The quality of who you know

The current economic crisis has put deficit spending on the front pages of the world’s newspapers. As Canada’s Jan. 27 budget proves, John Maynard Keynes is back, with a vengeance. But what if the age-old debate about government’s proper role in the economy misses a profound part of the story? What if community social networks are at least as important as economic

That’s the premise of a forthcoming book by University of Chicago professor Sean Safford, titled Why the Garden Club Couldn’t Save Youngstown (Harvard University Press). Its message has special relevance for Atlantic Canada, where community social networks are said to be particularly strong. Safford’s book tells a tale of two steel cities from the rust belt: Allentown, Pa., and Youngstown, Ohio. At the height of America’s industrial era, both were known as places that “worked.” They were twin cities in many respects, with matching populations, education rates, median incomes, and economic activity.

They don’t look like twins today. Allentown hosts a hub of head offices and is enjoying a mini population boom. Youngstown is a poster child for industrial decline. In 2003 average wages in Allentown were 10% higher than Youngstown, while unemployment was 33% lower.

What happened? Structural economic change is part of the story. Starting in the early 1950s, steel-production costs were no longer competitive, and by the 1980s companies and workers were leaving. Both cities did as most would do in a crisis: they commissioned reports. Those reports, which framed policy choices, were similar. There were two options: reinforce basic industry or diversify.

Youngstown’s response, writes Safford, was “extreme fragmentation.” Decision-makers dismissed recommendations, and infighting led to inaction. Four different groups battled for attention and funds. None of the proposals was ever fully accepted or implemented.

Allentown’s response was dramatically different. Civic leaders built a coalition that pushed for an extension of a major highway and convinced the state to make Allentown a fourth location for a highly coveted initiative with industry and research universities.

Differences were most apparent on the boards of the cities’ civic organizations. In Youngstown, participation in civic organizations reinforced existing ties and social status. The circle was small. In Allentown, civic organizations brokered relationships between otherwise disconnected groups. Call it social cohesion. Call it solidarity. By whatever name, the city thrived by uniting people behind ideas of progress. The different outcomes were not based on the ideas available. Instead, Allentown’s distinction was its ability to deploy far-reaching social networks of decision-makers.

The lessons of Allentown and Youngstown are starting to catch on here. In New Brunswick, for example, a public engagement initiative recognizes that government must work with stakeholders to reach desired outcomes. If a walking path is built to combat obesity yet no one uses it, is government to blame?

Small communities can have an advantage in pursuing economic development though social networks. It’s easier to identify key community leaders in Corner Brook than it is in Gotham. Indeed, it’s worth pointing out that the entire Atlantic region has a smaller population than New York City. Even the entire region is a village, and in organizing the 21inc Ideas Festival I was struck by the widespread desire among Atlantic Canadians to engage as a region. Safford would say we have an opportunity to mobilize our social capital around smart economic strategies.

Tim Coates is the executive director of 21inc., a network of new and emerging leaders committed to creating change in New Brunswick.