Economic development is the process of using scarce resources better to improve the lives of people. A flow concept, it's a simple definition, but something extremely hard to create in practice.
Usually when politicians talk about creating economic development, they talk about giving subsidies to this or that company to "bring jobs" etc.. But to subsidize someone, government has to tax someone else. So while it's supposedly "creating" economic activity in one place, government simultaneously creates an offsetting destruction of economic activity somewhere else. The destruction may be invisible, but it's there.
The best way, IMHO, to really develop an economy is to give people the freedom to contract with one another. That is, let individuals decide what to provide and what to buy. So when I read this piece by Charlotte Eby in the Sioux City Journal, I thought "way to go Iowa politicos."
Proposals to ease restrictions on Iowa's microbreweries and distillers are gaining traction in the Legislature among lawmakers who see Iowa's homegrown beers and liquors as economic development.
Senate File 2091, which cleared the Senate State Government Committee Tuesday, would allow the manufacture and sale of high-alcohol beer that contains 5 to 12 percent alcohol.
The bill is intended to allow Iowa micro-breweries to compete.
“This essentially evens the playing field that we've got with Minnesota, Wisconsin, other surrounding states,” said. Sen. Dennis Black, D-Grinnell.
Eby also writes that distilleries are asking for permission to sell their stuff on-site for consumption off-site. This too makes sense from an economic development standpoint because it allows buyers and sellers to decide what, with whom, and how much to trade. Minnesota politicos could take note and allow us 'sotans to buy our beer, wine, and liquor from grocery stores and convenience stores.
Of course, letting the public decide how they want to contract with one another creates winners and losers as well. But this way the public actually gets what they want. This is the way to real economic development.
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