Sunday, October 14, 2007

An extreme example of lack of rural economic disversification

This Sacramento Bee story about a "company town" under siege as its owner faces bankruptcy highlights the economic vulnerability of rural places in an age of globalization. The town of Scotia in Humboldt County has a population of 800. The entire town, including all housing is owned by Pacific Lumber Company, which founded it in the late 1800s. Even the local fire department is run by Pacific Lumber, not by public funds. Now Pacific Lumber is essentially trying to sell the town as part of its reorganization plan to emerge from bankruptcy.

Sometimes it is hard to understand how globalization plays a role in changing remote places like Scotia that have been reliant on natural resources and raw materials such as timber. This tale of economic restructuring is almost certainly linked to price pressures that are associated with globalization -- unless, of course, you believe the company's owner, who blames it on the environmentalists.

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