Today Alaska could be described with almost equal accuracy as one of the most excitingly confusing and one of the most hopelessly declining economic areas under the American flag. The characterization will depend on your point of view and the length of your look into the future ...
The upward thrust of growth that carried Alaska from 1939 to the present levels of population and development was spent by about 1953. The remainder of the decade of the fifties saw Alaska engaged in a process of consolidation observable in the continuing growth of service industries, trade, communications, etc., and the elaboration of government services culminating in statehood. The campaign for statehood hid from popular attention the underlying shift in the economy. The dominant and dynamic element had become public enterprise, not private, and this was accompanied by a shift in the foundation from natural resources to construction and services.
The magnitude of the change extending between 1960 and 1961 can be gauged by comparing a few statistical benchmarks. Per capita personal income rose from $2,231 in 1950 to $2,735 in 1960 and $2,718 in 1961. But this was a period of generally rising incomes and inflation, and the change in Alaska has not kept pace with the rest of the United States. In 1950, Alaska's per capita income was 50 percent higher than the US average and 25 percent above that of the Far West ... In 1961, it was only 20 percent above the US and 1 percent above the Far West averages. Military personnel stationed in Alaska were reported at 50,000 as of July 1952 as compared with 33,000 on July 1, 1961. Average monthly employment covered by unemployment insurance remained constant ... but there were significant changes in the industrial composition. Construction showed the greatest drop, from 10,492 per month in 1951 to 5,432 in 1961. Manufacturing employment dropped slightly, despite an increase in pulp and lumber industrial employment, from 5,733 to 5,525 per month, and mining (including oil and gas) from 1,637 to 1,139. Distributive industries, on the other hand, grew in employment from 15,611 to 21,433 per month.
The output of products from natural resources either changed very little (in the case of fisheries, agriculture, furs, and minerals other than oil and gas) or increased importantly. The volume of timber reported as cut within the national forests rose from 50,221,000 board feet in fiscal year 1951 to 354,156,000 board feet in fiscal year 1961 ... Crude oil production rose from nothing to 6.1 million barrels for the calendar year 1961, and natural gas to a volume of 485 million cubic feet. The salmon fisheries showed definite signs of reversing the steady downward trends characteristic of the past decade and a half or more. From a record low of 147,278,000 in 1959, the 1961 catch rose to 283,000,000 pounds ...
It seems safe to assume that the 1960's will see a continuing reduction of the military-construction-government sources of growth and will reflect the inability of older patterns of development to provide a force sufficient to offset this. If one draws only upon the experience of the past, Alaska's immediate future appears to offer a downward readjustment in the superstructure of distributive industries and government services created during the last period of growth and a continuing substantial out-migration of population. This would not be Alaska's first such experience. Immediately following the granting of territorial status ... there followed two and a half decades of decline and stagnation. A new pattern of development had to be fabricated from new materials and new forces before growth resumed. Something of the same sort can happen today if, in looking for new materials, Alaska's natural resources are again considered as suitable for providing a basis for its economy, and the powers inherent in statehood are intelligently used in assuring the flexibility required to capitalize upon these known physical assets ...
We must be conscious of realities in the direction of our own affairs, and aware of the carry-over of irrational beliefs and attitudes which block a more objective approach to discovering or recognizing development opportunities and understanding development problems. There still exists a need to provide the means for more effectively collecting, organizing, interpreting, and disseminating facts in order that future policy might have a sounder basis than the clichés inherited from the past or the influence of narrow special interest groups, and in order that we be better informed in adopting attitudes and taking actions. There is a need for more direct planning by Alaskans ... There must be a more rational use of available capital, public and private, in the furtherance of these reformulated aims of development. The new state must manage its affairs and finances in such a manner that essential public investment in social capital is provided, that other programs serve or at least do not obstruct economic growth, and that the tax program is not a barrier to the inflow of needed private capital investment.
Extracted from The Future of Alaska: Economic Consequences of Statehood, by George W. Rogers.
A version of this article appeared in print in the February 1963 issue of Resources magazine.
