[Since the 1980s, says Professor Marc Edelman, financial capital
has developed imaginative new ways to seize assets from small towns
and rural areas.]
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THE 40-YEAR ROBBING OF RURAL AMERICA  
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Olivia Weeks
October 3, 2022
In These Times - Rural
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_ Since the 1980s, says Professor Marc Edelman, financial capital has
developed imaginative new ways to seize assets from small towns and
rural areas. _

Abandoned buildings in what used to be downtown Rankin, Illinois. ,
HUM Images/Universal Images Group via Getty Images

 

Marc Edelman is a writer and Professor of Anthropology at Hunter
College. In his work, academic and otherwise
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Edelman investigates what he terms the underdevelopment of rural
America. In a 2021 paper entitled ​“Hollowed out Heartland,
USA” he writes ​“Rural decline is not simply the result of
deindustrialization spurred by free trade, the farm crisis, or
automation and robotization. Since the 1980s, financial capital has
developed imaginative new ways to strip and seize the assets present
in rural zones, whether these be mutually-owned banks, industries,
cooperatively-owned grain elevators, local newspapers, hospitals,
people’s homes, or stores located in towns and malls.” In the wake
of the fiscal austerity agenda enacted by financial and political
elites in the late 20th century, the vast majority of the wealth
created in America’s countryside ​“has accrued to shareholders
in corporations and financial institutions headquartered in a handful
of distant, economically dynamic urban centers.” The
financialization of the American economy, especially in those places
furthest from economic hubs, can be extremely opaque. But its
repercussions — many of which are often seen as causes and
effects of backwardness and small-town decline — are all
around us.

We discuss the destabilizing effects of such uneven development, the
parallels between rural and urban landscapes of decline, and the
political choices that sacrificed rural prosperity to urban
agglomeration, below.

OLIVIA WEEKS, THE DAILY YONDER: WHAT ARE ​“SACRIFICE ZONES” AND
WHAT ARE THE INSTITUTIONS THEY LACK?

MARC EDELMAN: The term isn’t used only one way. I think of it as
referring to sites where capital came in, extracted wealth, and then
left people worse off than they were before. This describes lots of
places in the rural and small-town United States and in poor
neighborhoods of big cities.

The more dramatic examples include communities where uranium tailings
or other toxic waste surround abandoned mines, where fracking for gas
contaminated drinking water, the ​“cancer alley” around the
refineries and chemical plants of Louisiana’s Gulf Coast, or the
CAFOs — concentrated animal feeding operations — where
ponds of hog or cattle manure cause horrendous rural air pollution and
health problems. Years ago, I went to a forum in a church in New
York to hear people from Appalachia affected by mountaintop removal.
One middle-aged woman described living in a paradisiacal country
environment of streams and meadows and then one day a coal company
blasted the top off the mountain near her family’s home. ​“We
got dusted out,” she said. Their water was polluted, their land
ruined. There wasn’t much they could do about it apart from linking
up and campaigning with other communities that suffered similar kinds
of destruction.

Less dramatic sacrifice zones are even more common. We might think of
cities and towns where redlining and predatory lending destroyed or
prevented people from accumulating housing equity or starting small
businesses. Or those thousands of places where people, especially men,
used to have factory jobs that paid adequate wages and provided
defined-benefit pensions. When factories closed or moved elsewhere
those men and their sons often became marginally employed small
entrepreneurs, guys with a pickup and some tools. I’ve been living
the past few years in a rural county in Pennsylvania. There are
people in the area for whom hunting and having a basement freezer
full of venison is how they get through the year.

This kind of shift intensified long-standing American ideas about
self-reliance and hard work. It fueled resentment of cosmopolitan
urbanites, who don’t work with their hands, don’t have
​“real” skills, and somehow seem to make money, nonetheless. It
also vitiated any working-class consciousness that might have been
there when people worked in factories and belonged to unions.

