Response to Seven Capitals, One Community: Exploring What Powers Local Business by the Belle Plaine EDA.

According to this publication, our community leaders believe that by focusing on our local resources, rather than approaching development by identifying what we need, we will retain more of our local business, and that any development will put more money into the pockets of those who are already in the community. This serves at least one huge fallacy. The only way we can develop anything is through addition, not through the stagnation that comes from avoiding what is required. What this policy really endorses is a monopoly on development through localization of need, rather than through acknowledging that as a community, we do not have sufficient resources organic to city, or even the surrounding areas to pay for the internal development ascribed by this policy. Let’s take a quick look at the resources the community has. I’ll put them in context of the seven pillars illustrated in the article. Starting at the bottom, is Human Capital.

Human Capital in economics is generally defined as, “...the intangible economic value of a worker's skills, knowledge, experience, health, and abilities...” According to Datausa, a popular online resource used by researchers, businesses, policymakers, journalists, and even academics, the city of Belle Plaine has about 7,400 people (2024 estimate). Of those people, the median age is a little over 35, with a median household income of a little more than $99K. Our unemployment rate is about 4%, which is less than 300 people out of 7400. That is an extremely low number and if those individuals had skillsets to leverage the surrounding area would better support their working interests than those employers within our city limits. Belle Plaine has groomed itself to be a bedroom community. Only about 10% of residents who live in Belle Plaine actually work in Belle Plaine. Most drive to another community because the median wage for employment in Belle Plaine is only $22.40 per hour ($43K per year). Even if you could double that, the job market in Belle Plaine would not support the median earner who lives in Belle Plaine. Currently there is no Human Capital available by any definition, and if there were, they would most likely travel outside the city to work.

Social Capital is a Marxist construct devised to empower governmental agencies over the liberty of individuals. Directly from marist.org (1), “...social capital is the aggregate of individual capitals taken together in their interdependence and interconnection.” I’m not even going to dignify this concept with an argument.

Built Capital is infrastructure. The article really doesn’t even touch on this beyond a definition. Infrastructure is perhaps the most important fuel to economic development. If there is a reason to levy taxes upon a small community it is for the sake of infrastructure. While roads are often the thing that people point to, and while transportation of raw materials into the community and the transportation of finished products out of the community are important, of greater concern is power capable of industrial development, water supply, and wastewater treatment. Over 1000 years ago in old England, each community was responsible for the roads around their areas. In those areas where communities developed roads, economic growth followed. Some time later, it was recognized that this economic growth wasn’t just centralized to those small communities. The larger communities that were interconnected by roads maintained (or not maintained) by those small communities greatly affected everyone. Today, the responsibilities for roadways are shared at municipal, county, state and even the federal levels. However, the other infrastructure concerns are not. Infrastructure dependence is political independence. If we do not develop and maintain our physical infrastructure, we will eventually become reliant upon others infrastructure. With that reliance will come obligations that we do not get to choose.

Financial Capital is the availability of fiscal resources for investment. Again, the article doesn’t really address this, but Financial Capital goes hand in hand with infrastructure. Here’s the thing, real investors don’t use terms like ROI (Return on Investment) they prefer ROE (Return on Equity). If we invest in infrastructure, we gain infrastructure. The new and/or improved/maintained infrastructure is physical equity. It’s a tangible resource we can leverage to gain a value add for the organization (community). If we use that money to invest in services (wages), at the end of the year we have no residual equity to show for that investment. Its key to note that there is no investment in equity without some investment that will not bring equity, but the ratio between the two must be justifiable.

Political Capital is misrepresented in the article and confused with the concept of Governance. Political Capital does not reflects how decisions are made, how accessible local processes are, and how well people feel represented. Political Capital is the ability of one political entity to reflect power and influence upon another. Politicians who win an election by a large margin generally are said to have gained political capital to flex their policies, but to ascribe that authority to “how decisions are made, how accessible local processes are, and how well people feel represented,” negates the phenomenon related to up-and-coming political movements removing established political machines.

Natural Capital is a real thing, but most people just say, “Natural Resources.” Within the context of our city, we might see the river that runs alongside our city as Natural Capital, until you seek to leverage that capital for the benefit of the residents of the city. Water can be used for many purposes, but in many cases, you need infrastructure to do so.

Cultural Capital as defined by the Belle Plaine EDA, is Identity, Brand, Market Appeal, Creativity, and Shared Values. This implies a common identity and shared values. However, the concept of Cultural Capital is a construct developed in the 1970’s by French Sociologists Pierre Bourdieu and Jean-Claude Passeron. Cultural Capital theory is an academic embodiment of Marxist theory, “...regarding economic power and class structure...” These two authored a book in 1964 called, “The Inheritors(2)” that many still see as important reading for modern day Marxists. Their theories are summed in a few statements, “...social future is clearly the link that ultimately binds an educational system to the dominant political goals in society and to its level of technical development.... We should remember that, according to Lenin, the strength of a party or a union is measured by its real power in the organization of the masses.” They go on to chastise individual initiative, “Autodidactism (the practice of learning a subject, skill, or trade on one's own) is the greatest enemy of Leninist political organization.” The application of EDA policy is anything but “common identity and shared values.” Rather it’s application has been self-serving, and reflective of a social agenda that is contrary to the identity of small town, rural Minnesota.

The article ends with market strengths and opportunities. Anyone who has been to a business school knows that two key ingredients are missing in this summation. Strengths and opportunities are always tempered by weaknesses and threats (SWOT Analysis). Lets explore those weaknesses and threats. The small-town of Belle Plaine has limited revenue potential for future investment. This is a weakness when you consider that the city is currently $20 million in debt and has a tax levy of over $10 million per year a number that is double most of its comparable neighbors. This creates ana environment where tax rates have sky rocketed and continue to rise. People are being displaced from their homes and are leaving the city. This is a clear threat to any investor who wants to bring capital to our city. By ignoring the needs of the city, things such as infrastructure like power supply capable of servicing future industrial capabilities, the EDA has sacrificed real investment who want to bring real opportunities to grow our economic base. Instead, our city leaders have mortgaged our future for streets projects and apartment buildings to accommodate unrealistic timelines for Metro-Council urbanization efforts. Those are not investments in our community; those are investments in the metro area at the expense of those who live in Belle Plaine.

On top of this we are ‘investing’ in infrastructure for public safety that is disproportional to the threat level relative to our city’s location, demographics and the needs of its residents. This is not investment that returns value. Economically, this is an internal weakness, as every dollar that is spent on Police and Fire that is not required is a dollar that could go toward bringing to our community those industrial investments that will eventual pay for themselves. We need a substation that will power a future industrial park. We need a water supply and wastewater treatment system proportional to industrial development requirements. We need to a city hall that sees investment as something other than a circular process by which one community business scratches the back of another community business with the city offering incentives for the scratching.

In short we need to seek out those economic principles that will bring capital into the community other that tax dollars from those who work out of town. When I first began looking into the city’s economic crisis, I presupposed that someone was just asleep at the wheel or in the worst-case scenario, incompetence. It’s pretty clear from the article that the perspective of our city leaders does not match the conservative values of a population that has recently elected conservative Republicans by a 2-1 margin.

(1) https://www.marxists.org/

(2) "The Inheritors" by Pierre Bourdieu and Jean Claude Passeron