Schumpeter!
Thursday, 29 November 2007 by Jacob TomawToday I heard this report from NPR’s Adam Davidson. It is about Ft. Payne, AL, the former Sock Capital of the World. (It is also the home of the greatest country music group of all time).
Ft. Payne is no longer the Sock Capital of the World because we liberalized trade in socks and removed the tariff in the ’80s. Free trade is good, but if you concentrate of particular jobs it might look devastating. Over half of the sock mill jobs are gone in Ft. Payne. Much of the report concentrated on this.
However, it is not that dismal. At the end there is this gem.
Jimmy Durham, the county economic development officer, shows just how grim things have been for the sock business here.
On street after street, he points to buildings that used to house sock mills, most of which are now gone. With all these businesses shuttered, you might think Durham is in despair about the future of Fort Payne. He isn’t.
Those closed sock factories are reopening as new businesses.
He points to Steadfast, which makes bridges; Ferguson, a major plumbing supply company; a distribution center for Children’s Place; two new metal tube manufacturers; a high-tech label maker. For a town of only 13,000 people, this is a lot of new, good-paying employment. These jobs pay more than sock-making jobs.
In fact, most of 4,000 recently laid-off sock workers quickly found new jobs.
Joscelynn, Is this an example of what Joseph Schumpeter called Creative Destruction?
Posted in Economics
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November 30th, 2007 at 7:43
Yes. :o)