The first thing they are going to have to decide is what kind of farmer they want to be. There are basically two options: The top fifth of U.S. growers (fewer than half a million individuals) run large, efficient family farms as commercial enterprises and produce 85 percent of our agricultural output. Most of the rest are part-time farming families who have found agriculture a good complement to a day job, an off-farm business, or a spouse's salary. Farm labor is what economists call "lumpy"—there are periods when you wear itself out, then long stretches where you can do nothing at all. That can fit well with another job, even when the farming is done on a reasonably big scale.
Big boys and part-timers alike have family incomes above the national average, but they earn them in very different ways: The first devote themselves entirely to agriculture and bring home an average of about $100,000, while the latter derive about three-quarters of their income from nonfarm sources. (In between the commercial and the part-time farmers are very small scale full-time farmers, who are often distressed and rapidly disappearing.)
Even farm families that are fully dependent upon agriculture are finding it advantageous to diversify their income sources. One example would be the Baxter operation located near Stockley, Delaware. Jim Baxter is a jowly, unpretentious man, feeding a smoky trash fire and loading junk onto a truck when I find him in his barnyard. The day before, a tornado had touched down and destroyed part of his grain bin and elevator, a reminder of the unpredictable natural environment within which farmers work.
"There's been a Baxter farm here since 1903," he explains, "but it's changed a lot over the years." With his two sons, Baxter started a farm-machinery parts business on the premises to supplement seasonal crop income. They also put up a string of chicken houses.
The modern broiler industry was born nearby, in the area where Delaware, Maryland, and Virginia meet, and it has broken into specialized components on the way to becoming a super-efficient business. Large companies like Holly Farms and Perdue Farms Inc. supply day-old chicks, special feed, and technical advice to growers, and they buy up the mature birds for processing and marketing. In between, nearby farmers provide the careful attention and efficient husbandry needed and, in the process, generate a predictable cash flow.
Every few weeks, flocks of 50,000 to 100,000 birds circulate through the Baxters' controlled-environment chicken barns. Though they require careful watching, the chickens remain a sideline on a relatively small piece of the family land. Between the chickens, the parts business, and the older grain-raising operation, Baxter Farms has become a diversified operation, with labor and financial demands smoothed and balanced out.
A more full-blown example of agricultural specialization is Harry Mitchell. Near Berlin, Maryland, Mitchell owns a compact 101/2 acre spread. On that tidy bit of carpet he has put up a half dozen chicken barns that 105,000 fowl call home. Every few weeks the companies with which he has contracts bring in a load of peepers and take away a load of squawkers. With his feathered guests zipping from infancy through adolescence, to prime McNugget-making age in a mere 49 days, Mitchell can run five-and-a-half flocks through his operation every year, a staggering total of more than half a million birds (let's say 3.5 million dinners). And aside from a few guys he calls in to wave their arms and make fox noises when it's time to herd a mature flock into the processing plant's trucks, he does it all alone.
Despite the tremendous productivity they make possible, the new patterns in broiler raising are controversial with some farmers, who consider contract-growing just one step above being a hired hand. One worry is that the trend could ultimately turn some farmers into little more than assembly line workers without much independence. Not all farmers, though, want the responsibility of running a complicated top-to-bottom business. Many complain about the heavy capital investments that farming requires today, the difficulties of managing so many different facets of an operation, and the crazy swings they face in commodities markets.
To a considerable extent, contract growing relieves farmers of these burdens. It brings infusions of money, machines, and management help. It moves price risk to the supplier/processor's shoulders. And it can make a bigger pie for everybody, because integrated processors like Frank Perdue can do sophisticated marketing and advertising that individual farmers cannot easily get into.
Farming was dying out in the Eastern Shore counties around Mitchell's place when the eight integrated companies reorganized local chicken production. Today, the region is the most concentrated broiler producing area in the United States, sending 150 tractor trailer loads of poultry across the Northeast every day, providing a huge market for local corn and soybean growers, and spreading ripples of prosperity through a territory that was once one of the poorest on the north Atlantic seaboard.
Rather than just concentrating on one stage of the growing process, some farmers are capturing more of the agricultural profit that once went to middlemen. Richard Justiss and other grain farmers interviewed in this series have put up elevators on their places and started storing and trading grain. Wheat grower David Magness got a spraying rig and buys wholesale chemicals so he can do for himself what he used to hire out. Vegetable farmer Charles West built his freezer a few years ago and now not only runs his own stuff through it but also packs branded vegetables for wholesalers and retailers. The freezing plant now generates more than twice as much income as his farm.
Leonard Martens is about as near a polar opposite to the empire-building Charles West as can be imagined. But using his own diversification strategy he, too, has stayed in the farming business long after many of his neighbors have moved on. A kindly man with a gently rounded belly and a big sense of humor, Martens was originally an egg farmer. He was squeezed out of that by a drop in U.S. consumption and the increasing decrepitude of his laying sheds. Today, he markets and delivers in his old van the eggs a partner produces. Though it is clear Martens hasn't made much money farming for some time, his egg partnership and the cattle he runs on his pasture land allow him a living.
The slanting spring sun ricochets off a long necklace of "Property Available" signs on both sides of the road leading to his place, and it obviously gives him some satisfaction to have kept intact one of the largest pieces of contiguous land in his area. Despite some tough scrapes, Martens has made adjustments and preserved his way of life without accepting a single government subsidy. He points out with quiet pride that all of his cattle are registered Beef Master hybrids, beautiful light chocolate animals, with sturdy young calves thick among them.
Recognizing that it can be hard to make a living just producing bulk commodities that are in chronic surplus, farmers have long tried to add value to their output by feeding some of it to animals who transform it into something pricier. A few head of cattle can serve as a kind of shock absorber on a small farm, because they can be grazed on fallow land, damaged crops, or harvested stubble, "finished off' when grain prices are low, and sold when beef prices turn favorable. Likewise, a dollar's worth of corn thrown to a piglet can bring a farmer more than two dollars' worth of hog six months down the road.
Other kinds of specialization and "value-adding" are available to farmers who want to stay in agriculture but are feeling squeezed out of traditional farming. Instead of trying to wring ever higher yields of unprocessed food commodities from their land, some small farms have turned to producing low volumes of high-quality specialty products like pond-raised trout, hydroponic vegetables, game meats, unusual cheeses, seasonal fruits, or local wines.
This usually requires getting into the business of marketing and selling. Some high-value farmers run their own stands or stores, deliver to regular buyers at urban restaurants or gourmet food shops, or run phone or mail-order operations. Their goods generally command price premiums over competing mass-produced products.
This strategy has made a big difference in some parts of the country. The number of farms in several northeastern states actually rose during the 1980s. Maine added 400 farms in five years. In Massachusetts, the number of farms went up by more than 10 percent in just four years. The number of farms in New Jersey rose 9 percent from 1982 to 1987, to 9,032. Most of these new operations, and many of the older existing farms in New England and the Atlantic states, prosper by running diversified low-cost operations, by taking advantage of their proximity to major urban centers, by selling direct to consumers, and by concentrating on under-served niches for high-value products.
"Niche farming is particularly important if one views agriculture from the point of view of practitioners rather than acres," says Bill Baumgardt, director of agricultural extension services at the Purdue Agriculture School. It can occupy lots of farm labor even while the vast bulk of land remains devoted to conventional husbandry. And niche farmers need not turn out a brand new, or especially exotic, product. Soybean farmers, says Baumgardt, may simply concentrate on the slightly different varieties that are exported to Japan for tofu making. Some corn farmers may plant only the strains that are desirable for industrial starch uses.
Missouri corn farmer Blake Hurst hopes to break out of the bulk commodity strait jacket by relying on a commonplace yet nontraditional crop. He and his bright, high-energy wife Julie have just built four large greenhouses behind their home and recently bought a flower shop in a nearby town. They plan to run a bedding and ornamental-plant business, selling to local homeowners. They hope that business, plus perhaps some journalistic income from Blake, will allow them to get out of the row-crop trade.
Hurst writes that some of his Corn Belt neighbors are venturing out in similar fashion to put their family finances on firmer, more independent footing: "West of town, land that used to grow the best corn in Atchison county is now planted to potatoes, a crop that doesn't depend on subsidies, but rather on America's appetite for potato chips. North of town, some neighbors are experimenting with broccoli, another nonsubsidized crop. Further north, a group of farmers' wives distribute their handsewn clothing to yuppies nationwide."
Not all diversification ventures will succeed, and they can be oversold. "Some of these things come and go. I can remember talk about rabbit farms, worm farms, you name it, and none of them took," warns Martens. Adds Iowa extension agent Mike Duffy, "There is a lot of room for more diversification on Iowa farms—an acre of strawberries, three acres of blueberries, whatever. But high-value crops have higher variances. Only if a farmer has the labor and management skills, and if he markets the crop before it goes into the ground, is it a good idea."
"I know a guy who planted 100 acres of asparagus without giving a thought as to how he was going to sell it," reports farm consultant Eldon Hans. "He ended up plowing 85 percent of it under." Says Hurst, "We're not going to solve the farm problem by everyone growing shiitake mushrooms. But people are trying new things, and efforts to broaden the agricultural economy will eventually pay off. I know our greenhouse is growing rapidly and helping us a lot."
Other families eager to stay in small-scale farming have turned to what Missouri Farm publisher Ron Macher calls "agripreneurship." Writer Anita Evangelista, who herself lives on a farm, describes how one Missouri farm wife signs up families in her small town on a "subscription vegetable" list. Every couple weeks, she delivers 10 to 20 pounds of just-picked veggies to each home, taking away $15 at each stop. She hopes to have 25 or so enrollees next year (that's $750 a month), and she does it all on less than four acres. A six-acre family operation in Maine provides 100 families with a full spring/summer/fall array of garden crops for about $320 each annually. Comparable crops, less fresh, would cost about $550 in the supermarket.
In the mid-l950s, Robert Bitz began to focus his family's small central New York farm on turkey raising. Today, the operation, thriving and no longer small, is both remarkably specialized and astonishingly complete in its field-to-dinner plate production cycle. Robert and son Mark supervise the growing of corn on more than 600 acres of land, the combination of that corn and other ingredients into turkey feed at the farm feedmill, the raising of 400,000 turkeys a year, and the processing of all of those gobblers right at the farm plant—not only as roasting birds but also into a growing range of specialized products like turkey pastrami, smoked turkey, and sausage.
The Bitzes market and transport their products throughout upstate New York and run a broad promotional effort for their own Plainville Farms brand, including a popular visitors center and an ambitious advertising campaign with its own cartoon character. As if that were not enough, the farm also operates two restaurants—one sit-down, one fast-food—that serve prepared Plainville Farms products directly to the public. In addition to allowing careful quality control at each step, this remarkable string of value-adding processes lets the farm capture for itself more of the income that derives from its product.
Although many farmers can prosper by selling more effectively in their own backyards, most of the future demand for U.S. agricultural products will come from abroad. Purdue University Agriculture Dean Robert Thompson argues that American farmers "have viewed the export market too often as a place to get rid of transitory surpluses, not as a regular and planned outlet for a significant fraction of their product."
To build export markets, U.S. agricultural groups need to further develop offices and long-term relationships abroad, and to help American farmers tailor their output to the needs of other countries. The Third World in particular offers enormous export potential. As people become wealthier, they sharply increase the amount of meat in their diets, and those animals must be fed grains and protein meals that in a great many cases can be supplied at low cost only by American growers.
Another area where farmers need to become much more active is in what might be referred to as private price insurance. Farmers have price problems: They sell an undifferentiated product into a market made up of thousands of small suppliers all selling the same thing. As a result of this intense competition, they have no control over what price they get. And in some cases the price shifts dramatically in the brief interval between planting and harvest—turning an expected profit into a loss.
Insulating farmers from some of the shock of these price swings has long been a major aim of government farm programs. They have done so fitfully, with many strings attached, and at great cost. But for most of this century farmers had few alternatives. Fairly recently, however, a host of new trading institutions and pricing mechanisms for farm products has sprung up, giving farmers a chance to shift much of the risk inherent in cultivation onto their customers and onto financial speculators.
Futures markets (which allow farmers to sell their crops in advance of harvest, locking in today's price for goods that won't be delivered until later), commodities options (which for a slight premium give farmers the right—but not the obligation—to sell their crop in the future for today's price), and various forward pricing contracts (which do similar things) are becoming easily accessible. Farmers now have the chance to lock in their returns months before harvest, removing much of the terrifying uncertainty that has long dogged farming.
Unfortunately, only a minority of farmers have bothered to take advantage of these new possibilities. "I would guess only 10 to 12 percent of farmers are hedging on traditional major crops like corn, beans, and so forth," says Terry Francl of the American Farm Bureau. "If you include contracts at local elevators and so forth maybe one third to one half of all crops are priced before harvest."
Farmers have real economic power in commodities trading, if only they develop the knowledge and confidence to exert it. In the 1988 Iowa State University Farm Finance Survey, farmers who hadn't used a forward contract over the previous two years were asked why not. Fifty-four percent reported that fear or lack of information held them back, 46 percent said they "didn't have enough time" to do a good job, 68 voiced the opinion that futures markets carried "too much speculation and manipulation," and 12 percent said such tools were "morally wrong."
"Farmers are already speculating every time they put a seed in the ground, they just aren't acknowledging it. They're flying blind," says wheat grower Magness. "I started getting the Wall Street Journal three years ago and following futures markets closely every day. It makes me feel a lot better to have my crop hedged. We ought to be as excited about commodities options contracts as we were about hybrid corn, but few farmers are." Commodity options, as opposed to futures, notes University of Maryland economist Bruce Gardner, duplicate "the kind of protection that farm programs give—a price floor but no limit on profits from high prices."
