If you have ever taken Amtrak’s flagship Acela Express along the Northeast corridor, between Washington, D.C. and New York, you’d be hard pressed not to notice the stretches of wasteland—“devastated, abandoned and burned-out America,” as Francis Menton calls it. Some of this wasteland is in Newark, some in Trenton, much in North Philly, some in Wilmington. But most of it is in Baltimore.
Mr. Menton quotes Selena Zito’s description of this wasteland in The New York Post:
Outside, a different Acela corridor rolls by — one roiled by isolation, decay and societal changes, a world ghosted by technology, corrupt politicians and bad city planning. Shuttered machine shops, refineries, steel mills and manufacturing plants near Trenton and Philadelphia slide past the window like a kaleidoscope of sorrow; scores of once-charming century-old houses are now covered in graffiti and dot areas in and around Baltimore, Newark and Wilmington, Del.
Ms. Zito laments, “… no one has any idea what to do with the under-employed, high school-educated people.” But she is just wrong, argues Mr. Menton.
What to do about it is obvious. It’s the “creative” part of “creative destruction.” Entrepreneurs and investors, given a good business climate and the rule of law, will create and grow new businesses and soak up the excess labor — no matter at what level of skill. That is, unless government hinders, obstructs, or prevents that process from proceeding.
The essential problem of Philadelphia, Wilmington and Baltimore is not the automation and the closure of what were once hundreds of viable factories. That happens everywhere. What distinguishes these places is that nothing has yet come in to replace the failed businesses. The problem is that the people who are creating new businesses today are not creating them in these places. Why? The right place to look is at predatory government. In these cities — but not in others — taxes are way too high, crime is not under control, labor regulations (minimum wage, wage and hour restrictions, favors for unions), and other regulations (including things like nitpicking “safety” and “environmental” rules) greatly increase the burden and expense of starting and operating a business. Potential entrepreneurs either go elsewhere or just don’t bother to go to the effort of starting a business.
As Mr. Menton points out, whether replaced by manufacturing, by robots, by creative destruction, by cheaper labor in China or Mexico, or by design of a better product, every job is vulnerable and some day will go away.
Cut taxes and get crime under control to help make places attractive for new investment. Don’t rail against “automation.” Embrace it. “But embracing automation does not mean that anyplace has to be abandoned and forgotten. That is a function of the attraction of new businesses, and has little to nothing to do with the destruction of the old, which is inevitable.”
Read more from Francis Menton here.
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