The Sunday editions of the Chattanooga Times Free Press tell of a winning goal: “Smartest City in the South.” That is the dream of activists who want market-based reform but without the loss of control.

By David Tulis / AM 1240 Hot News Talk Radio

The story fills most of Page 1 and an entire jump page. It describes the ideals of a group led by Jared Bigham that wants to improve public schools and attain the fruits of local economy and a free market in education.  But the effort of Chatt 2.0 doesn’t escape what one noted free market defender calls a “plantation economy.”

The plantation economy is one in which there is centralized planning, moral hazard (offloading private risk upon the public, uploading private profit by state connection) and a hierarchical, top-down structure. The organizers of Chattanooga 2.0, full of goodwill and a spirit of localism, do not see the plantation economy as an obstacle to their success. Or, if they see it, they hope to bypass the dead zone by earnestness, collaboration, unrelenting tax funding and lots of positive talk.

“It’s our chance to drive and press toward actions so we can build an infrastructure of opportunity for everyone,” Sarah Morgan, a partner of Chattanooga 2.0 and president of Public Education Foundation, is quoted as saying. The group’s goal is to get more people to complete post-secondary schooling — at a community college or at a university.

Sixty-five percent of county school graduates fail to get training, a certificate or a degree within six years after high school graduation, the story says, making them “unqualified for a majority of the county’s livable wage jobs.”

The organizers say a groundswell of support exists for improving public schools. They see their task as getting parents and families to invest in that sector of state economy. “People want better; the challenge to getting people to buy into different,” Mr. Bigham told the newspaper’s Kendi Rainwater.

It is proposed that if people in Chattanooga follow the group’s proposed strategies “from birth to career,” they will have a better chance at prosperity and earn higher wages. Organizers say under their plan every adult worker will earn about F$4,500 more year and that 8,000 adults will be brought out of poverty.

Mr. Bigham and his colleagues, judging by the reporting, care less for the invisible hand of private choices and the marketplace than the visible hand of the state.

The group hopes to involve opinion leaders and churches and to obtain money and “private investment capital” from the wealthy, either personally or through non-profit charities. To meet its goals, David Steele says, “it will take people standing all sectors of the county coming together and working to implement and refine the proposed strategies.”

It has a ring of local economy, of cooperation and voluntaryism. But does the favorably reported program offer anything the school sector hasn’t already proposed since the 1980s and ’90s?

Paradigm shift lacking

Local economy as an idea includes social capital, small-scale enterprises, decentralized and self-organizing human structures and organizations, according to Charles Hugh Smith in A Radically Beneficial World: Automation, Technology, and Creating Jobs for All (2015). Local economy identifies with place, allows for priorities and goals other than maximizing profit or increasing the claims of the state, whose “ontological imperative” is expansion, Mr. Smith says.

Chattanooga 2.0 gives the air of being locally owned and operated. Its steering committee and champions include local people in government, business and ministry. School board members speak favorably it. It intends a local benefit. One is ready to believe that the money coursing through the local educational market is local money, locally raised and locally spent. It almost appears that we have before us what Mr. Smith calls a community economy, one not dominated by the “moral hazard” of state-run economies. One in which, in other words, “the community must live with the consequences of the actions of its residents, organizations and enterprises” (Page 121).

The program looks lococentric, as if it might escape the progressive and state-centered paradigm in which bureaucracies, organizations, and large structures mold and shape the people they ostensibly serve.

Chinatown

I don’t use the word community because it is misused by people who run state systems and large organizations. But Mr. Smith uses the term without qualms. Community economy is the source of social capital, the essential human ingredient nourished by Christianity, free markets and human-scale systems.

Mr. Smith discusses the plantation economy and contrasts it to a “Chinatown” economy.

“In a plantation economy, a once-diverse landscape of decentralized, locally owned small enterprises is displaced by corporations that are dependent on state support for their profits: direct subsidies, tax breaks, and a cartel or monopoly enforced by the state. The corporate plantation’s low wages leave many of its workers’ families dependent on state aid to survive, and so it prospers on the backs of taxpayers who subsidize its low wages and the externalization of costs” (Page 121).

Mr. Smith says the current economic system worldwide “rewards those with access to cheap capital and the power of the state. The community economy has neither.”

Chinatown is a picture of local economy and the free market. Each store in that sector is tiny by corporate retail standards and in any one store, which may have a single aisle, there areg goods, beverages, dried fruit and goods crammed. Every store has numerous staff to stock goods and serve customers. The owners are usually there. Many suppliers are local. He mentions how there’s a bakery in which there are several sales people at the counter and several bakers jammed in the back. Next door, a deli with four clerks and four or five workers preparing food in a small kitchen. It’s a small and crammed area but very decentralized. Honeycombed in these businesses are churches, daycare facilities, schools and playgrounds.

