Saturday, February 06, 2016

Why Not Base Representation on the Number of VOTES rather than population?

Reading John Gunther, Inside U.S.A. (New York: Harper Brothers, 1947), 701 for my book on financial discrimination when I ran across a discussion of votes vs. representation: "South Carolina has precise equality of representation in the House -- six seats -- with the state of Washington, with 793,833 voters out of a total voting population of 1,123,725! Similarly Georgia gets ten seats for 312,539 votes; Wisconsin gets ten for 1,941,603." That prompted the question posed in the title of this post. 

Basing representation in the House on the number of votes cast, rather than on population, it seems to me, is a "market" (really incentive-based) solution to the problem of states trying (once again) to restrict voting by members of certain groups, e.g. Amerindians, Hispanics, or African Americans. Successful attempts to keep people from voting would hurt the states that allowed it by reducing the number of reps they could send to the House of Representatives and thereby also their impact on presidential elections through the electoral college.

Basing representation on votes cast would also give individual voters more incentive to turn out and vote because they would be helping to keep up their representation rather than just picking between frick and frack. Voting, I predict, would get a whole lot easier. We might even see negative poll taxes.

Friday, January 29, 2016

Have You Stopped Beating Your Wife, Answer Yes or No; Or, What About Those of Us Who Don't Want Any of the Presidential Candidates?

Did you know that the Iowa caucus, the New Hampshire primaries, etc. are not in the Constitution? That isn't to say that they are un-Constitutional, just that they are not mandated by the supreme law of the land. In other words, we can change the system whereby presidential candidates are selected and, in fact, have done so several times throughout the nation's history. Perhaps it is time to do so again, to make it even more "democratic." While the current system allows for more popular choice than previous ones, which were controlled by party stalwarts from start to finish, it is far shy of the goal of government "by the people" if said people can only choose between Frick and Frack, Flack and Whack, Loser and Schmoozer.

In short, I think we should hold an election right away to ascertain if at least half of the electorate thinks that any of the current slate of major candidates is acceptable. If not, then the two major parties should have to start over from scratch with new candidates. 'Cuz right now, we are essentially being asked if we have stopped beating our spouses, answer yes or no. Either way, we're screwed.

Tuesday, December 01, 2015

Out of Respect for the Dead: C'mon Fargo, that ain't East River So. Dak.!

I love dark comedies, especially, now that Breaking Bad is over, the TV series Fargo. So I was excited to hear repeated mentions of Sioux Falls in this second season after some tantalizing references to a "Sioux Falls incident" in season one.

Last night, Fargo finally showed "Sioux Falls" but placed it in a pine forest in the Black Hills! I moved to Sioux Falls in 2009 and the second season is set in 1979 but I'm 99.9999999% sure that Sioux Falls was always in the eastern part of the state, over 350 miles from Mount Rushmore.

The episode also featured Canistota So. Dak., which it correctly placed as vaguely near Sioux Falls but therefore also erroneously in the Black Hills. It referenced a lake near Vermillion, apparently conflating Lewis and Clark lake, which is near the city of Vermillion, SD, with East Vermillion Lake, which is about 5 miles east of Canistota. Both the lake and Canistota are on the open prairie, not in the pine forests depicted in the show.

It actually is not illegal to shoot movies or TV shows in South Dakota. (See my Little Business on the Prairie for details.) So it isn't clear to me why Fargo won't shoot in the actual locations they mention (99% sure its Luverne is not the real Luverne, Minn.), or at least get the ecosystem correct. It can't be part of the joke as so few people know what Canistota, etc. actually looks like.

Of course shooting 1979 Sioux Falls in panorama would be impossible because the city is so much larger today and greatly revitalized. But setting it in the Coteau des Prairies instead of in the Black Hills would add to the show's verisimilitude.You know, out of respect for the dead.

