Essay Responding the the Economy RI report

This rather long essay is my response to two reports the State of RI had generated as part of its Sustainable Communities process in 2013

Notes on the report  Economy RI by Fourth Economy Consulting for the RI Sustainable Communities planning initiative.    Greg Gerritt

 

I have been reading reports like Economy RI for approximately 20 years.  These reports are constantly produced in the economic development game.  Rhode Island has seen more than a few of these documents since I moved here 17 years ago.   We all agree that the RI economy could use some improvement, but considering all the brain power, time and angst devoted to these reports and their implementation, one would expect a better economic situation in Rhode Island if there was any value in these reports. It appears the people writing these reports, and the people commissioning them, are unable or unwilling to respond to what is really happening in the economy. If you read these reports you get new buzz words and the economic development flavor of the week, but no insight into the changes on planet Earth.   One might reasonably conclude that these reports are an tool primarily for the benefit of the the writers and commissioners of these reports rather than a useful blueprint for economic progress.

 

In 2013 we live in an age of ecological collapse and resource depletion in a world of 7 billion people.  Rather than taxes or the regulatory system, it is the resource situation and the evolution of the economy that cause the struggles of the Rhode Island economy. Rhode Island is a post industrial place that does not have huge natural resource based industries.  The Rhode Island economy is effected by what we do as well as by ecological collapse, resource depletion, and the evolution of global economy.  Globally ecological collapse is seen in extinctions, pollution, soil erosion, oceanic dead zones, climate change.  Resource depletion is striking for biological resources, such as forests and fisheries, and for mineral resources.  With mineral resources we are not likely to see the absolute total collapse of the resources, but depletion manifests as the exploitation of mineral deposits that are lower grade, more inaccessible, and require much more energy to process. They are also more costly, and the end of cheap fossil fuel is a fundamental change in conditions that seems to be unaccounted for in the Economy RI report. Another way ecological collapse shows up is in the inability of sinks to absorb more waste.  Ocean acidification fits into this category, as does the warming of deep ocean layers, and the RIRRC facility filling up in Johnston.

 

Immanuel Wallerstein, in his work on World Systems, described what he considered to be the conditions most necessary for rapid economic growth.   Wallerstein notes that rapid economic growth in a particular country is correlated with the rapid exploitation of previously uncut forests,  and urban communities that are rapidly growing due to migration from rural communities.  Forests are so critical because they provide a relatively low cost resource that can be easily stolen from the people who live in them, and the wood can be used to build cities and as a feed stock for many industrial products,    Urbanization is important because rural people who are not modern consumers do not buy enough stuff to promote rapid economic growth, and their unmechanized labor is relatively poorly paid.  With urbanization people are drawn into the manufacturing economy and consumerism.  Once a country is mostly urbanized the pace of growth diminishes.

 

The US generally, and Rhode Island in particular, do not have the two conditions for rapid growth, though Americans continue to use forest products from around the world at an ever increasing rate while restoring some of our own forests.  The US population is already 80% urban, so there is not much internal immigration into cities and the manufacturing economy.  And whenever immigration from rural communities beyond our borders increases in response to deteriorating economic conditions in their home countries, Congress tries to shut down the border.  In any case, the industrial revolution in the US was fueled by immigrants from overseas and the urbanization of our own farmers, as well as a ready abundance of a variety resources, including wood, stolen from the original inhabitants.  Our rural labor supply has essentially disappeared, it has been mechanized nearly out of existence.  New England farmers moving to urban Rhode Island are no longer a source of industrial labor or growth.  These days it seems as if economic development in Rhode Island is primarily around real estate development, but Rhode Island has not been a hot place for industrial real estate development since about 1890.  Maybe we need a new approach.