But, he says, "Sometimes farmers will say that selling forward is just as much a gamble as taking one's chances on the cash market. If you sell forward at $8.00, and the price rises later to $10, you have gambled and lost. In part, this is just a confusion about the meaning of gambling. It's like saying you are gambling by staying home from Las Vegas because you might have won big if you had gone there."
Farmers have been conditioned from long experience to shoot for the jackpots in peak years, because lean times will surely be coming. Widespread forward pricing, if it takes hold, represents an entirely new psychological environment—the peaks may not be quite so exciting, but the troughs will be moderated.
So much for what farmers can do to heal themselves. What about the federal programs? Perhaps the first thing that ought to be acknowledged is that the 1985 farm bill was a step in the right direction. It lowered price supports to 75 percent of the most recent five-year average of market prices, throwing out the high and low years. This was the first time price supports had been tied to actual supply and demand conditions instead of just some political calculation—and it was a breakthrough.
Linking price supports to market prices reduces the chances they will encourage overproduction, and keeping them down at the 75-percent level means the government will only get into the costly and destructive business of buying up surplus commodities in rare years. Low, market-tied price supports are also less likely to force prices above prevailing world levels, and this has helped U.S. agricultural exports rebound.
The Reagan administration also wanted to change deficiency payments (the money above and beyond price supports that is paid directly to farmers to give them a guaranteed income) so that they would give farmers an annual return equal to 100 percent of the previous five-year average of market prices. This would have transformed our farm subsidy program from its current status as a politically driven income supplement to something more like a real safety net: The government wouldn't let a bad year take place, but in the long run it would guarantee farmers a return equivalent only to what they could earn in the marketplace. Unfortunately, Congress insisted on maintaining high deficiency payments, prolonging a whole host of overproduction and misproduction incentives
And, of course, subsidy levels are only one part of farm policy. There are also mandatory land set-asides, various types of interference in export markets, conservation regulations, strict cropping controls, huge credit giveaways, disaster-relief protocols, and so forth. In most of these areas the 1985 farm bill made little progress, and in several it notably worsened government interference with agricultural functioning and farmer independence.
Worst of all, there is nothing to protect or preserve the few reforms where the 1985 bill did make progress. Next election, or cyclical downturn, the feds are quite likely to revert right back to old patterns: more welfare, more interference, more central planning, all in the name of the family farmer.
Clearly, sharp departures in U.S. farm policy are needed. Ignore the damage current policies do to farmer morale. Ignore the costs in economic efficiency. Ignore the environmental harm we are subsidizing. Ignore the huge balance-of-payments losses that come from forfeited exports. The single fact that the last decade's farm policy has cost every single family in this country $300 to $400 a year in extra taxes and consumer costs, without much to show for it, is reason enough to justify a break with business as usual.
And for practical reasons the present may be a good time to try something bolder. The federal government has just finished spending $200 billion on various farm programs during the 1980s. A painful farm shakeout has worked itself through—only 7 percent of all operations are today classified as under severe financial strain. Experts say 85 percent to 90 percent of the individual-debt problem that dogged farmers for most of the last decade has finally been digested. Exports, blasted by the disastrous '81 farm bill, have begun to rebound. Farm income stands at a record high. All in all, it is hard to imagine a time when changing directions will be any easier.
Farm bills are written from a notoriously short-run viewpoint. That is why we haven't had real improvement in the federal programs in more than 50 years, despite wide agreement that the current system has lousy long-term effects. It is time to begin some gradual, inexorable, structural reforms that do more than just tinker.
Our general goals ought to be several: to privatize the many functions of farm programs that can be done better or as well nongovernmentally; to redirect what the government does spend toward education, agricultural research, and support for rural and farm infrastructure instead of output subsidies; to end altogether practices that encourage destructive farming; and to otherwise reduce or reorient farm aid so that production choices and decisions are made by farmers on the basis of what crops are in demand rather than what is most favored by USDA programs. Even ignoring their potential for enormous taxpayer savings, these measures could be justified on efficiency and fairness grounds alone.
One clear blunderland where a beginning on reform could be had is the disaster-aid regimen. As we discussed in article three of this series, the disaster program, first set up in the 1970s, has encouraged environmentally damaging practices and sloppy management. (See "Technology, Ecology, and the American Farmer," December.) It costs a fortune, and it is distributed to farmers inequitably. All this the Congress already acknowledged in the early 1980s when it began a program to encourage farmers to hazard-insure their crops privately, swearing that once the private insurance network was in place not another dime of federal disaster pay would be doled out.
But the first year out, a dusty one in Texas, the Lone Star delegation broke ranks, and the boys on the Hill decided they'd pass out a little manna to the unfortunate after all. There's been a sad series of disasters nearly every year since, with the same result. Not surprisingly the demand for private insurance hasn't come on too strong. It's time to try another blood oath and forswear disaster-aid slush funds once and for all. Here's betting that the private underwriters' shingles will spring up thicker than daisies along farm roads if Congress does so with conviction.
Another dead zone for U.S. farm policy is subsidized credit. The government sponsors a separate credit system in this country for farmers, and it is huge—Uncle Sam is behind half of all U.S. farm debt. One of the central goals of the federal credit agencies is, literally, to give money to individuals who have been turned away from at least two regular banks because they are bad business risks. Surprise: The system is riddled with bad paper and required a multibillion-dollar bailout from Congress a couple years ago. We are about to see a rerun. Two-thirds of the U.S. (Farmers Home Administration's $93 billion in loans outstanding is owed by delinquent borrowers. (For political reasons, Congress has made it next to impossible for the agency to foreclose.) FmHA could lose up to $10 billion a year for the next decade. Proportionally, that makes the nation's ailing S&L industry look like a financial pillar.
Even ignoring mismanagement, it is a mistake to pump below-market-rate credit into agriculture. It encourages over-expansion of capacity in an industry already plagued by surpluses. It quickens the substitution of capital for farm labor, unnaturally hastening shrinkage of the farm population. It pushes intensification of tillage, with unhappy environmental ramifications. And with its current bias toward bad risks, government credit favors less business-worthy farmers over their more-efficient brethren.
In the short run, the government at least ought to get out of the business of underwriting and convert its farm credit to simple loan guarantees, letting commercial lenders cut the actual deals (as they do with small FHA mortgages and student loans). Medium term, the government ought to altogether quit forcing extra credit into farming. And if it wants to do something interesting to help get market-rationed capital into the hands of tillers it could encourage, perhaps through tax incentives, some sort of mechanism to encourage outside investors to buy stock in farms.
Another little corner where a redirection of government activity ought to take place is in stockpiling. Reserves hang over markets like an axe, and politicians have discovered that they can drive farm prices in convenient directions around election time by making little alterations in national stockpiles. To avoid this temptation, we ought to aspire to a largely private system of food reserves. (For national security reasons, the government might maintain some limited stockpiles. But they should be managed remotely, by officials not subject to reelection pressures much as the Federal Reserve is insulated from short-term political considerations.) Food would still flow in and out to dampen price swings but the ebbs and flows would take place organically, without central direction, for economic reasons (to avoid sharp changes in food prices) rather than political ones.
This is yet another thing that the private sector could do easily, if only it were not crowded out by a government program. Corporate food processors currently do remarkably little stockpiling, because they know the USDA will protect them at no cost. For the same reason, Japan keeps on hand only one month's supply of the commodities it imports from us.
If current USDA tinkering with supply is problematic, the full-blown version of supply control now being promoted in Congress ought to strike terror in our hearts. One of the main alternatives being proposed for the next farm bill is a scheme to bolster farm prices essentially by creating artificial shortages. The government would take authority over land use and ration farmers' "rights" to plant. Just in case mandatory acreage controls didn't do the trick (current land set-asides are commonly defeated via such practices as denser seeding and exaggerated fertilization), there would also be mandatory controls on what farmers would be allowed to sell.
This policy would indeed keep ag prices high. It would also create all sorts of unwanted feedback effects, wipe out many farm-servicing businesses in rural areas, completely destroy our export sector (two acres out of every five), and turn farmers into low-level employees of a kind of nationwide public utility in charge of food and fiber generation.
If this all sounds too outlandish to have any chance of taking root in the land of the free and the home of the brave, think again. Among other influential sponsors, the main supply-control backer is Richard Gephardt, once-and-maybe-future Democratic candidate for president and present House majority leader. There is one thing to be said in the policy's favor: Even a brief experience with full-fledged supply control would turn the vast bulk of American farmers into craving enthusiasts for free markets in agriculture.
Recognizing that Congress doesn't like to sit on its hands, it makes political sense for any agriculture reformer to suggest more appropriate channels for its intervention. "There are lots of things the government can do to help farmers without writing them a check," says Jim Baxter. An example would be more help with marketing abroad through U.S. embassies. Federal funding for agricultural research, which has been flat for more than a decade but yields high returns, could be increased.
Another thing governments ought to do is tax farms gently. This is particularly important at the state and local level, where many jurisdictions have already instituted agricultural tax abatements. As a group, farmers toil quite hard for relatively modest incomes. Their land assets make them "wealthy" on paper only. Taxing land really doesn't make much sense—land is an input, not a product. We don't tax machinery in factories. We ought to go lightly on farmland as well.
A related matter is the government's direction of the larger economy. "Macroeconomic policy will prob- ably be more important to the well-being of American agriculture in the 1990s than farm policy," says Purdue's Thompson. The wrenching financial traumas of the early 1980s were basically fallout of the stagflation and interest-rate rocket launch of the late 1970s.
Government also must avoid overregulating bioresearch and new agricultural technology, the development of which is critical to the future health of the industry. It ought to avoid, as an instrument of conservation or environmental policy, taking property—or farmers' use of property—without compensation. Within the farm programs, it ought to maximize flexibility in farmers' land-use choices, so acreage can flow in and out of various crops quickly and without penalty to the grower, the better to accommodate shifts in agricultural supply and demand. In general, the Agriculture Department must get out of the business of micromanaging our farm economy from above, interference that has never been worse than in the 1980s.
Instead it could help farmers strengthen themselves. Farmers change slowly, and subsidies often encourage them to be even less experimental. If the government is going to be in the business of handing out money it ought to encourage—-indeed require—-recipients to make use of modern financial information and business practices. For the tiny cost of running most commercial farmers through one of the private courses that teach them how to use futures and options markets, for instance, the Agriculture Department could powerfully bolster their financial savvy and independence. Of course, the best thing the feds could do to encourage a move toward privatized price smoothing and insurance would be to stop giving away the same services for free via price supports.
Which brings us to the fundamental question of subsidies. The entire history of our farm programs is one of periodic government meddling, rule reversals, and course changes. This very changeability is one of the most damaging aspects of farm subsidies. And the only way to introduce some predictability into our programs is to make structural changes that leave no avenue for political intrusion. That is why the best route for U.S. farm policy—albeit a gradualist one, to give the many actors affected time to adjust—would be a policy of privatization. Take the whole thing out of the political process.
We have already suggested that such undertakings as disaster insurance: stockpiling, and credit provision could easily, and often more effectively, be done privately. The same is true of the income protection that subsidies aim to lend. It can be done outside government. One ought not underestimate the political difficulty of achieving this—former Assistant Secretary of Agriculture Don Paarlberg points out that scads of agricultural economists have railed against farm subsidies, as has "every Secretary of Agriculture since World War II." Yet the subsidies persist.
We must understand, however, that it is only political will which is lacking. There are a whole host of alternatives to government manipulation of farm incomes. If not the private commodities markets discussed earlier, possibly the mechanism suggested in the last farm bill debate that would set income supplements by averaging the previous five years' market prices. If not that, maybe a variation of the income insurance scheme run by the Western Grains Stabilization Board in Canada. There, every farmer pays into a pool in good years (with some government matching) and draws out funds during bad seasons. There are dozens of other possibilities if only we will consider them.
Certainly, it would help if any wind-down of U.S. subsidies were accompanied by similar actions in other nations. With agricultural trading thoroughly globalized, inequities in one place can cause pain far away. The United States is now pushing hard on this matter at the GATT international trade negotiations. Success in this area would be a boon not only to American farmers but also to consumers the globe over, who cough up an estimated $150 billion to $250 billion annually to protect crummy farming practices. An end to the agricultural cold wars would be of particular benefit to humankind's poorest number—the peasants of the Third World.
The problem with current farm subsidies is not that they help farmers but that they also harm them, and other Americans, very much—by interfering in critical production decisions, by distorting food product prices, and by compromising producer and consumer freedoms. Our present subsidies are based on production, not income need, and so are lousy even as social transfers. They are also unjust in their effects on different kinds of growers. Worst of all, our farm programs don't really help—as more than a half century of simultaneous subsidization and agricultural turmoil ought to suggest.
The fact is, we will continue to have grave agricultural problems in this country so long as we choose to get money to farmers in ways that prevent farm output from being sold at market prices. It is at this point a simple law of history: Market prices must be respected, they must arbitrate between supply and demand, because the only alternative is for a grossly less fair and efficient decision to be made by some bureaucratic functionary. This even communist governments in China and the Soviet Union have begun to recognize.
There is a creaky old argument that agriculture is a unique industry, a special case, because of its vulnerability to weather and other external factors and because of the importance of food to national security. All that, to the extent it was ever true, is now mostly nonsense, thanks to improved plant genetics and chemicals, modern transportation, new abilities to interchange resources, and a million other little earthquakes that have changed the world in the course of this century. Truth is, the reason we have farm programs today has very little to do with agriculture or the land and a great deal to do with naked political muscle.