Mutualism: A Little Appreciated Alternative to Capitalism and Communism



I wrote the following to help my students to understand an assignment I had given them, the write a paper based on a book. Most in their drafts wrote book "reviews" or even "reports" instead, and even labelled them such. What I want is for them to take a book and develop a thesis from it, as I do below with my own Corporation Nation. I share it because the thesis I came up with is kind of neat imho.
MUTUALISM
A LITTLE APPRECIATED ALTERNATIVE TO CAPITALISM AND COMMUNISM
___
By Robert E. Wright
By all accounts, communism, the complete control of an economy by an autocratic government, is a failure. Whether in Europe (Eastern Bloc), Asia (USSR, North Korea, Vietnam), North America (Cuba), or elsewhere, communist states have all failed, some quite miserably. After a seemingly propitious start, the Soviet Union and its Eastern European satellites fell apart, China became communist in name only, and Cuba and North Korea wallow in poverty under dictatorial rule [A History of Western Society].
Capitalism is more difficult to define and hence dismiss, or, for that matter, defend. Economist Will Baumol has identified several types of capitalism, only one of which leads to both economic growth and widespread respect for human rights. [Will Baumol et al, Good Capitalism, Bad Capitalism] But even Baumol’s “good capitalism” has some ugly aspects, greed [Arthur Pollard, ed., The Representation of Business in English Literature], crises [Peter Garber, Famous First Bubbles; Charles Kindleberger, Manias, Panics, and Crashes; Walter Bagehot, Lombard Street], and wide disparities in income and wealth foremost among them [A History of Western Society].
Democratic socialism is often proffered as a third or middle path between communism and capitalism [A History of Western Society]. The nations of Scandinavia seem to offer the best of both worlds, including growing economies, political democracy, and social justice. The ability to extend the Scandinavian model to nations elsewhere has yet to be demonstrated, however, and may not prove possible given that not all nations have ample energy resources and small, racially and culturally homogenous populations. Moreover, democratic socialist economies may rely on more capitalist economies to spur innovation and technology. Socialist economies may be able to persist in Europe, in other words, only because companies in more capitalist North American and East Asian countries push them to higher levels of productivity through trade and competition. An entire world of socialist economies may prove as economically barren as the communist bloc [A History of Western Society].
Under communism, “the people” nominally owned all the means of production and distribution (banks, farms, factories, transportation systems, wholesalers and retailers, etc.) but in actuality the communist party or the government owned everything and ran it in its own short term interest. Under capitalism and socialism, wealthy elites own the major means of production, either privately or in conjunction with the government. In either case, a select few run matters to suit their own short term interests in order to win the next election or to meet or exceed quarterly profit expectations.
Control by the few is the key feature of capitalism, even “good” capitalism. In some nations, like the U.S.A. and Great Britain, large numbers of people own stocks and bonds through investment vehicles like pension funds, insurance policies, bank accounts, and mutual funds. They exert little or no control over those assets, however, because corporate elites usurped them long ago.
Augustana University professor Robert E. Wright details the process of usurpation in his 2014 book, Corporation Nation. Using a variety of primary sources, including corporate account books, corporate by-laws and charters, legal cases, pamphlets, and statutes, Wright argues on the basis of numerous examples and a dearth of counterexamples that most early U.S. corporations were at first controlled by their stockholders. Those men, and a surprising number of women, exercised control not on a quotidian basis, which would have been time consuming and awkward, but on a strategic basis. In other words, stockholders ensured that hired managers worked hard in the best long-term interests of the company, did not steal the company’s resources, and sought ways of reducing expenses without hurting the quality of the company’s output (which ranged from financial services to manufacturing to transportation).
Using contemporary pamphlets as well as a wide variety of secondary sources, Wright also shows, however, that by the end of the nineteenth century stockholders had lost control of most publicly traded corporations as managerial elites came to control stockholder proxies (votes when the stockholder was not physically present at meetings), to limit stockholder rights (for example to audit the company’s account books), and to reduce stockholders’ voting powers. By the Great Depression, the separation of ownership from control was pronounced at most large joint stock corporations. Rather than owning many shares in a few companies of which they knew quite a bit as they traditionally had (and as “focus investors” like Charlie Munger of Berkshire Hathaway do today), investors responded to the loss of control by owning a few shares in many companies of which they knew little. That diversification of course provided managerial elites with yet more power. By the early Third Millennium, U.S. corporate elites (board chairmen, CEOs, presidents) were able to pay themselves exorbitant sums and even to craft the “heads I win, tails I win” contracts that led directly to the financial crisis of 2008.
Not all corporations, however, are publicly traded. Wright also shows that most mutual corporations weathered the financial troubles of 2008 (as well as previous panics) with little difficulty. Unlike a joint-stock corporation, which sells tradable equity or ownership shares (stocks) in itself to investors (stockholders), mutual corporations are owned by their customers. Profits accrue but they are paid to the customer-owners, not to a separate group of stockholders. Mutuals do not issue shares that trade on exchanges. To participate in a mutual’s profits, one must become its customer, for example a policyholder or depositor. Because mutuals issue no shares, there is no pressure to make quarterly numbers so managers can run the company for the long-term. That generally means slow but steady growth. Unsurprisingly, many mutuals, Wright shows, are life insurers that date from the second half of the nineteenth century and are still going strong. They bear names like Guardian, MassMutual, and Northwestern Life, which long touted itself as “The Quiet Company” because it quietly provided quality life insurance at low cost to millions of policyholders.
Policyholders do not control mutual life insurers, Wright argues. Rather, managers in conjunction with sales agents run mutual insurers. In successful mutuals, the two groups check and balance each other. The sales agents push the managers to keep up with the competition while the managers make sure the agents do not engage in unethical or illegal sales practices. And they both make sure the other group does not pay itself too much. The CEO of Guardian, a Fortune 500 company by assets, earned less than $1 million per year at a time when CEOs of similar sized joint stock companies paid themselves 10 to 100 times that amount.
Credit unions, a type of depository institution like a bank, are also mutuals. Outside of finance, mutual companies often call themselves cooperatives or co-ops. They have flourished when allowed to do so but neither socialists nor capitalists are eager to see them spread because of their potential to render both big (publicly traded) business and big government less, or even un-, necessary. A system of political economy built on mutualism, after all, would encourage competition and innovation, and hence economic growth and development, without unduly enriching or empowering elites. If Karl Marx and Friedrich Engels had been more intelligent and less ideological, they may well have called for mutualism instead of communist.
It is important to point out that the mutual form is not perfect. Sometimes mutuals fail but that can be seen as a good thing because it means that competition is at work, weeding out inferior companies the way that natural selection eliminates individuals (and their genes) that are not sufficiently adapted to the present environment. Competition is a key component of Baumol’s “good capitalism.” So mutualism is not anti-capitalism per se but rather a different, and many think more just, way of organizing and controlling the means of production, a method that does not require elite control of corporate boardrooms and stock exchanges or government economic planning commissions.
Wright’s book has received rave reviews in scholarly journals thus far but it has had no discernible effect on public policy so its importance to date is essentially nil. One implication of the study, for example, is that instead of reforming Social Security’s disability insurance program, the government ought to privatize it by encouraging the development of mutual disability insurers. Recent reform proposals, however, have supported the general status quo instead.

