Notes from a Conference

At first glance, the connection between the fall of the Berlin Wall and the crumbling Midwestern economy might not be obvious. Certainly, we scheduled our second annual Global Midwest conference on the 9th of November without thinking that it was the 20th anniversary of the night in 1989 when the Wall opened and the whole world watched delirious Germans dancing on a barrier that, for 38 years, had become a symbol as ugly and soul-destroying as the corrupt system it enclosed. The fall of the Wall had been memorable and, for those of us who were lucky enough to have been there, unforgettable. But what does that have to do with the Midwest and with the erosion of our own economy here?

Quite a lot, as it turns out. The fall of the Wall symbolized the death of Communism as an economic system and the opening of the former Communist systems to the global economy. In fact, if we need a date for the birth of globalization and the global economy, Nov. 9, 1989 -- 11/9, not 9/11 -- would do quite well. 

Before then, we had had the First World, which was us and Western Europe and Japan and a few other modern countries like Canada -- about 1.5 billion workers altogether. And we had the impoverished Third World, connected to us only as suppliers of raw materials that we turned into products. The Second World was the Communist countries, and it played virtually no role at all in the world economy as it existed then.

Suddenly, in the space of a year or two, whole nations, from Eastern Europe to Russia to China, emerged from a half-century of self-imposed non-participation in the world economy. Some other Third World nations, especially India, joined them. Three billion new workers joined our economy virtually overnight. Since their countries were poor, they brought little new money with them. This meant that we had three times as many workers competing for roughly the same amount of money -- a fact that was guaranteed to drive down costs and wages and put a premium on doing everything as cheaply as possible.

As everyone know, this is a competition that, so far, we are losing. Not everybody is losing, of course. Nimble high-tech economies, well-financed start-ups, manufacturers on the spearpoint of technology continue to thrive. But with some notable exceptions, this doesn't exactly define the Midwestern economy. That economy has been dominated for a century by heavy industry, centered on lumbering companies making cars and car parts and home appliances, employing semi-educated workers to do routine jobs on assembly lines, dependent on a captive First World market. Cheaper competition, first from the U.S. South and then from Japan and Mexico, had already started this Midwestern economy on the road downhill. But it was the arrival of the former Communist countries, especially China, doing what we had always done but doing it cheaper, that made this slide permanent.

It's taken a while -- most of the past 20 years, in fact -- for this truth to sink in for most Midwesterners. Until recently, much of the region was still in denial, convinced that the good old days of well-paid jobs for life on the assembly line would come back. Some of that still exists. But if our conference on 11/9 was any sign, a corner has been turned.  

The subject of the conference was "A Green Midwest, a Blue Midwest." The "green" is land and the 'blue" is water, and the point was not only the preservation of these two huge Midwestern assets but their use to create jobs and economic vitality. Clearly, times have changed. Not so long ago, people in charge of Midwestern economic vitality talked about cars and steel. Now the future lies in green technology, sustainable farming, renewable energy -- topics that until recently were the province of tree-huggers.

As the auto companies and parts suppliers implode, it's the tree-huggers who are setting the agenda. The goal is both a more sustainable Midwest and the way sustainability can create new industries and new jobs. It's an idea whose time has come.

We took notes on the conference, and a fuller report will appear soon on this website. But some enduring images linger. Dallas Tonsager, an undersecretary of agriculture, devoted his keynote speech to new bio industries. Pat Quinn, the governor of Illinois, talked for a half hour without notes on clean energy, high-speed rail, green highways: somehow I can't imagine any of his predecessors, including his immediate predecessor, doing this. A Canadian challenged Midwesterners to join him in preserving and promoting the Great Lakes. Other speakers talked about training workers for jobs in the new green-blue economy and about a Midwestern venture capital fund to finance it. The mayor of Newton, Iowa, talked about his how his town, always dominated by Maytag, has struggled in the two years since Maytag's departure, to draw in companies making parts for wind turbines. 

Events have consequences. The post-Wall reunification of Europe has been hard, and has taken 20 years. The post-Wall recovery of the Midwest is harder and is taking longer.

For more information on the Global Midwest Initiative, visit our new Web site.

Comments

[Miklos Martin-Kovacs]

The fall of the Berlin Wall in 1989 was indeed such a powerful symbolic milestone of a new age it is hard to overestimate in terms of its global impact. History was made and not only in theory but a real life. During the euphoric sometimes turbulent early years of the new age the new NATO allies in Central Europe were immediately tested by the Balkan war and in the meantime the European Union became ready for the new members finally creating a unified market of 470 million people larger in numbers than the US. I know from the events in my home country Hungary the economic landscape changed entirely and the conditions of the market economy became the norm with I believe mostly positive results and with controversies, as well. The privatization process of the 90’s provided a once in a lifetime opportunities for many foreign investors to take positions in an expanding market. In some cases it did mean outsourcing that took a toll on jobs in the home countries including the US but at the same time the fresh stream of profit and the access to new markets supported the entire global operation of many companies. As a result the former Eastern Block was soon mostly synchronized into the global economy and provides extended room for manuvering ever since. On the day of the November 9th Conference in Chicago I attended the annual Automotive Outlook of the OESA the Original Equipment Suppliers Association in Detroit. Listening to the the presentations about the struggles and renewal efforts of the automotive industry just comfirmed my feelings about the many possibilities the New Global Economy that was born on November 9th, 1989 offer for the Midwest, as well. One of the presenters of the Outlook was a top executive from Remy, the Pendleton Indiana based automotive supplier and it is obvious the home operation in the US benefits from the developments in their facilities in Hungary. On the other hand Hungary’s current day largest employer General Electric is measuring the idea to close light bulb factories after running them for about 20 years because it might be too expensive to retool the production lines overseas so who knows maybe the pendulum swings back and jobs will be created in the US. It is still negotiated and the result is obviously due to corporate strategy and top level decision making. My point is only to join to those who believe the new global economy offers partnerships and opportunities for sometimes struggling regions of the Midwest and the initiatives including this new blog deserve a lot of credit.