The dead hand of diktat economics is something Americans have seen good reason to avoid in other sectors of our national life. It is just as much to be discouraged in agriculture.
Contributing Editor Karl Zinsmeister is a Washington, D.C.-based writer and an adjunct research associate at the American Enterprise Institute. He is writing a book on the American family. This article is the last in a four-part series.
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]]>Though it hasn't attracted much media attention, an equally unlikely relic—not as ancient but even more overgrown—exists today entirely above ground and in plain sight. This amazing organism is rooted in Washington, D.C., but has branches in almost every single county in the United States. It is not a fungus; it is more like a fossil. Its scientific name is the U.S. Department of Agriculture.
To trace the growth of this entity, let's transport ourselves back to 1933. Prohibition still reigns. There is no Social Security Act. Stalin rules the Soviet Union and Hitler has just become the German chancellor. Margaret Mitchell is working on a manuscript she will publish under the title Gone with the Wind and talking pictures have recently caught on. The Empire State Building has been open for two years.
Emergency measures, including production controls and price supports, are being imposed on the U.S. economy by new government agencies with titles like the NRA and the PWA. One-quarter of the nation's population still lives on farms, and Henry Wallace (who will run for president in 1948 on a platform of major social reform and friendship with Stalin's Russia) is setting up a radical new system of state-managed production in the agricultural sector. The New Deal farm programs are without precedent in the economic history of this country, and they produce constitutional as well as economic and political opposition.
Now fast forward to the early 1990s. The NRA and PWA have disappeared without a trace. The Works Progress Administration and Civilian Conservation Corp are long gone. And the agricultural sector has shrunk from a quarter of our population to just 2 percent.
Henry Wallace's U.S. Department of Agriculture, however, has changed remarkably little. The cropping and marketing controls are still in place. Prices are still set in government offices located on Independence Avenue in D.C. The bureaucracy is continuing to push a bulk-commodities production strategy even though global trade has long since shifted toward consumer-oriented and processed goods. "The department's structure and management practices have remained largely unchanged since the 1930s," concludes a 1991 study by the U.S. General Accounting Office.
Now that the GATT talkers have wandered miles from the original Reagan administration goal of free and unsubsidized international trade in agriculture (special credit to the French and Japanese farm-welfare queens for breaking up this rare chance to unsnare 60 years of worldwide bungling), here is one confident prediction about the Clinton administration: Agriculture Secretary Mike Espy, the Rhodes gang, and the Changemeister himself will achieve relatively little change in the federal agricultural apparatus.
Everyone knows that bureaucracies, especially bureaucracies that give away money, have a tendency to stay in place no matter what. And this one is really special. Reformers have been ricocheting uselessly off of U.S. farm programs under 11 different presidents now. Chances that the Clintonites—with their enthusiasm for industrial policies, national planning, environmentalist orchestration, and protection of industries "important to national security"—will be the ones to turn off the farm-regulation-and-subsidy tap would seem to be slim.
Interestingly enough, the private economic terrain that is overbossed by the Department of Agriculture has been utterly transformed in recent decades—changing more than almost any other major industry. The department, however, plods along in the same familiar rut. The major change in the department over the last 60 years is simply that it has gotten much bigger. It hasn't given up much of anything it used to do, but "USDA has added agencies and functions over time, making it larger," says the GAO.
The result: Big chunks within our agriculture department are now superfluous. There are hundreds of missions that ought to be dropped altogether. There are a thousand or more field offices that outside observers agree should be closed. (Unfortunately, Espy has suspended the Bush administration's plans to close 1,200 offices.) There are myriad responsibilities that could be spun off to the private sector.If there are any incoming congressional freshmen out there looking for useful work, here's a tip: The number of persons working on farms in this country fell 70 percent from 1950 to 1990. By rights, the ranks of federal agriculture department overseers should have fallen too. Instead, USDA staffing rose 53 percent. Would somebody please do something?
One reason the USDA is bulging even as its clientele is disappearing is that the department is being transformed into a multi-purpose agency of intervention, the way many Washington offices are these days: It's taking on new regulation-policing duties (inspecting occupational conditions and consumer products, enforcing a fast-growing list of environmental rules), plus ever-wider social-welfare responsibilities (disbursing food stamps, WIC subsidies to mothers, free meals to senior citizens and schoolchildren), while also serving as a handy porkbarrel conduit (through its management of "disaster relief" payments, Forest Service contracts, the credit slush funds of the Farmers Home Administration, and some research and extension services).
But even in its traditional farm programs, the USDA bureaucracy is continuing to grow in improbable ways. The number of full-time employees at the front-line agency that administers the big farm subsidies (the so-called ASCS, or Agricultural Stabilization and Conservation Service) increased by 24 percent from 1980 to 1990, despite the fact that the U.S. farm population fell by 24 percent over those same years. In all, the agriculture department now has one bureaucrat for every six full-time farmers.
The latest revelation to catch the attention of the small body of legislators working against USDA pork is the fact that the four agencies in charge of our major farm programs maintain a total of 11,042 different field offices across the country, requiring more than 63,000 person years and several billion dollars annually just in staffing expenses.
Our farm-support apparatus has offices in almost every one of the 3,150 U.S. counties at present, and in many cities too. "These elaborate field organizations," comments the GAO, "are primarily creations of the 1930s New Deal legislation, particularly of the philosophy that the federal government has a responsibility for the economy's performance." Almost 90 percent of the 127,000 persons who work full-time for the USDA, plus many part-time employees as well, micromanage from these local offices.
Certainly there is appeal in decentralization—in moving bureaucrats out closer to the people—and back in 1950 when 63 percent of all U.S. counties classified as farm counties a set-up like this may have made some sense. But today, when only 15 percent of all jurisdictions count as farm counties, this enormous field apparatus—which is one of the largest and most expensive in the entire federal government—is ludicrously wasteful.
Do 85 percent of our counties really need a branch of the bureau that makes crop-subsidy payments? Do 85 percent need an office of the Soil Conservation Service? Do 60 percent of our counties need a subsidized lending office of the Farmers Home Administration? When last calculated five fiscal years ago, the costs of keeping this administrative empire in place amounted to $1,100 for every farm in the nation (using the USDA's broad definition of a farm as any place having $1,000 or more of agricultural sales).
GAO investigators found that scores of local USDA branches actually spend more on overhead than they give out in program benefits. They calculated that 856 different ASCS county offices spent a total of $110 million in fiscal year 1989 in order to distribute $586 million in benefits—an average of 19 cents eaten up by bureaucratic expense for each dollar handed over to farmers.
They found that nearly all the farm program offices in New England are too inefficient to justify being kept open, as are three-quarters of the offices in North Carolina and Nevada, 90 percent of those in Virginia and West Virginia, two-thirds of those in Tennessee, Kentucky, and New Mexico, and so on. Consolidating these bureaus would net a quick, cool $100 million in reduced costs. Of course, the department is resisting the GAO hint.
And then there is the problem of these unpatronized bureaus creating work for themselves by dreaming up new places to channel public funds. The wealthiest county in the wealthiest state in the union—Fairfield, in Connecticut—has a USDA ASCS office that is desperate to give away money. Last year, not one county farmer enrolled land in a government crop-subsidy program, and county Executive Director Nancy Welsh is concerned lest Congress should close her office and consolidate it with some regional one nearby. "My personal goal is to sign up one farmer for the corn program," she recently told The Wall Street Journal.
Welsh also hopes to convince a few sheep farmers to enroll in the wool-subsidy program (which Congress set up to avoid a dangerous shortage of wool for military uniforms) and is trying to locate clients willing to have ASCS foot 75 percent of the bill for soil conservation and tree-thinning projects. "I see myself as a PR person," she relates. She did find one creative use for USDA funds last year: a $3,500 grant to the local horse-jumping club (where annual membership costs $20,000) to help defray one-quarter of the cost of a manure-loading dock.
There is no question that the USDA does lots of useful work—for instance, in its inspection services, much of its research and extension work, and some of its conservation efforts. But the agency also carries out lots of destructive market manipulation and is responsible for more regulatory intrusion every day. The department now has the third-largest civilian-agency budget in the federal government, and giant swatches of bureaus could be eliminated or spun off to private-sector providers to the benefit of taxpayers and agriculturalists alike.
Crops should be protected against natural disaster, for instance, via private insurance, not through ham-handed emergency appropriations by the secretary of agriculture or Congress. Likewise, the Farmers Home Administration's practice of forcing subsidized credit into hands that private lenders have turned down as bad risks is insane. There is almost nothing positive to be shown for this effort, and lots of competition distortions and lost money to argue for stopping it altogether.
Much agricultural research and extension could also be done on a more market-oriented basis, in the same way that technical progress is made in the joint corporate-academic research parks that surround many major universities today. Or, for a final example, forest management currently carried out clumsily by the Forest Service at a multibillion-dollar cost could be transferred instead to private corporations, without reducing recreational and other uses of the land.
Certainly most of the Agricultural Stabilization and Conservation Service, a central-planning relic that is not only outmoded but actually offensive in an era of educated producers and free markets, ought to be wiped out, along with the massive commodity-brokering agencies and producer cartels run by the feds to make their price-setting schemes work. To avoid sharp disruptions that would hurt farmers, crop subsidies and price-fixing mechanisms should be eliminated gradually—say over 10 years—and encouragement should be offered for more crop brokering, hedging, and price-stabilizing systems run by farmers themselves and other private entities.
Lots of private risk-spreading mechanisms already exist. Though you'd never know it from the popular farm-programs-or-bust rhetoric, only a minority of American agriculture is currently subsidized. Most sectors operate quite happily without benefit of government aid.
Many successful farmers now subscribe to electronic services that give them immediate information on prices, forecasts, foreign economic trends, and other factors that affect their business. They have access to private insurance schemes that didn't used to exist. Many have installed controlled-irrigation systems, indoor production facilities, and other equipment that reduce their vulnerability to the fates. I get lots of mailings these days from private companies that provide farmers with sophisticated software packages to monitor the milk output of their cows, or keep track of all fertilizer and pesticide use via tractor-mounted computers and receivers linked to the same Global Positioning System satellites that the Pentagon uses to send Tomahawk missiles down air vents. Farming today is not the miserable crap-shoot most Americans imagine.
And most farmers don't need the kind of help the USDA offers. Is there any possible justification for the fact that, in 1993 America, the price of milk is set by government employees working from an equation and set of rules that takes up three full volumes of the Code of Federal Regulations? Only one: This is the way things have been done for decades, and government agencies never make changes unless they have to.
As the GAO auditors put it delicately after their investigation of the agriculture department, "public organizations, whose funds derive from appropriations, do not have an objective indicator like sales or profits to compare resources used with results achieved….USDA agencies do not worry about competitors forcing them to downsize, close, or be taken over like the private sector." But legislators—and citizens—ought to.
Contributing Editor Karl Zinsmeister is an Ithaca, New York, writer and an adjunct scholar with the American Enterprise Institute. His REASON series on farm policy received the 1990 Oscar in Agriculture for excellence in agricultural reporting.
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]]>There Are No Children Here, by Alex Kotlowitz, New York: Doubleday, 324 pages, $21.95
The authors of The Urban Underclass start with a paradox: Despite big jumps in wages and income since the mid-1960s and a public mobilization that ratcheted welfare spending from 5 percent of GNP then to 10 percent now, the poor are still with us. In wrestling with this reality, the contributors' most interesting discussions center loosely around the question of whether it is primarily faults in the nation's economic structure or faults in human character that account for the most enduring and damaging forms of modern poverty.
There is wide agreement that continued economic growth is important to reducing persistent poverty. (Unemployment, it is pointed out, falls about twice as fast among blacks as among whites during economic recoveries.) Richard Freeman and Paul Osterman both show that in unnaturally tight labor markets, such as existed in several dozen US. cities in the late 1980s, many individuals from even the underclass can be drawn into the workforce, and at good wages.
No sane person, however, would prescribe the labor market conditions of, say, late-1980s Boston (which Osterman examines) as a healthy way to eliminate the underclass nationally. Labor shortages create serious problems in their own right. And even as antipoverty devices they aren't reliable: At the peak of the Boston labor crunch, 12 percent of all families in the city remained officially "in poverty."
This brings us to the behavioral issues. As Christopher Jencks shows, in 1968 only about a quarter of the people in poverty were "undeserving" (or lacking what he describes as "socially acceptable reasons for being poor"—for instance, old age, physical disability, or low wages in spite of steady work). Today, more than half of all poor people fall into that category. Simple idleness among young, able-bodied persons, he points out, has gone up dramatically since the mid-1960s.
Greg Duncan and Saul Hoffman present findings from their study comparing the economic fortunes of women who completed high school and avoided having a child as unwed teenagers to those of women who either dropped out or had a baby or did both. Not surprisingly (except to social scientists who never thought to measure this until Charles Murray brought it up), they learn that "teenagers who followed the rules" had much lower chances of subsequent poverty.
What's more, they find that the likelihood of a teenager becoming an unmarried welfare mother corresponds in a statistically significant way to the level of welfare benefits available to her—another Murray contention that has caused an outbreak of hives and indignation among members of the poverty-study industry.
Duncan and Hoffman conclude their contribution with this impassive sentence: "Our descriptive work on the consequences of teenage behavior shows…that schooling and delayed childbearing are sufficient conditions for most women, black and white, to avoid poverty as adults." Despite its bland tone, that statement represents a dramatic revision of the poverty research and advocacy of the previous decade. The existence of free will and the importance of lifestyle factors in influencing social condition are at last beginning to be acknowledged among certain of the poverati.
