Thursday, August 21, 2014

Speak Your Piece: Proximity Matters

11/13/2012

knox county high schoolers Knox County (KY) Public Schools These 15 students from Knox County were recognized this year as Kentucky Future Business Leaders. How many of them will choose to put their entrepreneurial skills to use in the Appalachian region?

"Can we turn this thing around?"

Dee, you pull at the heartstrings, you speak the truth and you ask the right question.  I have been asking it of myself for 40 years.  I write in response to your essay because I believe the answer is no.

When you say “turn this thing around,” I am thinking you mean significant and durable economic development, a large change for the better in the size and composition of our economy.  Why have we not turned this thing around already?  Are we chronically incompetent or do we have an expectations problem?

The evidence points to expectations.  As the years roll by I am ever less able to muster confidence that we have a sufficient chance of transforming our economy in these mountains.  I do not encourage us to give up, but if we are to make progress we must be realistic about our expectations and pick targets we have a good chance to hit.

As you point out, Central Appalachia has made decent progress on a number of fronts.  Education, health care, transport and communication are much improved.  Yes, we have new problems alongside our old ones, but even our economy has improved considerably over the years.  While we are still in last place by all sorts of measures and there is much distress to worry about, it is much harder to find abject human misery than when Lyndon Johnson was in town. 

map of app highway wiki The Appalachian Development Highway System has been one long-term, and very costly, effort made to improve the economy of Eastern Kentcuky and neighboring states.

It has been more than half a century since the problems you note became clear. It would seem we have tried it all: fifty years of economic development involving lots and lots of taxpayer money, large scale and small spending on one program after another, from roads to hospitals, from venture capital to industrial sites, job training to craft cooperatives, Foxfire to clean coal. Yet our economy remains woefully deficient and poised to fall into an even bigger sinkhole as our reachable coal reserves play out at the same time that coal is losing favor as a source of energy. 

You write, “Many poor rural communities have been transformed from hard-scrabble to self-sufficiency and, in some unusual cases, to high-tech and amenity-rich zones of great wealth.” I would like to know much more about such places, what they faced and what they did. To begin serving candor right away, I will say I do not believe your assertion is true. I have been looking for such places for 40 years now and have yet to find one with useful lessons for Central Appalachia. But it is the most important sentence in your essay and we should learn more about what those others have done and draw from them some good ideas and some ever elusive confidence. 

If we can’t find such examples, then we must return to Elwood Cornett and help him bring that federal prison to town. Does it make you angry and depressed?  Probably yes. Is it still worthwhile, better than the alternatives? Again, probably yes. Is it the best we can do? It just might be.

I submit that in an area of chronic economic distress, far removed from cultural and economic and social attractions, where the more ambitious kids have for decades brought their suitcases to high school graduation, we might be doing as well as can be expected. If there were significant developmental fruit out there, whether hanging high or hanging low, I would expect some of our larger development organizations to be actively pursuing such. I do not see anything like that out there. All seem to be doing pretty much what they have always done, and still talk of the bright tomorrow their work will surely bring. 

Our own experience of these past 50 years is not encouraging, and if we can’t find others to show us where we have been going wrong and how to get our strategies right, then we must conclude that significant and durable economic development in the mountains is not a realistic prospect.  Sure we should continue to work on stuff, but we should be honest about what we promise.

high tech employment density Zara Matheson/Creative Class A map showing the density of high-tech employment shows the exponential power of concentrating human skills. The map only charts metro areas.

Do you find this view unacceptable? Me too. It risks becoming surrender. But I am not encouraging us to do nothing, only to be realistic. You are correct that there is a reason Central Appalachia remains at the worst end of the poverty and well-being tables, but it is not one we can do anything about. Being in tune with modern political life, I have a bumper sticker for it: Proximity Matters

All of the economics and economic development experience I have and all that I read tells me that economies do much better in places of higher human density. Silicon Valley and the Research Triangle and all their copy cats are in the center of things. It is revealing that nearly 40% of the management teams of Silicon Valley start-ups are green card holders. I do not mean to suggest we ever thought we could become such a place, but it is surely true that skilled and ambitious people quickly move to places best suited to pursue their dreams, and they have not been moving to Central Appalachia.

Ever more damning, we all know lots of successful entrepreneurs who were born and raised in Central Appalachia but moved away and stayed away because they saw it necessary to their ambitions. A list of such expatriate success stories, had we the courage to prepare it, would be most depressing. But is it not also most revealing?

