If We Let Rural America Die, We Shall Lose a Piece of Ourselves
Jul 21, 2002
By Joel Kotkin
Publisher: The Washington Post

The Washington Post

The little town of New England, N.D., squats on the Great Plains of America's heartland, its homes and schools framed by the mammoth grain elevators that soar above the featureless landscape. Founded in 1909 by German immigrants and migrants from the Northeast who joined the great rush to the wide open spaces, this was a bustling place a half-century ago, a community of 1,200 that personified the boom of American agriculture and the robustness of rural America. But when I visited earlier this year, there was little of New England's one-time flourish left. Many of the storefronts had been boarded up. The Catholic school has closed, and the public school is slowly emptying, its former student body of 350 reduced to 220 and expected to drop to 140 within five years. "There's almost nothing left," Glenn Giese, director of the Grant /Hettinger County Job Development Authority told me. "You look at the graduating class and there's only 30 students. The whole place has pretty much dried up."

In the shadow of the silos, this small town has become little more than a shadow of itself, symbolizing the deepening failures of American agriculture - hastened by factors such as the industrialization of farming and the loss of key markets to developing countries - and the steady forfeiture of a quintessentially American way of life and of being, a loss that threatens, unless it is reversed, to diminish us all.

Carbon copies of New England dot the rural landscape, from the hillsides of Pennsylvania to the Colorado plains. Today, much of rural America has become what Karl Stauber, president of the Northwest Area Foundation in St. Paul, Minn., has called a "rural ghetto," its communities and small towns losing jobs and people and wealth. As they face the prospect of long-term, permanent decline, some voices are urging us to write off our centuries-old rural experiment. Two New York academics, Frank and Debra Popper, have even suggested that the federal government accelerate the depopulation of the entire Great Plains region and turn it into a vast "Buffalo Commons," a refuge for large mammals, hikers and a reviving Native American population.

But giving up on rural America would be a big mistake. The effects of the heartland's decline may not be readily apparent, but they touch the entire country - economically, environmentally, socially and culturally.

On the negative side, the flight from rural America contributes to the sprawl choking many of our great metropolitan areas, as poor people from the Plains, the Rio Grande Valley or central Pennsylvania settle not in densely populated urban cores, but on the peripheries of cities such as Minneapolis, Dallas or Philadelphia. On the positive side, rural areas provide social and economic diversity to a country that, in many places, seems made up of identically molded suburban pods, places where traditional crafts, native plants and even historical uniqueness no longer exist. And in an intangible way, rural areas project a different notion of America, in their incubation of traditional values regarding community, country, church and the nobility of work.

Rural America, in sum, represents something different from the larger nation, showing us what we once were and may still want somehow to remain. Saving it is vital; the question is how.

Decline, depopulation and a slow passing are not inevitable. They can be forestalled and reversed by a change in policy -- a change that seeks to reinvigorate rural areas not by subsidizing existing economies and elites but by finding ways to lure new energies and industries, and to encourage the most energetic local population, particularly young people, to remain.

A good place to start is at the federal level, with a change in Washington's system of subsidies and transfer payments, which have drained rural communities of most of the spirit of innovation and self-sufficiency that characterized them in their pioneer days. Instead of remaining ruggedly self-reliant, as most Americans think of them, they increasingly depend, like the much-disdained urban ghettos, on their own forms of welfare -- farm subsidies, Social Security, grants to Native Americans -- to survive.

In 2001 alone, the nation spent $25 billion on direct subsidies to farmers, with billions more spent to subsidize water and power suppliers in various regions. The farm bill approved by Congress this session guarantees an even heavier expenditure over the next decade. These payments should be gradually supplanted with other initiatives -- targeted venture funds, development grants and assistance for building technical infrastructure -- that will help restore both the vitality and self-respect of these communities.

Massive federal aid to agriculture began in the 1930s, when "dust bowl" conditions on the Great Plains led to a great migration out of the heartland to rural California, Arizona and the Pacific Northwest. Over time, however, dependence on subsidies to save rural communities has spawned conditions that undermine the creation of an economic future, by sapping those communities of the motivation to take risks, invest and build new businesses. Subsidies also have the perverse effect of flowing largely to those least likely to bring change to rural communities, enriching elderly residents and out-of-state investors, who often have little interest in reinventing the local economy.

The ironic result is increasing impoverishment. After more than a half-century of subsidies and anti-poverty efforts, rural America suffers a higher concentration of poor people than urban areas. Rural residents, who may enjoy lower housing costs but have greater energy, telecommunications and transportation burdens, make barely 70 percent of the salaries earned by their urban counterparts, and more than one in five rural children now live in poverty. This extreme distress is spread across the American countryside. Eastern Kentucky is worse off relative to the rest of state than it was at the beginning of the early 1960s War on Poverty. Rural Mississippi and Arkansas continue to lag far behind both the metropolitan areas of their states and the nation.