If the Brookings volume looks at the behavioral roots of poverty in abstraction, Alex Kotlowitz's book There Are No Children Here is all flesh and bone. The documentary tale begins with a Chicago woman who gives birth to her first child at age 14 and then has another at 15. After some personal turmoil and then a third birth, the father, Paul Rivers, marries the mother, LaJoe, and moves in with the family. About that time he starts a drug habit. He downs cough syrup. He takes barbiturates. He begins a 20-year addiction to heroin.
He doesn't lack for good jobs, however. He works for eight years as an upholsterer. He gets a decent-paying city-patronage position, then works as a garbage collector, then as a municipal bus driver. Meanwhile, the mother also has a job as a clerk in a medical center. "Though the two had their problems, money wasn't one of them," writes their chronicler.
The parents promise their children a house in a secure neighborhood, but they never fulfill that promise. Father takes to hanging out on a comer in front of a liquor store and drifts in and out of home life. He spends his pay on dope. His employer sends him to rehabilitation clinics, but he remains a junkie. He loses his job. He steals his children's television set and pawns it. By this time the couple has eight children. Meanwhile, the mother has left her job and been on public aid for many years. The welfare department supports the family by giving them a cash stipend and food stamps worth about $1,000 a month and renting them an apartment for $122 a month.
The children, all of whom still live with the family in public housing, have their own problems. The first three have each dropped out of school, spent time in jail, and gotten involved with drugs. The eldest daughter, in her early 20s, works as a prostitute off and on to support her narcotics habit. She is herself the unmarried mother of three, her last baby addicted in utero to karachi, a smokable mix of heroin and amphetamines. The second child, a son, has served time in state prison for burglary. The third son begins selling drugs at age 11 and has fathered three children by different mothers and been arrested 46 times on various charges by the time he is 18.
Hangers-on of all sorts pass through the family's apartment, with more than a dozen people frequently living off its refrigerator and bedrooms. Some are addicts. One works every day at O'Hare Airport selling fake-gold jewelry to tourists. The family is convicted of welfare fraud and the mother makes ends meet during the month or so they are off the rolls by card sharping, a late-night hobby through which she sometimes wins considerable sums. In a generation of cousins, there are 12 high-school dropouts and just two graduates (one, the family success story, is a girl weighted down with four out-of-wedlock children on commencement day).
The younger family members have more childlike problems. An 11-year-old son misses 35 out of 180 school days. The boys extort money from car owners who park at a nearby stadium and break into some vehicles when rebuffed. Neither the children nor anyone else in the household keeps regular hours. The mother is sometimes not yet home when the children leave for school. They do much of their own clothes washing and ironing. Cereal is a 24-hour, self-served meal. The kitchen is often piled high with dirty dishes and food scraps and trash. Clothes overflow onto bedroom floors.
Beyond the inner sanctum of family is a neighborhood equally drenched in self-damaging disorder and destruction, plus brutality. A benevolent merchant who sometimes gives mothers free diapers is run out of business by robberies and shoplifting in his two-aisle store. A kindly hot dog peddler who befriends local children is shot in a stick-up.
The family can't easily visit with a jail-confined son because inmates have permanently ripped the phones out. The bathrooms in the home apartment are fetid because residents have stolen their building's ventilators. A pool opens nearby for the children to enjoy, but the night of the ribbon-cutting ceremony it, too, is crippled by theft of its ventilation fans. The self-immolation runs across all groups: Resident children smash whiskey bottles on their own playground and tear down the basketball hoops that are their own best entertainment.
Meanwhile, the gangsters and drug dealers who control the housing project enjoy a kind of folk-hero status among some residents. The gangs never hesitate to use terror to get their way, but they also enjoy a certain measure of voluntary collaboration in setting up their gun and drug dens, and they can generally rely on community silence against the police and the housing authorities. A confidential crime hotline draws a total of 21 calls from Chicago public-housing residents in crime-snarled 1986.
Growing up within this family and the surrounding milieu of violence, cruelty, and utterly wasted lives are two smart, sensitive pre-teenage boys: middle sons Lafeyette and Pharoah Rivers. The author got to know the youngsters well over a four-year period, and he spent considerable time interviewing the relatives, neighbors, and local authorities around them as well. This book is the story of their days. In its grim outlines, the tale will be depressingly familiar to observers of the modern urban scene, but only rarely do we get a picture of underclass life this affectingly personal in its detail. There is real humanity and some masterful journalism in this book.
Unfortunately, the book's sympathy and personalism becomes its weakness as well as its strength, leaving the reader with an uneasy fuzziness as to how all these innocent and likable people could end up in such a nightmarish world. Kotlowitz's villains are all distant, impersonal abstractions: the housing authority, the police, gentrifying developers, the cigar-chomping owner of a sports stadium that dominates the neighborhood, Reaganites in Washington, Mayor Richard Daley Jr., the gangs (though not the gangsters). It is a sanitizing touch that makes the degraded narrative bearable—amidst this leprous inhumanity, all the evil has been banished to institutions.
Certainly there is ample blame to be shared. The innocent children at the heart of this book have been badly let down by many institutions: the criminally inept bureaucracy of the Chicago Housing Authority; liberal fatuities such as the various programs that have "adopted" street gangs, giving them official responsibilities, city grants, publicly supplied buildings, and other resources (all soon pillaged); a criminal-justice system that is neither swift nor sure (25,000 accused criminals were released onto the streets of Cook County in 1988 alone simply because city fathers provided no jail space in which to hold them); a public-school system that allowed four teachers' strikes in five years and provides perhaps the worst education in the United States.
The economic inducements prevailing in places like inner-city Chicago also corrode healthy family life and social relations. LaJoe Rivers's $12,00O-a-year welfare package, the separate welfare package of her resident daughter LaShawn, the off-the-books income from fake-jewelry sales, drug sales, card-game winnings, prostitution, video-game robberies and other thefts, the boys' car-park shakedown money, an older son's occasional gypsy shoeshine earnings (of up to $100 a day), Paul Rivers's paycheck and unemployment benefits, Medicaid benefits, and other entitlements mean that an alternative existence in market-rate housing and unskilled paid employment would very likely not pay off for the family. Our social-welfare system tells the Rivers to stay put.
The quality of housing, schooling, and medical care, the physical fabric of their dependent existence, is often abysmally low. But then no sweaty drudging or nagging responsibility are required either. Their demoralized, goal-less lives have been bought and paid for with public funds, and as an economic proposition there is no incentive for them to leave the projects and the dole for independent toil. Nor is there anything in our current welfare system that expects or demands any more of them, a scandalous indictment of the warped encouragements and apologies our society presents to its least proficient members. We are, at minimum, responsible for anesthetizing many of these families in their squalor.
But if welfare traps, inept bureaucracies, crummy schools, and weak law enforcement are ways that American society has failed children such as Lafeyette and Pharoah Rivers, more fundamental failings lie closer to home. Kotlowitz makes much of an incident in which Paul Rivers rages at a hustler who has introduced his son Terence to the drug trade. The confrontation is without effect, and the boy eventually becomes deeply involved. The family, Kotlowitz says, "lost Terence to the neighborhood."
A more detached observer might suggest something else: that Terence was less lost to others than converted, rather predictably, to the example of his own father. Had the son of the 20-year junkie grown to view drugs as anything other than commonplaces of commerce and consumption it might have surprised us more.
Kotowitz freely admits his emotional involvement with his informants, and one can easily understand his shying away from conclusions so acid. There is no pleasure whatever in wagging fingers at the pitiful adults and kinfolk who ring his child protagonist. Just the same, we will never accurately understand why those youngsters have suffered so horribly unless we face the implications of the personal and family behaviors that occur all around them. By many free choices, the boys' guardians set courses for lives other than their own. Time after time they badly let down the innocents whom they had more reason to protect than anyone.
This is the broader calamity depicted in this poignant book. It is bad enough the Rivers family is beset from without; what is more wrenching is that it first collapsed within. Virtually no member respects even society's most elementary rules of personal obligation. One can hardly be surprised that under such conditions there is no social success and little individual satisfaction. No amount of human love, mobilization of public concern, no teetering mountain of funds can reliably protect the vulnerable young in the face of moral decay as pervasive as that which blights the Rivers family. So long as a Hobbesian world of exploded families and suspended ethics pertains in our worst ghettos, every resident child will be gravely endangered; any who escape untwisted must be considered gifts.
Life's most damaging hurts are unquestionably the betrayals. At one point in this book the mother of Lafeyette and Pharoah, referring to a perceived police injustice, rues the occasion when "what you thought would protect you, you found out that you couldn't trust." That statement, applied even more to people than institutions, could be this opera's anthem. For Lafeyette and Pharoah, and their underclass siblings everywhere, it is the trusts broken by those most naturally relied upon that cut most deeply.
Contributing Editor Karl Zinsmeister is writing a book on the problems of children and family for HarperCollins. For six years he lived next to one of Washington, D.C.'s most troubled housing projects.
The post When You're a Ghetto Child appeared first on Reason.com.
]]>Allan Carlson, president of the Rockford Institute, has written a slim intellectual history entitled The Swedish Experiment in Family Politics. It chronicles certain obscure events that took place 60 years ago in a minor European country, involving two academics, and a social problem now considered passe. And it has my vote as the social policy book of the year.
The volume is a brilliant little case history of how momentary public panics can be manipulated to produce permanent social rearrangements, of how a handful of energetic and creative activists can transform an entire society, of how very easily the tools of "social science" can be used to intimidate politicians and the public. It provides sobering instruction on the tendency of the modern rationalist impulse to produce centralization, elite control, and compulsory behavior. And it illustrates how frail our stock of inherited social knowledge—the lessons and evolved behaviors of many centuries of often bitter human experience—has become. As we face a new wave of family benders and social reformers, Carlson's book provides a valuable opportunity to keep the long-run stakes in view.
In the 1920s and 1930s birth rates fell very low in many Western countries—hitting levels for the very first time that could bring sharp population declines over the long run. This drop caused great consternation in the affected nations, among persons of all political stripes, and within the elites and masses both. Gunnar and Alva Myrdal, who would later become world famous sociologists and activists but were then relatively obscure Swedish professors, turned their joint attention to the population question.
They produced an influential and popular book, gained Gunnar's appointment to the Royal Commission set up by the government to deal with the problem, and masterminded a sophisticated political and public-opinion campaign that brought revolutionary new social and economic policies to Sweden. Their core precept was that any effort to improve the status and number of children "required that the largest proportion of the costs and encumbrances associated with them be transferred to society."
The fact that this episode initiated Sweden's conversion into a thoroughly socialized welfare state was no accident. In fact, Carlson shows, that transformation was the deepest motive of the Myrdals and their Social Democratic Party allies all along. "The population question is here transformed into the most effective argument for a thorough and radical socialist remodeling of society," the Mydrals acknowledged. The government social minister who gave Gunnar his Royal Commission appointment was equally direct in addressing his fellow Riksdag members: "I do not hesitate a moment to frighten however many Conservatives and however many Agrarian Party and Liberal members with the threat that our population will die out, if with that threat I can persuade them to vote for social proposals which I offer."
Carlson points out that this was the first instance in a modern democracy of the use of scientific data to create a "crisis" atmosphere outside of time of war or serious economic failure, a crisis that could then be exploited for political purposes. Alva Myrdal's role in this effort was particularly cynical. While Gunnar at times showed a genuine worry over low birth rates and the durability of the Swedish family, Alva concealed a quiet loathing for the pro-natalist agenda even as she pressed her campaign in its name. She felt a pronounced antagonism toward home and private life, and her true goals in hitching her wagon to the popular population issue were the socialization of child-rearing and housework responsibilities plus the imposition of a broad social androgyny.
Carlson shows in intriguing detail how the Myrdals creatively and energetically worked the political system on behalf of their program. His descriptions of their manipulation of the Royal Population Commission make a particularly fascinating detective story. The Myrdals repeatedly demonstrated the "ability to determine the outcome of the commission's work by setting out assumptions and modes of analysis that could produce no other real result," as Carlson puts it. Techniques they pioneered—capturing the committee staff, controlling initial definitions of the problems at hand, mastering the technical subjects, and gaining monopoly control of calculations and report drafting—remain favorite string-pulling methods within democracies today.
The public policies the Myrdals sold the Swedish people and parliament in the 1930s included large-scale government income redistribution; support for more labor force participation by young parents; publicly funded day-care centers and universal collective child rearing; more communal housing; more state-supplied free meals, health care, and education; subsidies to certain industries; a lot more central economic planning and control; an end to social inducements in favor of marriage before childbearing; new, more "flexible" definitions of what constitutes a family; and new, more flexible "life-values" in general.
The Myrdals completely discounted liberal ideas of private responsibility and individual freedom, which they considered outdated and irrelevant. This attitude deeply colored their reform agenda. They were adamant, for instance, that the state should always provide its benefits to individuals in the form of standardized goods and services, never cash, because they strongly distrusted the ability of most people to know "what was good for them." Merely increasing the financial wherewithal of Swedish parents would do nothing to address what the Myrdals referred to as "quality" shortcomings in contemporary family life. Given that they always claimed to be acting in the name of democracy and equalitarianism, it is ironic that one of the couple's central convictions was that expanded parental autonomy and broader household options would only perpetuate bad choices and undesired outcomes.
Through its vehicle the state, the Myrdals often argued, society should deliver directly to each household the "rational" amount of each domestic resource. "An income equalization in services," wrote Alva, provides "a framework for a socialist development of society towards a more planned—and therefore less costly and more effective and adequate—meeting of needs."
