6 min read

Which side are you on?

Which side are you on?

Even a cursory read of American political headlines this fall would lead a casual observer to wonder who exactly is this "Joe Manchin" and what the hell does he want? Ongoing negotiations within the Democratic caucus in Washington D.C. over the fate of a large spending bill intended to include a bevy of climate provisions have inspired at times fatalistic, depressed, or else quasi-conspiratorial backlash at the Democratic senator from West Virginia fighting tooth and nail to protect the state's coal and natural gas jobs and industry. In particular, Manchin is solidly against the inclusion of provisions that would set hard targets for clean electricity usage nationally with mechanisms intended to punish companies failing to invest to meet targets established. One of the most common talking adopted by figures ranging from Paul Krugman to Jon Cooper, national finance chair of the campaign group that pushed Biden to run, to Adam Tooze (in a much softer, more contextualized form that captures far more of the local nuance) is that coal jobs represent a tiny or small portion of employment across the state and the fight to save those jobs is about nostalgia, history, or else a strategic choice. It's as if one could reduce the problem for families to a cultural matter or else a material choice locally to keep polluting when these choices are also bound up in decades of federal policy choices and the steady destruction of labor bargaining power. Yet when pulling figures showing that somewhere in the range of just 12-30,000ish jobs are supplied by coal in the state, it struck me that a bit of analytical malpractice was taking place. Take the Russian case:

Extractive sector jobs (including coal) only account for 1.7% of all jobs in 2005 and that falls to 1.4% by 2020, with a gap in the data for 2016 because of the annexation of Crimea and an interruption in the methodology update from Rosstat. Yet we'd never say at the national level that these jobs are just a relic of the past despite their tiny share of the total workforce in the Russian case. So what's going on?

My realization was that West Virginia has far more in common with an emerging market dependent on location-dependent assets, in this case coal and to a lesser extent natural gas, than the implicit tabula rasa developed market capable of completely overhauling its political economy. Coal jobs need not be a large share of employment nor even the best paying jobs in the state to be a fulcrum around which local and regional economies and political coalitions are built. Look at the structure of state revenues for September 2021:

Consumption and income taxes combine to account for about 66% of all revenues, whereas severance taxes (taxes on the extraction of a resource) account for less than 10%. Yet as noted in Tooze's great snapshot of the state's political economy, coal jobs pay best at a time when labor force participation is far below what you'd see in other states due to poor health, addiction, deaths of despair, and structural underinvestment into the state's infrastructure and public goods:

The median income in the state is closer to $26,000 a year, less than 1/3 what coal mining pays. US News rankings place West Virginia dead last nationally in the US for infrastructure using the proxy of % share of roads that are considered in disrepair or else unsafe. That figure rested above 30% at the last measure. Suffice it to say that the industry still holds the glue of the state's political economy together, whether through high wages funding consumption, sustaining local small businesses reliant on the receipts, creating ancillary service sector jobs locally, or else through local and state-level financial transfers depending on sources of tax revenues even if severance isn't a huge driver of the state budget.

In the Russian context, the state's response has been to increase coal export targets to sustain its own coal country in regions such as the Kuznets basin in Kemerovo oblast' in Siberia. The idea has been to freeride off of China shutting down its own mines to buy the area more time to avoid a painful adjustment process. American observers ask the question "why not just invest and pay to undergo a structural adjustment already taking place?" That seems an overly narrow viewpoint to assess the political prospects in West Virginia from. Stephen Kotkin's condensed account of the Soviet collapse and the 1990s Armageddon Averted captures the dynamic perfectly when drawing comparisons between the United States' ability to manage the decline of the Rust Belt and the Soviet struggle to do the same in its own territory. Neither Yeltsin nor Putin were comfortable bearing the political costs of complete marketization and the depopulation of many regions governed by individual politicians and networks that could raise significant problems for them. Most of these regions were home to extractive resource capacity of some kind developed by successive Soviet governments that had so drastically misallocated resources as to have built up industries in a manner that posed a net loss to the budget every year without making up adequate gains. The default consensus of Russian economic policy and politics since the late 90s has been the middle way, to avoid the pain of difficult adjustments that might massively improve efficiency and be optimal from a productivity perspective but nearly unthinkable in terms of the local economic and political effects. In the United States, we've seen the long-running backlash of the immiseration of countless manufacturing communities and areas going back to the 1980s since the 2016 election.

If the leaders presiding over a system that has become increasingly authoritarian and constructed with considerable vertically-organized executive power to take these kinds of decisions don't think twice about avoiding adjustment, why would democratically-elected officials with aging, well-paid constituents in small towns and communities unable to attract larger business investments or compete as an industrial cluster sign their own death warrants? Promising a clean job tomorrow over a dirty job today works wonders if you're a conscientious 20-something who can't afford or doesn't want to flee the state for better opportunities elsewhere and has an interest in addressing the climate emergency as a moral matter. It's politically incoherent if you're 50 years old and have zero prospects of transferring your skills and matching an 80+k salary elsewhere in the state with or without a higher ed degree. Economic development within the United States is incredibly heterogenous and uneven, with state and local political economies hostage to federal dysfunction and the disinterest of political parties as much as gridlocked interests. After all, West Virginia has a history as a hardcore pro-union state that Democrats have steadily abandoned over the years.

That's why over the coming months, I'm going to be putting out periodical pieces that will usually run shorter and be meant to provoke thought rather than definitively answer or explore any given question. My aim is to draw more comparisons between aspects of the political economy of resource extraction and Russia's intersector and inter-regional political economies with what's happening in the United States and elsewhere in the 'West.' Doing so is meant to reveal how much in common seemingly disparate contexts may actually have than meets the eye, and also how to rethink the existing and looming logjams in Western political contexts to push through better fiscal, industrial, and climate policy. The hope is to bring Russian studies of various kinds into better dialogue with current events elsewhere and other disciplinary foci. Hopefully you bear with me.


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