Afterwards, someone said, "That was really interesting—when's part II?"
And before long, the vaguest outline of a Part II started to take shape. And I thought, I should mention to Craig (our minister) that I have a Part II in mind. But then I'd have had to actually sit down and write it.
So instead I waited until Craig needed someone to cover a Sunday and couldn't find anyone else. When he asked if I could do it, I said yes, and that I even had a topic in mind.
So I finally wrote it.
As is the custom at our church, the sermon was preceded by a couple of brief readings. Unusually, my first was from the Bible, Matthew 6:19-21:
19. Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. 20 But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. 21 For where your treasure is, there your heart will be also.The other was "The task of the religious community," by Mark Morrison Reed, from the UU hymnal:
The central task of the religious community is to unveil the bonds that bind each to all. There is a connectedness, a relationship discovered amid the particulars of our own lives and the lives of others. Once felt, it inspires us to act for justice.
It is the church that assures us that we are not struggling for justice on our own, but as members of a larger community. The religious community is essential, for alone our vision is too narrow to see all that must be seen, and our strength too limited to do all that must be done. Together, our vision widens and our strength is renewed.After a musical reflection, this was the sermon for March 29th (podcast here):
In your mind’s eye, take a walk down Oneonta’s Main St. There’s a great bookstore linked to a coffee house, a new brewery, restaurants, brick buildings that come under the heading of “charming.” There’s the former Bresee’s department store, its façade restored to something more attractive than 1950s aluminum siding. All in all, some elements of a fine place to live.
There are also an uncomfortable number of empty store fronts, including Java Island, with the rough-cut wooden letters still there years after the business left. There is the shrinking population of children, leading to the closing of a school that had been part of center city’s fabric for over a century. There are the challenges of maintaining streets and pipes when we face harsh winters. And it’s not like the city government is rolling in money for dealing with these problems. For a few years now we’ve had to keep one of the city’s pools closed, and more recently curtailed other summer programs. Away from Main St., tucked away in neighborhoods and trailer parks there is visible poverty.
While there is a lot to love here, we clearly face some serious challenges, and these lie at the intersection of community and economy.
To think about them, I want to start in what may seem an unlikely place, with some acquaintances who got fired up about energy efficiency. They got so fired up that they transitioned out of their day jobs and started a company to do retrofits. They’ll come into your home or business and figure out ways to cut your energy bill. Sure, they know all about weather-stripping and insulation, but that’s just the easy stuff. They’re into deep retrofits that really take a bite out of your energy bill.
There’s the obvious question of how their customers will pay for their work, and one way is a loan. If they can save you $1,000 a year, you can get a loan and use those savings to cover your loan payments.
This calculation has what seems like an obvious implication. If energy prices double, they’ll be saving you $2,000 a year instead of $1,000—the reduction in energy use is the same, but you’re saving twice as many dollars. So these friends asked me, shouldn’t high energy prices be good for their business? If they can save you twice as much money, you should be twice as interested in hiring them, and it’s twice as easy to pay back the loan you took to hire them.
But there’s a rub. Contrast this work of saving energy through efficiency with a different approach, one where you actually produce additional supplies of energy. What if you had a windmill or, for the sake of argument, a gas well, that produced $1,000 worth of energy per year. If the price of energy doubled, that windmill or gas well would produce twice as much revenue and so would be twice as attractive to own.
On the surface, that’s just like the energy-efficiency retrofit. The windmill produces $1,000 of new revenue that can be spent on anything, while the retrofit frees up $1,000 that no longer has to be spent on energy and so can be spent on anything else. But they’re not actually the same.
The windmill is producing new revenue because it’s producing a new thing to sell. When the energy price doubles, you have $2,000 worth of stuff to sell instead of $1,000. You’re actually twice as well off.
The efficiency project doesn’t produce anything you can sell. To put it in slightly more technical terms, the retrofit isn’t creating new purchasing power. It’s taking your existing purchasing power and allowing you to redirect some, away from energy and toward whatever else you’d like to buy.
This is an excellent idea, but it’s not foolproof, because that existing flow of purchasing power can itself be affected by energy prices.
When oil gets expensive, it’s true that it becomes more beneficial to have a tight house, an efficient car, and a short commute. The higher the price of energy, the more money you save by reducing your energy use.
But those high energy prices don’t just make it attractive to save energy. They also raise the cost of other things, from extras like vacation trips to the basics of food and clothing. For some people, high energy prices will even cost them their jobs.
Say you’ve borrowed to finance the retrofit. High energy prices make the savings more attractive, but they also cut into your ability to pay off the loan.