Their distrust of average citizens was combined with a startlingly thoroughgoing faith in material and mechanistic solutions to human problems. Looking around them, the Myrdals saw (as intelligent and sensitive people will) a good deal of human unhappiness, a large measure of inefficiency and sloppiness. And always they insisted that these things could be cured by "a rationalization of human life."
So, the obvious question becomes: What was the Myrdal legacy? Did it all work? The simple answer is no. There was no clear improvement in fertility, and research shows that several of the programs seem to have increased divorce and reduced marriage rates. They didn't succeed either in buying more children or in strengthening families.
And then there was the wider fallout. As the relatively modest programs that the Myrdals succeeded in pushing through at the end of the 1930s were gradually expanded and extended, the effects rippled ever more deeply through Swedish life. While rapid changes had been taking place in the country since the mid-1800s, Sweden began this century as a predominantly rural and relatively traditional and socially conservative society. Carlson points out that conventional middle-class domestic structures, sexual norms, and economic arrangements persisted in Sweden for at least a generation beyond 1939 and the wrap-up of the Myrdal's big push. Indeed, the 1950s marked something of a domestic revival in Sweden, as in most other industrial countries, with marriage rates, home-based child rearing, and familism in general blipping upward.
This trend, however, was short-lived. The ideas and institutions of the 1930s debate—including government income distribution, special aid to never-married mothers, collective housing schemes, progressive taxation weighing especially heavily on families, feminist labor laws, welfare programs for an ever-growing array of social needs, and professionalized child rearing—steadily tinted behavior and attitudes. "State economic and cultural incentives," Carlson writes, gradually "lured ever more Swedes out of traditional networks."
Hewing closely to his self-assigned subject of family policy, Carlson doesn't stray into considerations of economic performance or other broad measures of the health of the modern Swedish welfare state. But even on his limited field of play he finds considerable damage done. The Swedish marriage rate is today the lowest among modern nations. Roughly a third of the 35-year-old women in Sweden today will die unmarried. Cohabitation rates are very high, and the couplings tend to be quite unstable. Carlson points out that when the divorce rate and "the dissolution rate of cohabitation couples" are added together, Sweden seems to have the highest rate of "couple dissolution" on the globe.
Sweden has the smallest households and the highest percentage of one-person households in the world—63 percent of all living units in downtown Stockholm contain only a single resident. Fully half of all current births in Sweden occur outside of marriage. (This compares to 26 percent in the U.S. and 1 percent in Japan.) The average age of first intercourse for Swedish girls is just over 14, versus 17 in the United States. Meanwhile, the overall Swedish fertility rate remains 15 percent to 20 percent below the zero-growth level.
Modern Sweden is, of course, a loudly trumpeted model for many of the American academics and politicians now peddling various "family policies" at the national level. Sweden's day-care centers, parental leave plans, labor laws, and tax and entitlement packages are proclaimed to be vastly superior to the crazy quilt incentives that poor old unsubsidized, unrationalized American parents experience.
By any decent standard of evidence, it shouldn't take many copies of Allan Carlson's terse, fair, and splendidly documented book to enter into circulation before "The Swedish Example" is knocked completely out of our public discourse for good. But don't count on that happening. Our modern-day Myrdals are a determined lot. They really want to help.
Contributing Editor Karl Zinsmeister is an Ithaca, New York, writer. He is working on a book about American children and families to be published by Harper-Collins.
The post Baby Talk appeared first on Reason.com.
]]>Observers faced with the task of reading flows in American culture often do so by slicing off significant subpopulations for detailed examination. One favorite cut is by age—"generations" have long been viewed as crucial dividing lines for understanding social behavior and attitudes. But the recent track record of generation-based social theorizing is not very inspiring. An egregious example pertains to the '60s kids. We were told over and over that they were unlike anything the human race had produced previously, yet in middle age they've turned out to be mostly indistinguishable from other Americans.
Part of the problem with the 1960s generation-break blather was selective focus. The 10 percent who shredded draft cards, mixed them with hashish, rolled the by-product in their bras, and burned the whole concoction in a water pipe were put forth as representative. The regular guy stiffs who joined the Marines, had children and then actually raised them, took jobs or created them, converted to Good News Christianity, and went deer hunting were, as usual, invisible to the people writing about over-affluent, greening, tuned-out Americans from their graduate school command posts.
Another part of the problem was that people not only can but almost always do change their minds about the world as they grow up. A generation that in college decides that marriage is rape, slavery, or just too bourgeois will, you may be sure, have a somewhat different view 10 years (and eight shiftless boyfriends) later. In each generation, a somewhat different set of ideas smashes up against the walls of experience and revelation, so the process cannot be accurately predicted in advance, but we know important revisions in attitude will take place.
These problems bedevil current attempts at generational encapsulation every bit as much as they did previous efforts. Still, people keep trying. The latest effort is a collection of essays titled Beyond the Boom, in which 15 young writers try to make the case that "late baby boomers" between the ages of 29 and 39 comprise a cohesive group, far more accomplished than their older brothers and sisters of '60s fame, and influential to the point that they are likely to set the tone for American society in the 1990s.
Ambitious contentions, those. And complicated by the authors' further claim that, collectively, they are representative spokespersons—"the true voices"—of their generation. This is an interesting statement, given that the foreword elsewhere divulges that "all but three of us live and work in the New York [City] area." (The other three reside in Washington, D.C., Washington, D.C., and Brussels, respectively.) Maybe they covered the geographical-representation factor during their college years: "We went to Yale, Harvard, the University of Chicago, Berkeley, and all points in between."
Well, we won't hold any of that against them, but what about the real meat and potatoes—how many of them have joined in the ultimate human pageant by becoming spouses and/or parents, people responsibly linked to others by pledge and blood? These 15 representatives, average age "35," report they have produced a total of nine marriages and six children. The comparable figures for a true national sample of 30-year-olds would be about 12 marriages and 25 kids.
OK, there has never been any shortage of well-educated, under-committed New York City inmates willing to advise the rest of the country on how the world works, and sometimes—as in this volume—some of them even do a pretty good job of it. But it would be nice, very nice, to someday hear a few such pontificators acknowledge, in between bites on the national soul, that their wisdom represents but one small portion of this nation's collective intelligence.
Many of the contributions in Beyond the Boom would best be categorized as New York urban essays. They are interesting enough on their own terms. It is not possible, however, to pretend they form a complete generational portrait. And when the authors do extend their observation into generalities—as when Maggie Gallagher turns an understandable (and otherwise quite interesting) gripe about New York City's idiotic real estate market into a moaning complaint that young parents today have to put up with less grand houses than they themselves grew up in—the results can be both erroneous and a little annoying.
Similarly, I don't believe Roger Kimball's contention that the year 1950 "seems to us to have been a time of cultural giants" is going to set epiglottises vibrating among many of his fellow baby boomers. Relatively little of the spirit of our age is captured in the discussions of high and low contemporary culture presented here. I myself can't imagine not being at least a little pleased by some of the changes since 1950. Take architecture. Take the Nash Rambler. It's not hard to understand how a critic might have come to dislike many of today's movies, books, magazines, paintings, musical pieces, and so forth. But one might hope they could at least explain why so many of their compatriots do like the stuff. There's too much abstraction and too much distance, not enough "real life," throughout this volume.
But, for reasons I've already mentioned, I would have approached even a more balanced book on this subject with a measure of skepticism. It is, after all, extremely difficult to generalize accurately and usefully about the inner life of 42 million people (which is the number of Americans currently in their 30s). And even if one could show that all 42 million really do, say, love Cajun food and Japanese industrial products and hate dams that hurt snail darters, it would be next to impossible, it seems to me, to know how they will feel about these and many other things after 30 years of regular experience with them. Who would have guessed Eldridge Cleaver and millions of flower children would end up as born-again small businessmen?
A smart observer would make his generational dissections only after the subjects had fully passed through middle age. At that point, lots of actual history is available, and it's unlikely many big surprises will lie ahead. A smart and lazy observer probably wouldn't do generational dissections at all. Fact is, consecutive age cohorts rarely show radically different patterns of living or opinion. New attitudes and practices tend to evolve across the nation as a whole, not just within peer groups. Factors like class, region of residence, family experience, and recent economic trends tend to be far more decisive in understanding and predicting personality than birth year.
That said, I will acknowledge that current trends are making age and generation membership more decisive influences on personal character than they were in the past. Several factors are involved. One is that it has become so much more common for different age groups to live separately. Increased wealth has allowed a great expansion in the number of separate households and a sharp decline in multi-generational living. Three-generation homes have virtually disappeared. The young have become separated not only from grandparents but even from parents in many cases, thanks to family breakdown and increased institutional rearing of young children. Same-age compatriots have become the dominant influence on many American children, and cross-generation bonds are weaker.
Government entitlements have also eroded natural alliances among age groups. Social Security payments have distanced old people from the young and supported the rise of completely segregated retirement ghettos in the Sunbelt. Social Security has also caused the elderly to organize themselves into an astonishingly cohesive and self-maximizing political faction. Payroll-tax payers are consequently being forced into their own (age-stratified) defensive encampments. Working adults have also begun to differentiate their interests from those of very young Americans to a degree rarely seen in the past, thanks in part to the large and growing burden on their incomes of state levies imposed in the name of children.
Cultural developments have drawn age groups apart, too. Many new forms of music and whole categories of television and film have almost no cross-generational appeal. Private language, separate clothing fashions, and different tastes in food, cars, and consumer goods have always been hallmarks of youth, but only recently has our commercial culture been so efficient at splitting generations into marketing niches. (Does anyone over 30 watch MTV? Does anyone under 60 read Modern Maturity?) All of this is exaggerated by demographic and economic trends (fewer family meals eaten together, fewer all-family events in general, more money for teens to buy their own cars, a lot more single-person apartments, etc.). Put together, these changes may yet make generation-based political and cultural horizon-scanning a tenable undertaking.
Whether you think that day has arrived or not, several of the essays in this volume present worthwhile commentary. Susan Vigilante contributes an interesting description of baby boomers' powerful attraction to Alcoholics Anonymous–type recovery groups, suggesting that the Twelve Step program may offer millions of them a path back to religious truths. George Sim Johnston takes a less optimistic view of his generation's spiritual capacities and considers the watered down alternatives that have replaced traditional religious teachings.
Maggie Gallagher defends yuppies against the charge that they are grasping and unreasonable in their material expectations. Andrew Ferguson describes tellingly how cynicism, and indeed a complete inversion of traditional truths, has today become the dominant mode of intellectual interpretation and understanding. John Podhoretz's wise observations on how baby boomers' views of children have evolved over time—from millstones around a parent's neck, to independent and self-moderating mini-adults, to pathetic victims (and therefore political footballs)—left me wishing he would do more of that kind of writing and fewer goofy newspaper columns. And David Brooks adds a very funny and apt cartoon of the diseased Washington power hound.
Unfortunately there is also some dreadfully stuffy arts criticism here, too much self-absorption, and much too much in the genre of my-coming-of-age-as-a-turning-point-of-our-era. There are a few shapeless clinkers and one strange piece mourning (quite rightly, in my opinion) the disappearance of qualities like valor, decisiveness, and ferocity among today's youth, while attributing it all to an absence of wartime experience (quite mistaken in my judgment, given what a bureaucratic endeavor battle has become in the modem era). But a certain jaggedness is normal for any multi-author collection. There's enough good thinking and writing here to reward a reader's time.
Contributing Editor Karl Zinsmeister is an Ithaca, New York, writer and an adjunct scholar at the American Enterprise Institute for Public Policy Research.
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]]>Michael Katz has written a book about poverty that contains no new arguments or facts and no passion or conviction of the sort that can occasionally cause reinterpretation of old material. It is a book that, in my opinion, errs in many important ways. Yet it is not a book I could get angry with; I found it agreeable to read, and it left me with a kind of gentle sadness. It is one of those discussions where you get the feeling that even the author suspects his case is hopeless.
Poverty is a topic near intellectual exhaustion—particularly when approached from the political left. (Katz reasons as a Marxist, though I have no way of knowing if that is how he identifies himself). Generations of interpreters have twisted and knotted themselves around the subject, eyes averted from the central taboos, producing one of the most cramped and oxygen-starved of policy literatures. The only discussions of the subject that have much originality these days are ones that consciously throw aside the layered pietisms and examine the brutally simple questions that most social scientists would prefer to keep deeply buried at the base of the mental pyramid. Basic things like: Do people feel better and live better when they work? What moves people to labor? Is a human entitled to his fellows' support?
Unfortunately, Katz's idea of going to the root is to call for "economic justice and political mobilization" by means of instruments like "controls on plant relocation, the stimulation of community-based economic development, the redistribution of political power, and a guaranteed income." If those seem like somewhat vague goals, let me say that I actually scoured his book to get that specific. Characteristic of most academic publishing these days, Katz writes with his neck pulled in, taking few risks and venturing almost not at all into the dangerous exploratory work of social invention.
Socialist theory tells Katz that the solution to poverty in industrial countries lies in turning the world upside down—state-imposed "distributive justice" is obviously his ideal. He avers that poverty has nothing to do with the particularities of human behavior or localized conditions, that it is about "power." A revolution something like those that swept the Third World in the 1960s is what is required for its abolition, he suggests.
But he says this only indirectly, without much heart. There is less-ambitious boilerplate in here about hidden successes in the CETA program and so forth, and the possibilities for better results from traditional income leveling plans if only the funding can be increased. But this, too, is unconvincing. Katz is an obviously intelligent man; he understands well the long debate over the sources of modern poverty, and he appreciates how durable poverty has proved to be in the face of repeated public attacks. One gets the feeling he is discouraged, and a little tired. Understandably so. None of what he calls for has ever worked, in this country or others.
