Alternatives to Tourism
Price of Paradise · Hawaii Public Radio · aired 1994-05-01
Guests: David McClain (Distinguished Professor of Business, University of Hawaii); Ira Rohter (Professor of Political Science, University of Hawaii)
Duration: 0:34:26
Note: music outro 582 s

[00:00:03] Randall Roth: Good morning. I'm Randy Roth, host of the Price of Paradise radio show. My guests this week are Ira Roter, a professor of political science at the University of Hawaii, co-founder of the Green Party, and author of a provocative book called A Green Hawaii. David Mclane is the Henry A. Walker Jr., distinguished professor of business enterprise and financial economics and institutions at the University of Hawaii. Besides holding the world's record for the longest job title, David has served as senior staff economist with President Carter's council of economic advisers and has taught at MIT, Boston University and Keio University in Tokyo. Gentlemen, welcome to the Price of Paradise radio show.

[00:00:40] David McClain: Thank you.

[00:00:42] Randall Roth: Ira, first of all, I'm disappointed you're not wearing green, but besides that, how about getting this conversation going by briefly describing the main message of your book?

[00:00:50] Ira Rohter: The main message is first to diagnose what's happening in Hawaii, and essentially, what we have right now is an economy that is dependent on three major sources of money. One is tourism by about $10-$11 billion a year, military, little over $2 billion, and agriculture, about a billion. Unfortunately, this rapid growth in tourism has produced a whole series of undesirable consequences, environmental consequences, an economy which is virtually owned by outsiders, which also creates not only inflated land values, but an economy, service economy, three-fourths of the people are working in jobs which pay below average wages, we have a 40% higher cost of living on the mainland, housing is astronomical. Highest number of working wives in the United States by over 20%. Young people are leaving, literally we're looking at 30, 40% of the younger people are leaving or thinking about leaving, that's an economy, we have a situation with the Hawaiians, which is the health, the the numbers of Hawaiians in prison, the the whole destruction of Hawaiian culture.

[00:01:56] Ira Rohter: And these are all consequences of an economy which I think has gotten out of control, and has, I think, doing a great great deal of damage. And if you think we've got problems now, I always tell people we're only halfway there because we're about six million tourists per year, and we're anticipating approximately 12 million by the year 2005-2010. So that's the problem, and the subtitle of my book is called Sourcebook for Development Alternatives, and I have a lot of very specific things that we can do to change the economy.

[00:02:29] Randall Roth: So for a starting point, you would say our economy is is dysfunctional.

[00:02:34] Ira Rohter: It's dysfunctional for some, for most people. You always have to ask the question, who benefits, who loses.

[00:02:39] Randall Roth: Let's let's see whether David agrees with that starting point.

[00:02:42] David McClain: Well, I agree, Randy, that an economy that has 40% of its gross state product in one industry is a vulnerable economy, no question about that, and this is the kind of economy that we see in a lot of developing countries. And unfortunately we've got a political system that reminds one at times of the kind of political system we see in some developing countries as well as well. The question is what to do about it. My sense is if we can take some lessons from the corporate sector, when corporations look to diversify, they look to diversify in areas that are closely related to their core competence, to spread out from there so that they're not too dependent on just one thing, but they can move into other lines of business that feed on what they know how to do well.

[00:03:24] David McClain: And what Hawaii has learned how to do well over the last 30 years or so is to be a host, to entertain guests. And I think if we were to go away from that in a major way, the standard of living of the economy in the next 5 to 10 years after that move would decline substantially. Certainly there's a problem with people moving away. Certainly there's a cost cost of living problem. But I reject the notion that that's tied to our dependence on the tourism industry, it's more of a reflection of the political environment we operate in.

[00:03:53] Randall Roth: So you would see tourism as as a strength and we should play off of that strength?

[00:03:58] David McClain: Well, it's a strength that we want to in the sense that we know how to be the host for for people. And we want to play off of that strength in the sense we want to diversify in areas related to tourism. For example, in the business convention area, in the sports and health recreation area, in the medical area, that sort of thing. That's the that's the direction we need to go because that's what we do well. And it's a very competitive international economy out there. You go away from what you do well at your peril.

[00:04:23] Randall Roth: Well, that makes sense to me, Ira. What do you think?

