Put Steve Frias’s Providence Journal op-ed in the “must read” category. Reviewing a couple hundred years of economic history sheds some surprisingly relevant light on the assumptions under which our state operates.
One such assumption is that our woes are a consequence of the decline of manufacturing here and in general. On the general side, it’s not true that U.S. manufacturing has declined, and a declining global market share needn’t affect a state as small as Rhode Island, if we were at the leading edge. Frias offers a clue as to why we’re not:
In the 19th century, because of the Industrial Revolution, Rhode Island’s economy grew at a rapid rate. The state’s economy was characterized by one historian as “a kind of manufacturer’s dreamland” where taxes were low, regulations were few, and labor was inexpensive.
Rhode Island’s manufacturing problem, then, has a lot to do with deliberate changes that made the state less attractive for it. The same problems — the difficulty of initiating and doing business here — also prevent Rhode Islanders from redefining the state along other industries. Consider:
In April 1946, RIPEC [reported] that Rhode Island had lost its tax advantage over other industrialized states such as Massachusetts. [Previously,] “a generally conservative attitude toward public expenditures, plus a relatively simple state government, produced a moderate state tax cost” … giving it a “rather substantial tax advantage” over most other industrialized states.
It’s possible to pump a lot of fog into economic debates, but Rhode Island does not have to lag the country in recovery. Our size does not dictate high costs for government. We’re not bound by an unhealthy tradition, inflicting hardship on our families, and we shouldn’t be cowed by assertions of “what Rhode Islanders believe” when we, as individuals, don’t actually believe it.
We are allowed to change this.