Socialism in North Dakota
Posting this because, though everyone has heard of the state bank of North Dakota, you might know about the state owned flour mill. Even Republicans in ND seem to be inclined to not mess with success. I find it puzzling that at the national level they want to privatize everything, but not in their own state. I mean, Social Security is every bit as much a success as their state bank and mill.
http://www.nationofchange.org/2015/04/13/one-of-americas-reddest-states-embraced-socialism-to-fight-robber-barons-and-bankers-heres-why-they-arent-looking-back/
North Dakota’s grain farmers had had enough of out-of-state elevator men and railroad bosses shorting them on their grain, and were fed up with out-of-state bankers from Minneapolis/St. Paul charging them hefty interest rates. In 1915, A.C. Townley led the organization of the Non-Partisan League (NPL), with the goal of taking over North Dakota’s economy through publicly-owned industries. Within a year of formation, the NPL recruited over 26,000 members. By 1918, the NPL’s engaged membership mobilized for a huge electoral victory – electing a governor, and majorities in the state house of representatives, the state senate, and the state supreme court.
In 1919, the NPL-dominated government passed three major reforms: one that formed an industrial commission to run state-owned industries, and two other bills that created those industries. The Bank of North Dakota (BND) Act created the nation’s first state-owned bank and the publicly-owned North Dakota Mill and elevator. The third bill provided the initial financing for both the bank and the mill. All three bills were introduced and signed into law within a month’s time.
The North Dakota Mill opened in 1922, and since then, it’s grown to become the largest grain mill in the U.S., providing 135 stable jobs and producing 3.8 million pounds of flour every day. In 2014, the mill delivered its second-largest profit ever at $13.3 million. In the last 43 years, the mill has produced $155.6 million in profits — $87 million of which has gone right back to the state of North Dakota to be reinvested in public infrastructure. A $27 million expansion of the mill will be complete by Fall of 2015, which will likely increase its capacity for both profit and state reinvestment.
The BND, by design, would house the state’s tax revenues and reinvest it into developing public infrastructure. The bank was also designed to provide affordable loans with low interest rates to homeowners and farmers. While the BND first struggled to sell the first load of bonds required to provide loans, suffered greatly from the Great Depression, and was almost privatized in the 1980s when the rest of the country was swept up in deregulation fever, the BND remains a staple institution today. The bank didn’t engage in the risky derivatives trading that crashed the rest of the financial sector in the late 2000s, and its executives are state employees that earn a respectable but not excessive salary, and are thus not incentivized to make high-risk bets with deposits to enrich themselves.The results of North Dakota’s experiment are clear: socializing a state’s key industry and chartering a state-owned bank are great for a state’s economy and its citizens. By cutting out profit-driven middlemen and simply focusing on delivering a product to citizens who need it, states could become industrial titans of the commons, creating jobs and additional tax revenue to provide even better public services and infrastructure. If North Dakota can do it, so can we.
