The temptation of the conservative critique

Just west across the Niagara River from Buffalo is a place where the income tax rate on individuals is higher than in New York or any of the other 49 United States. It is a place where national and provincial taxes on consumption are higher, and where there are more public employees per capita than in Buffalo. Comprehensive land-use and infrastructure planning there restricts development to specific corridors, in sharp contrast to the free-for-all, every-town-for-itself ways of Western New York. In the Ontario region immediately bordering us, the population is not only growing but actually outpacing projections, while we and the rest of Upstate New York shrink. If our community premise is that we need to grow rather than to shrink, and to become richer rather than poorer, then it’s logical that we’d look around to see how the neighbors are doing, and then see what we could do either to avoid their sad fate or to replicate their happy success.

The numbers suggest that prosperity in the Regional Municipality of Niagara is spreading, that violent crime is almost nonexistent except for the occasional murderous weirdness that somehow randomly emanates from the Welland Canal and makes headlines. We have for decades watched a growing stream of Canadian shoppers exercise their growing purchasing power at Buffalo-area shops, and our Niagara and Erie County green-eyeshade types rub their hands as those Canadians supply between three percent and as much as six percent of the sales tax revenue collected hereabouts. Immigration to the Greater Toronto Area is still strong, and some happens in Niagara Region, too. Manufacturing in the Canadian Niagara as a share of total economic activity is higher than in the Buffalo metropolitan area, where goods-making accounts for about 24 percent of all that transpires here. Tourism is stronger there than on our side of the ditch, where 85 percent of the wagerers in the Seneca-owned casinos are locals, while a larger share of the trade in Ontario’s provincially owned dens is from outside the market. In the summertime, major tourism dollars go there from Asia. Not so much here.

It’s no paradise in the Regional Municipality. The planning looks like a planful mess as Fort Erie sprawls out into usable farmland that is still mainly farmland, but less so. There’s intense planning for people-moving surface rail cars in Hamilton, which is on the way to becoming a miniature of Toronto in terms of density, educational sophistication, public green space, and diversity, but it’s hard to identify density in Niagara except in the concrete-encased Fallsview hilltop.

But growth is indeed happening there. Strangely, though, we tend never to get to the neighbor-to-neighbor comparison, because instead, we swirl round and round in the circular eddy of the American discourse on policy. Democrats and Republicans alike all swear that they hate taxes. They both vow to cut back public employees. Both parties avoid any talk of land-use planning. And they both embrace the notion that endless economic growth is a matter of win-win, never a matter of choices. Democrats bravely talk about distributional fairness, Republicans sneer at the F word, but it’s all about the grow—and when grow doesn’t happen, the ranting begins.

We don’t do growth here very well in Upstate New York. Nor do we grow anyplace else in the Rust Belt—notwithstanding the recent protest of a University of Rochester official, who explained that the bankruptcy of Kodak was no big deal because of all the entrepreneurship underway in what a journalist of a previous generation there called Smug City. (The U of R guy did not mention those Brookings Institution studies showing Rochester as having had the greatest increase in concentrated poverty of any American metro for years on end.) But even if the Census data show Rochester muddling along at a one percent population growth rate while the Buffalo-Niagara Falls metro, the Cleveland metro, the Pittsburgh metro, the Detroit metro, and just about every other Great Lakes metro shrinks, the experience of robust economic progress is highly localized…mainly elsewhere.

So despite our income and corporate taxes being lower than across the Niagara, our non-growth environment here makes us willing listeners to a much-circulated critique of Governor Andrew Cuomo’s proposed $1 billion Buffalo economic development fund. It’s a critique of any potential thought that might enter our cute little Buffalo heads that the exemplary path to growth at this notch on the Rust Belt might ever be found in Ontario rather than in the foreclosure fields of Florida, or in the drought-stricken stretches of Texas, or in the hurricane-hammered hills of Oklahoma, despite the cross-Niagara evidence that’s right in front of our lyin’ eyes.

Steven Malanga of the Manhattan Institute recently wrote of Buffalo that it was “ruined” by stimulus spending such as Cuomo has proposed. “Buffalo may be the paradigmatic example of why expensive government revitalization efforts often fail,” he opined in a Wall Street Journal essay. Malanga cited a Buffalo News study by James Heaney that found, in 2004, that federal assistance over 30 years included more per capita Community Development Block Grant aid for Buffalo than for any other city in the country, but that “$556 million later, there is scant evidence of the federal government’s largesse.” Heaney stated what everybody here knows, which is that the federal Department of Housing and Urban Development was set up by Lyndon Johnson for political purposes, not to solve social problems. Social scientists and reformers who hate both racist governance and the poverty industry know that regionalization is the only workable, proven, cost-effective, and sane way to cope with concentrated poverty in old Rust Belt towns like ours. Buffalo came close only once in the past 50 years to doing what Omaha, Louisville, Indianapolis, Nashville, and Canadian metros have done, which is to end Buffalo’s (Cleveland’s, Pittsburgh’s, Detroit’s) structural isolation by merging the city with the county and getting rid of the “little box” governments that do their own thing. Malanga ignores any of that, or all of it, and instead just restates the old song—that it’s New York State’s tax policies that have strangled economic growth here, and that all the money that pours in from federal and state sources is going to be wasted.