[00:04:26] Ira Rohter: Well, I think it makes sense if you're conservative. I think if you look at the question of who benefits and who loses, you discover the statistics that I'm talking about are very valid and important. First of all, I think one of the problems with conventional economics is that it ignores a lot of the most important things in human life. So the conventional economic system doesn't talk about what's happened to the Hawaiians. It doesn't talk about the number of people who have to work, the average family works 100 hours a week in Hawaii and can't therefore take care of its children. So the economy is extremely dysfunctional. I think we need to have a different viewpoint on what an economy means, and it means people must have a quality of life that's more than just going to shopping at shopping centers.

[00:05:06] Ira Rohter: I think we need to talk about mass tourism, which is what Hawaii is now in gripped by, and this is what has now simply bringing more and more people to these islands, less and less of the income that is brought in stays in the economy. My own rough estimates show about half of the income simply immediately bounces right back out or never even arrives here. So what you're getting are more and more and more people coming here, creating massive impacts on the environment, on the human, culture, and most of this money is not really trickling down. And so what we have to look at is an economy that really supports the people who presently live here. And that's where we talk about ecotourism, rather than mass tourism and things of that kind. The present present tourism is killing itself.

[00:05:55] Randall Roth: So you would say that maybe the present tourism is giving us a certain standard of living, but it's not addressing the quality of our lives?

[00:06:05] Ira Rohter: It's destroying our lives. We're running faster and faster just to keep even at the material level, but everything which is valuable in Hawaii is rapidly being destroyed. And people are literally leaving because they're saying not only is there a paradise tax, but this ain't paradise anymore.

[00:06:23] Randall Roth: What do you think about our quality of life and how it relates to our tourism driven economy, David?

[00:06:27] David McClain: Well, certainly, I'd agree, Randy, that the income distribution questions Ira raises are serious and valid ones. The issue is do you cure the income distribution problems by going away from your core competence of tourism, or do you build on it. I'm concerned that if the pie gets a lot smaller, the income distribution benefits of that would be so insignificant because everybody would have so much less, and that's my reservation in that regard. There's no question also that there is has been an increase in overcrowding and that sort of thing from the time, say, 20 or 30 years ago when I know Ira came to these islands. But I would say that the real problem here has to do with the political system. I mean the numbers are, I think, 4% of our land is owned residential.

[00:07:14] David McClain: We have a housing shortage because we choose to have a housing shortage. We have plenty of land, and there's more land coming out of sugar all the time. There's not a problem with places to build housing. The problem is with the political will to create affordable housing, despite all the rhetoric of our political leaders. I would also say that we ought to talk a little bit about moving away from mass tourism. I was recently in Australia looking at what they've done with ecotourism and they've done more than we have. But people who are experts in the tourist industry tell me there that ecotourism, as far as it's developed so far, really hasn't paid for itself. It hasn't satisfied the market test.

[00:07:54] David McClain: And that's interesting because unless a new product can satisfy the market test, it's just not going to be big enough and viable enough to solve our fundamental dependence on on mass tourism.

[00:08:07] Randall Roth: You're listening to the Price of Paradise radio show. I'm Randy Roth, and my guest this week are two professors from the University of Hawaii, political ecologist, Ira Roter, and economist David McClain. Well, Ira, what are some of the solutions? What's what's your vision for a better future?

[00:08:22] Ira Rohter: I think firstly, we need to define what ecocultural tourism means, and I want to make a distinction between a kind of a paint job, which many of the people in the tourist industry have adopted, and what's genuine ecocultural tourism. I think first of all, it's small, it's small scaled. It's essentially inns and breakfasts, bed and breakfasts, it's something which is not engulfing, destroying the environment, but is actually embedded in the environment. I think secondly, it's community owned. It means the benefits stay directly [unintelligible — audio glitch] community, instead of most of the money now being syphoned out by the multinational corporations, the money stays here. It has a number of other characteristics. We import three-fourths of the food that was consumed in these islands. Most of these big resorts do not use local food. They're making some some efforts here and there.

