How progress and big money destroys small communities

Paul Krugman had an interesting post up on his blog last May concerning the impact of gentrification on neighborhoods in large cities. And by the way, if you’re not regularly reading Krugman’s blog you’re missing out on some very sharp economic and social analysis.

According to Krugman, when big money begins moving into newly popular urban neighborhoods, substantial numbers of vacant storefronts start appearing. Krugman admits he’s just started looking into the phenomenon, but he suggests it’s “part of a broader story of big money moving into desirable neighborhoods, and in the process destroying what makes them desirable.”

The situation is different than before, when vacant storefronts were a sign of white flight to the suburbs, he contends: “…we’re now arguably looking at something new, as the really wealthy — domestic malefactors of great wealth, but also oligarchs, princelings, and sheiks — buy up prime real estate and leave it vacant, creating luxury-shopping wastelands at best…expensive ghost districts at worst.”

“Malefactors of great wealth” have been wreaking havoc, not only on city neighborhoods, but also on small town America for decades now, with the Walton family and their Walmart chain being one of the greatest malefactors of all. That havoc, combined with advances in farming technology, have dealt a death blow to small towns all across the Midwest, and probably beyond.

What Cheer

What Cheer, Iowa in Keokuk County was once a thriving farm market town with a high school, a dairy, and vigorous business district. The depopulation of rural Iowa has left it a shadow of its former self. Photo by Joseph Vavak.

You’d think that advances in farming technology would be a good thing, and they have certainly led to keeping food prices far lower in the U.S. than in other countries. But the ability of one 21st Century farmer to do the work of dozens of 19th Century farmers has caused many once-thriving farming communities to shrivel. Drive through, say, the Iowa countryside, through small, though once fairly prosperous, towns from Delta to What Cheer to Buchanan, and you’ll find little but economic wreckage.

According to 1987’s The Fact Book of Agriculture, published by the USDA, it took 344 working hours to produce 100 bushels of corn in 1800; 108 working hours in the mid and late 1930s; 20 working hours in the mid and late 1950s and just 3 working hours by the early 1980s.

Boosted by economies of scale and technological progress, the ability of one farmer to farm ever more land has only accelerated. Farm Size and the Organization of U.S. Crop Farming (USDA Economic Research Report 152, 2013), reports that in 1970, a farmer working 12 hours a day with available equipment could harvest 4,000 bushels of corn. By 2010, the amount one farmer could harvest during the same 12 hour day had jumped to an astonishing 50,000 bushels thanks to farm equipment evolution.

Since the amount of farmland has been relatively static for many decades, that one modern farmer could do the work of more than 10 just 40 years ago shows that a small fraction of yesterday’s farmers are required to produce ever higher crop yields.

It is that increasing productivity and the resultant consolidation of farms and the loss of farming jobs that has been a major contributing factor to the death of so many small farming communities. Fewer farmers mean fewer stores needed to serve the remaining families, and with the loss of business goes the small town tax base that finances everything from streets to street lights. And the resulting loss of population also causes the evaporation of local schools, churches, and civic organizations.

And as if that wasn’t bad enough, just as small communities found themselves in the throes of declining population, along came Walmart to locate stores in those communities that were still managing to survive, undercutting the remaining local merchants.

In addition—and, as a retired weekly newspaper editor, this is the reason I seldom, if ever shop at the Walton family’s stores—when Walmart began this small town invasion strategy, they decided to rely on direct mail advertising instead of advertising in local newspapers. So as Walmart drove small mom and pop drygoods, grocery, and drug stores out of business and local weekly papers lost their advertising bases, there was no replacement revenue from Walmart. Since advertising, not subscriptions, is newspapers’ lifeblood (subscriptions just about cover the cost of newsprint and ink), the local papers that were, along with schools and churches, the glue holding small communities together, disappeared, too.

So thanks to better farming technology and followed by a swift economic kick by the Waltons, just about everything that held small towns together dried up and blew away. Schools closed as enrollment declined, church congregations dissolved, and communities lost the sources of local news communities relied upon.

Granted, this isn’t exactly what Krugman suggested was happening in upward trending neighborhoods in big cities like New York, but the resulting destruction of existing communities, rural and urban, is as real in New York City as it is in the rural Midwest.



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Filed under Business, Farming, Frustration, History, Local History, Newspapers, Semi-Current Events, Uncategorized

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