Page 8 RAIN November/December 1985 a quarter of a million dollars a year, generate a million dollars of revenue by selling the wood to a district heating company, and reduce the pollution scrubbing costs that would otherwise have to occur for a coal-fired boiler. So there's a systemic benefit to the economy that's much more than a million dollars for that particular operation. Another example has to do with St. Paul's very interesting geological structure. Most cities either have granite or sand under their feet. St. Paul has limestone and then sandstone underneath that. The city has 7,000 acres where there are about 10 feet of limestone and under that about 80 feet of sandstone before it hits the water table. And it turns out that undergound construction is cheaper than surface space construction, and the operating costs might be two-thirds cheaper. So the city is now going out with requests for construction bids to begin construction of the city underneath St. Paul. The entire 7,000 acres would not necessarily be built, but there is more square footage possible underneath the limestone layer than exists in commercial space on the surface of the entire city. So it can be a very dramatic project, thereby freeing up the surface of the city for other more valuable operations. So those are some. I could keep going, but you're getting the idea that a self-reliant city is not a specific business, but it is a spirit, if you will, of a city. We'll soon be starting a labeling program that will label homegrown products so that people will know where they come from. Our feeling is that when people know where goods are made, they will tend to buy their neighbors' goods rather than goods from outside the area. So that will be a public education program. The city has appropriated a quarter of a million dollars for a product development seed capital fund, and is now in the process of getting matching money from the private sector in the city to set up a fund for specific ventures that are related to the self-reliant city. RAIN: As I understand it, import substitution is one of the real keys to creating a self-reliant city. Are there any general criteria for what makes a product a good candidate for import replacement? For example, if I were a "homegrown entrepreneur," where would I look for business opportunities? Morris: First of all, let me say that import subsitution is important because it gives you an initial dynamic; import substitution is a dead end if that's the only thing that you're doing, which is why we're also looking at the concept of invention, because you can get exports from invention as well as make things more efficiently. But to answer your question, there are many places you could look. The best thing to do is a balance of payments analysis of the city, which we did, and to isolate or identify those sections of the city where the larger sums of money are leaving, and then see if you can develop mechanisms—a business, a financial forum, and so forth—for retaining that money locally. It turns out, for example, that one of the largest sums of money that is leaving St. Paul and not coming back is federal taxes. The Midwest, unlike certain other parts of the country, loses an enormous amount of taxes to the federal government that it does not get back. St. Paul gets back considerably less than a dollar for each dollar that it pays out. The city doesn't have direct control over that, but the mayor is raising the issue again and again to make people aware that there are some places in the country, especially the Midwest, especially the areas of the country that are hurting in the current recession, and especially the agricultural sectors of the country, that are actually exporting capital to the rest of the country through federal taxes, while areas that are not hurting at all are importing capital from the rest of the country. That is more an education in national political strategy than anything else, but we've also identified energy as a significant factor in a poor balance of payments, and that led to the kind of strategy that I mentioned before. Health turns out to be another major problem area that can be resolved to a large extent at the local level. So the best thing to do is to start mapping the resources of the city as if it were a nation, and begin to look at the balance of payments and the balance of trade, and then begin to identify those sectors where "native businesses" can begin to have an advantage. RAIN: Many of us of learned in Economics 101 that national divisions of labor and trade between regions make for a more efficient economy, and that each region should specialize in its production according to the principle of "comparative advantage." The concept of a self-reliant city flies in the face of that understanding. Pipes for St. Paul's downtown district heating system. The system is the largest in the country and is designed to operate on any fuel. (FROM: The Homegrown Economy: A Prescription for St. Paul's Future)
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