[00:09:15] Ira Rohter: But on the whole, we are essentially part of a world economy, and David has mentioned that and that's I think the real critical issue here. So there is a different kind of tourism, small scale, genuinely cultural, it's not massive. I've talked about cultural cultural parks and plantation facilities and and things of that kind. There is a genuine small scale thing. Most of what's now being talked about by quote, the industry indicates a complete misunderstanding. They think it's something to do with collecting cans and low-flow shower heads.

[00:09:47] Randall Roth: I know you've got a lot to add to that, but I want to break just for a moment and ask David his thoughts about number one, the small scale direction, two, the fact that it would be community owned, and then what I interpret is as a more self-reliant aspect.

[00:10:02] David McClain: Well, with regard to small small-scale tourism, I think it's an interesting alternative, wherever it can be viable. And the issue is whether it can be the the small scale can be large enough, taken together, a lot of small operations, to generate the income necessary to provide an adequate standard of living. Perhaps in a very long run sense, we could transform the economy in that direction. But I think in any sort of realistic political short-run environment, it's very, very hard to get from here to there. With regard to the the issue of self-reliance and community ownership, I think it's important to understand that really any region that's about our size, we're about a million people, in the United States, any region has what Ira has called in his book, a flow-through economy, where it imports and exports a lot.

[00:10:53] David McClain: The multiplier for expenditure, government expenditure, in the Boston area is not very different from the multiplier for government expenditure here in Honolulu. And that's because just about every region there is, is in fact interconnected to the international economy. I don't think it's possible, even given our geographic isolation, which might might make us think it is possible, I really don't think it's possible for a geographical region to shut itself off from the international economy.

[00:11:20] Randall Roth: Let me ask you, is that what we're talking about, Ira, shutting ourselves off from the international economy?

[00:11:25] Ira Rohter: No, I don't think so. I want to say yes and no. The the no part is is obviously not if I'm talking about, for example, I think first of all, we we ought to not define the economy of Hawaii as to be exclusively based on tourism, and as the military base is shut down, we're going to have even a more problem. I think we need to talk about what a really diversified economy looks like, and so I've tried to look at the issue of food, and if you simply grow the food that we consume here, and we can produce virtually everything, we're talking about three to $400 million raw value. If you begin to process that food and sell it not as raw taro, but as poi or as taro chips, you're talking closer over a billion dollars, and if you add in tertiary, that is to say, you know, you hire an accountant who's local, rather than somebody who comes in from Tokyo or Chicago, you buy your supplies locally, you have local manufacturing of farm tools.

[00:12:22] Ira Rohter: You can begin to build an economy that's based not on everything coming in from outside, it can be much more self-reliant. We spend over a billion dollars a year on importing oil. Now more than half of that is for running airplanes, but we're spending over 4 or $500 million a year to import oil to run our lights and this radio station and our cars. That's all money that has to be paid, we have to get the cash to come in before we can buy the oil coming out. This place can be self-reliant in terms of energy and that would save approximately four to $500 million year. So we don't have to have as much money coming in, so you can begin to downsize the tourism industry and unless we do that, we'll continue to destroy this place.

[00:13:19] Randall Roth: And in fact, as I understand it, you would like to see fewer than the number of tourists that we have now. How many fewer?

[00:13:26] Ira Rohter: If you take the the idea that the money that comes in would stay in rather than basically coming through the hands of other sorts of people. I've talked about probably the figure of tourists who were here in Hawaii around the mid 1976 or so, which is around two to 3 million. And that could be people who would come here not because they want to go to Las Vegas and do [unintelligible — audio glitch] , but because they really are experiential, learning oriented tourists, they would love the kind of place we have.

[00:14:02] Randall Roth: David, what do you think? That sounds good, to scale it down, but get a bigger bang from each buck.

[00:14:07] David McClain: Well, let's start with something Ira said a few moments ago, which is the issue of being more self-sufficient in food production. The question I would I would just put to Ira on that score is, why hasn't that already happened? What's getting in the way of that happening now?

[00:14:21] Ira Rohter: Well, I don't expect that the plantation economy, which is essentially export crop-oriented, is at all interested in growing food for the local market. They're essentially growing for an international marketplace. If you're going to do an economy that's based on small-scale family farms rather than than basically corporate plantations, you're going to have to provide land, you're going to have to provide social, you have to provide infrastructure of of education and training and accounting, you're going to have to do marketing. It can be very profitable. You just can't give somebody 5 acres and throw them out there in the in the wilderness. It has to be well thought out and that's I come back to your point about the state.