He says “this is the complex, interconnected ecology of small-scale capitalism, in which competition yields a rich variety of goods, services, prices and wages. This decentralized ecosystem is self-organizing and flexible; if an employer treats employees poorly, they can easily migrate to a competing store. If one storefront is vacated, someone takes the space for another enterprise. The state’s role is limited to overseeing public safety and health, and collecting tax revenues. Since news travels fast in the community, anyone cheating customers soon pays a steep price as customers abandon that business. Choice of flexibility are the dominant dynamics in this ecosystem.”

Verticality in Chattanooga

Contrasting community/local economy is the plantation economy, the framework in which Chattanooga 2.0 is offered. “Contrast this to the plantation economies global supply chains that exclude small local enterprises and shift most of the profits of the supply chain to corporate owners. The plantation economy institutionalizes poverty, parasitic finance, externalized costs, moral hazard (since the corporate/state overseers do not live in the community being cannibalized)” and centralized wealth and political power. These are the only possible outputs of the plantation economy.

“Once the plantation economy displaces community economy, opportunities for work and starting small enterprises shrivel, and residents become dependent on state social welfare for their survival. By eliminating the need to be a productive member of the community, the welfare state destroys positive social roles and the interconnected layers of the community economy between the state and the individual” (Page 123).

Chattanooga 2.0 seems to yearn for the horizontality. Its list of supports would love to replace verticality with local economy if they could. But the state system to which it is allied discounts horizontality and social capital. We have state-centered and chambers of commerce-type hierarchy in Chattanooga. We don’t have the horizontal social networks that would bring about the results that the Chattanooga 2.0 organizers want.

“A vibrant community economy provides members with an infrastructure of opportunity,” Mr. Smith says, “multiple pathways to building capital, gaining knowledge and connecting with others. The key to broadly distributing capital and reversing inequality is to nurture the source of social capital: the community economy.”

Social capital’s sources

Local economy is self-organizing, not planned and organized by better people than us. It doesn’t have leaders on councils, commissions or at high-flying nonprofits with their ranks of private donors. Corporations and the state are hierarchical. Commands flow from the top down. Corporations and the state cannot create social capital that we would say is sustainable.

Social capital is at the heart of Christianity. As a system of practice, life and worship, Christianity has rejuveninated mankind because it has a personal savior, a God-man who teaches putting other people first and who dies on the cross to win and save His enemies and give His people eternal life. Mr. Smith does not account for the gospel’s effects on individuals and culture. But he is correct in saying that a more positive future is ahead if we can shift from the entitlement mentality of the current welfare state and state school model to a membership model, in which people identify with their places, belong among neighbors and care first about community over profit.

Until we escape the top-down state-centered model, there is not a demand on any individual to be a member. Membership “is constantly earned by deeds and can be revoked if a member shirks his responsibility toward each other members,” Mr. Smith says.

“Contingent membership is the essential glue of any sustainable system. Membership requires duty, participation, concerted effort toward common goals, placing the group’s priorities above one’s own private gain and sacrifice for the common good. Membership demands loyalty and labor; something for nothing has no role in membership” (Page 126).

‘Social defeat’ baked into River City

The system we have now in Chattanooga is not community economy or local economy, but national economy and destined for collapse. Critiquing the existing predatory capital and debt-based system, Mr. Smith says that it fuels “social defeat.” Its definition is “the surrender of autonomy, fear of declining social status, and a permanent state of insecurity. The socially defeated, stripped of sources of dignity, self-worth, meaning, membership, pride and purpose, slide into a behavioral sink: as positive social roles vanish, self-reinforcing social pathologies escalate to the point of breakdown.” He calls this a “black hole of self-inflicted suffering” (Page 126).

The only possible output of the current “something for nothing” system is a series of pathologies that include “chronic anxiety, resignation, domestic violence, self-medication with addictive substances, loss of empathy, the polarities of passivity and rage, and a spectrum of mental disorders from narcissism to attention deficit traits (ADT) and other socio-psychosis,” Mr. Smith says.

Sources: Kendi Rainwater, “Smartest City in the South,” Chattanooga Times Free Press, Sept. 25, 2016

Jared Bigham, ed., “A bold vision for our future workforce,” undated paper, Chattanooga 2.0, 46 pp. http://chatt2.org/wp-content/uploads/2016/03/Chattanooga2.0_FullReport_2015-2016.pdf

 

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