Economics with a heart, but no soul

  • Book cover of "Post-Cowboy Economics: Pay and Prosperity in the New American West"

  • NEW ECONOMY: Rafting in Montana

    Montana Department of Commerce

In 1996, Thomas Michael Power wrote Lost Landscapes and Failed Economies, an economic study of the Interior West, in which everything that happened was for the good. If the West were not the best of all worlds, it was as good as life would get on the coasts. We had half the money, but twice the sky; we had a fraction of the jobs, but half the crime and twice the scenery.

That book made three arguments. First, that all wealth did not flow from the ground, as ranchers and miners argued. Service jobs could provide as firm a base for an economy as mining, logging and ranching. Second, that Montana was a good place for a thriving service economy because it had the mountains, wildlife and clear air that would attract businesses and skilled workers.

Third, that the state's low wages were precisely balanced by a high quality of life. If you took everything into account, Montanans were as well off as Los Angelenos or Chicagoans.

Critics - I was one of them - argued that Lost Landscapes looked away from sprawl, class divisions, and Montanans' anger at the deal Adam Smith's invisible hand was handing them (HCN, 12/23/96: Denying the warts on the West's service economy). I argued that the book characterized Montana as a Barbie doll landscape that didn't take into account fires and weeds and overgrown forests.

It is now five years later, and Power, this time with fellow University of Montana economist Richard Barrett, has written a much more sophisticated book. Post-Cowboy Economics: Pay and Prosperity in the New American West, is ideologically softer, as is clear from the cover, which shows a cowboy standing in an irrigated hay meadow, working on a laptop computer.

Unlike the last book, this one has a heart. The writers acknowledge the pain Montana's economic shift is causing, and devote a chapter to what government should and should not do to strengthen people and communities. It is also loaded with data that let readers decide about the state of the state of Montana.

But the central idea is the same as that of Lost Landscapes: The authors asks Westerners to see that when "combined with a higher quality of life, lower incomes are a sign not of failure but of strength; they are an indication the people understand their own needs, that they share those needs with their neighbors, and that together they have provided for them."

Again as in Lost Landscapes, the land plays no role - other than as an unworked amenity - in the economy or psyche of the West. The authors love Montana and approve of its economic trends. The goal is to convince their fellow Montanans to at least accept the new situation.

They marshal impressive facts. Extraction is a destructive pimple on the state's economy. Extractive jobs are dwindling and those that survive pay less money with each passing year.

From the other side, they show that a service economy is not just Wal-Mart greeters and Burger King burger flippers. It's brain surgery, computer programming, college professoring, consulting, and real estate selling. It is the modern, 21st century global economy, and Montana can have the good life if it only refrains from trashing the golden goose: the land, its streams and its wildlife.

It's a rational argument delivered with sensitivity. Power and Barrett write that if you live in Montana or Wyoming, your wages are bound to be lower than the national average. That's because wages are low in any place that lacks a metropolitan area. Wages go up with population, and Montana and Wyoming don't have metro areas. That leads to a higher quality of life which balances out the lack of cash.

It's a good try, but it's unlikely to sway Montana as a whole. It didn't sway me, in part because the book provides ammunition against its argument.

First, Montana is a low-wage state even compared with other non-metro areas. And its real average pay per job has had a sickening drop in the last 20 years, from about (I'm reading a graph) $30,000 per job to about $22,000 per job. By comparison, the national average wage per job has held steady at about $32,500 per job.

Montana's per capita income has risen from about $19,000 in 1978 to $21,400 in 1998, thanks to pensions and newcomers bringing their income from elsewhere and people working two jobs. But working two jobs is a tough way to raise your income. And the quality-of-life advantages may not matter much to a family whose members work more than one job each just to get by.

The authors argue that the economic development path being taken today in Montana - bringing back mining and logging jobs - won't make a difference. From 1978 to 1998, their data show, average annual pay in the West's natural-resource sector fell from $35,578 to $30,065. So even those who held on to mining or logging jobs saw their incomes fall. But there is another way to look at the book's numbers: The fact that the average job wage in Montana is $21,400 makes it easy to understand why some would fight for even a few $30,000 per year jobs. But Power and Barrett are right about the big picture. The natural resource industries have been automating over the last several decades. Fewer miners and loggers and mill workers produce more and more ore and trees and two by fours. You could destroy the surviving forests and pure streams without creating a significant number of new jobs.

How, then, do Montana and Wyoming and other states or parts of states that lack major metro areas break a death spiral in which economic misery leads to angry politics which leads to assaults on ecological health?

This book doesn't provide even a partial answer. It can't provide an answer because it ignores the land except as backdrop to the kind of suburban development that characterizes the rest of the United States. There are no working landscapes in Power and Barrett's vision. The land is not part of any solution they can conceive.

They prove that their state can survive in a dollar sense with a service economy. But they haven't asked whether the soul of Montana can survive being sundered from the land.

It's a key question. My sense is that Western bitterness and political reaction will diminish only if the region reconnects to the land in more ways than recreation and preservation. The old approach to living off the land needed to be reformed. But this book implicitly argues that we can walk away from worked-over land and the kinds of jobs that worked the land over. My sense is that doing so leads to the kind of terrible mess Montana finds itself in - a mess that isn't good for people or the land.

Instead of rejecting extractive jobs, we need to figure out what kind of mining follows heap leaching, what kind of forestry follows intense roading and clear-cutting. We need to use the new mining and the new forestry to repair what the old mining and the old forestry damaged. We need to make the jobs that produce wealth from the land respectable and respected.

Some ranchers have already shown that they can run livestock while restoring grasslands and wildlife habitat. Forestry is beginning to follow in ranching's footsteps. And the Stillwater Mine in Montana shows that even hardrock mining may be able to treat the land right (HCN, 7/31/00: Mining out the middleman).

These jobs will never be numerous. They will never swing the economy. Power and Barrett prove that in 20 different ways. But the macroeconomic impact of these jobs is not what's important. What matters is that Montana's identity is tied up with having some people working on the land. The numbers aren't important. A football stadium with 100,000 people is exciting because of the 22 players on the field. Our region is exciting because of the land and those who interact with the land, both for recreation and the creation of wealth.

What we need next from Power and Barrett, as the third in the series, is a book showing how mining and ranching and logging can create wealth and jobs while restoring and protecting the land. I figure my review of this much-needed book will appear in the last issue of High Country News for 2006.

Ed Marston has been the publisher of High Country News since 1983.

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