Latest pieces

In case you don't follow me on Twitter, Facebook, etc., here are links to three recent publications available online:

Finance and Society: A Historical Perspective
https://www.theclearinghouse.org/publications/2015/2015-q4-banking-perspective/finance-and-society

An Open Letter to the Harvard Business School Dean
http://historynewsnetwork.org/article/161267

From Iraq to Mars and Construction to Insurance: Leadership and the Importance of History
http://www.internationalpolicydigest.org/2015/11/26/from-iraq-to-mars-and-construction-to-insurance-leadership-and-the-importance-of-history/

And a review of Genealogy of American Finance:
https://blogs.cfainstitute.org/investor/2015/11/19/book-review-genealogy-of-american-finance/

Monday, November 09, 2015

The Next Big Thing



The Next Big Thing

Robert E. Wright, Nef Family Chair of Political Economy, Augustana University

For the Young Professionals Network, Sioux Falls Chamber of Commerce, Sioux Falls, SD 

9 November 2015

I’m an historian because I want to peer into the future. History is the study of change over time, after all, and I believe all those clich├ęs about not being able to know where you are going if you do not know where you have been. And the longer one looks back, the better. If you look at just the last year or decade you might think you see a trend where one does not really exist. You might recall that a decade ago many Americans believed that quote housing prices never go down unquote. It turns out they were wrong and, worse, would have known they were wrong if only they had paid attention to what financial historians were saying.
It isn’t that history provides a crystal ball that predicts future events with perfect accuracy. Heck, any serious student of history knows that human paths are not predetermined, that slight changes in circumstances can lead to outcomes vastly different than expected. Just ask anyone involved in the American, French, or Russian revolutions or any major war for that matter.
One valuable piece of human capital that history creates is experience, which is something that nobody ever has enough of, but young people like yourselves especially need. By definition, young people are experientially challenged but you all can gain vicarious experience by studying the past, and the more deeply the better.
History also provides expertise, nuance, intuition, and sensitivity to context. At the very least, it can help us to eliminate certain paths from serious consideration. It is highly unlikely, for example, that the Dodd Frank Act will prevent another major financial crisis in the United States because that piece of legislation, enormous as it is, does not address the key cause of financial crises, which are asset bubbles.
But that need not directly concern us here in South Dakota, which weathered the last several recessions, including the one associated with the subprime mortgage crisis of 2008, with little difficulty. If anything, another crisis could help the state by highlighting its strengths. Yes, South Dakota has strengths, some surprisingly important ones.
Foremost, South Dakota has one of the highest levels of economic freedom of any of the states or provinces of North America. It is, in lay parlance, a quote unquote business friendly state, a place amenable to business innovation and entrepreneurship. In fact, South Dakota has been a very entrepreneurial place throughout its history. That is an important thing to know because entrepreneurship and innovation beget more entrepreneurship and innovation. People are much more likely to be self-employed, to form their own businesses, or to innovate in the workplace if they know someone else who is self-employed, owns his or her own business, or makes improvements in his or her job.
While it remains to be seen if there is an actual genetic component to entrepreneurship, there is some evidence of various risk-taking genes. Of course taking risks in the wrong situation is a good way to end up dead. Natural selection certainly did play a role in the state’s early history; the least quick witted were most likely to perish from thirst, fang and claw, or arrows. It is not clear, however, that risk lovers would have had a selective advantage, that they would have been more likely to survive and reproduce.
Cultural selection, by contrast, certainly occurred; the least risk-loving settlers were the ones most likely to leave the state. The stickers, as the ones who stayed behind called themselves, were the ones who could adapt to rapidly changing economic or climatic circumstances. Whether by birth or education, they were innovators.
Once the state had a reputation for economic freedom, of course, it attracted yet more innovators and free spirits, like shepherd turned author Archer Gilfillan, who called South Dakota quote A great land! A free land! unquote because it gave him quote the opportunity to live his own life in his own way unquote.  Conversely, statists and socialists have tended to eschew the state, a memo that I wish my colleague Reynold Nesiba had received.
The stickers and freedom loving immigrants like Gilfillan naturally voted for politicians who were freedom loving stickers too, or in other words people who saw value in innovation, entrepreneurship, self-reliance, and self-employment. So South Dakota lawmakers tended to be friendly towards business, especially small business and local business. That is the deeper context and background of South Dakota’s business friendliness or relatively high level of economic freedom today.