 

Other observers, maybe most notably Robert Gordon, an economist at Northwestern, have been pondering growth and the lack of it in the west http://www.ted.com/talks/robert_gordon_the_death_of_innovation_the_end_of_growth.html   Gordon hypothesizes that the conditions for rapid growth no longer exist, that rapid growth was simply the result of the unleashing of the fossil fuel that fueled many new things and sparked game changing innovations that lead to increased employment.   Without some sort of transmogrification, it is likely that the rapid growth is in the past for communities beyond the beginning stages of industrialization. Rapid economic growth has ended essentially in the west except in places exploiting natural resources such as fracking boomtowns or financial centers sucking the populace dry. For a bit longer there will be growth in the tropics and Eastern Asia. They are rapidly urbanizing while destroying what is left of the world’s wild forests.  We shall see an equalizing of working class wages around the world, with the growth machine stopping at lower and lower per capita incomes as more countries come into the consumer culture.  China is the example most in the news, and can be used as an example of the conditions for rapid economic growth.  It still has a rapidly urbanizing population coming out of its peasant farming communities, though with nearly 50% of the Chinese people now living in urban areas, the rate of urbanization has slowed down. Consequently wages are rising and the textile and the other manufacturing sectors that pop up in the beginning stages of industrialization, are starting to seek even lower wage countries. Brazil is another example, with a somewhat different path, population, and resource base, but generally following the trend.   China is not blessed with forests, but is able to steal forests from the forest people throughout Asia, the Pacific, and the tropical regions of Africa and the Americas, usually with the connivance of the various corrupt governments looking for a quick buck. Brazil just passed a law to make it easier to displace forest people and steal their forest. China has started to be massively affected by its self generated pollution, with some estimates that one half of the growth in GDP in China each year is lost to ecosystem and health devastation from industrialization.  China now has thousands of demonstrations by people who are being displaced and polluted each year and the government keeps making commitments to be more environmentally minded.   In any case the Chinese growth machine has started to slow down and is confronting a real estate bubble caused by the growth machine, and the inability to find useful investments in the economy that would create gigantic returns.    Hence a real estate bubble as the only way to keep the party growing, and very likely to contribute to an even bigger crash when it comes.

 

Another condition for rapid economic growth is economic equality.  More and more evidence (check out “The Spirit Level”  by Wilkinson and Pickett)  suggests that the more unequal an economy becomes, the less well able it is to function. Eventually it grinds to a halt.  The US has seen this many times and our longest and deepest recessions are always linked to growing inequality in the economy. Inequality is especially damaging to economies that run on consumer spending as a general population with less income buys less stuff, and even greater wealth on top can not make up for the reduced buying power of millions of people.  An incredibly telling statistic is that in 2011 121% of the growth in income went to 1% of the population in the United States.  If growth in income is going to just 1% of the population is it really growth or just shuffling the deck chairs of the Titanic?  Clearly any strategy that continues to favor the 1% will harm rather than help the general prosperity.

 

The idea that we can restart the growth machine permeates every bit of what passes for economic development thinking in RI, and generally in the US.  Because of the myth of growth there is an ever growing sense of desperation around slow or no growth in the economy. The desperation for more comes out in interesting ways such as the the Verizon commercials with kids screaming for more and the slogan “more is better” as if more is always good.  As dangerous to our community are proposals in the State Legislature to undercut environmental, health, safety and democracy protections by undoing regulations in the name of faster economic growth and more give aways to the rich.  I call it thrashing around for growth because these efforts do more and more to harm our communities while still not producing real growth.   There is no evidence that reduced protection for the environment promotes prosperity.  And the correlation between strong environmental regulations and state GDP per capita is a positive one.

 

My hypothesis is that all we are going to see in the future is funny money growth for the rich with the standard of living in the US going down as part of the equalization of incomes around the world and resource depletion on the planet.   But it is likely that the Gross National Happiness would go up if we started adapting our economy towards prosperity for the 99%, focusing on ecological healing, food security, climate change, and economic justice, as the economy shrinks.   We need a new path to prosperity. Business as usual and doing the same stuff only more of it, is not leading RI to prosperity.  Whether you agree with the premise that the economy is going to permanently shrink or not, if we do not start to at least take into account the historic trends on growth and the possibility of a permanently shrinking economy, we are missing an opportunity to make our community stronger and more resilient in the face of major challenges. We have to think really hard about what is sustainable.   From that perspective I briefly examine the reports the Division of Planning sent around to registrants for their Sustainable Communities opening workshop.

