Financial History Issue 114 (Summer 2015)

Courtesy of the Center for Western Studies Quillwork by Flossie Bear Robe is an example of reservation-based entrepreneurship, in this case at the Pine Ridge Reservation. are other hotspots of innovation in the Land of Infinite Variety (one of South Dakota’s most apt nicknames). If one or more of those industries suffers, entrepreneurs quickly shift focus and resources and the economy glides forward, the steady tortoise to North Dakota’s haughty hare. The lesson for the nation is that economic freedom works. South Dakota has so many entrepreneurs because the cost of doing business (such as taxes and regulations) is relatively low, while public infrastructure is adequate. State and local governments are relatively efficient because the state’s residents make their elected officials accountable. They even hail their governors and US Senators by their first names and expect them to do their jobs, which at the state level means keeping government efficient and at the federal level means getting as many resources for South Dakota as possible. Moreover, entrepreneurship is to some degree self-perpetuating. The denser the population of entrepreneurs, be they replicative ones merely selling an existing product in a new market, innovative ones selling new products or extractive ones stealing from others (sometimes by engaging in legal rent-seeking activities), the easier it is for those around them, including family, friends and neighbors, to strike off on their own. Most of their ventures will fail, just as Thomas Fawick’s “Fawick Flyer,” an early automobile produced in South Dakota, did. A few, however, will succeed and drive employment and economic growth for years or decades. South Dakotan success stories include ethanol producer POET (which wants 18 FINANCIAL HISTORY | Summer 2015 | www.MoAF.org ethanol subsidies to end because they are propping up inefficient competitors), electronic signage manufacturer Daktronics, high-performance balloon manufacturer Raven and used musical instrument retailer Taylor Music, among many others. All from a state with a population less than that of Erie County, New York (Buffalo and its suburbs). Of course, South Dakota is many times the physical size of Erie County, which suggests the importance of geography in any discussion of real world economies. The third and fourth Dakotas are “East River” and “West River,” terms regularly used by Dakotans to differentiate between the more humid, farming areas east of the Missouri River and the drier, ranching areas west of it. East River is more densely populated than West River and physically,

Financial History Issue 114 (Summer 2015) | Page 20