As a result of its business-friendly legal and political atmosphere, the history of South Dakota can be told as the history of one quote unquote BIG THING after another. What I propose to do today is to survey the state’s BIG THINGS in the hopes of ascertaining what might be coming next. For the sake of exposition and your sanity, I’ve broken these down by century and decade instead of providing precise dates. Note at the outset that these Big Things did not disappear completely but rather have stuck around to the present, albeit in smaller ways. For example, the first Big Thing, dating to about 10,000 years ago, was BIG GAME HUNTING AND PROCESSING. Those activities still occur in the state today, they just are not as important to the overall economy as they once were. For example, archeologists tell us that on Firestone Creek in present day Mitchell there once existed a site where an unknown number of Indians processed bison remains into pemmican that was sent down the Missouri River to Cahokia, near present day St. Louis, for purposes of trade or tribute. By 800 AD or so, RIVER VALLEY HORTICULTURE AND LONG DISTANCE TRADING were probably even more important than big game hunting. South Dakota’s river valleys were by then already part of a corn belt and the ecotone, or transition zone, between the woodlands of the east and the plains of the west, was an important zone of long-distance trade, as shown by the artifacts recovered from the Blood Run site along the Big Sioux River just outside of Sioux Falls. By about 1325 AD, if not earlier, SLAVE RAIDING and TRADING was also a Big Thing, as evidenced by the skeletons at the Crow Creek massacre site near present-day Chamberlain, which included examples of both genders and all ages … except young women.
During the sixteenth, seventeenth, and eighteenth centuries AD, after trading and then direct contact with Europeans, the FUR TRADE became the next Big Thing. That included bison and bear hides and elk and deer skins for sure but also the pelts of beavers and other small furbearers.
The 1870s of course witnessed the BLACK HILLS GOLD MINING BOOM. The placer prospectors actually did not find much gold compared to what would eventually come out of the Homestake Mine but various businesses found it lucrative to supply the miners with what they needed, which ranged from clothing, food, and shelter to … ahem quote unquote entertainment. Keep that lesson in mind: sometimes it is better to supply the producers of the next Big Thing than to be directly involved oneself. Cisco Systems is still around while Boo.com, Boxman.com, Clickmango.com, Etoys.com, and thousands of other tech startups live on only as examples of irrational exuberance in various blog posts.
The 1880s witnessed the Great Dakota Boom, the rapid expansion of EAST RIVER FARMING. Efficient farmers and railroads were the big winners here, along with successful town boosters in places like Aberdeen and Huron. The boom ended with the rains so some South Dakotans in the 1890s turned to FINANCE, especially COMMERCIAL and MORTGAGE BANKING, and also CORPORATE LEGAL SERVICES. That might sound odd but the state tried to unseat New Jersey as the corporate charter capital of the country, only to lose the contest to Delaware after South Dakota’s lightly regulated chartered corporations gained an unsavory reputation among investors for fraud and chicanery. South Dakota officials have made noises about making another run at Delaware and I’ve publicly argued that it is possible it could win so CORPORATE LEGAL SERVICES could become a BLAST from the PAST.
So, too, could RANCHING, which was the Big Thing of the first decade of the twentieth century, especially WEST RIVER, where the open prairie was enclosed by barbed wire fences for the first time, forcing small scale operators like Bruce Siberts out of the free range cattle and horse game.
In the 1910s and 1920s, WHOLESALING was the Big Thing as companies like Brown Drug Company of Sioux Falls cropped up and grew by supplying various RETAILING establishments throughout the Northern Plains. Competition was intense, especially as automobiles proliferated, which they did amazingly quickly in a state terrorized by its own vast spaces. The number of trade centers in South Dakota, where most retailers naturally located themselves, declined by just one during the 1920s. Turnover, however, was 50 percent. In other words, half of the little towns in existence in 1920 were gone by 1930; the retailers that inhabited them went under or moved on to the next trading center.
That brings us to the 1930s, the decade of the Great Depression, when the Big Things, and I kid you not here, were the PUBLIC DOLE and PHEASANTS. When people think of the Great Depression on the Great Plains, they think of the Okies of John Steinbeck’s Grapes of Wrath. A higher percentage of South Dakotans, however, were on the public dole than the residents of any other state in the union. Meanwhile, pheasants, which had been introduced in the 1910s and 1920s with mixed results, thrived in the state’s many uncultivated fields, supplementing the diets of many a rural family with cheap protein and cementing the state’s reputation as one of the world’s premiere pheasant regions.
The 1940s brought World War II and renewed prosperity that manifested itself in many ways, the most important of which was EAST RIVER FARM MECHANIZATION AND CONSOLIDATION. Steam tractors had appeared on the prairies in the 1880s and modern gasoline ones in the 1920s but it was not until the 1940s that it was clear that pack animals would soon completely disappear from the state’s farms, replaced by efficient but expensive mechanized critters that devoured farmers who were not shrewd businessmen as well as keen agriculturalists. Innovations included the proliferation of so-called sidewalk farmers who lived and worked in town during the week and tended their farms on evenings and weekends and also suitcase farmers who, like giant mechanical geese, worked multiple farms in multiple states by following differential seeding, weeding, and harvesting schedules.