When communities go into decline, their tax bases suffer. Since public
schools and so many services depend on local tax revenues, it becomes
difficult to provide education, healthcare, elder care, recreation,
and so on. The downward spiral affects people economically,
emotionally, and politically. All the social and medical pathologies
that people associate with inner cities — drugs, gun violence,
domestic violence, diabetes, hypertension, obesity, depression, and
suicide — are rampant in rural communities. Well-off urbanites
rarely have any idea of how difficult things are in some rural areas
and small towns.

DY: YOU WRITE THAT CURRENT RURAL DECLINE IS ROOTED IN THE ECONOMIC
RESTRUCTURING OF THE LATE 20TH CENTURY, IN WHICH GROWTH IN THE
AMERICAN ECONOMY SHIFTED FROM BLUE- TO WHITE-COLLAR SECTORS, AND THE
INFLUENCE OF THE FINANCE INDUSTRY EXPANDED. BY WHAT MECHANISMS DID
THESE MACRO-LEVEL TRENDS COME TO UNDERMINE THE COMMUNITY INSTITUTIONS
MENTIONED ABOVE?

ME: The so-called ​“free-market revolution” and the more
cutthroat version of capitalism that took hold in the 1970s and 1980s
have a lot to do with it. Trade and investment treaties,
deregulation, privatization of public-sector services, and government
retrenchment or downsizing are all key aspects. When the public sector
is eviscerated, people stop believing that government can help them,
because they see that it can’t or won’t. They then become easy
targets for anti-government, anti-regulation, pro-business demagogues.
Regulation is just law enforcement for corporations, but there’s
this whole discourse that paints it as a drag on entrepreneurial
energy and innovation. What’s really going on is that the government
can’t manage capitalism anymore. It has been captured by forces that
don’t want it to manage capitalism.

One of the big undermining mechanisms has to do with the free rein
that the financial sector increasingly has. I’m talking about
venture capital, private equity, investment banks, institutional
investors like my pension fund. They’re under increasing pressure to
generate big returns, sometimes because they need them to cover their
risky bets. These investors acquire ​“troubled” companies, load
them up with debt, dismember them and sell off pieces. If there’s
a union, they figure out a way to crush it. Then they cash out. They
have a short-term orientation, but the damage to communities is very
long-term and hard to reverse. One of the insidious things about
financialization is its invisibility to the people most negatively
impacted by it.

DY: CAN THE DESECRATION OF RURAL COMMUNITIES BE CHALKED UP TO
TECHNOLOGICAL AND CULTURAL PROGRESS, OR WERE THERE CHOICES ALONG THE
WAY THAT COULD HAVE SPARED THE ECONOMIES OF SPARSELY POPULATED PLACES
WITHOUT SACRIFICING ECONOMIC GROWTH?

ME: There’s a lot of questioning of economic growth these days,
mostly because people understand that the obsession with growth is one
element that fuels the climate catastrophe and is killing the planet.
But even if we imagine an economy that optimizes, say, people’s
wellbeing rather than corporate or individual profits, or happiness,
or some other desirable outcome, we can see that along the way other
choices would have helped.

Progressives often bemoan the policies of the Reagan administration,
which are rightly seen as unleashing neoliberalism in the United
States. But Bill Clinton’s administration also has a historic
responsibility for policies that contributed to rural decline. NAFTA
(North American Free Trade Agreement) sent many jobs to Mexico and
created a perception that the Democratic Party didn’t care about
rural people or the working class. It gave corporations rights to sue
in dispute panels, alleging that environmental, labor and health
standards were unfair, non-tariff barriers to trade. The repeal of the
New Deal-era Glass-Steagall ban on investment banks offering everyday
financial services spurred speculation and consolidation and led to
the disappearance of many local savings banks that had lent to nearby
businesses and kept wealth circulating in their communities. Banking
deregulation led private equity and other investors to play games with
leveraged buyouts that accelerated deindustrialization and with
mortgage-based derivatives that ultimately produced a major economic
crisis and millions of housing foreclosures. The 1996 Farm Bill ended
most supply management and crop price floors, generating gluts that
undermined farmers and constituted a handout to giant commodities
brokers like Cargill and ADM.

