The recent Missourian article, “Stamper: Focus on Economy,” reinforces a common myth that a primary function of government is to promote economic development. Don Stamper criticized council members for devoting too much time at a recent retreat to “regulations and ordinances” and too little to “improving the local economy.” He urged council members to be “cheerleaders” for job creation and retention.
However, the fundamental purpose of government is to do those things that benefit the public in general but for which private economic incentives are either absent or inadequate. Government is responsible for creating an accommodating legal and institutional environment for private enterprises but is not responsible for either subsidizing or promoting greater profits of private investors. Certainly, private employment creates public benefits, but employment creates far greater private economic benefits for both employers and employees. Scarce taxpayer dollars should be reserved for those things that are not profitable for individuals but are nonetheless beneficial for the community as a whole. The council shouldn’t be spending taxpayer dollars to pad employers’ profits or workers’ paychecks, and cheerleading for private industry is the job of the Chamber of Commerce, not the City Council.
Regulations and ordinances are precisely where the City Council should be focusing its attention, and not on cutting city sales taxes so developers can create still more special tax districts. The council is responsible for creating a regulatory environment in which ethical businesses do not feel compelled to exploit the natural environment, their employees, or customers just so they can compete with unethical competitors. There will always be incentives to exploit both nature and people for short run economic gain. In serving the common good, government must remove those incentives through ordinances and regulations. That’s how good governments encourage good economic development.