In the 1950s, the federal government stepped in to provide the next Big Thing, the RENEWABLE HYDROELECTRIC ENERGY produced by the dams of the massive Pick Sloan Missouri River improvement project. To this day, South Dakota gets well over half of its electricity from its hydroelectric dams, something this old boy from Western New York, which gets most of its electricity from Niagara Falls, surely appreciates.
Aided by another federal project, the interstate highway system, TOURISM was the Big Thing of the 1960s. The state of course had always attracted visitors, especially to the Black Hills. At first many came by rail but in the postwar period the automobile reigned supreme. And the motorcycle. The 1960s was when the Sturgis rally really began to take off as a national event. Pheasant hunting was big and the great lakes formed by the Pick Sloan project began to attract notice as one of the Midwest’s premier fisheries too.
In the 1970s, MANUFACTURING grew by leaps and bounds in the state, though admittedly from a low base. Between 1969 and 1984, about 100 manufacturing businesses left Minnesota for South Dakota to reduce their tax and wage bills. Litton, Sencore, Grant, Raven, and others built everything from air balloons to microwaves to motorcycle helmets in the state. Some folded, moved, or were bought out, but others, like Trail King Industries, took their places.
The 1980s saw the revival of the state’s FINANCIAL SECTOR with the entry of Citibank and other banks into the CREDIT CARD PROCESSING INDUSTRY. Well educated, hardworking, inexpensive workers without strong accents located in the center of the country was a dream come true for Citibank executives, who actually decided to move operations to Sioux Falls before the state dropped its usury cap. Ironically, liberal do gooders with no understanding of history, business, economics, or even rudimentary arithmetic are currently trying to cap interest rates in South Dakota once again. If they succeed, the next Big Thing might be businesses that work around their silly little law.
In the 1990s, HEALTH CARE was a big growth industry in South Dakota. That was the decade when Sioux Valley Hospital, now Sanford, Avera McKennan Hospital, and Regional Health in Rapid City began to rapidly expand and consolidate. By the first decade of the twenty-first century, agriculture was once again on a solid footing, after terrible troubles in the 1970s and 80s, because of improved techniques and technologies but also due to SPECIALIZED “NEOAG” PROPERTY RIGHTS that separated land ownership from agricultural rights and hunting rights. Because of this intricate system of contracts, an octogenarian living near Madison can lease land he owns in western Miner County to a resident rancher, a nearby farm operator, and a hunter from Sioux Falls, thereby maximizing both the use of the land and his income. ETHANOL is another recent Big Thing thanks to bumper crops of corn, POET, and government subsidies.
So, finally, we have reached the present and can start to think about what might be the state’s next Big Thing. Certainly OTHER FORMS OF RENEWABLE ENERGY, ESPECIALLY WIND have to be on the short list because of the state’s history with hydro and ethanol and its seemingly never ending supply of moving air. Many of the first jokes about the state referenced its wind, which allegedly required that South Dakotans scream at each other to be heard and that they double stitch the buttons of their shirts lest they be ripped off. Seriously, no where else in the country, at least east of here, do weather announcers call winds between 20 and 30 miles per hour quote unquote breezy.
In any event, another possibility is that entrepreneurship itself will be the state’s next Big Thing. In other words, DIVERSIFIED ENTREPRENEURSHIP, A LITTLE OF THIS AND A LITTLE OF THAT might be what drives the state in the 2020s. If anyone outside of South Dakota would read my book, Little Business on the Prairie, and discover the worlds of opportunity available here, entrepreneurs and innovators might start to flock here at least to get started, much like Gateway computers did before it slunk off to California and sold itself to Acer. Institutions like The Bakery, a new 8,000 square foot small business incubator in downtown Sioux Falls, combined with the state’s business-friendly atmosphere and culture, might make South Dakota the next BIG PLACE TO START a new business in the Midwest or even the nation.
MEDICAL RESEARCH could also be the state’s next Big Thing. The healthcare systems that emerged forcefully in the 1990s have matured and are now looking not just to practice medicine but to advance the frontiers of medical knowledge in areas like genomics and genomics counseling and some other specialties.
A closely related and certainly not mutually exclusive possibility is that South Dakota’s next Big Thing will be AUGUSTANA UNIVERSITY, if it can transition from a liberal arts college into the state’s FIRST GREAT PRIVATE RESEARCH UNIVERSITY. That will require more institutions like Sanford and more individuals like Rudy Nef, who endowed the chair that I hold at Augie, to step up and donate resources. It will also require people such as yourselves to enroll in the graduate programs that Augie is in the process of rolling out. Good, private research universities like Stanford, MIT, and others of course drive innovation in high tech industries but also across a broad spectrum of economic activity. Harvard, for example, originated many famous business consultancies while NYU, for better or worse, helped to create the nation’s modern financial system.
