Bare Trees Tell on the Free Market
[imgbelt img=collinswinterhouse320.jpg]Riding the country roads in Western Illinois, Tim Collins sees what decades of “free market economics” have brought rural America.
[imgcontainer left] [img:collinswinterhouse320.jpg] [source]Timothy CollinsAn abandoned house on U.S. 67 north of Macomb, Illinois.
Even in the best of times, rural life in a global economy isn’t all that easy, but curiously – and contrary to the general wisdom – some indicators from the current deep recession, such as unemployment rates, suggest that many rural areas in the United States aren’t doing too badly compared with some urbanized areas.
The current economic cave-in, in contrast with the Great Depression of the 1930s and the smash up of the 1980s, was not caused by downturns in agriculture and natural resource industries. We are enduring an urban-based recession created by global movements of abstract financial debt instruments. These leveraged instruments glutted the markets with money for awhile, creating huge profits for some, and, oops, they exploded, leaving a mess all over the place.
So, will rural areas miss out on this recession? It depends on where you are. For example, unemployment has not risen much in the Great Plains, and there is an economic explanation: Population and job losses over the last century have finally stabilized labor markets in this region. There just aren’t that many jobs, and there aren’t that many to lose. These places are at an economic equilibrium of sorts, so, maybe they just can’t sink much lower. Perhaps the current condition of some rural areas does indicate an efficient allocation of resources, especially west of the Mississippi. Few people. Few jobs. Giant agriculture. Wide-open spaces. But I wonder.
Basic economics teaches that capitalism is an efficient way of allocating resources, that markets, guided by the “invisible hand” of supply and demand, take care of things. This is dogma. In reality, economic efficiency is in the eye of the beholder. Those who embrace unfettered markets aren’t considering the whole picture or the long run. A winter drive through Midwestern America shows the scars left by that efficient invisible hand: abandoned buildings in small towns and substandard housing that creates rural ghettoes, junk vehicles, and the wide open emptiness of the rural landscape that may be efficient for agribusiness and not for much else.