Getting Economic Development Wrong


Readers may get the impression of a broken record with this post.  Before I go on, perhaps I should explain to the younger folks that records were large black vinyl discs, of about 10 or 12 inches, that would spin on a table called a “record player,” with a needle following grooves in the plastic and thereby transmitted prerecorded audio.  If the record were scratched, the needle would skip across grooves and the listener would often hear the same phrase repeated over and over again.

Anyway, repetition is obligatory in Rhode Island, these days, because the people we’ve elected to public office have the completely incorrect view of economic development.  Here’s Governor Gina Raimondo’s Commerce Czar Stefan Pryor responding to the House Finance Committee’s concern that the governor intends to give him a great deal of money and discretion:

… Pryor bluntly told the committee that the corporation cannot grow the state’s economy without the programs proposed in the governor’s budget. He described a conversation he had with the corporation’s executive staff before he formally assumed his new role earlier this year. Pryor said he asked the staff how Rhode Island would attempt to compete with a company that arrived in the state with a list of project terms provided by another nearby state, such as New York.

“This is not a fictionalization. This is the actual answer I got back: We cannot — on any point,” Pryor said. 

“That’s a problem. We must ensure the appropriate level of accountability and the necessary level of flexibility to carry out this work. But the primary problem that we have is we can’t even counter. We can’t help our businesses in Rhode Island grow.”

Simply put, it should not be the role of government to take money away from the people who live in the state in order to outbid other states’ bribes to lure the economic actors whom government prefers to the state.  Rather, the government’s role should be to ensure that Rhode Islanders have the space — in stability, security, and infrastructure — to make their state a place that attracts the sorts of economic actors whom they prefer.

Politicians sometimes say that Rhode Islanders are Rhode Island’s greatest asset, but they don’t really mean it.  If they did, they’d let Rhode Islanders maximize their own efforts toward building their lives and shaping their state.

The technocratic, Raimondian method of economic development is akin to confiscating money from the music industry in order to subsidize companies that make enhanced record players when they should be leaving the money in the economy and trimming regulations in order to allow Rhode Islanders to develop cassettes, compact discs, and mp3 players.

  • Greg

    Way to go, Justin!

  • Mike678

    So true. Create an environment that attracts business rather than providing an antidote to the poisonous business climate to a select few. Why can’t we do this?
    One reason may be entrenched interests, another because politicians will lose the power to grant favors–and get them in return.

  • Warrington Faust

    Doesn’t “38 Studios” say it all. Most states are re-thinking the benefits granted to the movie industry, they cost the states far more than they bring in. The movie industry is also tired of the states permitting the Teamsters to fleece them.

  • Winter Solstice

    Great article, Justin. When I read Pryor’s comments and listened to Skeffington on 10 NEWS CONFERENCE this morning, I pick up an undertone that we, the citizens of the state, should be appreciative, rather than critical, of their :”catalytic” efforts to improve the state. I am also weary of citizens, i.e.taxpayers, being chided for their skepticism about these questionable deals and told we have to “get over” 38 Studios so the state can “move forward.”

  • Peter Bonk

    You would think in a place that bills itself as “The Ocean State” that the concept of “a rising tide raises all boats” would not be alien. Set a good business environment and the natural, inherent advantages of being in Rhode Island will sell the state to new and growing businesses.

    • Warrington Faust

      The Rhode Island thought would be “A rising tide raises all yachts”

    • Max

      Instead we’re up the creek without a paddle.