Harris Analyzes Economic Crisis Facing Industries in New England

Troubled by the growing "economic arteriosclerosis" of New England Industry. Professor Seymour Harris sets down some problems and possible solutions in his new book, "The Economics of New England."

Harris, who has served on several government committees investigating the industrial situation in this area, cites the growing competition of Southern manufacturers as the main problem and proposes increased Federal aid as the best solution.

"Regions, like people, age," writes Harris, "and in the aging process an economic arteriosclerosis tends to develop. This social disease develops as inhabitants of new industrial regions, full of vigor and enthusiasm seeking a place in industry, confront the older regions with intense competition. These newer areas take industries away from the older ones, for the freedom of manufacture, relatively unfettered by past practices and customs, gives them a decided advantage in the struggle for newer industries."

This situation has produced an economic tug-of-war between the South and New England. One of the chief indications of this, Harris states, is that the last 20 years per capita income in the South has risen two-and-one-quarter times as much in New England and population has increased along with it.

Harris feels that the New England communities, trying to keep their industrial supremacy, are faced with an additional obstacle "unfair" competition.

"The new areas . . . offer subsidies to new industries or new plants, inclusive of free land, factories at low rents, and tax exemptions; they offer a tax structure which, on the whole, favors business against the non-business groups; they offer anti-union legislation, niggardly social security programs, and lower wages which in part are related to low standards of living. The result of these concessions is a movement of industry into these areas beyond what might be justified by underlying economic conditions."

The big problem facing New England Industry is adjustment to its manufacturing loss as other regions gain. Although this loss has been relatively alight over the past ten years. Harris predicts that large, absolute losses will occur in periods of depression.

A lot less reluctance toward accepting Federal outlays on the part of New England Industrialists seems the only feasible solution to the problem. Harris continues.

"New England will have to reconsider its attitude towards federal government. If it does not accept a stronger federal government and seek a fair share of federal outlays, it will suffer continued drains of cash, which will be used in part to strengthen the competitive position of areas attracting our industries, capital and managerial talent."

This area needs more up-to-date management with new plants and equipment and a realization of labor's migratory problems. Its poor location and scarcity of raw material also cannot be overlooked.

"Better exploitation of river resources, and improvement in the tax structure will also help. Of great importance is the advance by less-developed areas of working conditions, social legislation and the like."

Harris concludes by saying that as New England loses its export markets in the United States, it will have to pay for its indispensable imports by exporting more abroad.