South Dakota’s Indian Reservations may prove to be a superior asset. We all know that some tribes near major cities got rich from their casinos but that the Indians of South Dakota did not because of the tyranny of distance and the state’s relatively liberal non-Indian gaming laws: you know, Deadwood and all those electronic casino competitors. But there are plenty of other stupid laws that the state’s Indians could help to subvert. You might have heard, for example, about the marijuana lounge opening up in Flandreau. Because of fuzzy jurisdictional lines, the state’s Indian tribes have more policy leeway than non-Indian governments do and hence could help Americans to dodge Dodd Frank and Obamacare, among other policy monstrosities, and make a bundle in the process.
By design, the possible next Big Things just mentioned are tied closely to South Dakota’s unique history. But of course the state is part of larger regional, national, continental, hemispheric, and global economies, any of which could spark an exogenous Big Thing in the Mount Rushmore State, much as the Eisenhower administration did with the Pick Sloan project and the interstate highway system. Of course I can’t pretend to know every new trend and fad throughout the world, but I do know of some movements that tie in nicely with the state’s history. For example, due to the rise in sex trafficking over the last few decades, prostitution and pornography have become major political issues again. Some policymakers and pundits want to abolish them completely while others think that they should be decriminalized, taxed, and regulated. I don’t want to take a position on the matter here today, I just want to remind you that prostitution in Deadwood was effectively decriminalized, winked at in common parlance, until the early 1980s. To my knowledge, the state has never been a serious producer of pornography but of course that could change. After all, the state has not always been a bastion of family values. In addition to rampant prostitution, in the late nineteenth century South Dakota was a haven for rich folks who wanted to get a quick and easy divorce by the standards of the day.
Folks from the East think that we South Dakotans already have flying cars because of our 80 mile per hour speed limit and generally light traffic conditions but real flying cars are finally here! Well, almost. They have been just two years away for about five years now, but that is better than predictions of them landing half a century off. Over a century ago, South Dakota rapidly embraced telephones, automobiles, and airplanes because they helped to shrink the state’s vast expanses. Flying cars will do the same. They will be expensive at first but the entrepreneurial opportunities are seemingly endless if combined with services like Uber or Zipcar. Imagine flying to Pierre to harangue legislators in person in just two hours door to door, without a stopover in Minneapolis or being probed by the TSA. Or heading up to Waubay to fish or Chamberlain to hunt and returning the same evening. Some models of flying automobile will require an airport in which to land and takeoff but the state is already home to 75 public airstrips and many more private ones. Building airstrips could become a Big Thing as could selling, leasing, and servicing AeroMobil or Terrafugia flying cars.
Speaking of flying cars, attitudes towards death are changing in the Western world. Not everyone wants to spend their last days depleting their estates clinging to an increasingly painful and immobile existence. Assisted passage to the next world, if legalized, could be the next Big Thing, especially given growth in elder care in the state. Imagine passing peacefully, on one’s own terms, looking at Harney Peak or Crooks Tower at sunset or the Missouri River from the bluffs above during the harvest moon while listening to Stairway to Heaven or Free Bird.
Postmortem body disposal is also an emerging issue. Many folks do not want to be cremated or buried in a box but open burial is a big health risk in densely populated areas. West River, however, could host quote unquote corpse ranches where people like myself, who want to return our bodies to Gaia as soon after we are done with them as possible, could be laid out on platforms to be eaten by eagles.
Of course I make these suggestions partly tongue-in-cheek.  Adam Smith once claimed that all that was necessary to turn a barren desert into an opulent state was quote peace, easy taxes, and a tolerable administration of justice, all the rest being brought about by the natural course of things unquote. South Dakota has those three things and is better than a barren desert, most years anyway, so all that is left is for the natural course of things to occur and that means for you to discern the next Big Thing and go for it. Most of you will be wrong, of course, but even in failure you will gain in valuable experience and professional contacts and maybe even make a little money, or at least not lose too much. If South Dakota retains its economic freedom, you will witness five or ten new Big Things before you join me in the Great Beyond and will surely gain from at least some of them. So, like Vikings, sally forth and explore but, unlike Vikings, remember that in the long run trading is more profitable than raiding.

