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One benefit of local capitalism is that people can do pretty much what they want to do, assuming that they can earn a livelihood at it. One problem with global capitalism is that it isn't enough for an operation to earn a profit -- under the emerging rules, a given operation has to earn a greater return than it would if the same resources were invested elsewhere on the planet.
This struck me last week when quite a few Salidans were in a good mood at the same time that many Denverites were in a rotten mood.
The depression in Denver was the result of a decision by the Chancellor Broadcasting corporate chain to adjust one of its stations.
Few if any American cities have ever supported a commercial classical music station, but Denver did, and KVOD-FM was often pointed out to visitors as evidence that Denver was not entirely a rustic cowtown.
It was profitable -- but in Chancellor's eyes, not as profitable as some cookie-cutter format on the same frequency. To please the stockholders, who might have invested elsewhere if Chancellor wasn't getting the maximum possible return on its licensed frequencies, Chancellor moved KVOD and its programming to an AM position.
Since AM broadcasting suffers from static and a limited audio frequency range, it's not a good medium for classical music, even though well it seems to work well for conveying the wisdom of Howard Stern and Rush Limbaugh.
It's hard to believe that a classical KVOD will last very long on the AM dial, and Denver has lost an institution -- not because it wasn't profitable, but because it wasn't profitable enough. Chancellor was making money on KVOD-FM, but it wasn't making as much as it might have with a generic recycled format on the same frequency.
I saw quite a few Salidans in a good mood last week at a party to celebrate the re-opening of a local institution, the First Street Cafe.
Early on Christmas morning of 1998, an electrical cord overheated in an apartment over the cafe. The resulting fire was quickly contained -- the fire station is just around the corner -- but the building suffered severe structural damage.
It's a handsome old Victorian building, but its east wall was never designed to stand by itself -- it relied on an adjacent building, demolished many years ago for a gas station, for support.
The cafe wall was standing on account of habit and not much else, and after the fire weakened the cross beams, a good windstorm might have brought the place down.
If this had happened to some franchise outlet responsible to distant investors, they'd have done the sensible thing and torn the place down before starting over. Or they'd have moved the restaurant from downtown out to the highway where the corporate bean-counters would have shown them there was more traffic.
Also there are a lot of people who, if they had suffered this catastrophe, would have taken such insurance money as was available, and decamped for someplace warmer.
But Wayne and Darlene Louch haggled with their insurers to get their building overhauled, rather than demolished and replaced. The structural engineer devised a system of cables, anchored to the solid west wall, that would keep the tottering east wall more or less plumb.
It meant being closed for a long time, and spending a lot more money than would be justified by the rules of modern global capitalism, but a local institution is back in business. A local enterprise like the cafe can make decisions on a basis other than maximum rate of return; a big company like Chancellor Broadcasting apparently cannot.
This sort of analysis seems to explain other things, too. Tennessee Pass was a profitable route for the Denver & Rio Grande Western Railroad, and so it stayed in use.
Presumably it would have been just as profitable for the Union Pacific Railroad after it swallowed the Southern Pacific that had swallowed the Rio Grande.
But UP's accountants could tally up the cost of maintaining a fleet of helper locomotives and crews in Minturn, and compare the return on that investment to what the railroad might make by putting the same resources into more trains to haul coal out of the Powder River Basin of Wyoming -- an investment that was beyond the realm of the Rio Grande.
When Climax Molybdenum was just a molybdenum company in Colorado, it didn't have much choice but to invest in domestic molybdenum production. But Cyprus-Amax can decide that certain operations aren't sufficiently profitable, abandon those, and put its resources into coal or copper or gold, anywhere in the world.
With local capitalism, earning a decent profit is
enough. With global capitalism, a decent profit isn't
enough -- it's got to be the maximum possible return. And
if that means a drab world without much variety, well, who
are we to argue with the wisdom of the market.
This doesn't strike me as quite what Adam Smith had in
mind when he wrote The Wealth of Nations,
but then
again, a lot of things have changed since 1776.
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