The real root of Katz's failing lies in the central tenet of his book: his refusal to accept that there are categories of poor. He argues strongly against any differentiation or discrimination among the poor. Indeed, he makes the more radical case denying functional distinctions between economically successful and unsuccessful persons. Longstanding efforts by scholars to understand differing sources of poverty, and to draw "arbitrary distinctions" among "deserving" and "undeserving" poor are, he insists, baseless.
Which leaves us in the unfortunate position of having to dump the retired poor, the drug-addicted poor, the disabled poor, the criminal poor, the juvenile poor, and others all together into one lumpy stew. The idea that you can improve the physical welfare of a steam-grate wino, or the infant of an unmarried teenage mother, the same way you help a West Virginia coal miner thrown out of work by the Clean Air Act is the kind of thing that only sociology professors think of. Thankfully.
The occasional leftist gas bubble also contributes to the artificiality of Katz's thesis. For instance, he approvingly quotes Charles Reich's "elegant redefinition of property": Property is a collective product created by state law. If this is true, one wonders why the Ethiopian government does not just pass an edict declaring that there is food for all, or why the Romanians do not decree equal heat for every home. Perhaps they have.
Happily, these intellectual surrealisms can be skirted, and the larger part of Katz's text is a concise, generally fair, and sometimes even epigrammatic history of arguments on the poverty question dating particularly from the early 1960s to the mid-1980s. Oscar Lewis, Edward Banfield, and the "culture of poverty" are recapitulated interestingly, as is the battle over the Moynihan Report. An extended tracing of the black family debate is presented, and the conservative criticisms of Gilder, Murray, and Mead are summarized. A lot of this material is pretty well worn—Molly Orshansky and the origins of the poverty index, the Rawls-Nozick debate, the statistical war over homelessness, and so forth—but it is woven together nicely.
For this compilation of historical sketches the book will probably earn a handy spot in certain libraries. But by the conclusion of most chapters, and at the end of the book, an impression of vagueness wells up: So what? Does this matter? What is to be done?
One would like to admire a pithy, well-phrased book like this. But we live in a time of economic expansion to the point of labor shortage, yet where infant mortality is rising in some urban areas for the first time in decades, where generations are growing up without close knowledge of a single self-supporting adult, where crime has become at least a temporary career choice of perhaps a quarter of all young men living in cities, where average black life expectancy has actually fallen for three years running. In the face of cold, clashing, catastrophic patterns like these, Katz's incantation of Michael Harrington's muffled solution—"when we join in solidarity…with the poor we will rediscover our own best selves"—reeks of fire-midst fiddling.
Contributing Editor Karl Zinsmeister is a Washington, D.C., writer.
The post Po' Folks appeared first on Reason.com.
]]>But fat federal field corn subsidies came along and did away with all that. Corn requires a week or two of hard work at each end of the summer and then nothing but a little casual watching; specialized crops can be a lot more painstaking. Corn prices are set high, and guaranteed, by the government; other crops vary in price like most things vary. It's little wonder, then, that farmers in East Iowa, and in lots of other places across the country, quit growing mixed crops.
All those canneries that Eldon Hans remembers have moved to Minnesota, where the short growing season prevents corn from pushing out competing production. And like most of the rest of the country, Iowans get the bulk of their fresh vegetables from the vast corporate operations based in Florida and California. There's not a reason in the world that dirt-rich Iowans should be eating trucked-in strawberries and string beans picked seven days earlier during the summer, but they are. Because most of the state has become monocropped in corn. As you crisscross the endless rolling hills, king corn—sponsored by federal payments that have nearly doubled the market price in some years—stretches from horizon to horizon, farm after farm, season after season.
Agriculture this unbalanced can reduce the quality of output available to consumers—there is no fully adequate substitute for fresh local produce. It has made farming more cyclical and insecure, as a grower's fortunes often rise and fall on one crop price. It can be very hard on local economies that have lost much of their diversity, becoming truly one-horse towns. And it has brought real problems environmentally.
The traditional route to high farm productivity was to rotate various crops to keep humus and soil-nutrient levels in balance. But very high subsidies for a handful of "program crops" have made them so unnaturally lucrative and secure, compared to alternatives, that rotation is falling off. As a result, many farm counties are characterized by excessive concentration on a narrow range of agricultural output. From his extensive studies of various cropping regimens, Iowa State Cooperative Extension agent Mike Duffy concludes that "all the financial rewards currently favor the most environmentally damaging practices."
In addition to the overconcentration on favored crops that subsidies bring, there are more-specific problems with current federal programs. For one thing, payments are made to farmers on the basis of the total acreage they devote to a program crop over a period of years. If a corn farmer rotates his fields with soybeans, oats, or pasture for conservation purposes, his "base" for corn falls, reducing the area he is eligible to harvest in future years. "Government programs kick you in the teeth if you try to follow a rotation-based system," says Duffy.
To save their teeth, most growers of corn and the other supported farm products have taken to monocropping—the same kind of plants on the same land, year after year—and pouring on fertilizers and pesticides to try to maintain soil fertility. That is costly, and it can have untoward environmental effects, including increased insect immunity to pesticides, excessive leaching of fertilizers into watersheds and aquifers, and possible buildups of chemicals in the soil, water, and food chain.
In September, the National Academy of Sciences released a major study concluding that federal farm subsidies encourage overuse of fertilizer and pesticides by rewarding maximum yields per acre rather than maximum overall return in the marketplace. The NAS also pointed out that farm policy discourages diversification into other crops not covered by government programs. The chairman of the research committee that wrote the report said the finding of government culpability was the most important conclusion of the study. "It is these programs that really restrict experimentation, the changing…to alternative crops" and other conservation practices, explained John Pesek.
The over-intensification problem is aggravated not only by subsidies but also by other provisions of U.S. farm programs. In an attempt to contain the unwanted agricultural surpluses that subsidies inexorably bring, lawmakers have increasingly relied on a strategy of land-idling. The 1985 farm bill included measures to take tens of millions of acres of U.S. farmland out of production for periods ranging from 1 to 10 years. To keep farm income up while this was taking place, direct payments to farmers were increased.
These measures had a very perverse combined effect. On the one hand, the supply of available farmland was constricted. On the other, payments for each bushel actually grown were very generous. Farmers responded exactly as you would expect—they poured chemicals and tractor time onto those acres that remained in circulation and got higher yields that nearly canceled out the lower acreage. That defeated the lawmakers' intent of cutting output. It also souped up agricultural intensity to unnatural levels—the last thing to be desired from an environmental point of view.
So long as politicians insist on handling the surplus dilemma by reducing the supply of agricultural land instead of attacking the problem at its root—by cutting subsidies—farmers will continue to substitute chemical and energy inputs for acreage. The strange result is that in this country, where we have more rich earth than we know what to do with, much of it is tilled as frantically, and harshly, as if we were some soil-shy rocky island.
Another effect of high farm subsidies combined with mandatory land "set-asides" is to encourage sod-breaking on fragile lands. For instance, the sagebrush lands of West Texas and the sandy prairies of Colorado, Nebraska, and Wyoming had for most of this century been considered too frail for tillage. Under market conditions, they would rarely have been used for anything but grazing. But thanks largely to federal incentives in the late 1970s and early 1980s more than 10 million acres of this highly erodable land were plowed under for wheat and corn.
Much of it gave out within a few years, but a safety net yawned below: In 1985 the Department of Agriculture set up a "Conservation Reserve" program to buy out of production up to 45 million acres of "fragile" lands—three-quarters of them planted in program crops—for a 10-year period. Most of the sodbusters jumped on board. In that way they extended their economic bounty another decade, proving they were right to bet the feds would make their environmentally and otherwise imprudent decision economically lucrative.
Tarkio, Missouri, farmer Blake Hurst notes the perversity he observed in his county: "What programs like the…Conservation Reserve really do is remove the risk from farming highly erodible, unproductive land.…When times are good, plow it up and let it blow or wash away. Don't worry about the bad times; you can always rent it to Uncle Sam."
Similar whackings to Mother Earth have been administered by another portion of the U.S. farm program: the disaster aid regimen. Established in 1973, federal disaster aid allows growers whose harvests are stunted or who are prevented from planting by "conditions beyond the control of the producer" to collect payments that frequently total many hundreds of millions of dollars. (In the 1988 doozy, nearly $4 billion in drought aid was handed out.) In addition, the government farm credit agencies routinely make billions of dollars in "loans" (many of which go delinquent) available to farmers in areas hit by flood, dryness, or similar inclemency.
The problem is, the easy availability of free insurance encourages more exploitation of dicey lands, riskier planting decisions, and less care in management. Agricultural economist Bruce Gardner points out that "corn is more susceptible to lack of water than is grain sorghum; but if all goes well, corn is a more profitable crop." With disaster aid guarantees behind them, dryland farmers will gamble on the bigger payoff instead of planting the crop that makes most sense in their area. The sensible old arid-region practice of leaving land fallow every few years in order to let subsoil moisture build up has fallen off for the same reason. Disaster aid, Gardner writes, "can be characterized as an anticonservation policy."
One of the clearest examples of the sloppiness that disaster payments can bring on was a little program that existed until 1980 to indemnify beekeepers for their losses. Content with the assurance that the USDA would make good any losses, some apiarists didn't even bother to move their hives from orchards and fields when they were being sprayed with pesticides.
Another way the federal government has sometimes underwritten ecological foolishness is through its irrigation policies. Large federal water projects are almost never self-financing. Some are selling water to farmers for $3 an acre-foot when its marginal cost is 200 times that. That leads to wastage, depletion of sometimes irreplaceable supplies, less water available for other uses such as human consumption, and sometimes damage to soils from dissolved salts left behind on overwatered land.
Federal water projects have also distorted regional farming patterns. Without subsidized water, California would be relatively unimportant agriculturally; with it, it is our number-one farm state. Much of California's agriculture replaced production that had previously taken place elsewhere. Its large cotton and rice industries were stolen from the Old South. Most of its corn and wheat operations would have remained in the Middle-West but for the cheap drinks. Its extensive cattle ranches pushed out operations from both the South and Midwest (an incredible 30 percent of California's state water production is now used to irrigate pasture). Its massive produce farms overpowered local operations all across the country.
And California is but one example. Maine's potato industry has similarly been dashed by competition from irrigated spud ranches in Idaho and Washington.
The frequent misallocations of the water projects have been recognized for some time, and slow movement toward more efficient pricing of federal water is beginning. But that alone will not solve the irrigation follies. Irrigation has nearly doubled over the past 30 years, and much of the most recent increase has come through private investments. Many of these projects are sensible, a kind of self-insurance against drought. But some draw over-heavily on nonreplaceable ground water, particularly in the northern Great Plains. The culprit here is not a federal water authority but rather farm price supports set so high over market levels they overpower any incentive to conserve the water for future use. Economically, it now makes sense for some farmers to pump their wells dry, collect fat federal payments, and retire off the proceeds.
But, of course, this is not wise long-range policy. Former Assistant Secretary of Agriculture William Lesher points out that "from 1929 to 1978, 60 percent of the increase in irrigated acreage occurred on the principal program crops. We are mining and depleting our water resources to produce more of the agricultural products for which we already have burdensome supplies."
It is clear that rolling back agricultural subsidies would bring a more flexible, somewhat less intense agriculture that would not only be less costly for farmers and more varied and responsive to consumers, but also gentler on the earth. So, as you might expect, environmentalists have shown increasing interest in farm questions. (Current EPA chief William Reilly made agricultural topics a special concern in his previous position as head of the Conservation Foundation.) Environmentalists have vowed to be active in the drafting of the next farm bill, and in the current atmosphere much of the process could be environmentally driven. "I'll be very surprised if environmentalists don't come up with a common agenda and a strong effort to see it passed in the next farm bill," says Ken Crook of the Center for Resource Economics, a Washington, D.C.-based environmental group active on agricultural issues.
Unfortunately, most environmental groups are much more interested in strapping controls on farming than they are in trying to help put its economic incentives in order. They are more likely to throw regulatory tantrums on issues like chemical use than to seriously pursue the more lasting solution of putting farming onto a self-sustaining, market-sensitive path.
Environmentalism's relationship to farming has always been ambivalent. As several farmers told me, many people love to have open space around them, but they don't want anyone to go out and earn a living on it. Blake Hurst speaks generally for tillers when he says, "We think of the environment as something we have to battle. We have nasty insects, destructive windstorms, dangerous floods to be resisted. It's a lot easier to be an environmentalist when you live in an air-conditioned house and commute in a comfortable car to an office, when you don't have to worry about parasites in your meat or worms in your pickles."
Soybean grower Jack Fischer of Pomeroy, Iowa, cites the example of the open drainage ditches on his spread that require cleaning out every 40 years or so. "Some environmental groups see that as destroying natural habitat, but that ditch was dug by a farmer, and its purpose is to provide an outlet for runoff." In the past, the government has bought various forms of conservation compliance from farmers with its outlays. Increasingly, however, environmentalists are pushing toward just mandating changes.
Maryland chicken producer Simpson Dunahoo worried to me about the "grave, growing threat to farmers, and private property owners generally" represented by so-called critical areas legislation pushed through in his state a couple years ago (and replicated in many others). It requires, for instance, that any land within 1,000 feet of tidal water have no more than 1 house per 20 acres. No state compensation is offered for what effectively amounts to a taking of valuable land. Other measures forbid drainage of low spots in fields or filling in marshes, again without compensation.
