When economic development becomes a state priority, citizens lose control


By Hannah Hill for TheNerve.org

July 14, 2017

As the Policy Council has been compiling this year’s Best and Worst of the General Assembly, I couldn’t help noticing a recurring theme: economic development-related bills.

Some are overt, like one that would create two new programs and a grant fund to further integrate economic development into the school system.

Others are not, such as the bill that offers a tax credit for purchasing South Carolina produce. The credit is capped, which means not everyone who applies will get it. Guess who doles it out? Not the departments of Agriculture or Revenue. It’s the Coordinating Council for Economic Development, which is instructed to consider “factors related to the economic benefit of the state” when selecting the winners and losers – excuse me, the recipients — of the credit.

These are just a couple of examples from this year’s bills. This is nothing new: Multiple state agencies have economic development missions. The economic development mentality permeates our government.

Economic development is a fine thing — in the private sector. It only becomes a problem when government uses its unique resources, force and tax dollars, to try to promote it. Inevitably, that leads to central planning.

Let’s pretend you’re the government and you want to develop an economy. First you must decide what success and prosperity look like, and that’s your first mistake.

Next you consider your resources, determine which industries fit them best, and try to recruit them.

The industries you want might not want to come, however, because of unsuitable infrastructure or high taxes or regulatory burdens, or because other states are offering better deals. So you make exceptions for them. You give them tax breaks. Sure, you’re using taxpayers’ dollars to benefit one business, but that’s OK because you’re “creating jobs.”

Then you realize that the businesses you’re courting need workers who are educated a certain way for those jobs. Fine, you’ll just take economic development into consideration when you plan for education. You’ll gently push students into the right industry funnels. You’ll ensure that “they are matched with available employment opportunities in industry sectors with critical workforce needs throughout the State.” That language comes from a bill that passed the House this year 104-1.

This is central planning at its finest, and it’s what our entire state government thinks it should be doing.

Once you start down that path, efficiency demands you take the next step, and the next, and the next. Each violates principles of good government – respect for free markets; broad-based, low taxes; and equal protection for all businesses, no matter their size.

As for education, the job of our schools is to enable students to pursue their own dreams, not their government’s.

And you know what troubles me most of all? In a state that prides itself on its conservatism, I shouldn’t be the only one saying this.

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