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The Myths of Montana by John Lawton- City Manager, Great Falls

This is an essay on some of the myths that Montanans have about themselves. Myths are stories that spring from the human psyche to help us explain what might otherwise be unexplainable. In other words, as human beings, if we don’t know something from our senses, we tend to make up a story to provide an explanation. Some myths are beautiful or clever or ingenious ways to illuminate basic human truths or to provide insight about some aspect of life or human nature.

Many myths age well like wine or fine cheeses, becoming better with time. Others become obsolete when their truths are superceded by objective knowledge. A story may no longer be needed if it is replaced by an objective set of facts or if it can be demonstrated to be false. Some myths endure for their metaphoric beauty even when everyone knows they are not literally true.

The problem comes when myths are taken for literal truth even when they are metaphor. In this circumstance, myths can slow the growth and development of a community or a society by blocking the flow of objective information that might encourage progress. For example, the objective reality of the Copernican universe (Earth revolves around Sun) was blocked for a time by the obsolete myth of the Ptolemaic universe (Sun revolves around Earth). Society’s institutions were threatened by the truth, and they denied it vigorously.

Sometimes Montanans entertain myths about themselves that may block the growth and development of the State and its communities. Public policies concerning economic and social matters may be established on the basis of stories some of us believe about ourselves that at best are only partly true. Let’s look at some of these myths along with objective information that might help us get closer to the truth. We will also consider some of the misdirection that might occur because too many of us believe in the myths.

The First Myth: Montana is a Rural State.

If we are talking about where people live and work, then we are an urban state. We often think of ourselves as rural, we frequently hear, read, and discuss rural economic issues, yet fully two thirds of us live in the nine most populous counties. These are the seven counties with the largest cities and two "suburban” counties, Lake and Ravalli. Since 1950 virtually all the growth in Montana has taken place in these counties while the rest of the state population has declined slightly. The top nine counties have increased over 100% while the rest of the state dropped by about a percent.

Does this mean that rural areas are not important or that rural issues do not need attention? Of course not. The decline of the rural economy may mean that it needs even more attention. But when we think about how to make our economy grow, we also need to recognize where it is growing naturally and stimulate it to grow faster there and with higher quality.

The Second Myth: Montana’s Economy is Based on Natural Resource Extraction and Agriculture.

By any measure, Montana’s economy is based on services and retail trade. Not only is the largest number of jobs, by far, in these sectors, but most of the job growth in the past 20 or 25 years has been in these sectors as well. There are over five times as many jobs in the services and retail trade sectors taken together as in the farm, agriculture services and mining sectors combined.

Of course, this also relates to where people live. Most of the service and retail trade jobs are in the urban areas where most of us have our homes. I should hasten to add that many of these jobs must be attributed to the need to serve people who live in rural areas or to process the produce of our farms and ranches. Again, this is not to minimize the importance of rural areas, but rather, to try to encourage realistic thinking about what we are really like rather than what we imagine we are like.

The Third Myth: Wealth Comes from the Ground.

Wealth comes from the minds of people, not from the ground. Lester Thurow, our Montana born MIT economist says it succinctly in the prologue to Building Wealth. He talks about the global economy becoming possible for the first time in human history and describes it as an “era of man-made brain power industries.”

Thurow goes on to say, “The old foundations of success are gone. For all of human history, the source of wealth has been the control of natural resources land, gold, oil. Suddenly, the answer is ‘knowledge.’ The world’s wealthiest man, Bill Gates, owns nothing tangible, no land, no gold or oil, no factories, no industrial processes, no armies. For the first time in human history the world’s wealthiest man owns only knowledge.”

It would be interesting to know the ratio of media stories about natural resource issues to stories about knowledge industries in our state. My impression is that we spend far more time talking about natural resources than about knowledge. Our job and income levels reflect it.

The Fourth Myth: We Can Bring Back the “Old Montana” Natural Resource and Ag Economy; All We Have to Do is Make it Easier for Them.

A story recently appeared in the Great Falls Tribune about an announced candidate for governor who proposed that we reduce the restrictions on Montana’s traditional industries to allow them to bloom again and bring back the old, high-paying jobs in oil and gas drilling, mining and forestry. This was his economic development strategy for our state. Every industry is important and every job is important. But Montana’s traditional industries will never again dominate economic activity in Montana as they once did. This is because we are subject to global economic forces beyond our control. We will never be able to go our own way independently of social and competitive forces that we do not and cannot control.

Does this imply that we should abandon these industries and pay them no attention? Certainly not. But we should not pin unrealistic hopes on them as they seek new levels or new niches in the global and regional economy. In terms of public policy, we should not over-invest in them at the expense of other industries that may have a higher potential for job and income growth.

Myth Number Five: We Are Isolated, Too Far from Markets. This is One of Our Handicaps.

This is something we have heard for years, and we still hear from time to time. What we really lack is a critical mass of people to create wealth. There are large cities far to our north, even near the Arctic Circle, which have thriving economies. They are far more isolated from continental and global markets than we are. Thirty or forty years ago we were isolated. Now, we have people in Great Falls who make a living selling on Ebay, who ship out of our regional FedEx hub. In many cases, markets are as close as our computer terminals.