A more egregious example of the same phenomenon was related to me by Johnny Cooper, the Agricultural Extension agent of Fort Bend County, Texas. Seems six to eight specimens of a rare wild fowl known as the Attwater's Greater Prairie Chicken had been sighted in some thickets on private land in that farm county. The local Farm Bureau chapter proposed setting aside a large chunk of land extending at a radius of one to six miles from the site to protect the birds. The U.S. Fish and Wildlife Service, however, stunned local farmers by declaring that within a massive pie-shaped piece of land bordered by the San Bernard and Brazos rivers and U.S. Highway 59—an incredible 250,000 acres of private land in all—use of most pesticides and certain other farming activity would be flatly forbidden.
When that decision becomes final, the upshot will be to effectively shut down farming in one-quarter of this heavily agricultural county. "Either that or make liars of a lot of fellows," says Cooper, alluding to the fact that the farmer's word is often the only way of knowing what he's put down on a field. One other possibility, locals sigh, is that the little chicken band will get a severe case of lead poisoning late some night.
Uncompensated appropriation of the use of private land is becoming one of the most contentious issues dividing farmers and environmentalists, but there are other points of friction as well. Activists in Massachusetts with goals like keeping hogs and chickens in "family units" and banning any animal surgery that causes discomfort recently tried to place rigid restrictions on livestock production in that state. When a referendum on the subject went to ballot, the American Farm Bureau and other groups weighed in with paid advertising emphasizing the harm such measures would cause family farmers, and the measure was defeated by a 71 percent majority.
In other areas, however, environmentalists have had more success in influencing public opinion. Chemical usage is a prime example. A drumbeat of cautionary reports, some responsible, some not, has left many consumers concerned about food safety due to alleged pesticide residues. As scientific knowledge improves, farmers are using smaller and smaller chemical doses, and, on the whole, there is no question but that America's current food supply is safer and more wholesome than it has ever been. That fact is not reflected, however, in most environmentalist reports.
The recent case of Alar and apples was representative of the kind of harm done to both farming and the public interest by environmental extremism. Based on some grossly distorted science, and heedless of the near disappearance of the Alar preservative due to voluntary measures by apple growers, a group called the Natural Resources Defense Council panicked parents all across the country with claims that normal apple consumption could threaten children with cancer. Apples were removed from schools, and apple sales plummeted, doing grave damage to growers. A great many youngsters who had been eating wholesome snacks and desserts switched to something gummier. Forced to choose between strident negative claims and complicated rebuttals, "the public banned Alar," as one congressman put it. The politicians and EPA bureaucrats will soon follow suit.
There are numerous other instances where calculated incitement of public hysteria by environmentalists resulted in over-hasty banishment of chemical compounds important to agriculture. Often, no thought at all is given to what might replace the compound in question, and in some cases the substitute has been considered even less healthful than the criticized target. Government certification of agricultural chemicals has become so involved, taking two to five years, that it increasingly does not pay manufacturers to keep their products on the market unless they are big sellers.
As a result, specialized compounds and bug controls for minor crops are disappearing, to the alarm of growers—not because they are unsafe but because sales aren't high enough to justify undertaking exhaustive environmental approval. Earlier this year, for instance, DuPont said it was discontinuing phosdrin, a vegetable insecticide, and azodrin, a cotton and sugar cane pesticide, because it wasn't cost-effective to spend the millions of dollars necessary to reregister them.
Another offshoot of unbalanced chemical alarmism has been the substitution of foreign-grown food for domestic production. When necessary chemicals become too costly or too hard to obtain, some crops cease being raised in the United States. The irony is, they are replaced by supplies grown in countries where monitoring of the safety of agricultural chemicals is far more lax. This is an important source of the increasing transplantation of American fruit and vegetable production to countries like Mexico and Chile.
Farmers themselves are pretty sensitive to the effects of agricultural chemicals. After all, in most cases they have to apply the chemicals themselves, and many farmers pointed out to me that it is their family drinking water that is affected if buildup becomes a problem. Since 1981, all farmers must pass a detailed test and be certified before they can buy and use restricted pesticides. Better, more selective chemicals that are used at rates just a fraction of what prevailed 10 years ago are now coming to market, and much more measured application is being practiced.
New techniques and technology promise further improvements. For instance, researchers have found that herbicides dissolved in vegetable oils are much more effective, allowing equivalent control with just one-fourth of current usage. Application equipment is now being designed. Forthcoming electrostatic sprayers will increase delivery efficiency even further—electrically charged droplets will wrap themselves around plants, allowing ultra-low-concentration solutions.
Since pesticide costs can total as much as 15 percent of a farmer's production expenses—billions of dollars a year nationwide—and only about 20 to 25 percent of conventional spray reaches its desired target, these improved practices can bring farmers dramatic cost savings while reducing environmental worries. The next stage, well underway, will be to attach cameras and other image sensors to the tool bars of tractors and set up a computer to digitize leaf outlines, turning herbicide nozzles on when it sees a weed and off when it doesn't.
Researchers at Purdue University have already developed color sensors that can assess the amount of organic matter in soil. Attached to fertilizer or herbicide rigs, they can calibrate the exact dosage of chemical to the earth being passed over. The technology is now being licensed and should be commercialized within about two years.
Other work by the Agricultural Research Service of the U.S. Department of Agriculture is examining ways to encapsulate fertilizer or pesticides in starch or water-resistant membranes, so a controlled amount applied directly to the soil will be released slowly, as plants need it, instead of in heavy conventional doses that can wash or leach away. More-fundamental research is aiming to give plants the ability to fix their own nitrogen—extracting it from the atmosphere where it is abundant, as legumes, vetches, and some other plants do naturally—so that no artificial fertilizer will even need to be applied. New technologies like these offer far more promise in solving environmental problems than any regulatory strategy.
Even absent bold new tools, farmers have begun to vastly improve their utilization of fertilizer and chemicals. Delaware vegetable farmer Charles West, for instance, makes four separate fertilizer applications on each crop of spinach, because multiple small applications are much more likely to actually reach the plant (and less likely to leach into the groundwater) than one big dose. Cover crops are also planted on almost all fields over the winter to help keep soil nutrient levels high. "If for no other reason than cost, you won't find anybody just dumping stuff on their fields anymore," says wheat grower David Magness.
And reducing use is usually all that is necessary. Agronomists have shown that most of today's farm chemicals are easily degraded by natural microbes present in the top four feet of soil. Provided they are not overapplied or too heavily watered in, modern chemicals could be used indefinitely in most places without threat of buildup.
Probably the single best way to get farmers to reduce their use of chemicals would be to free farm prices, so that growers would profit from paying more careful attention to their input costs. There is reason for hope on this increasingly fractious issue, if only environmentalists would acknowledge the new research on dosages and delivery systems and accept the confluence of economic and environmental interests when it comes to farm chemicals. Cost-driven conservation makes every farmer an antipollution force, but it only takes hold when farmers are exposed to the free market's powerful incentives to pinch pennies. One more voice on the side of subsidy reform could make a difference here.
Unfortunately, environmentalist sentiment seems increasingly unwilling to acknowledge the concept of an "acceptable" dose greater than none and ever more hostile to considerations of cost-effectiveness. Any discussion of the growing conflict between farming and environmentalism must ultimately look deeper than the subsidy problem and the economic divergences and consider the philosophical split. Modern environmentalism is slowly grinding its way toward a zero-tolerance standard which allows little room for compromise with productive goals. It frequently exploits, and feeds, what appears to be a rising antiscience, anti-material progress feeling among parts of the general public. In too many instances, critical agricultural advancement is being thwarted by environmentalism's opposition to new technology and sometimes even to research.
An example would be food irradiation, an efficient, scientifically uncontroversial method of preserving and sterilizing edible products without the use of chemicals. In a process that might be thought of as somewhere between microwave cooking and the airport luggage x-ray, low-dosage ionizing energy can be used to kill harmful organisms without leaving any radioactive residue behind. All meat products, for instance, could immediately be certified free of trichona, toxoplasmosis, salmonella, and other dangerous microorganisms via irradiation.
Irradiation is already used to sterilize food eaten by some hospital patients and by astronauts, as well as to make products like cosmetics and medical supplies. The United States Food and Drug Administration, the World Health Organization, and other regulatory groups have approved it for use on a range of commercial foods in countries around the globe. Hardly any food is so treated in the United States, however, because environmental and "consumer" groups have been able to mobilize public dread and opposition to any process with the word radiation in it, particularly since the Chernobyl panic.
One of the agricultural scientists I interviewed suggested we are at the beginning of a new era which will increasingly see the substitution of botanical for mineral resources—plastics supplanting metals, plant and animal "factories" synthesizing a growing range of chemical compounds, new reliance on biopharmaceuticals, cultivated energy sources, and so on. Some of the procedures involved—genetic engineering, hormone therapy, cloning—are very new and make people nervous. There is little question, however, that the future will require more, not less, expertise in biological exploitation and management. Undue fretfulness in this area will mean lost opportunities and surrender of leadership on the newest science frontier to better-prepared competitors.
Some optimism is in order—current developments in bioresearch are exciting on several fronts. Originally, most agricultural study was oriented toward making farmers more productive and giving them new products. Most of that work is now done commercially rather than publicly, although the government does continue basic production research.
The second big push in agricultural research was to find new uses for agricultural products. Researchers continue to come up with fresh applications—biodegradable plastics made from vegetable starches are gaining attention now, as are industrial oils derived from plants, printing inks and engine fuels made from soybeans, alcohol fuels distilled from grains, and so forth. An entirely new commercial crop—bamboo-like kenaf—is now entering production as an annually harvestable paper source. Researchers are even beginning to talk about making plastic films that could be used, for instance, as floor coverings from the casein in milk.
But the biggest hunt in agricultural research today is for new answers to health and safety questions. The latest research offers something for everyone—better quality and wholesomeness for consumers, improved efficiency for farmers, more benign ecological effects for environmentalists. Scientists are on the verge of identifying plants that can "eat" toxic compounds out of the soil, plants that can fertilize themselves, even plants that produce their own natural insecticides internally. Farm animals are becoming healthier and more efficient. Insects are being combated naturally through use of sterilization and other processes.
Development of biological controls to replace inorganic pesticides is an area of particular emphasis. Biocontrol is not new. For 100 years, U.S. scientists have been collecting, studying, and then releasing natural predators that attack nuisance weeds or bugs. The first microbial pesticide, a bacteria that infects Japanese beetles, was first distributed back in 1939 and can be bought by home gardeners at any hardware store under the name Milky Spore Disease.
But as scientists have begun more active measures to find and create natural pesticides via genetic engineering, even biological control has begun to be attacked by environmentalists. Earlier this year, the EPA gave permission to Crop Genetics International, a Maryland biotechnology company, to plant corn seeds inoculated with a bacteria that will live within the plant and kill any caterpillars that try to eat it. The technique could make the U.S. crop resistant to a borer that does $400 million of damage every year, even after farmers apply $50 million of pesticides. If the system works, the pesticides can be scrapped, and scientists estimate that Nebraska alone will have a 25 percent increase in its corn yields.
The biological agents tested so far are all variants of naturally occurring organisms. Before they are approved, manufacturers have to demonstrate that the agents won't kill beneficial insects in addition to their targets and that they won't spread to neighboring weeds, giving them unwanted predator immunity. If allowed to develop, a clutch of these new measures could bring dramatic containment of insect and weed threats without heavy use of invasive chemicals.
Farmers are enthusiastic, sensing a solution to the triple squeeze of decreasing availability, increasing costs, and possible environmental effects of chemicals. "The chemical companies tell us that to put a new pesticide in the market costs so much that they have to pass it on to us. Five years ago it used to cost me $60 an acre to spray cotton. Now it costs $120 to $130," says one cotton farmer. "We urgently need a different approach," agrees another.
Environmental groups, however, including the Environmental Defense Fund, the National Wildlife Federation, and the Audubon Society, have tried to block commercialization of the Crop Genetics product. Other nonchemical systems that would cause natural viruses to break out among crop pests, or stop their digestive tracts from functioning so they starve to death, have also met resistance from environmentalists who believe much more regulatory control is called for. The group Friends of the Earth has labeled bio-engineering "Russian Roulette."
Plant disease research may be thought of as at a threshold similar to when the new process of vaccination began to be used to protect humans. But rather than treating this as an exciting scientific refinement that requires normal laboratory precautions, many environmentalists insist biotechnology is a dangerous leap into wholly new territory. It is not. The National Academy of Sciences' Committee on Scientific Evaluation of the Introduction of Genetically Modified Microorganisms and Plants into the Environment concluded in a major report released in September that the process presents no unusual or unmanageable risks.
The technological progress made in improving and supplanting farm chemicals has been mirrored by positive developments in animal husbandry. Over the last 30 years half the fat has been taken off U.S. pork. Loin pork is now equivalent in cholesterol and fat to chicken, a very healthful improvement. Similar progress is being made with beef. If allowed to proceed, cloning, gene transfer, artificial insemination, and other biotechnology could improve leanness by another 50 percent.
Waste and costs in animal production are also coming down. In 1950 it took 84 days to raise a 4-pound broiler chicken, with a feed conversion rate of 3.25 pounds of feed for every pound of meat produced. Today, thanks to poultry inoculation, scientific breeding, controlled diets, and other factors, it takes 42 days, with a 1.9 feed conversion. Again, agricultural science has brought more efficiency, fewer unwanted byproducts.
Similarly, in 1945 there were 25 million dairy cows in the United States, and they produced 4,600 pounds of milk each. Today, we have just 10 million animals, but they put out an annual average of 14,000 pounds each. That can only be thought of as a boon for consumers, farmers, even cows (less competition for the most scenic grazing sites). Developments now underway could dramatically push that trend line upward again—except that environmentalists and some hidebound farmers may succeed in preventing it.
