that, because of productivity issues at the Galesburg plant, it was to be closed. In a short time, 4,500 decent-paying jobs had been lost. Then firms that depended on business from Maytag and Butler Buildings, or from their employees, folded. Gates Rubber also cut back its workforce. Gary Goddard, the Galesburg city manager, watched as his several decades of work to build up his town evaporated. Many people in my town commuted to Galesburg. People would work full-time in Galesburg, and farm full- or part-time. Now, an economist would say this happens because of inefficiency, and the failure of manufacturing is all part of the “creative destruction” that is an essential engine of capitalism. But what I have seen here in the heartland of the United States is only the destruction; the creation takes place offshore. Making a god of efficiency denigrates the much more important goal of effectiveness. Efficiency (as Peter Drucker writes) is doing the thing right, while effectiveness is doing the right thing. Of course, ideologues firmly believe that effectiveness is purely automatic: Progress is inevitable! But that is not the reality I have seen.
Galesburg has long been a strongly pro-labor-union city. Predominantly a Democratic stronghold, the city did elect some Republicans, some of whom were even endorsed by the local unions. So I was not surprised to learn that even the office staff at Maytag was unionized. I am ambivalent about unions myself. When I was a municipal intern, I was part of the management team that negotiated a new contract with the AFSCME local representing the public works crews and the E911 dispatchers. Our city manager had been fired and was off to his next hopeless case. All of us knew that we were leaving, but the negotiations had to be held, and we still had a fiduciary duty to our taxpayers. The union initially proposed a contract that would have benefited only the two most senior workers, who coincidentally were the local president and vice president. Instead, we managed to negotiate a much superior contract that benefited almost all of the less-senior workers, and addressed some serious equity issues—and did so well within the tight budgetary constraints of the city. So unions are not always a panacea. But I also spent about ten years working in factories, where the organizational cultures tended to convince managers to view workers as moronic subhuman brutes. I suspect that resentment against attitudes like these helps explain why firms become unionized.
In any case, during the crisis in Galesburg, management blamed the unions, and the unions blamed management. I suspect that both sides were partly right. The result was the economic devastation of the entire region.
Back then, I was on the Henry County Economic Development Committee. Among other things, we were looking into building an ethanol plant in the county. There was certainly enough corn to feed it, and it would help keep some more of the value of that corn in the local area. When I realized that the proposed site of the plant was in a town on Interstate 80 and not in my town, I talked to a friend at the co-op who thoroughly understood the commodity markets and the grain business. He knew that if that plant went in, it would kill our inland grain-terminal business. We needed to build an ethanol plant, too. He showed me that there was more than enough corn in the county to feed both plants, and we had much better rail access. So I set to work and managed to put together a consortium of venture capitalists, the local bankers, the co-op, and a bunch of well-heeled farmers. We built the ethanol plant, and it employs about 35 people in decent-paying jobs.
Along the way, I helped get an assisted-living facility for senior citizens built, and even a drive-in movie theater. We made good use of Tax Increment Finance districts, and aided the local school district by putting them into the TIF district. I helped keep the local medical clinic open. Overall, I can honestly say that I had a positive impact on the town while I was there.
One thing I will never forget was taking part in the high-school homecoming parade. I don’t know why a bureaucrat was invited, but since it was apparently a town tradition, I hurried to the local store, bought a lot of candy on my own dime, and climbed aboard the fire truck. As we wound through town, merrily tossing treats, I was struck by the presence of so many young women, each with a bunch of adorable little kids. Then it hit me: How the hell do they make it here? In Swedeville, you are afloat if you make eight bucks an hour at a job with some benefits. But I’d seen houses sell at auction for $12,000. None was the Taj Mahal, but all were livable. I had people commuting 40 miles to work in our pet-food factory. They weren’t paid much.
Our town was luckier than a lot of places. Most of our downtown buildings were still standing and somewhat occupied. Many neighboring towns’ downtowns consisted of empty buildings with only the front and back walls standing; the roofs had caved into the basements. In many places, the Great Depression never really left.
Now, to our Ruling Establishment (of both parties), people like the Swedevillians are of no account. At most their value lies in their willingness to suffer the risks of being cannon fodder in the many wars fought for pipeline routes, foreign nation-building, and the price of defense stocks. But for people like me and my internship mentor, both Christians and professional public administrators, these people and their towns are important. And their overall welfare is of great concern.
Most of Flyover Country is hollowed out. The factories are closed, the downtowns are boarded up, and even churches are abandoned. Free-trade ideologues say that these people should just move to greener pastures. But the ideologues apparently don’t take into account the problems of selling a house in a decaying town or not having enough money to pull up stakes. And where are the greener pastures these days? Where would these people move in order to put their lives back together? An emphasis on effectiveness would find a way to put these people back into decent-paying jobs and save their towns and their children’s futures. It might even help Make America Great Again.