Dear Mr. Gibson:

Welcome back to Montana and to your new position as the state's Chief Business Officer. I offer congratulations - and condolences. The congratulations have strong foundations. You were selected from hundreds of candidates and have a wonderful opportunity to realize your personal goals while helping others achieve theirs.

While U.S. Army Ranger training is extremely demanding, the rigors you faced will pale in comparison to those in Helena. Your new job is tougher - in part because those under whom you serve will not measure up to the Rangers' leadership standards.

Yet, you have lots of advantages. You and your wife are from Kalispell, not outsiders. Second, nearly everyone admires the Rangers. Those who don't will respect your Harvard degree (on an ROTC scholarship) in applied mathematics. Your MBA from Dartmouth further testifies to your abilities. You also succeeded in two of America's well-known companies, Frito Lay and Weyerhaeuser.

And Montana is poised for huge success. Intelligent, well-informed people realize that our future does not lie in extractive industries or agriculture. Traditionally, our economic weakness was linked to our status as a colonial economy ripe with corrupt officials controlled by remote interests. That era is over. Global forces are shaping new economic landscapes favoring knowledge and information-based industries. In sum, the state's dependency on exploiting nature is over.

Montana's attractive environment has tremendous economic value. Outside magazine just included Missoula one of America's top ten towns under 100,000. And people within Montana ranked Bozeman number one. Roadless lands, wilderness, free-flowing rivers, national parks and forests, and healthy wildlife habitat stimulate much of our new economic activity. These amenities attract entrepreneurs. For example Bozeman, a town of 32,000, has 60 high-tech firms, such as Montana BioResources, Inc. Freed by FedEx and the Internet, ambitious, successful people are attracted by our high environmental quality and cultural amenities.

Well-funded and entrepreneurial universities also make a huge difference. We need not replicate a Cal-Tech or Chicago, but we can capitalize on existing institutions. For example, Boeing and Microsoft recruit highly from Montana State's engineering and computer sciences departments.

However, our governor jeopardizes Montana's chance for economic growth. She looks primarily to the past. Montana's traditional industries -- farming, ranching, mining, and forestry -- face rough times. Unfortunately for my many friends with a history and culture within these industries, the future is grim. But denying and delaying the consequences of these cultural, political, and economic shifts is irresponsible.

Although Governor Martz made the 1964 Olympic speed skating team and was crowned Miss Rodeo Montana in 1963, she missed Phi Beta Kappa. She apparently doesn't yet understand the difference between being pro-business and pro-market process. Your admittedly tough assignment is to make the distinction and explain the policy implications. Don't give cartoonists an opportunity to portray our governor as a former buckle bunny turned lap dancer for business.

The Governor fails to understand that the market is an evolutionary game. Like an ecosystem, it's complex and complicated. Entrepreneurs scan the globe for opportunities to create value. They've recently discovered Montana.

Successful economic planning is impossible. Your office can't predict who will succeed. Thus, tax breaks to attract an industry are highly speculative. These were Friedrich Hayek's seminal ideas in 1945 and led to his Nobel Prize in 1974.

Over time America has become ever richer. As it does, the marginal value of money decreases and people search for non-financial rewards (e.g. recreational time with family). Thus Montana is exceptionally well-positioned. Our strengths include good schools, low crime, beautiful scenery, and accessible amenities. These attributes, combined with ever more mobile capital, present huge opportunities for economic progress.

Your office should foster entrepreneurship not court industry. Constructive acts include substantial investments in higher education and fundamental tax reform. Relaxed environmental standards, high marginal income and business property taxes repel entrepreneurs. Reducing Montana's income tax rate, the highest in the country, is a better economic development plan than chasing industries.

So welcome back to Montana, but it's not the state you left. Ingredients for success have changed. The new keys to economic progress are qualities that attract and retain human capital. These are: environmental amenities, quality education, and low barriers to entrepreneurship. Our tradition of extraction and exploitation is obsolete and dysfunctional.

I enjoyed talking with you and hope you found our website helpful.

Best wishes,

John A. Baden, Ph.D.