Myth Number Six: Service Jobs Are Not Worthwhile; They Are the Equivalent of “Hamburger Flippers.”

To be technically correct, “hamburger flipper” jobs are retail, not service. Just the same, jobs in the sometimes-maligned service sector are one and one half times more numerous than jobs in retail. They include architects, engineers and jobs in the medical professions. If fact, nearly a third of Montana’s service sector jobs are in the health field. In terms of wages and benefits, the decline of Montana’s traditional industries and the rise of the service sector isn’t always bad. It depends on what you are talking about. The service sector includes a wide diversity of occupations and a corresponding range of compensation levels.

The Seventh Myth: Jobs Produced by Tourism Are Mostly Minimum Wage and are Not Worth Developing.

There is a growing recognition of the importance of tourism to our economy. Nevertheless, we still hear that tourism is less desirable as an industry. As in the service and retail sectors generally, tourism jobs encompass a wide range of businesses and occupations. There are some low-paying jobs that support tourism but there are also well-paying jobs and, just as important, business income. Moreover, tourism brings dollars into a community from the outside. New dollars “turn over” in a local economy, creating a secondary impact as they do so. If tourism is of lesser importance, we should ask why nearly every country in the world and state in the nation spends a great deal of time and resources trying to attract tourists.

Cultural or heritage tourism offers great potential as one replacement industry for the declining natural resource industries all over the American West. Great Falls is particularly well positioned to develop this industry with the Russell Museum, the Lewis and Clark Interpretive Center, the Ulm-Pishkun Interpretive Center, the River’s Edge Trail, and the rest of the City’s museums and cultural attractions. This industry will take time to fully develop, but we are beginning to see the impact.

The Eighth Myth: We Are a High Tax State. Reducing Taxes Will Revive the Economy.

Like everything else, it depends on how you look at it. When you consider total state and local tax burden we are 46th in ranking with the rest of the states. When this is adjusted for the amount of money we make, our ranking becomes 24th, just about in the middle. For property taxes, the rankings are 13th and 5th, respectively. This is on the high end, but we are the ones who insist that we will not have a sales tax like most other states. The money for the basics has to come from somewhere. It isn’t realistic to expect low property taxes without having a sales tax.

This is not an argument against tax cuts. Maybe we need them and we certainly need efficient, low cost government. On the other hand, we have had several tax reductions recently and we have seen no discernable impact on the economy. While a more rational and balanced tax system is desirable, one could also conclude that many of the taxation arguments are a smoke screen to avoid dealing with the real issues.

Until the climate for comprehensive tax reform is right, maybe we should put our energies into the basic components of economic development such as making sure we have high quality educational systems, adequate public infrastructure, and aggressive business development and recruitment programs.

The Ninth Myth: All We Have to do is (Cut Taxes, Eliminate Restrictions on Business, Enact a General Sales Tax, Tap the Coal Trust, Fill in the Blank) to Revive the Economy.

We hear many sweeping proposals to correct big things that are may be wrong with Montana to revive the economy of the state. Many of the proposals emanate from Helena and envision a limited range of solutions to fix a narrow range of statewide systemic problems. Economist Larry Swanson of the University of Montana points out that we actually have three different economies in Montana, each with its own distinct characteristics. Therefore, the economic problems of the state are probably not going to be solved by “one size fits all” solutions from Helena. Moreover, the well-known divisions among Montanans make it unlikely that we will be able to agree on very many sweeping reforms, at least not in the immediate future.

Economic development is an intensely local issue and many communities are aggressively pursuing their own development strategies. Communities have economic development plans, business development and recruitment programs, and capital improvement plans for infrastructure expansion. Many of our communities have general agreement about what the future of their economies should look like.

For the economy of the state to grow the role of the State Government should be primarily to encourage and support local economic development efforts. This is the area with the highest potential for near term return on investment. The urban areas in particular are capable of taking care of themselves especially if they are given the tools and support they need to develop themselves. Equally important, the State should focus on areas of the economy that are not prospering or are falling behind the growing areas. Finally the State should work to fix the systemic problems of the society and the economy. In any event, we should divest ourselves of notions that if we just do this or we just do that everything will be fine.

Conclusion

So, what is the prescription for change? First, we should do everything we can to put the myths in their proper context and begin dealing with the reality of the economic world we are in and our place in it. Let’s continue to discuss and address the problems of ag and natural resources but let’s also recognize that these sectors are only a part of our economic future and that Montana needs to develop its niches in information technology, tourism, and many other areas. We should also continue to preserve, tell and enjoy our past, as in “The Last Best Place.” Maybe we should also spend a lot more time talking about what our future should be. Otherwise, what we believe to be the best place might always be in last place.

All this is a function of leadership. Our leaders need to understand that the myths are no longer true and that the world may be passing us by. Continuing to discuss the myths as if they are true blinds us to the new realities that we need to be thinking about. There is no reason why Montana cannot reinvent itself with a new economy attuned to the modern world. We also have great mythology and we don’t have to give up our traditions. But we have to recognize them for what they are to move along with them into the future.

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