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What's the proper role of government in South Dakota's economic development? Photo by Katie Hunhoff.
What's the proper role of government in South Dakota's economic development? Photo by Katie Hunhoff.

Manpower and Free Market Fundamentals

Dec 11, 2013

Our publisher invited me to write a column "From the Left." So why do I feel like I keep coming around "To the Right" of South Dakota's Republicans?

Governor Dennis Daugaard was willing to invest $5,000,000 in an exclusive contract with Manpower, an out-of-state recruiting company that promised to help Dennis bring 1,000 new workers to South Dakota. After burning up a million taxpayer dollars, they recruited just 95

Governor Daugaard is wisely defunding that particular economic development initiative. But he's still asking for tax dollars to continue our grants and loans and other recruitment efforts to coax businesses and workers to buck the market and come to South Dakota. 

The failure of the Manpower initiative and the Governor's persistence in other economic development spending raises a tough question: what is the proper role of government in economic development? 

I propose a political experiment: let's find a candidate for Governor — Republican, Democrat, Independent, I don't care, though we might have to turn to the Constitution Party to find someone this crazy — who will advocate eliminating all state economic development programs. No more Governor's Office of Economic Development, this candidate would cry from the hustings. No grants for beef-packing plants. No promotion of green-card buying to funnel foreign dollars into shaky local projects that can't win traditional investment. No tax rebates for any business projects, big or small.

Instead (our candidate would declare in faithful Adam Smith fashion), let government fulfill its proper role of doing what the private sector cannot or will not. Build good roads and schools and sewers and parks. Build public services and policies that serve and protect all citizens equally. Create a reliable, uniform economic framework in which business and labor can make their own decisions about where to set up shop. But never step into the marketplace with a state decision or a state check that gives one business or one worker a benefit that is not available to every other actor in the South Dakota marketplace.

How would such a candidate fare in a South Dakota election? Do South Dakotans believe that business can grow and prosper without direct state intervention? Or do we think that South Dakota's businesses and communities are so inherently disadvantaged that state government has to do their recruiting work for them? Could any candidate, left-wing or right-wing, lead that conversation... and win votes with it?


Editor's Note: Cory Heidelberger is our political columnist from the left. For a right-wing perspective on politics, please look for columns by Dr. Ken Blanchard every other Monday on this site.

Cory Allen Heidelberger writes the Madville Times political blog. He grew up on the shores of Lake Herman. He studied math and history at SDSU and information systems at DSU, and has taught math, English, speech, and French at high schools East and West River.


12:15 pm - Wed, December 11 2013
dave tunge said: been drinkin'? Fall and hit your head?
I gotta say man, that this is a brilliant idea whose time is long overdue.........but my confusion lingers with your statement " let government fulfill its proper role of doing what the private sector cannot or will not." Is that not a conservative, even tea party, approach to the role of government?
It's not the 1st of April. I'm pretty sure it's not sarcasm. So.........I'm 100% in agreement.
And I think you might be surprised just how many South Dakotan's would vote to dissolve the ED office.
03:30 pm - Wed, December 11 2013
Bernie said:
I second what Dave said.
05:04 pm - Wed, December 11 2013
Dave, I remain a dedicated teetotaler, and I haven't bonked my head.

"Let government fulfill its proper role of doing what the private sector cannot or will not." I mean that. So did Adam Smith. There is some conservatism to it, but it doesn't exclude what you might typically consider liberal policy. The statement still leaves open the question of what we should do.

For instance, education: I believe universal education is vital to democracy. The private sector can provide good education (I enjoyed my summer classes at Harvard), but it does a poor job of providing universal education. Thus, I believe the government has a proper role in maintaining free K-12 schools that have the capacity to educate every child and affordable (maybe fully taxpayer supported, zero-tuition?) universities and technical schools.

And don't get me started on health care. :-)

Dave, do you think we can do without the GOED? Bernie, do you?
05:06 pm - Wed, December 11 2013
Gov. Daugaard's budget proposal includes this text:

"The Governor’s total recommended budget for the Office of Economic Development is $2,431,420 in general funds, $11,663,319 in federal fund
expenditure authority, $21,199,048 in other fund expenditure authority, and 40.6 FTE."

40 employees? $36 million? Could we find other, more productive uses for those resources?
05:23 pm - Wed, December 11 2013
Bernie said:
Yes, life would go on without GOED. We have a 420,000 jobs in the state and most of them can't be connected to GOED programs no matter how creative you are at government math. Admittedly it could put us at some disadvantage to neighboring states if they continued to fund projects that are looking for a home. But I'm convinced we could get a better long term return on our investment if we put the money smartly into pre-K for at-risk youth, better career programs in the high schools, and a much better emphasis on innovation and entrepreneurship.
07:08 pm - Wed, December 11 2013
dave tunge said:
Bernie nailed it.........but there needs to be some form of checks & balances at the district level of education. Prime example is our school districts opt-out attempt for too much for too long. And it was without respect for the taxpayers as they had to file a petition to deny the opt-out attempt. Trying to better the education system is admirable but may work best if they ask the folks who pay the bills.
10:54 am - Thu, December 12 2013
Dave, I'm all for accountability and checks and balances at every level of government, from local school board to Governor to Congress.

Bernie, I like hearing legislators talking about return on investment. Keep it up! We could show other states a new path by pulling out of the Toyota lottery (the constant race to outbid other states with incentives and handouts to itinerant corporations) and dedicating our investments to public goods like schools, roads, and parks.

But I could be entirely wrong... because rabid conservative Bob Ellis agrees with me: That's scary.
12:57 pm - Thu, December 12 2013
Steve Sibson said:
Cory, are you also going go free market when it comes to the energy industry?
01:06 pm - Thu, December 12 2013
Steve Sibson said:
Cory, there are also private schools who do not get any tax dollars, but public ones do. That is not free market. It appears you are picking and choosing, based on your personal value system, what areas should be free market and what should not. Of course that is the nature of the political environment...greed and power.
10:39 pm - Thu, December 12 2013
No, education is not free market. As I said above, public education is a public response to a need that the private sector does not meet. Neither Adam Smith nor I advocate for the free market to be in charge of providing public goods.

And educating all children is not about greed and power. Quite the opposite: it is about making sure every citizen has the knowledge and skills necessary to check greed and power.
07:07 am - Fri, December 13 2013
Steve Sibson said:
Cory, education has been changed into workforce development (college and career ready) that does cater to the capitalists (greed and power). It has been dumbed down so most do not have discernment, and thereby unable to understand the power structures.

And the Northern Beef Plant was a need (food) that the private sector could not support, so Rounds used the government.

I am having a hard time following your logic. I believe that is due to your insistence that pragmatism should trump principles, which includes free market principles. What we end up with is a political game based on pragmatic arguments where the players fight over power, so that their special interests get more funding (money). Both parties are playing that game. The result is a huge federal debt that is being passed on to children who have been dumbed down and seem not to understand that they are being ripped off. And that is education: Children paying for a process that prevents them form knowing that they are going to be paying the costs.
06:24 am - Tue, December 17 2013
Rep. Dan Kaiser (R-3/Aberdeen) weighs in with sentiments to mine; perhaps he'd like to run for governor on the free-market platform?
06:25 am - Tue, December 17 2013
And Steve, Adam Smith's logic is perfectly easy to follow.

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