The rural Southwest now constitutes one of the nation's most extended regions of poverty; four of the nation's 10 poorest counties can be found in the area stretching from rural Texas to California's San Joaquin Valley. And much of it remains a kind of feudal economy, with a large, increasingly Hispanic laboring class presided over by a small, often self-satisfied Anglo elite. There is little pressure, argues James George, the provost at California State University, Bakersfield, for agricultural interests, which enjoy massive subsidies for their water, to make any substantial changes in the community. "The valley is like a Third World country. We're Nigeria," he says.

A somewhat different, but equally pervasive decline grips large parts of the nation's agricultural heartland, which receives the bulk of farm subsidies and other federal largess. Poverty is less pervasive, largely due to the massive out-migration of young people. Instead there are listless economies and an overwhelming sense of impending, inevitable demise.

Some champions of rural America, such as Sens. Byron L. Dorgan (D-N.D.) and Chuck Hagel (R-Neb.), believe changes at the federal level could reinvigorate areas such as the Great Plains. They have proposed a new Homestead Act, modeled on the original 1862 legislation that spurred settlement of the frontier. This new effort, however, concentrates on the broader economy through such provisions as setting up venture capital funds and providing tax credits and other incentives that might bring entrepreneurs, including returnees from the metropolis, to rural America.

This is not as fanciful a notion as it might seem. Two major factors could provide hope for a new approach to rural revitalization: sociological changes that are leading individuals and companies to reconsider rural locations, and new telecommunications technology that allows such communities to participate in the global information economy.

There are some signs that there may be a small counterbalance forming to the steady movement of residents out of small rural communities to larger metropolitan ones. According to the 2000 Census, the largest shift in the nation's white population over the previous decade was to rural areas, particularly small towns on the fringes of large cities. The number of whites moving there grew by 70 percent, while suburban households grew by only about half that. Much of this growth, according to demographer William Frey, has taken place in the not-too-remote regions of the Intermountain West and the South, to what could be called "meatloaf" communities -- comforting small towns that boast local recreational and cultural assets such as universities, antique districts, artists' colonies or ski resorts.

It would probably take more to bring settlers to and keep younger people in more isolated communities such as New England, N.D., and other less well-favored agricultural areas. The key here lies in retaining what are increasingly rural America's most important assets: its distinctive quality of life and its young people. The Great Plains today are a kind of "brain belt," boasting one of the nation's highest levels of literacy and scholastic achievement, with Minnesota, North and South Dakota, Iowa, Nebraska and Kansas almost invariably ranking at or near the top in national science test scores and in bachelor's degrees per capita.

The problem has been that most of these talented young people move away. Yet in the few areas where they have chosen to settle in the Plains, the results suggest the long-term potential of the region. Some communities are showing remarkable signs of life. Fargo, N.D., whose population grew 20 percent in the 1990s, also enjoyed robust wage growth and, critically, saw its populations of young people ages 20 to 34 and those under 17 rise by roughly 10 percent.

This year, a Forbes magazine study identified Sioux Falls, Iowa City, Bismarck and Fargo as among the 25 best smaller cities for high-tech companies. These areas have spawned a series of successful technology firms, from Gateway Computers to Great Plains Software, as well as a large array of smaller start-up companies. Although these burgeoning communities are no longer really rural, they help prop up the economies of the surrounding rural areas and help keep younger people and their families close to home. "There's more opportunity here now," notes Mike Chambers, founder of Aldevron, a Fargo-based biotechnology firm. "People are starting to stay."

Entrepreneurs such as Chambers believe that advances in telecommunications technology could eventually allow firms such as his to provide some work to the smaller communities in the Great Plains. Already, some of Fargo's larger firms "farm" work out to smaller communities and even to contractors on isolated ranches. Doug Burgum, the executive widely credited with developing Great Plains Software into a major powerhouse, grew up in Arthur, a farming community of 400 some 30 miles from Fargo, and believes such places could become small hubs of new economic activity. "You look ahead and you can see the possibilities of a lot of vibrant communities in these places," Burgum told me. "You have a low cost of living, a great quality of life -- there's a population that wants to be there but can still participate in cutting-edge, substantial work."

Some smaller companies, such as Killdeer Mountain Manufacturing, also have seen the advantage of such rural-based development. Headquartered in a small town at the edge of the North Dakota badlands, Killdeer was founded in 1988 by a native son who returned from nearly two decades in Arizona. The firm now employs more than 140 people at four locations, making cables and other parts for aerospace companies. Some of the work is done in communities with barely 100 residents. The company's long-term vision is to locate 10 plants in similarly tiny towns across the state, networked together via a high-speed fiberoptics system.

As these successes suggest, rural America's vaunted values of self-reliance, hard work and attention to education still could be potent if unleashed in an information economy. But the key to transforming this vast and vital region is to free it from a federally funded culture of dependency that offers only the promise of continued stagnation and impoverishment -- and the loss, for all Americans, of an irreplaceable piece of the nation's heritage.

Joel Kotkin is a senior fellow at the Milken Institute. He is author of "The New Geography: How the Digital Revolution is Reshaping the American Landscape" (Random House, 2001).