Updated: Oct 27, 2018
I went to Williston ND because it is an unusual example of capitalism. Talking with students I generally say an economy is "how we make and distribute what we need". Throughout the rural U.S. farm work, family-based saving and reinvestment and locally-focused distribution have long been braided together with national capital-based: railroad conglomerates, commodity companies, non-local banks.
In North Dakota interdependence, co-existence and competition between these interests is longstanding. Land of the Arikara, Assiniboine, Chippewa, Hidatsa, Mandan, Lakota and other Native peoples was acquired by European (and smaller amounts of other ethnicity) immigrants through federal homesteading grants. Railroads that allowed for import and export of goods were built through alliances between state and federal political forces and big capital from New York and other cities. Where lines were built - and where they were not - determined human geography. During the late 19th and early 20th century North Dakotan farming families fought these capital-based state and national forces.
"In their opinion, the state provided too many incentives, and they pointed out that huge profits were being taken from North Dakota, that the distant leadership of rail and commodities companies was often arrogant and unresponsive to the needs of their customers, and that rural people were often taxed out of proportion to their means. Most galling, however, was the frequent evidence that out-of-state corporate interests dominated North Dakota government, using it to further private goals rather than the general welfare of the citizens." (North Dakota State Historical Society website)
In the early 20th century a progressive coalition came to power in North Dakota that united northern European social ideals and a very strong rural cooperative movement (by 1913 there were over 400 marketing and purchasing coops in the State (ibid). In the 1930s rural communities - like those in Madison County, NE (see previous post about Newman Grove) - organized a Farmers Union and participated in the Farmers Holiday Organization. The Depression devastated rural communities, leading to massive shifts in land ownership as a result of foreclosures. "One historian estimates that over 70% of the state's people required one form or another of public assistance" (ibid). During and after WW II, the North Dakota benefited from extensive public investment in productive infrastructure and rising commodity prices.
Oil was first discovered in North Dakota in the 1950s, leading to oil "booms" in the 1950s and 1970s. In 2007 horizontal fracking techniques allowed for extensive exploitation of the Bakken Reserves near Williston. In a few years capital investment and conducive regulation created created a boom economy attracting "a lot of arrogant 20-somethings who drove like maniacs" (according to one residen), making Williston one of the fastest-growing municipalities in the country, with some of the highest rents. National and international investment poured into oil extraction and processing, retail and services and real estate development as apartment complexes and single-family homes sprung up across the fields near the small downtown.
The changes weren't welcomed by everybody; one person told me, "local people got kicked out of their own city" (by prohibitive rents) and another said, "it ruined a lot of people". And then, after six years, oil prices fell and what people refer to as "the first boom" ended. The decline of the local economy was swift and the impact on people's lives dramatic (see Reuters report from 2016). In the last year or so oil prices have risen and a "second boom" has begun. I met briefly with a few of the Williston staff at ERES (Energy Real Estate Solutions), a company that services the oil-industry throughout the U.S. (see their website for an interesting map of the location of oil fields). They described how rents for 2 bedroom apartments they manage went from $3,050 in 2014, to $800 in 2016, to $1,200 today. Everywhere I drove in Williston I saw signs announcing apartments for rent. Labor is again in high demand.
Lower-wage jobs are particularly hard to fill, given the relative abundance of higher-paying jobs in the oil industry. Walmart pays $17/hour and apparently shelves are often bare for a lack of workers to stock them.
One of the things that struck me in my short visit to Williston was the way average people were conscious of and talked about the workings of capitalism. Sitting in a coffee shop downtown, for example, I overheard a conversation between two oil workers, men in their 20s, who were catching up:
"It's the owner-operator hot shots that make the big bucks. You do a rod run – pick up like 50 rods, make 150 a rod with your truck. One truckload can be $8,000. All you need is a truck. You and I can’t start our own drill rig. But I guess I don’t love money enough to buy a truck. It’s easy money."
"I haven’t worked these last few weeks and I still made more money from oil stocks than I used to at my job."
"We’re here in the center of it, here in Williston."
"But they’re not as busy now….I don’t see people working."
"The drilling is busy right now. When the drill rig disappears Halliburton comes in, Nabors, comes in and does fracking. They can’t build rigs fast enough."
In the same coffee shop the counter person was talking with a customer about how rents for apartments were changing quickly. A fleeting impression: capitalism out in the open.
During the first boom public investment in all kinds of infrastructure also increased rapidly.
The impressively bright and airy new Williston High School building is so new that when I tried to find it, the GPS in my car thought I was heading into a field.
Principal Germundson was very welcoming. Over the course of two days I worked with six 53-minute classes. Business Education teacher Kenzi Mitchell was a wonderful host and co-teacher (she also said that she didn't recall ever being taught about capitalism in her own preparation to teach business). The classes of hers I met with covered a range of material: accounting, Windows applications and entrepreneurship and also a range of grades, from first year to seniors. It was also a visibly very racially, ethnically diverse group (reflecting the influx of people to the broader community) and - according to Ms. Mitchell - also economically diverse.
