The Trust-Funder Economy 
By Martin Harris

Back in geography class, a long time ago, I learned that the Appalachian Mountain chain stretches north into Vermont, where it shrinks and disappears. The mountains further south have a long history –Scotch-Irish settlement, subsistence farming, ethanol manufacture (of the potable type), and, of course, recreational spending. The latter phenomenon became noteable in the late 19th century, when railroad magnate Cornelius Vanderbilt bought a few tens of thousands of acres near Asheville, NC, and built a huge dressed-limestone faux-French-chateau mega-mansion which he named, with punnish deviltry, Bilt-More (get it?) at which demesne he could live in conspicuous-consumption ease while spending lots of money earned elsewhere, some of it on the locals whom he employed after buying their farms, to cut his grass and wait his tables.

Ever since, the higher elevations of the Appalachians have been home to retirees and trust-funders: even to day, mega-mansions are being built, some in gated communities, some not, in places like North Carolina’s Blowing Rock, (not even an incorporated village) an hour’s drive north of Asheville, or Henderson County, an hour’s drive south.

Henderson County is particularly interesting because it demonstrates that you don’t need a rail baron’s extraordinary wealth to sustain a local economy on the basis of passive income; the non-working segments of the upper middle class, retirees and trust-funders, can do it on their own, just fine. Indeed, further north where the Appalachians fade away into such insignificant bumps as western Vermont’s Mt. Philo, the same sort of economic base is gaining strength, both political and economic, and even though it’s not yet socially acceptable to recognize the phenomenon in speech or print, it’s by far the fastest-growing (as I have documented in earlier columns on this subject) the most vibrant, healthiest, and brightest-future sector of the rapidly-changing Vermont income distribution.

Admittedly, Vermont has had some previous experience with rail barons and others who came from the cities to spend their earnings, at full-time leisure, in bucolic surroundings: The Webbs of Charlotte and the Billings of Woodstock come mind as 19th century examples, as do the many early 20th century businessmen who came north to play at dairy farming (not them, personally, in the barn, of course) and left behind such memorials as grambrel-roofed stanchion barns and the original campus of what is now Goddard College in Plainfield, before the end-of-the-20’s Crash and the subsequent Great Depression depleted their portfolios and forced them back into the cities to replenish their wealth. Now, the State is seeing a new surge of passive-income folks, and is meeting the phenomenon with a lot of secret welcome and approval and professed objection and denial.

Locals, in general, don’t like it when the wealthier move in among them, and raise the costs of property ownership and living even as they create some low-level jobs and tax revenue, but they have little choice: the phenomenon is sometimes called gentrification, a word which implies both sides of the question. Consider, for example, this definition of North Carolina’s Henderson County in Wikipedia. Was it written by a local? You decide.

"Henderson County is characterized by its exceptionally large retiree population, which is primarily composed of rude Yankees."

Written by locals in northern New England, the word "Yankees" would be replaced by "flat-landers", a similar pejorative intended to describe self-transplanted urbanites who have brought their urban culture with them, and used their political and economic clout to re-shape the pre-existing local culture –rural, agricultural, small-business, low cost-of-living, high personal independence—in ways the locals don’t like but can do nothing about, except to try to cope with them.

What the modern Henderson County proves, by its very presence, is that formerly rural areas can in fact be exurbanized by in-migrant relatively wealthy outsiders, creating a new local economy based primarily on passive income, much to the contrary of protestations that more conventional economic growth is a key element.
 

Martin Harris is a former Chairman of Citizens for Property Rights