[00:15:19] Ira Rohter: The state has no idea of how to create family farming, what we call sustainable agriculture. They're still locked into the old period, and that's the basic problem in the state.

[00:15:42] David McClain: Well, my concern is is since is is that these things are good ideas in principle, but you have to ask, will somebody pay to do them. And so far I think what we've seen is that the small-scale family farm idea is not sufficiently attractive from an economic point of view that you can get anybody to do it on a large enough scale to generate enough food grown here. You ask a moment ago about what's feasible for us in terms of a size of a tourist population, let's say two or three million. Well, Australia has two or three million tourists right now and that country of 17 million seems to get along just fine with two or 3 million tourists.

[00:16:20] David McClain: So it's certainly conceivable that any particular geographic locality doesn't have to have the six or seven million that we have. My concern here is that standard standards of living that currently exist with all their unfortunate side effects, those standards of living would diminish pretty considerably if we tried to take 2 or 3 million tourists out of the economy.

[00:17:05] Randall Roth: You're listening to the Price of Paradise Radio Show. I'm Randy Roth and my guest this week are Ira Roter, author of the book A Green Hawaii, and David McClain, an internationally recognized scholar and economist. Well, Ira, I know you've been critical of our present political structure and you've indicated that the community needs to somehow be empowered. How do you see this happening?

[00:17:26] Ira Rohter: This is really the nut that has to be cracked. There are many, many solutions to all the problems I've talked about. We have state regulatory agencies and bureaucracies and leaders and people in the private sector who are really committed to doing things as as it was done and has been done forever. And so that whole capstone on progressive ideas really has to change. We are at I think an important junction point. There was an important revolution that occurred here in the early fifties when the Democratic Party took over the political structure and and essentially moved us from a plantation economy into tourism, which was the way to first diversify the economy. But I think it's become somewhat like cancer or like bamboo. It has just sort of grown and gotten out of shape.

[00:18:23] Randall Roth: Is is the point that tourism is is okay in moderation, but it's just gotten beyond that?

[00:18:29] Ira Rohter: Yeah, it's essentially, people have, there are two things to it. One is the old money and power and corruption, and I'm not sure we're much more corrupt than any place else. I grew up in Chicago. But what I'm really stunned with is the complete absence of vision of how to do anything different at the highest levels in the state government. I've been working on energy issues and there are many, many good studies of how we could move us into a modern advanced kind of really soft reliant on energy with energy efficiency and alternative fuels. It stops at the top. It stops at the governor and it stops at his his directors of these various departments.

[00:19:11] Randall Roth: Let me see if if David agrees with that.

[00:19:13] Ira Rohter: Well, I have to say there's a lot of truth in that. There's um uh I mean, my sense is that um there there is a lack of vision in our political leadership has been uh for some time.

[00:19:25] Randall Roth: I think it comes from the fact that things have come to us very easily over the last two or three decades. Um, we have had a fairly easy time of it, an economy that would grow at 6% per year because frankly, the product we were selling in tourism was a unique product, uh, in demand throughout the world.

[00:19:41] Ira Rohter: That that often happens in single product economies. Um, if if uh the market is good for copper or bananas or whatever, uh the political elite that came to power because of the control of that uh particular product is uh tends not to to become sophisticated and be able to think about alternative futures.

[00:20:04] Randall Roth: I know in Massachusetts, uh when I came, uh this state was uh very strongly dependent on high-tech and particular main main frame computers, and it was very much a one-party state. And when the main frame computer market uh went bust in the late '80s, um the state had really never had a debate on how to do things differently. Um, and it it uh struggled and continues to struggle a bit.

[00:20:26] Ira Rohter: I think that's the concern we we both have here for Hawaii, is that until very recently, there's not been any significant debate about alternative futures here in the state.

[00:20:35] Randall Roth: Ira, how do we turn that around?

[00:20:38] Ira Rohter: Um I I think you have to turn it around by uh essentially politics. And people ask me, uh, you know, what are you writing? And I'm saying, I'm not trying to write anymore. I'm trying to make this happen. And I'll give you a real example uh in the on the on the big island, Kauai.