So there’s a conundrum at the heart of this business model. We’ll be better off if we have these homes retrofitted than if we don’t. But there may be no set of circumstances under which, judged simply from a money point of view, they pay off.
When energy is cheap, we can afford to keep wasting it, and measures to save energy look like money poured down the drain.
When energy is dear, efficiency measures are very attractive, but we can’t afford them—the high price of energy has made us poorer, now and into the foreseeable future, so we’d never be able to pay back the retrofit.
Why do we need those improvements, anyway? Why do we need more efficient homes? Why do we need a commercial district that works for people walking or biking? If it’s not financially viable to create these things, doesn’t that just show that they’re not important?
In a word, No.
Oil prices are low at the moment, but I stand by what I said 7 years ago at the dedication of Golisano Hall up the hill at Hartwick: In the 20th century we had fast-growing economies enabled by cheap oil. In the 21st century, if the global economy is doing well, oil prices will be up; if oil prices fall, it will be because the global economy is stalling out. And that’s even before we take climate change seriously, which is another nail in the coffin of our cheap-energy past.
If we’re going to prosper as a community, we need to rebuild ourselves to be able to have a good life here while using less energy. And doing that may require us to draw on what makes us a community. I’ll come back to those things, but I’m going to get there along a different path.
And the start of that path is a tension between two ways of understanding where prosperity comes from. I think one story we have in our heads about the economies we live in is a class of fables dealing with trade, and thinking about it on the sort of small scale we can keep in our heads. Within a community, my prosperity depends on yours, and yours on mine. The farmer feeds the city-dweller, and the shops in the city make tools for the farmer to be more productive, so the farmer can feed the city even better, and the city folks can devote even more time to making books, clothes, entertainments, for the enjoyment of all, both in the city and on the farms.
But if you look more closely at a place like Oneonta, the reality has been much more about the outside world. Our past prosperity was no self-contained phenomenon, where I thrive by making you thrive. It was based on our fortunate position in the much larger economy.
When you drive through the surrounding countryside, look at the barns that haven’t fallen down from neglect and notice the dates on them: usually between about 1880 and 1910. That was clearly a good time to be a farmer in our region, but those barns weren’t built with the profits from feeding Oneonta. The farms were dairy farms, and once the railroad came through, they were the perfect suppliers for New York City. When you’re selling something, you like selling to big markets with lots of money, and New York City was one of the biggest, richest markets in the world. Our region was far enough from the city that land was cheap, but close enough that you could get your milk there. In other words, perfect. [See end note]
The railroad helped on the other end of that business as well. Oneonta used to have a feed mill, and it was right next to the tracks, where Foothills is now. That location made sense, because the grain being milled wasn’t local; it was brought in by the railroad from places further west where field crops are easier to grow.
Farms in our area prospered because geography and infrastructure made this a good place to turn Midwestern grain into New York City’s milk. The farmers then took their earnings, and spent them on Main St.
The railroad helped in another way. Oneonta has minor fame for its former roundhouse, the largest in the world at the time. We also had repair shops, whose elegantly decaying buildings were still standing in the railyards, last time I looked.
Like the farmers, those railroad workers were a big piece of what made Oneonta thrive a century ago. They built houses, paid taxes that supported the schools their kids attended. And just like the farmers, they shopped at Bresee’s and helped make Main St. a vibrant business district. But also like the farmers, their prosperity didn’t come from serving others in the community. The revenues of the railroad represented transportation that served the entire northeast, moving the products of fields, forests, and metropolises far and wide. That service couldn’t happen without a roundhouse and repair shops being somewhere, and they happened to be here, so as the railroad prospered, a piece of its revenue ended up in the pay envelopes of Oneonta’s yard workers, and their spending made Oneonta bustle.
In their different ways, the farms and the railroad used local labor to make things to sell to the broader world. And the revenue they brought in allowed us to buy from the broader world the things we wanted but were poorly equipped to make for ourselves.
Today the farms struggle, undercut by operations further away that can work on a larger scale. And the railroad still passes through, but the trains don’t stop and the yards are empty.
Economically, we’ve replaced the farms and the railroad with the colleges and medical care. Most of the education the colleges “produce” is “sold” to families far from Oneonta. The hospitals by their nature serve locals, but if those locals are on Medicaid or Medicare the actual revenue is generated where the state and federal tax revenues are generated, which, on average, is in places far richer than here.
This has been a reasonably successful move. The empty storefronts on Main St. are unsettling, but compared to other rural cities we’re doing pretty well. And there are promising efforts at fostering creative new businesses in the area, including cooperative projects such as one among local government, entrepreneurs, and some of my colleagues at Hartwick.