 

 

The Economy RI report by Fourth Economy Consulting

http://www.planning.ri.gov/documents/LU/economyri.pdf

 

The report opens with a list of organizations that were interviewed to help develop the report.  I read it with interest. The list is bit skewed. Every organization interviewed has drank the Kool Aid that blinds them to the collapse of ecosystems and the fundamental changes in the economy such as the end of growth.     How about interviewing people on the other side of the growing inequality gap or people who have a real understanding of how economies still are based in natural resources and food security and how those effect Rhode Island?   Ask then what RI ought to do. A report quoting people suggesting ways to make the rich richer is a nice thing to have, but basing state policy on a failed philosophy of economic development is not all that good an idea.

 

The list

(add)ventures, Arkwright Advanced Coating, Inc., Banneker Industries, Betaspring, Brito’s Landscaping Services, Business Innovation Factory, Cytosolv, Inc., The Economic Development Foundation of Rhode Island, Fidelity Investments, Globex Industries, Horton Interpreting Service, Inc., J.C. Electric, Inc., Nabsys, Inc., Peregrine Group, Pilgrim Screw, Rhode Island Association of Independent Colleges and Universities, Rhode Island Monthly Communications, Inc., Rhode Island Public Expenditures Council, The Providence Chamber of Commerce, The Rhode Island Foundation, United Natural Foods, VIBCO Vibrators

 

 

The Chapters

 

The report begins with a discussion of the business climate.  For a good understanding of what business climate reports are read the report by Good Jobs First  “Grading Places:  What do Business Climate Rankings really tell us”    http://www.goodjobsfirst.org/gradingplaces  .   The short version is that there is almost no useful information in business climate rankings.  They are based on circular logic confusing cause and effect, and even more importantly, there is no correlation between a state’s business climate ranking and its economic performance.

 

If the state of Rhode Island wanted to release on honest report, it would eliminate chapter one and stop subjecting the people of Rhode Island to class war propaganda from the rich.   I think all of us could use a critical look at how the 1% attempt to manage the public relations around the economy and the relationship between the policies recommended and actual performance.  Good Jobs First explains it well enough that I will just use their words for a few examples.  What makes Grading Places even more relevant to Economy RI is that some of the same sources that FEC used in compiling its report were analyzed by Good Jobs First.

 

 

FEC used the Beacon Hill Institute’s report.  Here is what Good Jobs First said about the BHI report.

 

Beacon Hill Institute

“The most serious problem with BHI’s indices is that they mix causal and outcome variables indiscriminately. They claim that their index measures the “policies and conditions” in a state that make it more likely to compete successfully for economic growth, and their validity test is how well it predicts increases in per capita income. Yet a number of BHI’s variables are in fact measures of the outcomes or components of economic growth, not the causes of it, such as the share of adults in the labor force, budget surpluses, initial public offerings, exports, and firm births.

 

Similarly, a number of the variables are simply correlates of high income: the percent of households with cell phones or high-speed broadband, bank deposits per capita, and the prevalence of high-paid workers (scientists and engineers, high- tech workers). Not surprisingly, where people earn more money, they have more money in the bank.

 

The inclusion of variables that measure outcomes, or results of high or low income rather than causes, “…is profoundly circular logic and is equivalent to saying ‘we measure things that indicate how well off you are, therefore if you increase these things you will be better off.

 

 

FEC also used the Tax Foundation Report.  Here is a short snippet from what good Jobs First said about the Tax Foundation.

 

The Tax Foundation here remains true to the overriding principle governing the State Business Climate Tax Index: lower taxes are better no matter what. The Unemployment Insurance Tax Index rewards states for lower UI tax rates regardless of the condition of the state’s UI trust fund. States with trust funds teetering towards insolvency would be rewarded with a higher ranking for pushing the fund over the brink by imprudently lowering taxes. Such a move would, of course, necessitate higher tax rates in the future, but no matter. Fiscal responsibility does not really enter into this sub index

 

I could offer up more specifics on the business climate genre, but one thing is really important.  The rankings of business climates, in addition to being based on mixing up outcomes and causes in a brand of circular logic, do not predict economic outcomes.  In other words many of the states with “excellent ” business climates have lousy economies and vice versa.

