I’ve had some free time to catch up on my reading and two books that I’ve recently finished I recommend to anyone interested in larger economic development issues.  Both of these books, “The Other America:  Poverty in the United States” written by Michael Harrington and first published in 1962 and “The Post-American World” written by Fareed Zakaria and published in 2008, are two books that wouldn’t normally come across the reading list of a class in economic development or on any economic development professionals bookcase – but they should!

 The first book, “The Other America:  Poverty in the United States” (I recommend the version published in 1981 with subsequent papers written by Michael Harrington himself), is a masterful account of poverty in the United States and what it means to be poor in one of the wealthiest and most economically developed nations in human history.  Throughout his book, Harrington goes on at length discussing and describing the physical, emotional, and psychological torment the poor have historically and in contemporary times endured in this country.  Although I am disappointed that Harrington spends very little time on how we, as a society, might solve the problem of poverty, and fails to really develop a well thought out policy agenda that we might implement, his accounts and conclusions provide an eye-opening insight into a part of American society that has and continues to be invisible to most.

Harrington makes several points that anyone in the field of economic development, or anyone interested in economic development, should take to heart – I will mention only a few of them here.  First, Harrington points out, over-and-over again, that there is a big difference between being born into poverty at the “right time” (i.e. when the economy is doing poorly) and being born into poverty at the “wrong time” (i.e. when the economy is doing well).  Harrington argues that anti-poverty legislation, and legislation designed to enhance the economic well-being of individuals, receives political attention only in times of economic depression, recession, or downturn.  Job-bills (i.e. public monies for retraining, workforce development programs, or even small business development) are only considered when people are increasingly losing their job.  Rarely do our policy makers engage in comprehensive economic development debate on a regular basis that would help everyone – even the most poor – regardless of macro-economic characteristics.

Second, a growing number of the poor – when Harrington first published his book in 1962 and even today in more contemporary times – are “forced into poverty” due to economic obsolescence.  Economic obsolescence is the regrettable cost of Joseph Schumpeter’s concept of “creative destruction”.  Schumpeter, an economist and political scientist, argued that radical innovation needed to sustain long-term economic growth was the “creative destruction” of obsolescent technologies, goods, services, and even methods of production.  Lacking in Schumpeter’s work is an answer to this question:  “What happens to the 40-year old or 50-year old or even 60-year old who is too old to be retrained in a new industry after the old one is no longer economically viable but who is not wealthy enough to retire?”

As a society, we too often say that the poor are poor because they refuse to get a job.  Rarely do we, as a society, demand of our policy makers comprehensive job retraining programs that would smooth the transition of individual workers from an outgoing industry and into the emerging industry.  For example, the recent American Recovery and Reinvestment Act – the federal “economic stimulus” plan passed about a year ago – made lost of money available for renewable energy development.  But it made almost no money available for training oil refinery workers to work in geothermal plants.  I guess the oil refinery workers will have to join the ranks of the poor when oil goes the way of the dinosaur.  As part of our economic development plans – nationally, at the state level, and at the local level – we need to develop measures that effectively combat and minimize the affects of economic obsolescence if we are to have any success in actually reducing the number of poor in this country – a point that Harrington makes at length.

Third, and finally, Harrington argues time and time again that the solution to poverty will not come from politics.  I think it’s a fair statement to say that Harrington was not overly thrilled with either of the two dominant political parties in the United States – and I’m pretty sure he’d be just as disappointed with both parties today as he was in 1962 and then in 1969 and 1981 when he wrote two follow-up essays to his original publication.  Although Harrington hints at the possibility that poverty might never be fully solved for, he put the stock of his faith in education.  Harrington believed, and his book makes the point, that the best chance of the poor to not be poor anymore was through an education that offered some real opportunity for some measurable level of general upward mobility.  Harrington’s argument in a nutshell:  Put money in the pockets of the poor by providing an education that gave the poor a fighting chance in becoming employed!

The point that Harrington makes over and over again – and the one that was most important for me – is that the “other America” is invisible to mainstream America.  Harrington argues that the main reason why poverty is allowed to endure in the most prosperous nation in Earth’s history is because the “rest of us” don’t see the poor.  And as a result of this invisibility, we don’t demand that our government – national, state, or local – develop and implement policy that efficiently and effectively solves poverty once and for all.  Think about this – in 1962 Harrington estimated that there was between 40,000,000 and 50,000,000 million living in poverty in the United States (I used the zeros to nail the point home).  According to the United States Census Bureau in the 2000 U.S. Census, there were 33,889,812 people living in poverty in the United States in the year 2000 – almost 40 years after Harrington first wrote “The Other America”.  And the 2000 figure doesn’t include those populations that don’t often get counted like the elderly poor, the poor who live in residentially overcrowded housing, or the homeless.

My point is this.  In contemporary times, we don’t write economic development policy for the poor.  The fact that the number of poor people living in the United States has gone relatively unchanged for almost 40 years (probably longer), is testament to the colossal failure of our national, state, and local economic development policy.  If our economic development policy doesn’t help those that are least fortunate and that are in most need for public economic development-oriented policies that actually create mid to high skill and paying jobs and that offer individuals meaningful opportunities for general upward mobility, than it doesn’t matter if we are opening new shopping centers, building new sports stadiums, or creating new hotels and convention centers.

The second book I’d like to recommend for those interested in economic development is a book recently written by Fareed Zakaria.  Zakaria’s book, “The Post-American World”, is not about the decline of the United States globally – per se.  Instead, it focuses about how the rest of the world – nations like China and India and even the recently revitalized European Continent through the European Union – is beginning to develop and, in some ways, catch-up, to the United States politically, militarily, and especially economically.  Zakaria also spends a great deal of time talking about America’s role, as the last true superpower, in this new more globally integrated and, dare I say, “equal” world.

