‘Moral Consequences of Economic Growth’ - Beckley, Bluefield & Lewisburg News, Weather, Sports

‘Moral Consequences of Economic Growth’

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Brooks McCabe Brooks McCabe

The Greater Kanawha Valley Foundation recently hosted its annual meeting, during which it presented the foundation’s strategic thinking process and outlined its path going forward. In an excellent overview by Thomas M. Watson of Rural Support Partners, TGKVF’s past experience, what it has learned and where it is headed were summarized.

In moving forward, the Foundation will use a systems approach to community change — a collective analysis and vision — and will become more focused and proactive. Its strategic thinking process has value for more than the foundation, as it also has important implications for our state’s business community. In many ways, one of the most interesting aspects of the excellent presentation was the root cause analysis that identified why we, as a community, are the way we are.

Root causes were defined as the “source of one or more symptoms, that when fixed will reduce the likelihood of the symptom’s occurrence.” The four main root causes were lack of cohesion and trust within the community, lack of effective leadership at all levels, poor health of the population and the underperforming education system and ill-prepared students. For the purpose of this commentary, the first two root causes will be discussed since very little substantive change can occur without cohesion and trust within a community coupled with effective leadership.

If one would look at our state and community from the outside looking in, it could be concluded that these root causes of our current situation relate most directly to the fact that West Virginia, for the past 50-plus years, has had a subpar economy, especially as compared to the nation as a whole. Benjamin M. Friedman’s book, “The Moral Consequences of Economic Growth,*” presents in considerable detail how economic growth-stagnation affects the moral character of a society. Although Friedman’s book is about how countries grow and prosper, or not, it has many insights especially pertinent to West Virginia and the greater Kanawha Valley.

“Economic growth … more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy,” the book reads. “But in a stagnant economy, where one person’s gain is necessarily someone else’s loss, people who get ahead are perceived not only as doing so at other people’s expense but as directly disadvantaging others.”

Friedman discusses a society’s retreat into rigidity and intolerance when the citizens come to believe they are no longer getting ahead in their lives. There is a rising of intolerance, incivility and the eroding of generosity and openness when the economy becomes stagnate over an extended period of time. The trust equation is dissipated and the zero-sum mentality becomes more prevalent as everyone fights for what is perceived as diminishing opportunity and resources. A short-term survival mode is the focus and not long-term strategic planning and investment. At some point, everyone becomes accustomed to a stagnate economy and their view of the world is clouded accordingly. These behaviors become the norm and begin to be passed on to those who follow. The culture of the community changes. Friedman describes the “virtuous circle” where strong economic growth allows for everyone to work together and prosper accordingly versus the “vicious circle,” where economic stagnation and a zero-sum mentality take hold.

Now let’s look at the root causes and challenges identified in TGKVF’s strategic thinking process. There is a lack of leadership and diversity of that leadership, which seems to largely focus on a short-term perspective instead of a long-term vision. There is a lack of cross-cultural connections and a corresponding inequality. Couple this with a perceived lack of resources to make necessary changes or high completion and little cooperation among users of those resources. There seems to be an “us vs. them” mentality and a corresponding difficulty in engagement among interested parties. There is little shared vision and a significant lack of both visionary and cross-cultural leaders. There is a scarcity mentality joined with an apathetic attitude. There is a lack of civic and cultural investment associated with low levels of engagement and empowerment. There is a lack of a world-class education system as well as a lack of exposure and experiences, providing for a broader cultural perspective.

Together these root causes and related challenges describe many of the underlying problems in the greater Kanawha Valley. These root causes are well earned and the result of two generations swimming upstream in a stagnate, if not contracting, economy. The 50-plus-year experience has left our communities scarred and with cultural attitudes that must be changed. The analysis of TGKVF is not an indictment of our region and state; rather it is a candid assessment of root causes that make change so difficult to accomplish in a holistic and systematic manner. It is the beginning of a call to action. With the conceptual overlay provided in “The Moral Consequences of Economic Growth,” our challenges become a little clearer. To enter Friedman’s “virtuous circle” we also must address the economy. Longterm and sustainable economic growth may actually be on our immediate horizon. The economy is not the task of TGKVF. But it is the task of business and industry. It will not be easy knowing that the business community must deal with the root causes of our cultural mindset, which have been so ably articulated by TGKVF. The strategic thinking process of TGKVF has done far more than provide a road map for the foundation, as it has illustrated for the business community why sustained economic growth is so vital to our future happiness and well being. There is indeed a moral and community consequence to sustained economic growth. With TGKVF and the business community working on parallel paths, we may be able to create at the same time both better communities and a sustainable vibrant economy fully engaged with the world around us. Yes, TGKVF strategic thinking process has given us the beginning of a call to action. Now for the hard part: let’s get started.

Brooks McCabe is managing member and broker of West Virginia Commercial LLC. He has been involved in commercial and investment real estate for more than 30 years, and he also is general partner of McCabe Land Co. LP. He has served in the West Virginia Senate since 1998, and is a special project consultant to The State Journal.

*“The Moral Consequences of Economic Growth” was published by Alfred A. Knopf in 2005. Benjamin M. Friedman is the William Joseph Maier Professor of Political Economy, and formerly Chairman of the Department of Economics at Harvard University.