 

I offer one example, but you can find many others.

 

From the Mississippi Development Authority website    http://www.mississippi.org

According to an independent study by a major American manufacturer, Mississippi’s business climate ranked number one among 23 states in which it has manufacturing operations. Factors weighed included taxes, unemployment compensation, workers’ compensation, labor, transportation, energy, health care, job growth and quality of life. Mississippi’s diverse manufacturing sector produces ships, furniture, automobiles and parts, food, defense weapons, computer chips and electronics.

 

In other words, Mississippi is a state which follows the business climate model of development pretty closely.  But does anyone in RI want the economy of MS with the lowest per capita income, least healthy population, shortest life spans, highest teen pregnancy rates, lowest academic achievement,  etc.  Do we want to have unemployment payouts that mean that people can not afford to live? If we look at state after state, the fundamentals of the economy, what intrinsic assets it has, are MUCH more important than tax rates, unemployment insurance rates, and regulatory climate in determining how well it is doing economically.   Is an economy that shifts the balance a tiny bit towards working people and those in need such bad thing?

 

Rhode Island is always trashed in business climate reports, yet RI ranks in the middle in most economic indicators.  We all know there is disfunction here, but for 50 years RI has attempted to follow the business climate model of development. Either the people who make the decisions about economic policy and the people who carry it out are completely incompetent (I have met too many of them for me to believe that) or there is something wrong with the approach to economic development that the business climate model offers.  I may be in the minority, but maybe the development model offered by the business climate adherents is fundamentally flawed and is not a functional response to the current conditions on planet Earth and in Rhode Island.   We need to pay much more attention to the likelihood that we are at the end of economic growth and need a new model for prosperity.

 

Another point with business climate reports is that they are always written as if the economy was truly private.  But when I go to a meeting on Kennedy Plaza in the Biltmore and all the talk is of a public/private partnership, What gives?  The financial industry was bailed out by the government just a few years ago in an ill informed attempt to bail out the rich instead of anyone else.  How is that a private enterprise based system?   It is clear we have a mixed economy and any effort to describe it another way is likely to mislead.

 

Rhode Island would be much better served if we never had to hear any more of the crap about the business climate and what the rich demand for ransom.  That the state spent tax dollars on the report makes it even more reprehensible.

 

 

 

The Cluster analysis of chapter 3

 

I will not quibble with the job statistics other than to point out FEC sloughs off the increase in number of farms and farm jobs that RI is experiencing by only looking at the non frame economy, even though the agricultural sector is one of the fastest growing industries in our state. But I have concerns about how useful cluster analysis is.  A few years ago a similar cluster analysis gave us what was called FIRE (Finance, Insurance, and Real Estate) as a cluster of great opportunity.  Shortly after FIRE burned down the economy with their financial shenanigans.  They have changed the name from FIRE in this report, but the result is still the same.  A few people making lots of money, most people getting poorer, and a growth in inequality.

 

Some of the other clusters, while providing some jobs, are likely to be problematic as well.

 

High tech will always be problematic as more and more the research is showing that High tech can not create more jobs than it destroys.  The major economic revolutions over the last 12,000 years, agriculture, industrial, created the ability to employ and support more people than the previous condition.  We may not take a step back in terms of communications technology, but we can expect fewer jobs if we let this new revolution run rampant, and even fewer that will match the mix of people Rhode Island has.

 

Meds and Eds is the one cluster in which there are significantly more jobs in RI over the last decade.  But ponder this.  The medical Industrial complex is taking up a larger and larger share of the American economy as the cost of health care becomes more and more oppressive. At recent rates of growth it will be the only part of the economy still expanding10 years from now as its share of the American economy goes from 17% to 25% while still delivering poorer health care than any other industrialized county.  Businesses and communities are already struggling with including health care as a benefit of employment and a discussion of how to really improve our health is off the table.

