KUZMINSKI: Do We Give More Than We Take, And Does It Matter?



Do We Give More Than

We Take, And Does It Matter?

By ADRIAN KUZMINSKI • Special to www.AllOTSEGO.com

Jane Jacobs “Death and Life of American Cities” helped spawn the historic preservation movement.

In my last column, I discussed “Sustainable Living” – one of the three principles of Sustainable Otsego. Today I want to consider the second principle, “Economic Independence.” I’ll take up the last principle, “Home Rule,” in a later column.

The phrase “economic independence” is bandied about these days by politicians and pundits alike. But what would real economic independence look like? How could we measure it?

The issue was clarified some years ago by the insightful economic and social critic, Jane Jacobs, in her influential book. “The Death and Life of Great American Cities.”

Her key idea is what she calls “import replacement.” Insofar as a community imports more goods and services than it exports, it runs what’s essentially a trade deficit. Money drains out faster than it pours in.

We usually think of trade deficits as a national issue, but they are in fact a good indicator of the economic health, or the lack thereof, of any community.

So let’s take Otsego County.

There are few statistics on this subject, but to the extent that we’re consuming more than we’re producing, we’re running a trade deficit. I suspect that’s the case, and that it’s a significant deficit, but we really don’t know for sure.

Most consumer products we purchase – from energy to motor vehicles to appliances to furniture to construction materials to drugs to food and clothing to phones and computers to you name it – are made somewhere else, usually far away.

And more and more of these things arrive as Internet purchases bypass local retailers.

What local products are exported? Corn, hay, timber, milk, maple syrup, alcoholic and non-alcoholic beverages come to mind. On the industrial side we’re exporting ultracapacitors, precision molded plastics, energy storage products, lab ware and glassware, crushed glass, cosmetic packaging, military equipment, and barbecue sauce, among others.

Sounds fine, except the volume of exported products is infinitesimal compared to imports. Or so it seems intuitively.

What about services? The local economy has been described by politicians as “Beds, Meds, and Eds,” meaning roughly tourism, health care and social services, and education, to which we can add the retail and professional trades.

Retail and professional trades cater generally to local residents, and mainly recycle local dollars, but the other services are very different.

Tourism brings in outside money, almost by definition, while the colleges in Oneonta, for instance, bring in funds from distant tuition-paying parents, as well as from taxpayers spread across the state.

Public schools and infrastructure projects also attract significant amounts of outside money (in grants, reimbursements, rebates, etc.).

But the biggest infusion of outside money probably comes from healthcare and social services
reimbursements, not just to Bassett and Fox, but to institutions like Pathfinder Village, Springbrook, nursing homes, and others.

Outside money also comes from retirees, second-home owners, and others who move here (even as our home-grown youth often must leave to find work). These immigrants, who usually come from urban areas, often bring with them the financial resources they need to live locally.

And finally, government transfer payments, such as Social Security, flow into the county as well, helping to keep us solvent.

In short, our service economy, including government reimbursements, is what keeps us going today.
Our reliance on government funding, however, can be precarious, as we saw when our previous congressman proposed to undermine Medicaid funding by eliminating its current tax support without replacing it. That would have put our local healthcare system at risk.

Tourist and immigrant spending are attracted by our natural beauty, cultural activities, and rural way of life, but they too have their limits.

Tourism depends on discretion-ary income, leaving us vulnerable to any serious economic downturn. And the stream of immigrants is limited by the difficulty of making a living locally, constrained in part by the lack of modern broadband telecommunications as well as our relative isolation.

For now, as long as someone else is paying for most of our social services, we’re okay. But otherwise we have only our natural beauty, rural lifestyle, and seasonal cultural attractions to sell.

Until we begin to make products replacing at least some of those we import, we will remain far from economic independence, and true prosperity will continue to elude us.

What can be done? We once had a vibrant farm community, an industry with a large multiplier effect on local commerce which anchored a significant exporting economy. Rebuilding local agriculture, particularly with food hubs and value-added products, would help us enormously.

A service industry that could boost the local economy would be an Otsego County Community College. Not only would it bring outside dollars, but, by training students in needed skills, it would contribute to jobs for a local population better equipped to adapt to local production opportunities.

In the meantime, a serious study of the “balance of payments” of Otsego County would provide an important indication of the real state of our economic health. If we could compare the dollars that we’re sending out of our economy with those that are coming in, we’d have a pretty good picture not only of where we stand now, but of what we might do to improve our economic independence, the key to our future prosperity.

Adrian Kuzminski, a retired Hartwick College philosophy professor and moderator
of Sustainable Otsego, lives in Fly Creek.

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