As I have in other schools, before I started to explain the capitalism diagram I asked each group of students to write an answer to the question, "What does "capitalism" mean to you?". Across all the different classes and grades the answers fell into three broad categories:
Some variation of "I don't know" (39%)
Never heard the word (the majority)
I never heard the word before.
It means nothing to me. I have no need to know it.
The system we live in (I don't know).
I haven't heard of capitalism before.
Some kind of a system or organization (41%)
You live in capitalism..
Something we've lived in our whole lives but I've never quite attempted to understand what it is.
I'm not sure what it is but capitalism to me sounds like a bad form of government
Very business-y stuff.
Opportunity to make money and get as wealthy as you want. Free enterprise.
It means you can be an owner of your own business/have a private business and make all decisions for that business.
A way our government helps us as citizens to make money and own a business.
The belief that anyone can make money or market.
It means freedom to choose what we do with our money whether to save or spend we get to choose and that is essentially God's plan for all of us.
No matter who you are or where you are from you can become the best of what you do to then profit from it.
Where business plays a central role in the economy or in the way of living politically and economically.
It makes me think of the government and how society within your community works.
It is how the U.S. is run and how things work. Like money and how we pay and have stuff set up.
Something organized. Like an organization.
A way to make a democracy.
Something to do with money (20%)
Money (the single word, a majority)
Capitalism means money. It means a way of living. To do what you wanna do with your life.
When I hear this word I think of money.
People with money to gain from having money.
Using what you have to make money.
As in the coffee shop the previous day, I was struck by how, in the discussions, students indicated in-depth awareness of key aspects of the economy they live in:
Even the younger students seemed familiar with the boom-bust nature of the oil industry, including the direction of oil prices and the impact on the community. The older students easily talked about the current, second "boom", the recent "bust", etc.
Most students seemed familiar with what wages are, in the fast food and retail jobs they worked in (many said they had jobs) or in the oil industry.
I had learned that Williston doesn't provide transportation to school and when I told them that some business people had told me this was a constraint that exacerbated the tight labor market, one young woman said, "there's a lot of women who don't work because their husbands earn a lot of money in the fields; they can drive their kids to school".
Many of the (male) senior students conveyed a sense of proximity to beginning to work in the oil industry. Their awareness of the relatively high salaries they could shortly be earning with, for example, Halliburton (see flyer, above), was palpable.
One young woman, a serious senior, talked about her job at a local Mexican restaurant and how she studies personal finance, asking me if I was familiar with Dave Ramsey, the author of books about debt and wealth. She said she and her friends studied these and that she wished the school taught them more about managing money.
Discussing government regulation I told them that the day before while in an office I'd seen an oil industry magazine with articles about changes in federal regulation, and how Occupational Safety and Health Administration standards are an example of "costs" that must be subtracted from "revenue" to get to "profit".
When I suggested companies could be motivated to invest more in the oil industry (and possibly create more jobs) if OSHA regulations were eased, a young man (a senior), said, "but that's a double-edged sword; what happens to the workers?" and that got a group of them talking about the dangers of a particular kind of toxic exposure, using an acronym they all understood.
The last class I was with turned out to be the same group of students I had met with the previous day. They were mostly seniors and had been enthusiastic participants in the first discussion and, since the idea of communism had come up at one point I decided to show them a quick comparison of communism and capitalism (all value to the workers, no private profit, state ownership) and divide them into groups to debate the relative merits of the two systems. It turned out to be too difficult for the "communist" group to articulate a defense and we ended up having a fun whole-group discussion about how anyone could possibly find communism attractive (they ventured that people who didn't earn enough money might) and what works well and what doesn't in capitalism. These were questions I'd asked them to write about they day before. Here are some examples of what they'd written:
What do you think works well about capitalism?
It lets people decide better with what they want to spend their money.
It allows anyone that wants to be able to make money and own a business.
In most cases everybody is having good stuff happening to them and is getting a profit unless of course your business fails which just means you weren't running it right in most cases.
Everyone could become as successful as they choose it all depends on them.
That you can work hard for more money.
Having the choice of something.
What do you think doesn't work well?
.Some people may not be able to work and get a paycheck because they can't afford to go out and get a job.
Some people pay less taxes when they make more money.
Sometimes you don't get paid enough and can't get anymore money so you just can't put more money into the system.
The government trying to control it all.
Our public school system.
The paying of some jobs, a lot of people risk their life for their job and don't get paid enough.
When businesses don't pay well enough to pay bills and save enough for whatever comes our way.
I am very grateful to Ms. Mitchell and Principal Germundson for giving me the opportunity to work with the bright and energetic students of Williston High School!