[00:20:53] Randall Roth: It's a rural area. Um there are lots of people out there who are business people, there's a plantation which is closing down. And the state came up with this concept of the space launch facility, a thing they called the spaceport. And it's something that nobody really wants it except the one large land owner.

[00:21:09] Ira Rohter: Um but the community doesn't want it. And what the community wants instead is what we call community-based economic development. They want to develop a dairy, they want to develop some farming, they want to develop eco-cultural tourism, they want to develop a business center. Uh there isn't a single Xerox between uh south between Kona and uh Volcano.

[00:21:28] Randall Roth: Uh a whole lot of things that you and I would agree upon, and the state kept wanting this this bizarre thing called the spaceport and they spent several seven million dollars on it. They formed a community-based economic corporation there. It's called the Ka-oo. Ka-oo economic development. The state just couldn't get anything from them.

[00:21:46] Ira Rohter: Number one, you have to stop the spaceport. We simply had to say this is unacceptable. And so that's happened. And uh we've been lobbying down there. We've been trying to get bills passed in the legislature. We've been trying to get some money to set up a small economic development corporation. They want to do maka hiki, they want to do this and that, and nobody's listening here.

[00:22:05] Randall Roth: That's the problem. And there's a tiny bit, there's a small there's a small division in in DBED that does this, but on the whole, we're still doing the old stuff. And I think David said it right quite correctly, there's simply an absence of competition of fresh ideas and we need politicians who will speak freshly and not the same old blah, blah, blah. What do you think, David?

[00:22:25] Ira Rohter: Well, my um my bugbear is uh not the Ka-oo spaceport. I happen to be a fan of that venture, but uh it's the Hawaiian Air bailout. Uh, what a silly thing to do to uh give loan guarantees to uh to bail out an airline uh in that situation. Uh I know the arguments that were made before our state legislature was that uh uh these uh these men and women that work for Hawaiian Air wouldn't uh have any jobs.

[00:22:51] Randall Roth: But the truth of the matter is if the market can support enough air travel, uh a United, an American, a Delta, any of those would come in and run inter island air service. In fact, United wanted to before they were scared off a couple of years ago. That whole mentality of uh of preserving the status quo of uh protectionist mentality is really what it is, um is a mentality, I think, that's destructive for the state.

[00:23:13] Ira Rohter: Yeah I'm sitting here thinking if if I were the governor, I'm not sure what to do. Ira would suggest one approach, David another one. Um where do where do we go from here, Ira? How about David?

[00:23:24] Randall Roth: Well, I let me just say that uh I guess historically, if you were the governor, you wouldn't have had much opportunity to to listen to the citizenry, debate this. And I think the encouraging thing [unintelligible — audio glitch] has happened, I think largely as a result of the recession, is that ideas are bubbling up to the surface. Um we're making more demands in this election campaign of uh of the candidates uh to be more explicit, uh as you yourself have said, uh not just holding signs on the highway, uh but actually talking about real issues, and I think that's essential.

[00:23:57] Ira Rohter: Ira, we're almost out of time. Anything that needs to be said that hasn't been said?

[00:24:02] Randall Roth: I I think the solutions are there, and one of the things I've seen in the area of housing and in energy and environment is that you get all the people together who are called stakeholders, and we hammer out in six months, we came up with some very good bills that were, I think, compromises, but the environmental community, the energy community, everybody except one electric, um agreed these were good things to do, and I think we could put together the economy, not, you know, long-term philosophically, but I think we would agree on a lot of immediate steps.

[00:24:28] Ira Rohter: And that's what we really want to do, and I would say that's the essence of the green uh campaign is is going to be, let the people participate in the decision-making process and and listen to the people and not continue to ignore them, which has been [unintelligible — audio glitch] political process in the state for the last 40 years.

[00:24:44] Randall Roth: Thank you, gentlemen. My guests this week were UH professor of political science, Ira Roder, and UH distinguished professor of business and economics, David McClain. This week's show was produced by Susie Roth, with technical assistance from Mark Wagner. Next week my guest will be Democratic State Senator Matt Matsunaga and Republican representative Barbara Marumoto. They'll share their thoughts and feelings about this year's legislative session. You've been listening to the Price of Paradise Radio Show. I'm Randy Roth. Aloha.