There are a lot of points that Zakaria makes throughout his book that I simply don’t have the space to go into any amount of detail in given the limited space I have available for this blog.  It’s enough to simply say that Zakaria has written enough to make anyone interested in America’s political, military, and economic future glued to the pages of “The Post-American World”.  Because I’m interested in economic development, it is Zakaria’s comments that pertain to economic development in the United States that I will talk about here.

In Chapter 6, “American Power”, of “The Post-American World”, Zakaria uses an exceptional array of qualitative, anecdotal, and quantitative analysis to dispel the myth that America, in the beginning of the 21^st Century, has already passed by it most glorious days.  In fact, Zakaria points out that America’s long-term economic dominance and leadership in the world will continue as long as we, as Americans, can continue to answer one simple question:  “What is America’s competitive advantage?”  (Chapter 6, pg. 209).

As economic development policy makers, professionals, and practitioners, no other question so occupies the mind.  We are on a constant quest – nationally, at the state level, and especially at the local level – to ascertain what a target areas “competitive advantage is” and how we can economically profit from it in order to create mid to high skill and paying jobs that offer individuals meaningful opportunities for general upward mobility, provide a stable tax base to fund public services, and improve the area’s overall quality of life.  Zakaria puts competitive advantage, quite properly, at the forefront of the discussion about what a post-American world will look like.

Policy makers at all levels of government in the United States (national, state, and local) should pay extra special attention to this point specifically – Zakaria points to two specific competitive advantages that will, if properly nurtured, ensure American economic leadership in the world for the next century:  1) an education system that teaches people to think and innovate, and 2) a “can-do” American sprit that has endured since colonial times.  Let’s look at each of these two competitive advantages and how they relate to economic development a little more closely.

First, Zakaria points to the innovative and free-thinking emphasis of America’s educational system as one of its main competitive advantages.  Sure there are problems – most notably for Zakaria is that there is incredible disparity among public schools especially at the primary and secondary levels.  But, as Zakaria points out, the American educational system as a whole – but especially in the undergraduate and graduate levels of colleges and universities in the United States – is the envy of the world for one reason:  IT TEACHES PEOPLE HOW TO THINK.

Whereas the rest of the world emphasizes memorization and test taking, students in American schools are encouraged to take risks, think outside the box, question authority, and develop creative and innovative solutions to whatever problem the student wants to think about.  Zakaria writes, “While America marvels at Asia’s test-taking skills, Asian countries come to America to figure out how to get their kids to think.”  (pg. 194).  Another quote form Zakaria might be more illuminating, “…simply changing curricula – a top-down effort – may lead only to resistance.  American culture celebrates and reinforces problem solving, questioning authority, and thinking heretically.  It allows people to fail and then gives them a second and third chance.  It rewards self-starts and oddballs.  These are all bottom-up forces that cannot be produced by government fiat.”  (pg. 195).

In short, economic development practitioners, professionals, and policy makers must make education a central aspect of our economic development goals and objectives.  I’m not saying that education should trump other approaches.  In fact, it shouldn’t!  Instead, we have to better consider how we can merge our educational approaches with our workforce development strategies and our technology-led development strategies and our real estate and reuse development strategies and all the rest.  Education and other economic development strategies are NOT in competition with each other.  They aren’t even two sides of the same coin.  They are just the SAME coin.

Secondly, Zakaria muses about the power behind America’s “can-do” attitude.  I really don’t want to give away much, if any, of Zakaria’s writing about this particular competitive advantage.  I smiled and chuckled as I read this section only because it is often so true that it is often overlooked by those of us in the field of economic development.  The reason for America’s economic near 200-years of general economic prosperity?  We have simply willed it to be true!  Even those not born in the United States are part of this legacy.  From the time before the United States as actually the United States, immigrants from Europe and then from across the world have come to the United States with a single, solitary idea in mind:  make one’s life better.  Through perseverance, hard work, and determination, Americans (used here more as a description of a personality type than a nationality) have carved one of the most prosperous existences the world has ever known.

Zakaria brilliantly points out that, in spite of America’s ability to will itself into prosperity, almost every American generation has predicted its own future decline in the face of global pressures.  Since 1945, Zakaria identifies at least four separate “waves” of American pessimism and fear of American decline in the world since 1945.  First, Americans were generally horrified when Sputnik was launched in the late 1950’s.  In the yearly 1970’s, high oil prices and slowed economic growth in the United States convinced many that Western Europe and Saudi Arabia were the “powers of the future”.   Third, in the mid-1980’s, everybody believed the Japanese would be the “technologically and economically dominant superpower of the future.”  (pg. 210)  Again, someone remind me how the turned out?  And of course, the fourth wave today centers on the rise of everyone else – but the rise of China and India specifically.  But Zakaria reminds us that historically, “…none of these scenarios came to pass.  The reason is that the American system was proved to be flexible, resourceful, and resilient, able to correct its mistakes and shift its attention.  A focus on American economic decline ended up preventing it.”  (pg. 210-211).

Although neither author, Harrington or Zakaria, likely intended either of their books, “The Other America:  Poverty in the United States” and “The Post-American World”, to be considered masterful works in the field of economic development, both of them truly are!  Both books offer a tremendous amount of insight into how we can better craft and execute economic development policies and programs.  As an economic development student and professional, I highly recommend both books to anyone who has an interest in economic development policy.

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