North Providence Economic Development as Another Government Boondoggle

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There are basically two ways to approach economic development through public policy.  The first — the one I favor — is to look where government impedes what the people want to and would do in its absence and back off.  The second — favored by those who either don’t like the idea of backing government off or who believe that central planners in government can make better decisions than the people — is to try to constrain activity so that people will consent to doing what the government wants them to.

In the latter approach (borrowing from a phrase of Andrew’s), government officials see themselves as a sort of board of directors and superstructure that ultimately has responsibility for all of society.  The jobs are theirs to create.  If there’s a vacancy, it’s their job to go out and find a way to fill it.

And thus we get the local government of North Providence going out and luring a Crossfit gym to a specific location in town, promising what government-centric economic development proponents like to promise: a streamlined process.  The problem is that government is not a unitary force, but a collection of bodies, and it’s not very good at planning and acting as a superstructure that ultimately has responsibility for all of society.  At the end of the day, figuring out the maze of regulations and requirements isn’t the hard part; moving through it is.

As Ethan Storey reports:

On the afternoon of April 11, a cease and desist letter to the “ladies and gentlemen” of Ocean State CrossFit was hand-delivered from the very “one-stop shop” Department of Planning and Zoning that had helped make it so easy for Berling to invest $100,000 in a second Rhode Island CrossFit location.

The letter, from new Zoning Officer Kelley Morris, and not the retired Ed Civito who helped Berling open at the urging of Lombardi, declared not that there was an issue with noise, but that the owners were in violation of the town’s zoning ordinance by running a fitness center in a “commercial village” zone.

I’d argue that it isn’t government’s place to pick, choose, and solicit businesses; that’s another way of limiting the opportunities of some in favor of others and using the power of the state to displace the power of the people.  In North Providence, we find that government also isn’t competent to pick, choose, and solicit businesses.  As an organization, it’s unreliable, and as Rhode Island’s ongoing pension reform controversy shows, and as the Obama administration has made a specialty of proving, government can change the rules whenever it wants to suit its own interests, whether they be sincerely well intentioned or corrupt and self serving.

Government’s role should be strictly limited to offering a neutral field in which private parties can mediate their differences.  When it does more than that, well, Crossfit owner Mike Berling puts it well, “He said he will never again believe that North Providence is the business-friendly town Lombardi told him it was when he called him last fall to invite him here.”

In other words, where the government’s hand is too strong, people will avoid setting up shop.  Witness Rhode Island’s nation-leading unemployment rate.