American Conservatism

Would New York Really Benefit from Amazon?


- February 25th, 2019

Quite a few “I-told-you-so” articles have appeared in the conservative and business press piling on Representative Alexandria Ocasio-Cortez (D-N.Y.), who opposed Amazon’s planned relocation of its second headquarters to Long Island City in Queens. The deal was controversial because it entailed extensive subsidies that have long raised the ire of the libertarian Right and the pro-union Left. After Amazon decided to pull out, the Job Creators Network, a free-market activist group, even got a billboard in Times Square, saying, “Thanks for nothing, AOC!

Ouch.

New York Does Not Lack High Wage Jobs
The pro-Amazon factions talk as if New York is a moribund place in desperate need of jobs, a city little different from Gary, Indiana or Flint, Michigan. It is, in fact, a city of 10 million people, the wealthiest city in the United States, a world financial center, and a very crowded and expensive place to live. The city had a 4 percent unemployment rate in December 2018. Wages there are the highest of anywhere in the country. Companies and high talent people from all over the globe move there because it is a unique and dynamic place.

At the same time, many of the people already living there are leaving and do not find it supportive of a normal life, complete with home ownership, a family, savings, and leisure time—that is, the stuff of which a community is made.

While the city’s average wages are extraordinary, the lower-wage service workers increasingly have been crowded out of the city altogether. In Long Island City itself—hardly the toniest neighborhood—studio apartments rent for $3,000 a month. The addition of more high-wage workers would simply make life more difficult for the less well-heeled people already living there.

As one local woman put it, “Where will we park?”

The Economy Is Means to an End
There is no doubt the “economy”—that is, the collection of numbers that measure economic growth, average wages, tax revenues, and the like—would probably rise from the Amazon deal, even with the generous subsidy.

But life is more than an economy. An economy—like the government, a job, a car, or the legal system—is a means to an end. It is supposed to provide for needs and create some excess for wants, so people can pursue their own happiness.

Likewise, a city is supposed to serve its citizens and permit their flourishing. But economic growth that increases congestion, makes housing unaffordable, and gives a city all the charm of an international airport lounge is not the same as happiness.

An excessive concern for the economy also conceals the identities of those who actually benefit from economic growth. A country is a combination of a people and a place. The government is supposed to serve the interests of the people in that place; however, the economy and large global corporations like Amazon are indifferent both to people and places. The economy benefits whether a new job at Amazon goes to an American, a New Yorker, or an H1B visa holder imported from overseas. The economy benefits when China’s wealth increases, even if America’s stays flat, and even if that rival country converts its wealth into military and strategic power.

The same is true locally. New York may be a wealthy and dynamic place, but the old New York is gone. Its people, including almost all of my family, have left for more congenial places, whether in the ring of suburbs around New York City, or other states entirely. This kind of dynamism may be appropriate for a few cosmopolitan cities, like New York, but even New York would have found Amazon’s promised economic benefits far from certain. Like itinerant sports teams complaining of obsolete stadiums, what will New York (and now Arlington, Virginia) do when Amazon threatens to leave if the subsidy is not doubled? And what happens if this myopic focus on the economy that excludes other important parts of life is applied to a whole country?

A nation’s policies are supposed to increase the collective wealth, security, and happiness of the people living there. This is what the preamble of the Constitution means when it sets forth its purpose to “provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity . . .” Our founding documents sensibly recognize both the existence of a common good and that it is supposed to accrue for a particular people, i.e., “posterity.”

Social Stability Is Important, Too
The association of conservatism with doctrinaire free-market views is something of an anomaly. It grew out of the extreme threat of Soviet Communism, which contrasted so sharply with the American free-market system, as well as fear of the growing welfare state. The strong free-market views of American conservatives also expressed the interests of the old America, with its bedrock of small businesses, family farms, traditions of upward mobility, and culture of rugged individualism.

Yet the conflation of conservatism with capitalism ignores that Americans have always been a little skeptical of large corporations, particularly when they are not embedded in and loyal to a particular community. Outsourcing of jobs, hiring of foreigners, and the destruction of social capital have been criticized by conservatives since the time of the National Grange and Teddy Roosevelt’s trust-busting campaign.

Amazon is a large, quasi-monopoly, and its owner, Jeff Bezos, is literally the richest man in the world. I frequently use Amazon and find it convenient, just like everyone else. But one of the purposes of public policy is to restrain what is individually beneficial but socially harmful, such as economic activity that harms the long-term viability of a community.

New York City will not be a city that anyone would actually want to live in if homes are unaffordable, nothing ties its people together, and congestion makes it unlivable for the middle- and working class.

As a conservative, I favor a light touch in addressing these things; after all, solutions may be worse than the problems they aim to fix. But I apply that same skepticism to the mania for artificial, government-subsidized growth that concentrates benefits in the hands of particular companies, while dispersing the costs on the community as a whole.

In a similar way, our immigration and trade policies add more foreign workers and increase corporate profits, while imposing various burdens on the country as a whole. None of this conserves or enhances our people, even if it is “good for the economy.”

Conservatives’ knee-jerk attacks on Alexandria Ocasio-Cortez for her criticism of the Amazon deal are tone-deaf and predictable. Her solutions may be demented and poorly reasoned, but her rise, along with the similar appeal of Senator Bernie Sanders (I-Vt.), and even of Donald Trump, are signs that the system as a whole is not working for many people.

The Left’s economic radicalism is mostly a symptom of these problems, not its cause. Young people faced persistent economic obstacles after the 2008 recession, and now face headwinds from the costs imposed by our artificially diverse and artificially expanded population and the low levels of trust and social cohesion that flow from that diversity. These problems are not caused by socialism, but by globalism and neoliberalism, which make a cult object of the economy and substitute its growth for the good of a people.

In short, whether or not New York City’s subsidies for Amazon eventually would have paid for themselves, those on the Right should be skeptical of the mantra of economic growth as the chief purpose of life and government. Just as money does not buy happiness, there is more to a community’s welfare than economic growth. Government-subsidized growth is destructive when it comes at the expense of the very people whose “general welfare” the government is supposed to look after.

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Photo Credit: Job Creators Network

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