Red States: Rich in Votes, Poor in Power
Blue city boardrooms hold more sway over red state policies than their own voters do
By Aaron M. Renn, senior fellow at American Reformer
America’s economic and cultural capitals are the so-called “global cities” like New York and Washington, often described as the “command nodes” of the global economy. They are home to the most important firms and institutions in strategic sectors like technology (Apple and Google in the Bay Area), finance (JP Morgan Chase in New York), higher education (Harvard and MIT in Boston), government (the federal government in Washington), and media (Disney in Los Angeles), as well as leading specialized financial and producer-services firms. These key cities and institutions are typically in very blue cities in solid blue states.
By contrast, many red states have an almost neocolonial air about them, operating at the economic and cultural periphery. Their economies are dominated by natural and agricultural resources, as well as branch plant operations and activities at the lower levels of the value chain. Their rapid population growth—if they have it—is in part from them serving as a demographic relief valve for people out-competed in or priced out of the metropoles; the same function played by Britain’s colonies back in the day.
Oklahoma fits this bill. Gas and oil are leading industries in the state. All of its Fortune 500 companies are in the energy space. Its economy is otherwise dominated by branch plant type operations and companies. Its non-energy headquarters are in non-strategic sectors, such as retail operations like Love’s Travel Shops and Sonic Drive-Ins. It is lacking in nationally or globally important institutions. Its top college is the University of Oklahoma, only ranked 132nd in the country by U.S. News. It ranks 15th among states in population growth since 2020, powered by wide-open spaces and relatively affordable real estate prices.
Oklahoma does have high-value economic activities in aerospace and biotech. It offers a high quality of life, with many of its communities having dramatically improved themselves in recent years. As with moving to America itself earlier in our history, there’s a sense of opportunity and being part of a place that’s on the rise and far from peaking.
At the same time, it is a state economically dominated by energy and out-of-state concerns, and which has few companies or institutions that project economic, cultural, or financial power beyond its borders.
It’s largely the same with my home state of Indiana, though it is much slower-growing than Oklahoma. It is an agricultural powerhouse. It’s the most manufacturing-dominated state in the country, and one that is overwhelmingly branch plant in orientation. It is a bottom-ten state for college degree attainment. Indiana does have some powerful companies and institutions like Eli Lilly, the world’s most valuable pharmaceutical company, and the University of Notre Dame, ranked 18th in the country by U.S. News. But it has far fewer of these than leading blue states and cities.
The fact that economic and cultural power radiates largely from blue states and their global cities means that most red states are structurally weak. They are market takers not market makers. The values of their children are heavily shaped by media and technology developed and controlled elsewhere. They are dependent on out-of-state corporations and money managers favoring them for investment, limiting how much they can defy the values of elite coastal America. This is something perhaps illustrated by the furor over Indiana’s 2015 Religious Freedom Restoration Act, which was neutered by a mass corporate boycott, despite a Republican supermajority in the state house and a very socially conservative governor in Mike Pence. For all their electoral power, they weren’t the proverbial “deciders.”
Unless these red states are able to transform their demographics and economies, they are unlikely to be innovators or disruptors but rather trend followers. They will not be influential in the country at large, and they will be politically limited because of their dependence on the favor of out of state entities.
There are exceptions to this pattern. Texas is large and growing red state with a large natural-resources sector. But it is also the global capital of the energy sector in Houston, making it the hub of at least one strategic industry. It has numerous Fortune 500 headquarters in a wide range of industries. It is attracting the HQs of leading-edge companies like Tesla and SpaceX, and major cultural influencers like Joe Rogan. It has huge amounts of wealth that can be deployed “domestically.” It is actively looking to move up the value chain in areas like finance, where it wants to create a stock exchange to compete with New York. It has its own powerful and unique culture that it sees (and its citizens see) as an alternative to the East and West Coast.
Texas isn’t just a growing place, it’s a place with real leverage and impact beyond its borders. Florida likewise is showing signs of similar growth. But these are not the red-state norms.
It is the nature of the world for there to be hub places and spoke places. The fact that our major hub cities are mostly located in blue states is a product of history, not modern-day progressive politics. New York City has been America’s largest since the very first census in 1790.
And being one of the spokes is not necessarily a bad thing. The average person may well prefer living in a place like Oklahoma or Indiana than a high-cost location like Massachusetts. The northern suburbs of Indianapolis—where I live—may well be the most desirable places to live in the country for most people, all factors considered. But you have to accept that it is largely people in other places, who may have very different values, that will shape your community’s economic and cultural destiny.