Enterprise clusters, entrepreneurial mixing and matching, friends and family and associates to help finance or solve business problems, finding economic opportunity in import substitution and new ways of combining resources, all these things happen in cities, or in proximity to them, much more than they do in rural areas.  Even some of our very best poverty-reducing inventions, affordable housing and microfinance, do not work nearly as well in remote rural areas. 

us population density Map Collection An image of population density across the U.S.: half of the nation's population lives on the coasts.

It is not that rural people do not know how or do not want to do these things. It is that a certain population density is necessary before you can accumulate the necessary amenities to attract new residents and build the skills and connections between people that can lead to a diversified economy, that social capital that Mil Duncan and others so rightly talk about. In many ways our development challenge is mostly a math problem about miles distant from the action and population per square mile.

I probably need a second bumper sticker. It would say “Amenities are necessary.”  That is not as zippy as the first, but probably more important.  Unless you are from the mountains, it is very difficult to move here and fit in, difficult to find a movie theater or a restaurant or a drink or a museum or even a handball court. I know. I tried. I love it here and moved back very much on purpose after a lifetime of chasing around the world, but I live in the technical mountains (as defined by ARC) and not the real ones.  As you remarked, Dee, when I told you I was moving back to Berea, “Well, I guess you can see Appalachia from there.”  (Who knew that you and Sarah Palin had the same writers?)  As much as my wife and I love this mountain culture, it is not welcoming to outsiders. 

So, our kids take their suitcases to graduation and outsiders will not move here.  How can that possibly end well? 

Ben Chandler at EKU Eastern Kentcuky University Congressional Rep. Ben Chandler (KY-6) visited EKU's Center for Economic Development last month. The Center, funded by USDA, will develop business networks and offer training in Madison, Estill, and Owsley counties.

Central Appalachia is not only rural, it is remote.  Such places are the hardest development challenge of all. If a mistake has been made by the people of Central Appalachia it is not a new one. It was made when our forbearers moved away from the economic mainstream to these mountains so far away from everything else.

For most of the last 50 years our development strategies have addressed our communities, their infrastructure and their economies, but we remain profoundly disappointed at the failure of those economies to develop as hoped.  There are other ways to think about these challenges. For example, The Economist (Nov. 3, 2012) recently summarized Bangladesh’s development outcomes, some 40 years after Henry Kissinger called the country a basket case.

"…in the past 20 years Bangladesh has made extraordinary improvements in almost every indicator of human welfare. The average Bangladeshi can now expect to live four years longer than the average Indian, though Indians are twice as rich. Girls’ education has soared, and the country has hugely reduced the numbers of early deaths of infants, children and mothers. Some of these changes are among the fastest social improvements ever seen. Remarkably, the country has achieved all this even though economic growth, until recently, has been sluggish and income has risen only modestly."

The article goes on to explain that through both effective outreach to assist the poor to improve their livelihoods and a vast Bangladeshi diaspora and the remittances they send home, some of the pain of poverty is assuaged even if the basic economics of the country have not changed all that much. Is it time for us to think in these terms, to ask ourselves whether our focus ought to be less on the geography and infrastructure of Central Appalachia and more on the people themselves.

miner light Allianz Coal has been a mainstay of the Eastern Kentucky economy, but reserves are dwindling and the resource is losing favor as an energy source. Eastern Kentucky needs businesses with a future.

Most important of all, I submit that these observations and resolutions, yours as well as mine, are the easy part. The question, as always, is what to do on Monday morning that will have some chance of yielding more than what we have so far tried. Let our honesty begin with a discussion of what our efforts have or have not achieved and quickly move to lessons we can learn from others (those successful rural communities you talked about.) Let our honesty begin by talking with people we usually yell at. Let our honesty begin by dropping all the old feuds, by taking those pictures of strip mines off of our essays.

I do not know what else we can do but be radical now, in our analysis, in our debates and in who is sitting around the table. From a new analysis and a new table we might be able to see a better way forward and point our horses in that direction.

As you say, Dee, it begins with looking in the mirror. I quibble and quarrel as usual, but “To thine own self be true” really is a very important thing. You and Polonius got the big one dead-on right.   

Thomas Miller lives on the shoulder of a knob in Berea. 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.