 May innovation pour from your every pore every day. Thank you!

Friday, October 09, 2015

The Bum's Rush: What to do (maybe) if somebody is shooting at you

Without in any way endorsing the candidacy of Ben Carson, I was quite surprised by the way Trevor Noah (now heading The Daily Show) and others went after Carson for saying that he would respond to a shooter by rushing him (and yeah, it is almost always a male). The Bum's Rush can work in certain circumstances, as when anarchist Alexander Berkman failed to assassinate industrialist Henry C. Frick in 1892 because another executive and other office workers attacked and disarmed Berkman, who, like many shooters, was apparently nervous and inexperienced. Recently, a shooter in a school near Sioux Falls, South Dakota was thwarted by an assistant principal.

Don't get me wrong, I am not saying that the bum's rush is always, or even usually, an appropriate response. Everything depends on the context, including the firearm-related knowledge of the people involved. South Dakota has a robust gun culture, so many people here know how many shells different types of guns hold, their range, how long it takes to reload them, what they sound like, etc. For example, a double barrel shotgun will go bang, bang, with no sound of clanking expended shells or sliding mechanisms (pumps) between shots. They need to be reloaded after just two shots and take a few seconds to reload (unless the assailant is a professional target shooter, which is highly unlikely). Maybe a time for the bum's rush if the shooter is close and there are others ready to move with you. On the other hand, I would cower in the nearest hole if I hear the rata tat tat of a fully automatic weapon.

So Carson, the thinker, should have responded: "it depends on the details of the situation." Of course Carson the politician should have said "I would return the assailant's fire because as President I would do away with no gun zones." But he is only a brain surgeon, so what do people expect?

Monday, September 28, 2015

Commercial Fishing of White Bass in South Dakota: More "Class" Rules and a Plea for Unleashing the State's Entrepreneurial Energies

I just emailed this public comment for the South Dakota Game, Fish and Parks Commission's October meeting in Spearfish at the Holiday Inn Convention Center to be held this Thursday, 1 October at noon mountain time.


Dearest Commissioners,

White bass are a highly prized game fish everywhere, it seems, except South Dakota.

They are the state fish of Oklahoma and are so closely related to striped bass ("stripers"), the state fish of Maryland, Rhode Island, South Carolina, New York, New Jersey, Virginia, and New Hampshire, that they can be successfully hybridized with them to create superfish called wipers. [https://en.wikipedia.org/wiki/Striped_bass]

White bass and their various kin are voracious predators; feeding schools of them are among the most exciting environments in which one can fish in fresh water. I urge you watch this YouTube video of white bass "boiling" on Lake Mead [https://www.youtube.com/watch?v=-m8E_8WCPR4], where fishing guides like Adventure in Angling [adventureinangling.com] earn thousands guiding fishers to hotspots.

White bass also fight like the dickens. I have often had on line what I thought was a 2 lb. white bass only to pull out a 4 lb. walleye. Unlike walleye, white bass strike with force and will often jump. Even throwbacks fight hard.

Despite a myth to the contrary, white bass are excellent table fare when properly prepared by avoiding the lateral line or mud line. This guy knows what he is doing [https://www.youtube.com/watch?v=Xcb3dYWiXcs]. These stuck up walleye fishers also have a clue: [http://www.walleyecentral.com/forums/archive/index.php/t-200335.html] though I have found that nothing but salt, pepper, and butter are needed. The owner of M&W bait shop in Sioux Falls once told me that she silently served white bass (and drum) to some friends and they found it the best "walleye" they had ever eaten!

Most importantly, though, white bass can be caught with regularity from shore throughout the temperate part of the year. (I don't ice fish so I don't know if they hit hard in the winter.) I stress from shore and with regularity because they are in many ways a poor man's fish. No boat required, just a pole, a simple hook, and $2 worth of minnows and a guy can limit out in two hours any evening in the summer. And, thanks to the generous limit, a successful white bass outing can feed a family (well) for several days while walleye fishers get skunked completely or have to scrape together a meal out of four "smalleye."