 

We have a paradox.  We need to bring the cost of health care DOWN, while those in the economic development business want to see more and more money go into this industry.  I do not know when the shakeout will occur, but clearly there are major changes coming here that will see the end of medical industrial complex driven job growth.  That is unless we want to see a commensurate growth in medically induced bankruptcies and an inability of other businesses to function.  If we move to a single payer system, which is likely to be the only way we can actually provided health care for all in our community, clearly the growth of income in the medical industry will go down.  It will also give us the incentive to move much more towards a prevention based healthcare system in which economic activity does not poison the planet and the people.

 

Every dollar that goes into medical research comes out of our pockets as taxes, as subsidies to tax exempt activity, and as payments for medical services.  If the cost of health care rises faster than everything else, everyone who does not work in the industry loses.  But unless there is more money in that system, it does not generate jobs.  Already the result is other parts of the economy withering away, swallowed by the medical industrial complex.  Be careful of what we wish for here, and remember that sewers, clean water, and public health improvements increased life span in American communities much more than all the high tech medicine we dream of.  There is a better way but this report seems oblivious to that.

 

Colleges share some of the same dilemma.  Growth of employment in colleges provides high paying jobs to a few, but with college costs skyrocketing fewer and fewer will be able to afford to go, and more and more will come out with debts that make moving forward much more difficult.

 

i saw little in the report about collateral damage of this strategy.

 

The military industrial complex is also going to shrink as the American public tires of war and the incredible costs of empire catch up to our communities.  In a shrinking economy with more and more inequality, either we convert much of the military industrial capacity to alternative energy and mass transit or we go with antiquated infrastructure.  Maybe the strategy by the 1% is to bankrupt everything else in the system and keep the war machine and the national insecurity state going.  In that case our government will have made so many enemies that the only thing that keeps the perpetrators alive is spending ever greater efforts and more of our money to suppress democracy and destroy communities.  In any case more money flows out of RI to pay for war than flows in.  We ought to get out of the business all together.

 

The analysis of the Green economy is of very limited value.  it focuses on only one sector of the “Green” economy, energy and energy efficiency, and leaves out anything that is actually alive.  The part of the Green economy that can create the most jobs are those sectors dealing with living things.

 

I have very little to say about section 3.6 other than that we need a prosperity strategy from the bottom up, not a growth strategy.

 

 

The regulatory climate

 

Everyone wants smart efficient regulations that protect the public in every way and are easy to understand and administer.  If we want a good regulatory system that protects the public it needs clear well written rules, capable people to administer it, and actual enforcement when necessary.  It is great that RI is looking at its regulatory system systematically, but let us hope that this is not taken as an opportunity to weaken the rules. Up on Smith Hill the politicians are being very strange about it as the proposal from Speaker Fox and Finance Chair Melo show us.  What we are getting is not an effort to protect the public and the public interest, but rather an effort to weaken regulations in the name of allowing certain industries to destroy and pollute for profit, mostly the real estate industry.   This flows right out of the business climate model of development.  The demand to weaken environmental regulations in the name of profit is both obscene and ridiculous.   There is absolutely no evidence that weakening the regulations actually helps anyone or produces economic prosperity. None. Often these regulations spur innovations in industry. So why do Chairman Melo, Speaker Fox and the Division of Planning promote this philosophy?  Have they drank the Kool Aid?  In fact often it is the weakening of regulations that creates the disasters that we all end up paying to clean up.  Flooding along the Pawtuxet in 2010 is a recent example of the damage that can be done because we let people build in the wrong place.

 

Regulatory enforcement and the ability to protect the public has been slashed at by the legislature for at least the last 15 years.  RIDEM has half the staff of 15 years ago.  It has become much more efficient, but at some point it becomes clear that a few people want the opportunity to build in wetlands and on other inappropriate sites because it is a way to make a quick buck.  And they have promoted a political climate that works to dismantle much that the public still wants.  Reports like Economy RI are a part of the propaganda campaign to roll back environmental, health and safety regulations.

