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It’s Like Hurricanes

Rather than in the abstract, try tackling the following problem.

I grew up in the small town of Vestal near Binghamton, New York. The major industry of the area in 1900 was cigars, which left when tobacco fashion shifted to cigarettes and cigarette production was mechanized. No matter, by 1950 the Endicott Johnson shoe company had replaced cigars. But shoes, which had left artisan shops in Boston to come to upstate New York, continued their footloose behavior and left the US altogether in the 1960s. Not to worry. By 1980 IBM was the major employer of the area. THINK sat on every desk and every wall at IBM, and what IBM produced was “thoughts,” which were packaged in mainframe computers built by high school graduates at high wages.

Now IBM is gone and there is not much of anything in the way of jobs except hospitals and Wal-Mart. Young people are fleeing for better lives elsewhere. It isn’t just Binghamton. On Tuesday, June 13, Sam Roberts wrote about this in the New York Times in an article titled “Flight of Young Adults Is Causing Alarm Upstate”:

From 1990 to 2004, the number of 25-to-34-year-old residents in the 52 counties north of Rockland and Putnam declined by more than 25 percent. In 13 counties that include cities like Buffalo, Syracuse and Binghamton, the population of young adults fell by more than 30 percent. In Tioga County, part of Appalachia in New York’s Southern Tier, 42 percent fewer young adults were counted in 2004 than in 1990.

We have a real problem here, don’t we? What is causing this radical change in the physical geography of wealth formation? What should Binghamton do? Is there any way to save upstate New York? What say ye, o wise men of Cato Unbound?

First, Mr. Thomas Friedman: What did you mean by the item quoted in Richard’s original essay: “you no longer have to emigrate in order to innovate”? Should we plaster the Binghamton area with posters that say that, and keep all the bright kids in the area?

Frank: Is this the failure of education? Did my high school in Vestal take the wrong path after I graduated? Do State officials need to swoop down on these schools to prepare kids to do the problem-solving tasks of the 21st Century? Or is it the institutions? Do we need some new laws that make membership in a labor union mandatory?

Richard: How does the word “creative” help find a solution? This region contributed more than its share to the innovations of the 20th Century—Corning glass, Xerox, Ansco, and thousands of small manufacturing firms. IBM was one of the most innovative companies that has ever existed. This was accomplished with a minimum of diversity. Actually, IBM was the opposite of diversity, with straight white men wearing starched white shirts and creased dark trousers. Do you think now the region could be helped by some remedial general training in tolerance as a way of attracting creative people?

Robin: What do you say about this? You have a sharp critical scalpel, but what solutions do you propose for a real problem? It sounds like your advice is: Don’t worry. Be happy.

Last, to Ed: For all the wisdom your words try to convey, you don’t have a clue, do you? It’s like hurricanes. You can study and understand, but there isn’t much you can do about it, except offer some disaster relief after the storm has hit.

Also from This Issue

Lead Essay

  • The Future of the American Workforce in the Global Creative Economy by Richard Florida

    In this month’s lead essay, Richard Florida, bestselling author of Rise of the Creative Class, argues that the old industrial era has given way to a new creative era. Science and technology, art and design, and culture and entertainment have superceded natural resources and industrial infrastructure as the key to economic success. Talent is now the key factor of production and winners in global economic competition will be those who can best deploy and attract it. However, the creative economy is a source of increasing inequality both within and between nations. Florida argues that the key to bridging the gap between the creative and service sectors is to harness the creativity of service sector workers to make their jobs both higher-paying and more satisfying.

Response Essays

  • Reality and Fantasy in Economic Revolutions by Robin Hanson

    In his reply to Florida’s lead essay, George Mason economist Robin Hanson argues that creativity matters less for economic growth and the future of work than Florida thinks. According to Hanson, Florida’s emphasis on creativity distracts us from the prospect of a truly revolutionary change to work and economy just over the horizon: rapidly exponential growth driven by smart machines. “An economy with intelligent machines could grow very rapidly indeed,” Hanson argues, “and induce rapidly falling human wages.” Will we be prepared if we’re busy making the Creative Class comfortable?

  • Education and Inequality in the Creative Age by Frank Levy

    MIT economist Frank Levy agrees that creativity is more important than ever in a world where computers and foreign workers can do routine work less expensively than domestic workers. This shift, Levy says, requires better education in problem-solving. But education can only do so much. The gains from rising labor productivity are going largely to the wealthy, Levy argues. Unless policies and norms are reinstated that spread those gains more widely “all of the nation’s institutions will be at risk.”

  • Wealth and Power in the 21st Century by Edward E. Leamer

    While agreeing with much in Florida’s essay, UCLA economist Edward Leamer suggests that the key to understanding the future of work isn’t creativity, but talent. “Is a personal computer like a forklift or a microphone?” Leamer asks. Forklifts are forces for equality, washing out individual differences in ability. Microphones, on the other hand, amplify difference in ability and talent. If training cannot create talent, but can only enhance it, the gains to training will be highest for the talented, and it will not be possible to close the talent and wage gaps by offering more training to the less talented.

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