Economics different in rural areas

Eric Dent

The election of President Trump reminded the elite in major cities that places like Robeson County do exist. The election focus was on the working people of Michigan and Pennsylvania, but we are in the same situation here. Even the tepid national recovery from the recession mostly hasn’t touched Robeson County, where the unemployment rate is often double the national rate.

Having spent the first 40 years of my life in the major metropolitan areas of Miami, Atlanta, and Washington before moving here, I will admit that I was clueless about places like Robeson County. We don’t really fit economic models, which assumes rational behavior and focus on innovation. Economics assumes, for example, that if a factory closes, those who lost jobs will move to other locations or retrain themselves to take other jobs. Rational behavior is typically ideal, but much of what we care about is non-rational. For example, anything we have allegiance to is typically not rational — love for our children, loyalty to the community of our heritage, the value we place on the beauty of where we live, and so forth.

Economics also doesn’t focus on what is left behind after innovation. It might be better for the whole world if a job paying $10 an hour in Robeson County can be completed for $3 an hour in China, but it isn’t better for the person who lost the job and it isn’t better for Robeson County.

Economics, or any other approach, really doesn’t provide us with a good guide for when there should be tariffs, for example, or how high they should be. We do have several examples of people willing to pay higher prices for non-economic benefit. Many people are willing to pay more for their coffee (“fair trade”) if they expect that the grower will receive more money. Others will pay more for a Toyota Prius than a comparable sedan because of its lower consumption of fossil fuels, helping the environment.

Shopping is also a subject with important non-economic considerations. If people from Robeson County shop regularly in Fayetteville or Raleigh, or online, soon there won’t be shopping options locally. For example, we no longer have a bookstore, a music store, fine dining, an electronics store, and we are down to one limited movie theater. On one level, it is no big deal to order products from Amazon, but the richness of a community is lost when options are not available and the community has to disperse to complete the regular activities of life.

Let’s take this up to the national level. Ricardian economics suggest that if the Swiss are better at making watches, the Germans are better at making cars, and the Americans are better at making computers, then we should let each country do what it does best, raising the standard of living for everyone. That sounds good in theory, but there are practical considerations that complicate the theory.

One real problem arises if a country that specializes in a product becomes an enemy of ours. Or, what if the industry of that country is hit by a national disaster — such as the tsunami in Japan? Just as above, though, non-rational factors are important too.

It may not be ideal for a community to be completely removed from the development of a variety of products and services. If we keep more jobs in the United States, we will be economically better off? Probably not. Will we create a better community and a higher quality of life? That remains to be seen, but I think the answer is likely to be, probably so.

Eric Dent Dent

Eric Dent is Endowed Chair Professor of Ethics at Florida Gulf Coast University.

Eric Dent is Endowed Chair Professor of Ethics at Florida Gulf Coast University.

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