Many other policy choices reflected the interests of powerful actors.
Industrial agriculture is propped up with numerous upstream and
downstream, direct and indirect subsidies. We taxpayers are covering
that, and the externalized costs of industrial ag show up in our
cancer rates, drinking water, novel zoonotic diseases, and myriad
other negative effects. Much of the corn grown in the United States is
for biofuel to ​“feed” vehicles. The productivist ​“we must
feed a hungry world” narrative is mistaken and myopic, but Big Ag
lobbies have deep pockets for promoting it and politicians know this,
whether they buy the discourse or not.

It was a choice, or really many interlinked choices, to favor
large-scale monocropping over the diversified small farm, with its
synergies between livestock and crop production. It was a choice to
favor investment banks over credit unions and mutual savings banks.
The productivist approach has become so much a part of our common
sense that it requires real imagination to conceive of alternatives
and political will to implement them. With an unfolding climate
catastrophe and the imperative of reducing greenhouse gas emissions,
those alternatives become ever more urgent.

DY: IS THE MAIN ARGUMENT AGAINST THE GEOGRAPHIC SACRIFICE YOU DESCRIBE
THE FACT THAT IT CREATES A NOXIOUS POLITICAL CULTURE, OR IS GREATER
GEOGRAPHIC EQUALITY VIRTUOUS IN ITSELF?

ME: Today’s noxious political culture is in part the result of
sacrificing rural people and communities on the altar of capital. But
it’s also important to recognize that many of those noxious
aspects — violent nationalism, white supremacy, anti-immigrant
sentiment, misogyny, anti-democratic ideologies — have deep
historical roots and multiple causes.

Uneven development, whether that’s across social classes or regions,
is inherently destabilizing. One of the weirdest aspects of
contemporary U.S. uneven development is that it is precisely those
regions where hatred for the federal government and exaggerated
fantasies about self-sufficiency are most widespread which receive
vastly more in federal support than they pay in taxes. But like
invisible financialization, this federal support — Medicaid,
Medicare, unemployment insurance, disability, social security for
aging populations, childcare tax credits, SNAP, agricultural
subsidies, highway and education programs, and so on — is mostly
below people’s radar and isn’t appreciated.

Uneven development always implies an immense loss of human potential.
Groups and individuals that suffer social exclusion — whether
based on class, race, gender, or geography — can’t realize
their full potential. This sacrifice has immense costs for any
society — in scientific discoveries that don’t get made, in
beautiful books that don’t get written, and so on. That’s one
rather instrumental reason why greater equality is an ethical
imperative. There are also, of course, rights-based arguments that are
even more compelling.

DY: PLACING THE BLAME FOR RURAL DECLINE AT SUCH A HIGH LEVEL AS THE
STRUCTURE OF THE ECONOMY FEELS TO ME — SOMEONE FROM
A STRUGGLING SOUTHERN ILLINOIS COAL TOWN — BOTH VINDICATING AND
HOPELESS. WHAT ARE THE PROSPECTS FOR LOCAL, GRASSROOTS CHANGE IF THE
FORCES WHICH SHRUNK THE HIGH SCHOOL AND SHUTTERED THE CHURCHES ARE
GLOBAL AND TECHNOCRATIC IN NATURE?

ME: When we think about rural decline and sacrifice zones one of the
biggest problems is the way multiple forces have drained wealth out of
communities. The institutions that once facilitated wealth circulation
within and around communities — producers’, consumers’ and
service providers’ cooperatives, credit unions, mutual savings
banks, locally owned businesses — have weakened over the years.
People can organize to take back value-added that now gets taken away
by far-off investors, though this requires a kind of local-level
solidarity that isn’t always easy to muster. It’s the ongoing
struggle of society against the market and it’s happening in a lot
of places. Scaling up successful efforts and resisting pushback by
self-interested powerful actors are among the most
formidable challenges.

Olivia Weeks [[link removed]] is
a contributor to _The Daily Yonder_ [[link removed]] from
West Frankfort, Illinois. 

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* Rural Towns and Finance Capital;
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