 

The issue of consistency from municipality to municipality is also a contentious one in RI.  If it was reversed, if towns were allowed to let businesses follow weaker standards than the state, the calls for consistency by developers would disappear.  So lets call out the hypocrisy.  And can someone tell me why in a democracy there is any call to prevent communities from holding themselves to stricter standards to protect natural and community resources?  The whole idea of not allowing communities to protect themselves is offensive.

 

As for what it takes to get a business off the ground, FEC’s own report notes that RI ranks pretty highly (11th) in business start ups.  Clearly the regulatory issues are a straw man being used as a way to deny a little longer that the structural changes wrought by urbanizations, overconsumption, depletion and pollution have changed some of the fundamental ways our economy works.

 

Taxes

Everyone hates paying taxes, but despite the screaming there is little evidence that tax rates play a major role in where businesses locate (See Good Jobs First report for the details) and this is especially the case with start ups who rarely pay significant taxes as they have small profits. Even for larger profitable businesses, taxes are a vanishingly small percentage of revenues.   The obsession with tax rates is just rent seeking by the rich who are always looking for ways to avoid community responsibility.    And as our infrastructure fails, this becomes a clear case of penny wise and pound foolish.

 

Housing

 

Housing is a big part of the American Economy.  Intimately tied into the American Dream.  But the current system all but guarantees the rich will steal from the poor as the poor seek housing.  The effort to end public housing coincides quite well with the further squeezing of American workers seeking housing, and the creation of the entire range of crazy mortgages designed to swindle buyers who would be renting if rentals were available at appropriate prices.

 

The problem sometimes can be defined as if house prices do not continue to rise home owning Americans are poorer, but as people already can not afford housing, relying on rising housing prices to fuel the economy and consumerism is a dead end.  The price of housing needs to come down if we are to all have safe affordable places to live. ” The Rent is still too Damn High” with many renters paying much more than the recommended 30% of income on housing.    If we had bailed out homeowners instead of banks when the bubble hit, and reduced principles to what was actually affordable in the economy, the economy would be smaller as measured in funny money, but housing would be more affordable, our communities would be more prosperous, and fewer people would be living on the streets.  Alas Wall St does not care if people live on the street. Wall St can make money on private prisons.

 

I have previously written about how housing is used as an investment by the wealthy when there are few other places in the economy to productively invest.  I recommend my paper  ;’Foreclosures, Ecosystems, and the Economy for a more in-depth view.  https://prosperityforri.com/foreclosures-ecosystems-and-the-economy/    That we go through the game where everyone asks for housing prices to rise is a statement on the shrinking of the American economy and the lack of productive industries to invest in.  That China is following our path, using the construction and real estate industries to churn things up when nothing else is going on needs to remind us that we are approaching the limits of more stuff on Earth as an economic philosophy.

 

Full Cost accounting:

 

We are in the age of metrics, but if we do not measure the right things we still get the wrong conclusions.  Much of the American business philosophy appears to be built on externalizing costs.  You know;  public cost, private profit.  We need to change what we measure to and make sure that businesses are no longer able to externalize costs.  If that happens we get a much clearer picture of what is going on and where we need to focus.  A report on the economy in Rhode Island without a call for true cost accounting is not very helpful.  If we look at the finance industries without looking at their downsides, if we tout the war machine without adding up the death toll, if we seek the medical industrial complex without looking at how it eats the rest of the economy, if we permit building in wetlands without understanding the effects downstream,  what can we see clearly?   If we do look, we are likely to see is that most of our opportunities are in ecological healing and encouraging communities to be much more involved in what their economy looks like.

 

Conclusion

The Economy RI report was a waste of the taxpayers money.    I refer you to a blog article by one of America’s wiser political observers to further make this point.

 

http://prorevflotsam.blogspot.com/2013/05/the-silent-war.html

 

 

 

An Equity Profile of Rhode Island

http://www.planning.ri.gov/documents/LU/ri-equity-profile.pdf

It is nice to have the statistics that show how unequal the RI economy is and the statistics in An Equity Profile are most useful.  Wilson and Pickett in The Spirit Level show Rhode Island in all their graphs at about the middle in rankings of American states in inequality and many of the indicators that show the effects of inequality on the population. What was missing in An Equity Profile was a discussion of economic democracy and how enabling communities, especially marginalized communities, to participate in the discussion of what is to be, and to benefit directly benefit from the ensuing development rather than be displaced, is critical to achieving prosperity.

