Consider Pilot Grove, a tiny town of 723.  Its grocery store closed recently to much local moaning that another small business – one which represented the heart of the community – was disappearing.  Residents interviewed by the Sedalia Democrat did the moaning, but also confessed that their grocery shopping had long since transferred to the bigger towns of Boonville and Sedalia.

Economics is constructed on some pretty mean laws.  While some dwell on the ebbs and flows of supposedly self-correcting cycles (demand for money falls in a recession leading to lower interest rates which spurs investment to enable a recovery), there are also a set of virtuous and vicious cycles in which the  outcomes become inputs and reinforce the direction of a specific market.

For small towns in Missouri, the cycle is looking vicious from my viewpoint.  Adam Smith wrote that the division of labor occurs to the extent that the market will bear.  Where the markets are larger, there will be greater specialization – more jobs, often requiring specialized skills or experience.  Simply put, this means that in the larger cities, there are simply more opportunities. 

Without a whiff of the ecodevo packages in which politicians invest so much time, energy and tax revenue, the cities are able to produce – organically – more jobs in a month than a team of DED deal-makers with PowerPoints can land in a good year.

It’s the magic of free enterprise. That magic requires capital, labor, entrepreneurial spirit, and markets, but not much more.

I’ve asked folks what qualifications the next director of the department of economic development should possess. The top response has been “salesmanship” (or saleswomanship, if you prefer).  But this seems mainly a reaction to Linda Martinez’ shortcoming. 

I wonder if Nixon should take this opportunity to change the state’s ecodevo orientation. Instead of chasing every deal in our peripheral vision, perhaps it’s time to think broader about the cause of economic growth, and withdraw from the little hunts.  Would big investments in the state’s most potent assets – its labor force, its cities, its investor class – make the state more competitive over the long-term?