This brings me to a bigger issue: "class" rules. I use this term with trepidation because by "class" I do not mean just socioeconomic class (rich, poor, or in between) but also class of outdoors folk. Some of us do not have the money or time or frankly patience to buy, maintain, pull out of storage, launch, etc. an 18 foot Lund with a fish finder, a live well, etc., etc. Some of us just want to run out to East Vermillion or Thompson or Poinsett on a whim on a long summer evening and catch some fish. We don't know where the precious walleye are biting or what color jig is hot this week. If this "class" of fisher catches a decent walleye while out fishing (for whatever bites), yeah, it'll go on the stringer. But we are just as happy with some perch or crappie or, yes, white bass. And this class is not happy that if he is with a buddy and one of them catches fish over his limit, he can't legally share with his buddy because they happen to be standing on shore instead of lounging in a boat (one typically laden with high tech equipment ... how fair is that? For the fish I mean).

Some other "class" rules on SD's books include the 5-day limitation on ground blinds on public land. Why is it okay for a guy to put up a tree stand and leave it in the same spot the entire season but another guy, too old, fat, afraid, or poor to use a tree stand, can't? When I called GFP to inquire about this, I was told that the ground blind seems to "claim" an area more than a tree stand does. I'd like to see some empirical research on that (and I know there isn't any because the officer I spoke to admitted there was not clear policy on tripods because no one had ever asked), and if it is in fact the case, then why not make clear to everybody that blinds, stands, tripods etc. do not given preference to the owner, only a vehicle in the appropriate parking space does?

Half of all states allow the use of crossbows during whitetail deer archery season (24 w/o restriction, 1 on private land only): http://www.tenpointcrossbows.com/united-states-crossbow-regulations/. Why is SD one of the half that does not allow them? Again, it appears that there is a class bias to the decision because bows are generally more expensive than crossbows in terms of initial purchase and subsequent kit (arrows, sights, etc., etc.) but especially in terms of practice time to become proficient. Some of us simply do not have the time to shoot 100+ arrows per week for weeks on end while others, city dwellers, cannot practice in their backyards (rightly so) or afford to give $7.50 per day to use the ranges at Archery Outfitters. So why not allow archers to use crossbows, if only for part of the full archery season? Crossbows would draw more females and kids into the sport. Or is that why it is illegal (except in firearms season, which really isn't all that useful)?

SD GFP's policies also seem to discriminate against hunting lessees. Special buck tags are not made available to them (unless they are also ag. lessees, which in this day and age is rare) so they have to take the risk of the draw as most such leases are concluded in the spring/summer and not after GFP's September lotteries. This raises yet another issue: why is it in most states, hunters are guaranteed a shotgun/rifle buck tag but have to enter a lottery for antlerless tags while in SD the antlerless are doled out liberally and the lottery is for bucks? Only landowners get buck tags with regularity. Again, whatever the rationale for the system was/is, it reeks of "class" legislation, in this case rural vs. urban.

Finally, hunting lessees on annual leases (as most seem to be) can't invest in the sorts of technologies that allow people to hunt all day in the state's harsh climate (e.g. the wooden "condos" that dot the landscape) because they are too costly to put up for only one season. But hunting lessees could invest with confidence, if allowed by law, in moveable elevated blinds. By the current regulations, a moveable elevated blind would have to have the wheels removed or be detachable from the vehicle. The types of vehicles used in Texas are illegal (for deer) even if the engine is off and the operator is not in the cab. (See http://texaspredatorposse.ipbhost.com/index.php?showtopic=23790 for several of many examples.) Why? It can still be illegal to drive on public land, to shoot at deer out of a cab, or out of a moving vehicle while allowing people to drive to a spot, hunt it, and drive away when the day is done.

I think by liberalizing these rules (and there are probably many others I have yet to discover) you could INCREASE hunting and fishing tourism into the state and get more residents interested in hunting and fishing and hence buying licenses and paying sales taxes on kit, etc. Instead of commercializing the white bass harvest, GFP should encourage more outfitters to offer white bass/fishing packages, maybe combined with doves (the season for which seems to start too late, btw) or geese. You wouldn't think about allowing the commercial harvest of walleyes or pheasants, right? So use the same techniques that generate revenue to the state from those sources to build up the markets for white bass, archery, hunting leases, etc. That boils down to being more INCLUSIVE rather than EXCLUSIVE, without, of course, endangering the reproductive success of the underlying resource.

For example, instead of allowing Asian and European carp to collect in their masses at the Vermillion spillway (where I saw people catching and RELEASING them over the summer), sponsor a bow fishing contest where the deceased carp are mulched for fertilizer instead of becoming a burden on the archer/fisher (or a stinky mess when illegally left on the bank). You could run the contest yourself and keep the profits or license it to entrepreneurs for a fixed fee. I've written a book called Little Business on the Prairie [http://www.amazon.com/Little-Business-Prairie-Entrepreneurship-Prosperity/dp/0931170680/ref=asap_bc?ie=UTF8] that shows how entrepreneurial South Dakotans can be when allowed to innovate. Free them up, as you did decades ago for the pheasant industry, and the state soon will be known for more than roosters, bison, and snobby walleye-or-nothing fishers.

-- Robert E. Wright, Sioux Falls, SD