Yet our success feels fragile. Those empty storefronts are there, and all over the city there are vacant houses where nobody has the combination of money and motive to make them once again part of a healthy neighborhood fabric. The families whose tuition money is one of our community’s lifelines? They’re being squeezed by global economic realignments and shifts in the concentration of wealth that are leaving fewer families with the means to pay for college, even as the modern world makes a flexible education more valuable. The city government has been able to avoid drastic cuts, but its reserves won’t last forever. (Dick Miller was well aware of this dynamic, and was eager to find a lasting way of addressing it.)
So we’re doing OK for now, but there are troubling signs, and it would be good to have a sense of what we might do to face the future on a firmer footing.
I’ve been focusing on the aspect of economies as physical systems, ways of raising crops from the soil, pulling minerals from the earth, transforming them, and moving them around, to make the things we want and the things we need. But economics is actually about the social mechanisms we use to coordinate those activities.
In the old, old days, our ancestors relied on norms of behavior. Hunter-gatherers would share with their neighbors, not necessarily out of conscious self-interest, but because that’s what their culture instructed them to do. Of course, in most situations, mutual sharing was a good way to put off dying, so cultures that shared were cultures that survived. Evolution selected for effective cultural norms.
Over generations, human societies grew larger, and we developed new technologies, like large-scale irrigation, that required different mechanisms for coordinating people’s economic activity. And so, in tandem with technological change and the growth of political units, we evolved massive hierarchies, where people do things not because their culture says, “This is what we do,” but because the person above them on the totem pole tells them to do it.
And then there are markets and money. These have been with us for millennia, but one of the defining traits of the modern world is that those old tools evolved to cover ever-larger parts of our economic life. We have reached a point where if something can’t be done through markets and money, we doubt whether we can do it at all.
So to understand our situation, it’s important to understand money. I’m obviously not going to cover all of that today, but it’s enough for our purposes this morning to touch on the idea of “backing”.
There’s a notion out there that money isn’t backed by anything unless it’s backed by precious metal—the paper in your wallet, the numbers in your bank account are worth something because they can be converted into gold, or maybe silver. Of course, our money hasn’t been backed by metal for decades, and yet people still accept U.S. dollars.
In modern economies, money is actually backed by the government. Specifically, government money has value because the government imposes taxes and accepts its own money in payment of those taxes. But just imposing and collecting taxes doesn’t mean much if there’s nothing to tax, and so the ultimate backing of money in a modern economy is the economy’s ability to produce goods and services that can be sold.
This is where we come back to the energy-efficiency retrofits. Remember the fragile success of our community. That success would be more secure if we could find a way to make ourselves much more energy efficient. Whatever purchasing power we draw in from the outside world would then do more good here, since less of it would flow right back out to buy oil.
What if we had a local currency, something like the Ithaca Hours in use a little to our west? The community could issue money to finance investments that would improve our region, and the money would be backed by the value of those improvements.
But that’s not how money works, at least not today. Money is backed by the ability to produce things that can be sold. Energy efficiency doesn’t produce anything to sell, it merely creates a reduction in our need to buy.
Our situation is that we can make out the shape of our goal, but we don’t have the social tools to reach the goal itself.
Norms, by their nature, are slow-moving things—one of the advantages of markets and hierarchies is that they can respond more quickly to new situations.
As for hierarchies, there may be some role for them, but we’ve also learned to be wary of authority.
And our current situation has presented money with a problem it can’t solve, because large parts of what we need are things that can’t be sold.
So it’s time to evolve again.
I don’t have a clear idea of what form that will take, but I can only imagine it will be grounded somehow in our connections to each other.
In your mind’s eye, take a stroll out the door behind you and into the city. Conjure up the things you love about it. Conjure up the things you’d like to see improved. Conjure up the people who give this place its life.
Now bring yourself back into our sanctuary. Look at the people around you.
Those folks you thought of outside, the people sitting beside you—we are each other’s treasures in heaven.
We’ve been storing them up for a while now, in this church, in other religious organizations, in civic groups, in youth leagues, in all the places where we live out our lives together.
Those treasures already serve us. They’re part of what make life here so rich.
But we do have to address the material problem of how to provision ourselves in challenging times.
As the passage from Matthew indicates, storing up treasures on earth is a mug’s game, and I’m not advocating that. I’m just thinking that perhaps we can find a way to draw on our treasures in heaven to sustain and renew our life here and now.
(In conversation afterward, Ginny Scheer from the congregation gave me a slightly different take on the local farms and prosperity. From her oral-history interviews, the time of greatest relative prosperity was not based on fresh milk. It was earlier, based on butter, which was transported over to the Hudson River and down to New York City.)