Tribute to an Oregon Visionary: Ed Whitelaw

Ed Whitelaw was a disruptive visionary. Though he recently passed away, his vision must live on.

John Tapogna is president of ECONorthwest, an economic consultancy founded by Ed Whitelaw in 1974.

Image via ECONorthwest.

It can be a burden to see things before others do. Seeing the unseen, and acting on what you see, is disruptive. Ed Whitelaw was a disruptive visionary.

The venerable University of Oregon economist, who died this month, always had his eyes fixed on the future. And unlike many of his peers, he saw the future in decades rather than quarters or years. He looked beyond business cycles and had no patience for short-term forecasts. He was looking where others weren’t.

Whitelaw’s unwavering long-termism made him a trusted advisor to governors, a successful consultant, and a highly sought-after teacher to more than 10,000 students during his five-decade career at the university.

What did Ed Whitelaw see?

When he arrived in Eugene in the late 1960s, the timber industry was the driving force of Oregon’s economy. Since the 1940s, timber had consistently employed more than 70,000 workers and paid wages 30 percent above the statewide average. Timber-related work existed in almost every corner of the state, and Portland was home to several of the industry’s corporate headquarters. The economic and political tables were tilted hard towards timber.

Until then, Oregon’s political and business elite viewed trees like Kansans viewed wheat—a crop to plant and harvest. Whitelaw, born on a Kansas farm, recognized the difference between wheat and trees. People are drawn into the deep beauty of the woods. Unlike wheat, trees have value if they are left standing. Whitelaw knew Oregon’s stunning landscape, if protected, would be key to the state’s economic future.

At the same time, Whitelaw noticed Americans were increasingly mobile. They were migrating to places they wanted jobs to be, not necessarily where the jobs were. Sometimes they even brought jobs with them. Workers, especially in the growing high-tech sector, were showing strong preferences for natural amenities—mountains, coasts, clean streams, temperate climates. And they were accepting lower wages to live near them.

Whitelaw didn’t have a name for this wage-foregoing phenomenon at first. It was as if workers were getting paid twice—once from their employer and once from the natural beauty around them. He tried the “two-paycheck theory,” the “environmental paycheck,” and the “paycheck from God.” He eventually landed on “the second paycheck.”

He carried the theory onto the frontlines of the Pacific Northwest timber wars and the fierce debates around management of old-growth forests and protection of the Northern Spotted Owl. Whitelaw didn’t consider himself an environmentalist but argued that protecting the owl and its forest habitat aligned with the state’s long-term economic interests. The old growth forests had become more valuable as producers of scenery than producers of wood. In his view, the region was in the midst of a painful, but unavoidable, transition. “We used to call it progress,” he said.

Timber industry advocates attacked his analyses as “lunacy and fantasy economics” and labeled him a “heartless community assassin.” Opponents ridiculed his “second paycheck” theory and dubbed him “Eat Trees Whitelaw” because, they argued, if you don’t get your first paycheck, you can’t eat. The U.S. Marshals Service feared the attacks would go beyond name calling and assigned him a bodyguard when he testified at a federal hearing.

Timber wars were at the center of national politics. In April 1993, a newly inaugurated President Bill Clinton made good on a campaign promise and traveled to Portland with half of his cabinet for a high-profile summit. “Some mysteries are going on in the Northwest economies,” Whitelaw told the new president. “CEO after CEO will be speaking to their ability to attract highly educated, technical professional personnel at less than national market rates because it’s a nice place to live. We don’t fully understand that dynamic, but it seems to be pretty strong,” he said.

Whitelaw’s mysteries—mobile workers with strong preferences for nice places to live—were linked to the advent of what social scientists would later call the “knowledge economy” –an era of accelerated scientific discovery and automation coupled with a decreased reliance on physical labor and natural resource extraction. When he spoke to President Clinton, Oregon’s forest and high-tech sectors were equally sized—each employing about 70,000 workers. But they were headed in opposite directions. Over the next decade, the high-tech sector gained 30,000 jobs while the forest sector lost 10,000. Federal land restrictions designed to protect owl habitat played a role in the forest sector’s job losses but so did mill automation and competition from the Southeastern U.S. and British Columbia.

The future unfolded as Whitelaw predicted. A well-managed natural endowment attracted a broad mix of engineers, scientists, designers, coders, brewers, vintners, restauranteurs, artists, actors, outfitters, and more. During 1990-2020, Oregon’s jobs and population grew by 50 percent while the once-dominant forest sector settled into a supporting role. Tragedy and trauma ensued in isolated mill towns, but a steady flow of migrants into rural Oregon prevented the economic calamities experienced in parts of the Midwest and Plains.

And now Oregon enters a new era with people more mobile than even Whitelaw could have imagined. The pandemic has accelerated the use of videoconferencing, telemedicine, and online shopping and has provided even more flexibility in the choice of where to raise a family, work, and grow old. That, in turn, puts an increased premium on nice places to live. These advances have boosted the value of our natural inheritance and has strengthened our comparative advantage relative to other regions.

“An attractive environment is money in the bank,” Whitelaw said 30 years ago. That bank account is much larger today and will need new stewards. Oregon has lost a visionary but can’t afford to lose his vision.

***************************************

Editor’s Note: If you had the pleasure of knowing, learning from, or laughing with Ed, please leave a comment below. Like John and so many others, I mourn the loss of a friend and father-figure. Love you, Ed.