Educational Ludditelike Mercantilists

In the early 1800s there were movements in both England and France that tried to turn back the progress offered by technology. In England the Luddites, supposedly led by one Ned Ludd actively tried to destroy new machines that were making woven goods much cheaper and which the Luddites thought would cause all sorts of calamities. In France, some workers actually took their wooden shoes and threw them into the machines, damaging the machines and forestalling, albeit very temporarily, industrial progress. That act of throwing their "sabots" into the machines brought us the word "sabotage." But a good part of the century before was taken up with debates about the mercantilists who argued that wealth was created by forcing consumers to use home prepared goods.

I can't decide whether two midwestern governors are luddites or mercantilists

Jim Doyle and Mitch Daniels are intelligent governors. But both are considering a way to reduce the "brain drain" from their respective states - Wisconsin and Indiana. “If we can’t lure them here, let’s tether them here,” - so says a member of the Wisconsin governor's commission that is exploring ways to improve the commitment of college educated people to stay in the state. The ways both states have thought about it is to create a "groan or a lant" (a program that switches an award from a grant to a loan - or moves a loan to a forgivable loan if the person does the right thing). Thus, both governors are considering a program which would offer students loan forgiveness to those who are educated and then stay in the state.

An expert who has looked at this set of policies is pretty clear about how well these kinds of programs work. “I don’t think there’s any evidence to suggest that these policies have been effective,” said Bruce Vandal, director of the Postsecondary Education and Workforce Development Institute for the Education Commission of the States. So these kinds of protectionist proposals are likely to be expensive and ultimately unsuccessful.

Perhaps these governors would be better off to think about two alternative policy approaches. The first comes from a classic work by an economic geographer named Charles Tiebout. Tiebout's 1956 article "A pure theory of local expenditure" suggests that people select their locations ultimately by judgments about ambience. People chose their locations on a whole series of issues including the availability of work opportunities and things like livability of the city. I am not a big fan of cold weather but a lot of other people are. A lot of people who now look at where I live don't want to be saddled with a monstrous mortgage. Neither Wisconsin nor Indiana have those problems for now.

The second thing both governors should look at is the work of Joel Kotkin. I am a particular fan of Kotkin's because he seems to be able to think out trends long before most people recognize them. In his influential book called The New Geography Kotkin argued that with the wide availability of broadband people have a significantly greater flexibility in choosing where they want to live than they did in the past. A financial whiz once had to live in New York City - no longer. Kotkin also found that people with like interests tend to congregate (or to use the more common term) cluster. So find a niche and encourage it, and the brain drain problem will disappear a lot quicker than with tethers.