Since the first textile mills arose along the banks of Maine’s rivers in the 1840s, Maine’s prosperity has depended on the resource base and the entrepreneurial spirit required to turn raw materials into “stuff” demanded the world over. Our industrial history is the cascading story of a series of products – first textiles, then wood products, then food, then shoes, then paper, then machinery. For a while it was ice, then electrical components, even computers. By the 1970s and 1980s, it was call centers.
The central defining characteristic of all these industries was that while the “stuff” was made in Maine, Maine was not the market. The market was the world. Maine’s industrial history was the textbook definition of economic base theory. An economy could prosper only when it had a base – some product or service – it could produce at a competitive cost here and sell elsewhere, thus bringing money from the rest of the world here. These export earnings supported a larger portion of the economy: the local retail and wholesale trade, local “Main Street” business services as well as state and local government services such as transportation, public safety, education and health care.
These local businesses often provided most of the jobs in the state, but they clearly depended on the outside earning brought into the state by its “base” industries.
The great problem of the past 30 years has been the loss of much of our economic base, our signature industries, the producers of the “stuff” for which we were known throughout the world. During this period of “de-industrialization,” the only base industries that seem as strong today as they were half a century ago are lobstering and tourism, and, ironically, their very success is often seen as a sign of the problem – we have to be seen and see ourselves as more than “Vacationland.”
If we are to address the slow corrosive effects of the loss of our economic base, of de-industrialization, we must confront our attitude toward scale, toward growth, toward bigness. Indeed, looking at the dominant tenor of our political debate, it is clear that it is focused on precisely the wrong topics. How do we get more money for education, how do we keep our “small-town feel,” how do we keep everything from getting “too big”?
All of these issues are local issues, not economic base issues. The simple answer is that we will never have enough money for education, or health care, or any other public service if we just keep demanding that we get that money only from ourselves. Looking around at the empty mills that employed thousands of people 30 years ago, it is clear that there simply aren’t enough of “us” to maintain the level of services we had a generation ago.
Why? Are we just that much more selfish, that much more mean-spirited? Not at all. It’s just that we don’t have the economic base, that money from the rest of the world, to raise the level of our everyday standard of living. And no matter how hard we try, we can’t get there staying small and taking in our own laundry. That’s just recycling the money we already have. To create prosperity, we have to embrace bigness. Everything doesn’t have to be big. And bigness doesn’t have to be everywhere. But there has to be bigness somewhere. We have to have enterprises that don’t want to stay local, that look to the world not as a frightful place that’s “from away,” but as a world to be conquered, a dream to be realized.
While some of these potential new “big” industries may emerge from development of our natural resources – food, water, timber – the majority are likely to be new categories of business not even imagined today. They are likely to be businesses whose basic element is information. It is interesting that Wex (formerly known as Wright Express) recently surpassed annual sales of $1 billion. While not significant as some sort of business or technological breakthrough, the milestone is evidence that a once-small Maine company can become a successful big Maine company.
And this, when combined with continued growth of other big Maine companies largely based on the creation of information – think Idexx, Tyler Technologies, Collaborative Consulting, The Jackson Laboratory, the Maine Medical Research Center and others – it is clear that creating knowledge and providing it to the rest of the world offers Maine its best hope of creating an economic base well suited to the 21st century and thus capable of providing the wealth needed to solve our domestic social problems.
Charles Lawton, Ph.D., is a consulting economist. He can be contacted at:
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