Speak Your Piece: Change the Economy First
Misty Mountain Threadworks
At least we Appalachians don’t hide our opinions under any bushel baskets. When I see a bumper sticker that says “Friend of Coal” or one that says “I Love Mountains,” there’s no question what the sticker-wearers mean.
So, which is it?
The coal industry is the only hope this region has of producing a significant volume of goods that can be exported out of the region to provide earned income to a significant number of residents.
The coal industry stands in the way of the region’s ability to diversify its economy, and we will not develop until it ceases to be a controlling force in politics and the economy.
Dee Davis started a timely debate on whether we can “turn this thing around” and finally make some economic-development headway in Appalachia. He asked us to face facts and get honest. I threw in my two cents, and now Jason Bailey and Kelli Haywood have added their strong voices to that terribly important question. Our local economies remain dependent on coal, and the dole and corruption are debilitating. Institutions (business, political and nonprofit) are key, and it is fair to ask whether those we have built in the mountains serve us all and whether they could do better. Kelli is spot-on when she asks us to recognize the centrality of entrepreneurship to our economic prospects.
Of course, the trouble is that both sorts of bumper stickers contain sufficient truth to fuel a feud that has already raged for a century. Extractive industries, especially those that dominate a region’s economy, do tend to control the politics and raise wages and other costs beyond what other businesses and industries can afford. Politics and community life can get polarized very quickly as some see big benefits from extraction but others see only the costs.
Economists have given this tendency a name, “the resource curse,” and it has been experienced in places as diverse as Holland and the Democratic Republic of Congo.
Yet much of Central Appalachia is not suitable for industrial development and offers limited tourism potential, and after years and years of development efforts, the coal industry remains our only significant economic engine. Its disappearance or decline would bring severe increases in economic hardship and dependence on transfer payments.
The most important thing to understand about the pro/anti coal debate is that it is both unhelpful and unnecessary. The wider world might find utility in these conflicts (environmental and energy worries are serious and widespread), but for the people who live here, it seems obvious that we should stop arguing and find some common ground.
On that common ground what we really need are actions, powerfully targeted and sustained over time, to build and diversify our economy. Will it be difficult and require decades? Of course it will. Does that mean we should not do it? Of course not. The question, as usual, is what to do.
Jason Bailey cited Why Nations Fail and noted its recommendation of broad based empowerment and reinvigoration of political institutions. This is surely correct but how does one bring it about? Can our politics change before our economy grows and diversifies? It is my view that economic diversification will be necessary before much empowerment or political development can be achieved.
A strong community of local entrepreneurs is what we need most, for our civic life as well as our economy. Of course, it would be better to work on political reform as well as building local entrepreneurship. They are in no way mutually exclusive.
I vote for direct action in support of local entrepreneurs, strategies that help them step forward and plan new or expanded businesses, that help with management and technical needs, that provide risk capital and problem solving assistance. Entrepreneurship is central to our future, and in most communities we are doing absolutely nothing to help build it. Isn’t that a rather glaring oversight?
The thing is, we know how to do that work; there is encouraging experience in our own backyard and throughout the world. There are things called incubators, risk capital funds, crowd funding, start-up training, industry clusters, angel networks, and debt pools. Yes, these approaches are tricky and often involve a step backward after one or two taken forward, but such strategies have been proven worthwhile in a number of diverse settings.
Several years ago I wrote a paper on the subject of entrepreneurship in Central Appalachia and made a set of specific recommendations. I know there are many other ideas out there. Dee and Jason and Kelli have made a great start. Let us right now begin a larger debate, one that speaks firmly and sharply of the truth of the situation and focuses tightly on what exactly we should do.
Thomas Miller lives on the shoulder of a knob in Berea, KY. He helped build the Kentucky Highlands Investment Corporation, is a founder of MACED, worked for the Ford Foundation in New York and East Africa and has been following community development issues for 40 years.