Op-Ed: Eco-Devo, Public or Private but not Both

January 20, 2017

by John Pickerill

There was news last week about my county’s economic “development” corporation that may have statewide implication. The mayor and his board of works withdrew all city funding for the corporation. He proposed instead to give elected officials direct control over economic development.

Since the county government was already planning to withdraw its funding within the next year, that will soon leave the corporation as a 100-percent privately funded organization. So now the question is, will this be good or bad for our local economy?

It’s good in that local taxpayers won’t be forced to fund the group, it now having to prove its worth to earn future financing. It’s bad in that it creates a new government economic-development authority under complete control of politicians. Economic-development policy will likely be used even more for political gain rather than real economic prosperity.

In a free society, individual consumers decide the direction of the economy. Businesses are most successful when they best serve their customers. Good business owners live by the motto, “the customer is always right.” The only time government steps in is when someone refuses to honor their contract, commits fraud or does something harmful. Otherwise, government stays out of the way so that individuals can work together through their own social cooperation to make the best economic decisions.

But in a society where government oversteps these bounds, politicians and bureaucrats arrogantly think they can make better decisions for individuals than individuals can for themselves. That is when government force is used against taxpayers to fund their schemes. Tax abatements and taxpayer-funded infrastructure improvements are given to one company but not another. Politicians decide who wins and who loses. It’s a big, ugly step toward socialism.

Actually, I take that back. It opens up the whole process to corporations funding politicians re-election campaigns, who in turn hand out government favors to those same corporations. It’s a big, ugly step toward crony corporatism.

This is why this move is a positive step for an economic-development corporation. Now that it gets no government handout, its survival depends on admitting “the customer is always right,” and by doing so they will become a much more effective organization for our community. Our corporation will likely seek funding from local factories to remain solvent.

That’s good because when local factories scream that they need a pool of good workers from which to hire, the economic-development corporation will have to deliver on its promise of workforce “development” if it hopes to keep them as investors. The corporation will also likely need funding from our community’s numerous small businesses. So when the corporation considers inviting an outside business to come to our county, it will tend to concentrate on those companies that best complement existing businesses.

On the other hand, the proposed Economic Development Authority, being government funded and controlled, will tend to make decisions based on getting politicians re-elected. Stanford economist Thomas Sowell put it best: “No one will really understand politics until they understand that politicians are not trying to solve our problems. They are trying to solve their own problems — of which getting elected and re-elected are No. 1 and No. 2. Whatever is No. 3 is far behind.”

An economic development corporation, as a privately-funded organization, is a step in the right direction. Creating a government Economic Development Authority is a step in the wrong direction.

John Pickerill, former chairman of the Montgomery County Republican Party, wrote this for the Indiana Policy Review Foundation. A graduate of Purdue University and the Navy Nuclear Propulsion Program, Pickerill retired from the U.S. Navy with the rank of Commander.



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