 

Let me start with some things from a World Bank Report on economic development in marginalized communities, Managing Forest Resources for Sustainable Development: An Evaluation of World Bank Group Experience, prepared by the Independent Evaluation Group,

 

Only rarely do World Bank reports have anything to do with Rhode Island, and we all know the World Bank has a less than stellar reputation, but this report on the results of the WB’s forest lending practices are relevant to our economic struggles.  Forest people are among the most marginalized and easily displaced people on the planet.  Everyone wants what they have, and outsiders have the money and weapons to steal it.

 

WB   1.4  page 2    ”Poor forest  governance stems from the fact that forests often have a combination of capturable wealth but poor, isolated, and powerless residents. Powerful interest groups can seize this wealth, depriving poor people of access to forest resources, and sometimes contributing to corruption and poor governance at the national level. Because it is more profitable to mine the forest than to manage it sustainably, this contributes  also to environmental damage.

 

The statement of “poor, isolated, and marginal residents can be just as easily applied in Rhode Island as in tropical forests.  Can anyone say the old industrial heartland of Rhode Island,  the inner city communities of Woonsocket, Providence, Central Falls, West Warwick, are not isolated, marginalized, and less than powerful?  These are our Environmental Justice communities.  People living in the old industrial heartland that has been hollowed out.  The only asset the communities have that everyone wants are brownfields, and while the communities do not own the brownfields, the games being played in Rhode Island, such as the attempt to overturn the School Siting Bill, show similar forces at work to those wrecking the forests and lives of forest people around the world. In these communities economic development must begin at the bottom, and truly include low income communities in the process, and the benefits, if it is to be successful.

 

WB  2.58  page 45   Evidence is lacking that the World Bank‘s support for industrial timber

concession reform has led to sustainable and inclusive economic development.

 

This quote points out the weakness of outside driven economic development for low income communities.

 

WB   2.79  page 56   The focus on engaging local resource users in decision-making is a vital element of resource management that holds potential for increasing synergy among

the three pillars. Increased local participation in environmental management is

viewed as a means to eliminate inefficiency and corruption in administration of the

forestry sector while enhancing equity in the distribution of economic benefits.

 

WB  2.82  page 57   Across the World Bank forest-related projects in the Sahel, the failure to explicitly address asymmetrical power relationships between decentralized bodies and forestry agents is likely to reduce the ability of local groups to actually exercise decision-making power in forest management.

 

This is exactly what our low income and environmental justice communities face.  If the work on equity does not specifically address asymmetrical power in economic and political decision making it unlikely to help reduce or eliminate poverty or achieve environmentally positive results.  The report was on economic equity and reported the statistics to show how skewed our economy is.  Now we need the report that shows us how we are going to get to equity, and notes that economic equity does not happen without political will to make sure the benefits of economic development stay with the people in the community and that they NOT be displaced or gentrified out.  In other words economic democracy is necessary if our economy is to work well.

 

CONCLUSION

 

At this point no one in RI except those of us on the outside are talking about economic democracy as a critical factor in economic development if we want it to work for our communities.  We are constantly looking at rich folks seeking to cut the community out of the process, except when it supports their private projects.  And it is more obvious every day that until the marginalized among us are put at the center of the economic development process, until it works with and for our lower income communities, economic development in RI will continue to be a sham and a failure.

 

You can not heal ecosystems without ending poverty, you can to end poverty without healing ecosystems. You can not have a strong middle class without doing both.  It takes economic democracy to do this work. As we slide through economic evolution, as we understand the end of growth, the effects of ecological collapse, and the need for justice in the economy, our communities and the marginalized communities with in them need to determine their own fate and co-develop their own economic prosperity.  The continued subjecting the people and communities of Rhode Island to the power of the 1% and their chase for money no matter what the consequences is unlikely to increase our state happiness, nor our Gross State Product.  We have much information on what a sustainable path forward looks like.  Economy RI is not an accurate roadmap.

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