Ontario, with all its successes and shortfalls, its saneness punctuated by weirdness, simply doesn’t exist for old-time American hummers of that hymn of hate.

Decline, sustain, or degrow?

The American Left is busy just now with the 99 percent critique, and bully: The beaten-down, betrayed, and still demonized labor movement has some new relevance because union folks may yet help the rest of America figure out, in the lingering aftermath of the 2008 financial crisis, that there really is a Them and an Us. Labor would be helped were the US Attorney General to arrest a few more sneering bankers, expose their utter contempt for the rule of law, for anything like a notion of community, and for the rest of us. One hopes for more fight, though perhaps Eric Holder is too polite, or too intimidated, to reprise Eliot Spitzer from his Sheriff of Wall Street days.

But there’s another critique forming of the world Wall Street gave us. In Europe, where low birthrates have been a reality for decades, and where there is a keen awareness of how dependent they are on imported energy (Mideast oil and Russian natural gas), there’s a new, very non-American discourse that is bringing climate physics, the Peak Oil hypothesis, and environmental science in general to questions of economics. What they’re talking about in Europe is not growth at all, but degrowth.

Degrowth is the new term for a concept that gained some currency in the early 1970s, namely, that the Earth itself is running out of the ability to handle so many human beings. When the critique began in earnest with the Club of Rome’s 1972 “Limits to Growth” position paper, the planet’s population was two billion. Today it is over seven billion. Too many people using too many resources at too fast a pace would lead, according to the early critics of global economic expansion, to resource depletion, and eventually to environmental disaster, and to massive starvation and death.

The Club of Rome’s analysis was updated a couple of years ago. The case for limiting growth got stronger, if not louder. The revisers charted out how the 1972 report got ridiculed and marginalized for more than three decades. The degrowth paradigm was not a part of respectable economic analysis until the great crisis of 2008, when suddenly the reigning growth-oriented, free-market, neoclassical economic orthodoxy came under fire from all sides. Environmental economists have been chugging away before and since, huddling in their own conferences, as they make mathematical models based on geologists’, physicists’, and climate scientists’ reports of diminishing fossil fuel supplies, expanding greenhouse gases, and negative-feedback loops in the atmosphere. This spring, the international Degrowth conference will be held in Montreal, which is to say, in the country that is riding a new wave of prosperity funded by the very mucky Alberta oil-production boom, which environmentalists say dooms air-breathing life on earth.

In Europe, degrowth is not a marginal enterprise. Five universities have joined three research institutes and several national environmental agencies—i.e., government offices, including Germany’s—to coordinate efforts on sustainable economic alternatives to the growth scenario. The degrowth alternative is taken very seriously. In Canada, both the Montreal universities of McGill and Concordia have major sustainability-modeling efforts underway. There is nothing that universities don’t study, of course, but the difference with these operations is that at least the Europeans are in the conversation about public policy choices that elected leaders are making. The Australian climatic crises of floods, droughts, and fires have made politicians stand to attention, but the neoliberal pro-growth framework dies hard.

The European Union may not even survive the current crisis of Greek debt, but the website of this multinational economic-sustainability effort has a full, EU-sponsored schedule through 2014. There will be “dialogues” and conferences on food, housing, electronics, transportation, and even household debt. There will be web-based seminars and knowledge-sharing events. The premise seems to be that the Club of Rome got it right 40 years ago, and that the EU will be making policy on the theory that the over-developed, over-stressed landscape has a justifiable need for humanity to hit it and each other less hard.

Doubtless, this renewed effort to present an alternative paradigm, even in shrinking places like the Rust Belt, will be overshadowed by progressives like Paul Krugman and the post-Keynesians, whose base assumption is that economic growth is the measure and the norm, but whose focus is ever on how to achieve fairness and distributional equity, not on whether to keep developing, building, mining, farming, consuming, and making babies.

There is work to be done, however, in figuring out how the concepts of “growth” and of “sustainability” work in places like Buffalo, of which there are many in old Europe, and here in North America, too, on both sides of the border. Hollowed-out northern Ontario towns, obsolete Quebec mining centers, old Ohio and Michigan car-parts towns, port cities that don’t do much shipping anymore—we know what dependency is. We know what decline is. We don’t know any definition of sustainability yet, and we need to learn one that works. We are, after all, living a version of the degrowth paradigm.

Bruce Fisher is a visiting professor of economics and finance at Buffalo State College, where he directs the Center for Economic and Policy Studies.