Like most Minnesotans, my mood has been lifted over the past few days by news stories and photos showing people in the eastern United States struggling with a snowstorm.
There is nothing that strokes our sense of Minnesota superiority than to see New York, Boston or Washington grinding to a halt from a storm that would not be more than a minor inconvenience here. We snicker at TV images of fools red-lining their car engines in futile attempts to go faster down streets coated with 3 or 4 inches of soft snow and positively chortle at the sight of New York City garbage trucks with little toy snow plow blades tucked underneath. It is better than Prozac.
Moreover, as an economics teacher, I had a ready-made lesson for Tuesday night’s class about what our national income accounts — the ones that tabulate gross domestic product and per capita income — do and do not tell us about how well off we are.
You see, we Minnesotans can snicker at those fools out elsewhere who cannot plow streets and don’t know how to keep an airport open when it snows. But the flip side of that is that we in the Upper Midwest also spend a lot on snow removal. That goes into the accounting system that tells us how much Minnesota produces in goods and services and eventually into estimates of what we earn.
The brutal facts are that while Minnesotans produce a lot per person, compared to people in some other regions, some of what we produce goes to counteract challenges posed by our environment. It does not really make us better off.
If Minnesotans earn $500 per year more than Virginians but we spend $500 per person on snow removal and they don’t, do we really have higher “incomes” than Virginians? Clearly not.
If you want to live and do business in Minnesota, you have to be prepared to move snow. This isn’t true everywhere it snows.
In the early 1980s, I worked for an institution based in Arkansas. There was lots of joshing, both friendly and barbed, between the native Arkansan employees and those of us from outside the region, with lots of anecdotes that accented the inherent inferiority of the other group.
One such story, beloved among the non-Arkies, was of a colleague who drove from Morrilton back home to Chicago. When he got northeast of Little Rock it started to snow and driving became very unpleasant. After struggling for hours on slippery, unplowed and unsanded Arkansas interstate, he pulled over for gas, coffee and a break from wearying concentration at the wheel.
“Man, its really bad out there,” he complained to the cash register attendant, “When is it ever going to get better?” His question was a rhetorical one, but the gas station operator gave a literal answer, “Oh, about 4.6 miles.” “What do you mean, 4.6 miles?” the Chicagoan asked. “Mizzurah State line is 4.6 miles from here. MO DOT has snowplows, Arkansas DOT don’t,” the attendant replied.
“No snowplows, indeed!” we northerners would chuckle. What kind of a two-bit state doesn’t own snowplows? But Arkansas DOT’s resource allocation decision probably was an efficient one. Given how rarely snow blocks Arkansas roads, it would be a waste of resources for Arkansas to field a fleet of plowing and sanding trucks as Minnesota or Iowa do.
Just as it is cheaper for Arkansans to stay off the roads when it snows, it is cheaper for Connecticut to close Hartford’s airport than to invest in the equipment and people that the Metropolitan Airports Commission does to keep Twin Cities International open.
The economic lesson here is that while gross domestic product and other measures tabulated in national income and product accounts are useful, they are a very imperfect measure of “how well off” people are.
I had the wonderful privilege of doing a little consulting in Barbados a decade ago. That blessed little island, with the area of Ramsey County and the population of St. Paul, has to be one of the most wonderful places in the world to live.
Bajans, on average, earn under a third of what people in the United States earn. But with any point on the island no more than 10 miles from the sea, Barbados is warm in winter and cool in summer. People don’t spend money heating or cooling their homes. They don’t plow snow or have to jump-start cars with near-frozen batteries. There are few mosquitoes or other insects. The air and water are clean. Seafood and fresh vegetables are cheap. Virtually everyone is literate and public health is excellent.
People in Barbados “produce” much less value per person we do in Minnesota. But in most senses of the term, Bajans “live nearly as well” as Minnesotans. The only thing they obviously lack is the opportunity to experience that wonderful sense of moral superiority we get from having our sidewalk shoveled before anyone else on the block.
© 2003 Edward Lotterman
Chanarambie Consulting, Inc.