The biggest improvement on the milk horizon would come from use of bovine somatotropin (BST), a natural growth hormone that could boost milk output another 15 to 20 percent per cow. The U.S. Food and Drug Administration, which has already given the go-ahead to sales of milk from cows getting BST (it is indistinguishable from other milk) has concluded after careful study that BST is an entirely safe protein. Only some atavistic environmental groups continue to make the opposite case, and commercial approval is expected early in 1990.
But environmentalist opponents now organizing a scare and boycott campaign have allies in this case among dairy farmers, who have their own reasons for opposing BST. The dairy program is one of the most rigidly controlled of all the farm subsidies. The federal government supports milk prices at strictly controlled levels by buying up tons of surplus dairy products. If BST suddenly boosted milk output, keeping prices right where the dairy lobby has convinced Congress to set them could become very expensive—possibly a couple billion dollars a year beyond the similar figure already budgeted.
The obvious solution is to let prices fall, but dairy farmers used to their cozy cartel would consider that a calamity. Better to remain inefficient. So in this instance, bounty-inducing new technology is being resisted, on trumped-up environmental grounds, largely because the U.S. farm program makes it impossible for prices to adjust to changes in supply. Not only BST, but any other research that would increase efficiency in the ways that we have come to think of as synonymous with modem progress becomes anathema under this warped set of incentives.
What's the big loss, you say, not noticing any great milk shortage. Well, maybe none. But we don't know what benefits might accrue from cheap milk. There are always those floor coverings made from casein. And scientists think they may someday be able to extract rare medical proteins—such as the blood-clotting factor used to treat hemophilia—from milk. Progress can't be anticipated in advance, but we would definitely be foregoing something. And tactically, the timing of this case is bad. Because it is about to run up against the political might of one of the most venerable farm subsidies, biotechnology—in the BST case—is going to get a very black eye even before its potential has fully seated in the public consciousness. That could set a nasty precedent.
So we are back where we have ended up several times before in our tour of U.S. farming: concluding that without price reform—specifically, a return of market incentives—great opportunities will be lost. That, plus openness toward the new agricultural science, is essential to the future health of U.S. farming. A biotechnology cornucopia is about to open, offering riches on many fronts. Among other things, a flood of mutually beneficial innovations could heal the increasingly antagonistic relationship between farmers and environmentalists. But if that is to happen, both sides must be willing to embrace positive change. Stubborn insistence on blocking the door to progress could prevent a synthesis with truly rare potential to improve life for all Americans.
Contributing Editor Karl Zinsmeister is a Washington, D.C.-based writer and an adjunct research associate at the American Enterprise Institute. This article is the third in a four-part series. Next: How to get out of the subsidy trap.
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]]>Agriculture is an occupation like no other. It fosters private discipline and self-reliance in ways not easily replicated by office work or assembly lines. Each independently owned farm is like a miniature frontier, where individuals must face nature, solve problems alone, and rely on both their wits and their strength to earn a living. Farming is a supremely entrepreneurial activity—self-employment with special character-building twists.
One of the remarkable things about American farm culture has been its ability to adapt and apply the miracles of modernism and technology to achieve a productive revolution without destroying older ethics and living patterns. Farming has become very much a high-tech industry, with advanced equipment, computerized information, and lots of science in place. Yet even with the bioengineered seeds and the big bank deals, most American farmers have retained remarkably simple, straightforward values. They continue to get up every morning at 6 A.M.; they work hard; they stay pretty humble; common sense and stamina are in abundant supply; family ties are strong, psychotherapy bills low.
Farm families have long replenished our society with sturdy lessons in self-reliance and realism. Millions of Americans value the agricultural sector for that. But there is a perverse danger to be avoided in any embrace of family farming. Farms must stand on their own strengths. If they are adopted as public charities, lap-fed on fatty government largess, they will cease to exist as the independent, strong, and diverse social institutions that inspired us in the first place. Farmers do not make good pets.
M.E. Bradford is an enormous man, the son and grandson of cattle ranchers. Himself, he is a philosopher and writer, a proponent of southern agrarianism, the intellectual school descended from Thomas Jefferson's argument that free and self-governing small farmers are the very roots and stem of American democracy. "The regular difficulties of agricultural life," Bradford has written, have "very positive effects in the formation of character." Indeed, he concludes, "the most important crop of a sound agriculture" is "solid freemen."
America's agricultural sector, Bradford argues, will always be built around the family farm and exist somewhat uneasily outside the nation's industrial structure. "Commercial, corporate America wants a proletariat—a wealthy one, mind you, but pliable. The thorny individualism of independent farmers—who have never surrendered a sort of artisan like autonomy, with whom many separate negotiations and personal contracts are necessary—has always sat uneasily with corporate business solutions," he says.
This aspect of agricultural life has to be interpreted carefully. The distinctiveness of farm communities is often sugarcoated and crudely romanticized. "We've got farmers who are drunks, farmers who won't pay their bills, won't work, you name it," states Missouri corn grower Blake Hurst.
"Farmers have been patronized forever as hearty souls, but there are as many whiners there as anywhere," argues one Farm Bureau official. Even genuine yeoman independence can, and occasionally does, spill over into an unproductive cussedness. Several of the more venomous populist demagogues of past and present have sprung from farm-state bases.
Just the same, there are some valuable differences in rural life. Earlier this year, American Farm Bureau President Dean Kleckner worried over the fact that this country's urban majority is increasingly cut off from the land, from mechanical processes, from any first-hand experience of the relationship of human beings to the natural world. "There are people out there who think milk comes out of a carton and peas out of cans," as one observer put it.
This alienation of many Americans from the physical universe has sometimes led to morbid and exaggerated fears (for instance, about food safety). Or to unrealistic expectations of the possible (like simultaneous demands for no pesticides, no migrant labor, lower prices, more salad bars, and heaven forbid anyone should ever find a horny caterpillar in their lettuce). Occasionally it results in Luddism, damaging ignorance, or just simple kookiness (as in the movement which urges that cows be pastured where they have ocean views). If an effete fussiness has crept into American life, certainly farms continue to be great places to learn to repair an engine or figure a cubic volume, to discover how to tell a ground wire from one that will stop your heart, to develop the ability to keep a sick animal alive, even to find out how a fellow can get by without a hairdryer.
The Priesmeyers are a farm family. Eldest son A.J. is a small, wiry man with sharp-featured sunburnt good looks and an outgoing directness. His brother Terry is fair and burlier, a classic quiet and thoughtful younger sibling. There is an obvious bond between the brothers, a genuine friendship to match the close-quarters working relationship. A third brother, Lester, is younger, unmarried, and inclined to do a little more running around before he pulls on his farm business cap for good. But three-and-three-quarters Priesmeyer men are already hard at the task of growing rice, and it's taken some hustling to size up their El Campo, Texas, farm to support four families.
Arthur Priesmeyer, Sr., clearly admired by his sons, is the man at the top. He is roaring around, dust flying, in a massive earthmover when I meet him, regrading and leveling a rice field. "He likes to drive anything with Caterpillar on it," A.J. says, winking at me. In the course of expanding his operation to its current base of 1,200 acres, Arthur stepped in a few of the pitfalls that swallowed a lot of farmers in the early 1980s. Some land bought on credit with no down payment has scurried off into the arms of creditors.
But the family has made do. "We're shade tree mechanics," says A.J., indicating they do most equipment repairs themselves right at the farm. Their wives work in town, supplementing the family income. The Priesmeyers buy most of their farm machinery used, and the old man has a reputation for having skinned more than one auctioneer. "The way we look at it," Terry explains, "we can buy a neighbor's 80-acre farm for the cost of one $75,000 tractor." And land is what a four-family farming operation needs.
In any event, the tight finances haven't prevented the Priesmeyers from enjoying meaningful lives. Day long, kids wearing grimy grins and scrub haircuts putter barefoot in the powdery dust of the yard, circulating through shifting groups of relatives who come to gather around the kitchen table. In this farm family, as in many, much of the essential business takes place there—"the marketing gets done where the electricity runs," goes a common saying.
A.J. keeps a 1946 single-engine airplane with deep vee wings, a dual tail, and gorgeous showgirl curves, flying it out of a barn for pure fun. And the whole lot are hunting and firearms nuts. Piles of deer antlers and other trophies lie around the house, including two stuffed bobcats father and son shot on the farm a few years past. The one vacation every year takes the family to Colorado to camp and stalk elk.
This passion for wildlife and the outdoors has led to some very unconventional farming practices. With its flowing water and heavy grain yields, rice farming attracts birds and animals in great number. To avoid pilfering losses, most growers keep their boundary land clear of nesting and hiding spots. The Priesmeyers, on the other hand, have for years let their turnrows, canal banks, and hedges grow up in lush wildness. Scrub trees, junglegrass, ducksalad, hemps, hedges, smartweed, and bushes of all sorts flourish improbably.
There is a price to be paid for this—blackbirds can easily destroy 15 percent of a crop, even when farmers fight them off with shotguns. But there is also a benefit—one that helps make agriculture a worthwhile way of life for these men: The farm is rich with geese, ducks, ibises, dowitchers, doves, and pheasants, plus the bobcats and foxes that feed off them. There are deer. There are cottonmouths, and even a few alligators, in the drainage basins.
The Mennonite who owns the adjoining farm, with its clear-mowed and sprayed-down field margins, is undoubtedly astonished by this riot of unruly subtropical habitat, but for the Priesmeyers it is a reasonably cheap joy-producing fringe benefit of being a farmer. For most of its practitioners, agriculture has value and importance beyond its ability to provide an income. Part of the compensation is in the fabric of rural living, the satisfactions of owning land, and the freedom to set one's own course. For some there is even a payoff in letting things go to seed.
Unfastidious and incautiously fond of guns, Caterpillars, planes, and pheasants as they are, Arthur, A.J., and Terry Priesmeyer are nonetheless impressively resourceful, hardworking, and free-living Americans. As individuals they have tremendous personal vitality, and their family allows a great collective strength. It is very hard to imagine these men beaten down. Even in a scientific society, those are qualities that count for something.
Even if one accepts the view, dear to many Americans of varied persuasions, that our nation's farms are to be valued for important social contributions, one hard fact remains: Those benefits simply cannot be purchased with money. A half century of copiously flowing funds has not been able to prevent a decline in the size of America's agricultural sector. That shrinkage is powerfully driven by technology—it simply doesn't take many farmers nowadays to produce tremendous bounty—and it is inexorable.
More to the point, as even Bradford acknowledges, "sustained government help…is self-defeating. It saps the very vitality we value." A deep embrace of subsidization, protection, and coddling threatens the loved one with suffocation.
A large portion of government assistance for farmers today can't be considered anything more than welfare (or to be more precise, "workfare"), and it is having many of welfare's characteristic effects. One is dependency. Once you've bought land and equipment counting on the regular check, you're hooked. It's no accident discussions of farm programs often use the image of the addict.
"The programs are 'voluntary,' but the penalties for non-participation are so great that a farmer who wishes to be self-reliant is nevertheless virtually forced to sign up," says former Assistant Secretary of Agriculture Don Paarlberg. "This subversion of formerly independent farmers is one of the worst attributes of government farm programs."
Bay City, Texas, farmer Loy Sneary is just one of many who expressed worry to me that the great run-up of farm subsidies during the 1980s has cost farmers a measure of self-respect. University of Missouri sociologist William Heffernan, who has surveyed the attitudes of farmers for years, confirms that the trait traditionally tied most closely to farmers—a strong sense of self-worth—has begun to be eroded by guilt. Heavy costs and unwieldy surpluses in government programs have led some farmers to "see themselves as liabilities." Heffernan reports that some farmers "are willing to forgo their subsidies to get back in society's good graces. Others just want their independence back."
"My wife's father is of German extraction and he keeps up with events there," Blake Hurst says as he drives me around his farm in Tarkio, Missouri. "He tells me the German government pays farmers to keep Bavarian farm houses 'typical,' to keep neat fields along the autobahn, things like that. That seems pretty artificial, even a little humiliating, to me."
The approach of "farm as theme park" also has a foothold in this country. The state of Vermont recently disposed of part of a budget surplus by establishing a special payment to dairy farmers. According to a Farm Bureau official, its general intent was "to keep the barns painted red and the calves in the fields in a state where image is important."
The programs also encourage underhandedness. Schemes like the "Mississippi Christmas Tree," "PIK and roll," and the "Dakota shuffle"—some illegal, some merely unseemly—feature prominently in coffee shop conversations in farm counties these days. The thicket of constantly changing government provisions makes arbitrage, asset shifting, inventory shuffling, and creative bookkeeping not only profitable but necessary.
Sometimes the result is outright scammery. Delaware farmer Charles West recounts the case of a local farmer who had planted more acres of barley than he was allowed. The authorities ordered him to plow under the area that exceeded his allotment. He did. Problem is, he harvested it first, by night. "We had neighbors who saw the combines, and we knew the cab drivers, but he denied it to the bitter end," says West. "We had to have agronomists come in and analyze the plow-under. The whole thing was an embarrassing mess."
Unvarnished fraud is probably pretty rare, but as Paarlberg points out, "farmers talk frankly with equal parts of cynicism, humor and guilt" about even the milder, very common, varieties of fiddling. Yet so long as government programs set the baseline on available returns, most farmers of the major government-regulated crops feel as if they must get a piece of the action.
As Hurst says, "We don't really like accepting subsidies. But if we didn't enroll in government farm programs, our corn would be worth $1.80 a bushel; because we participate, we receive $3.00. Everybody has his price. Now you know ours."
And it is not only on farmers themselves that the government programs have eaten away. The transfer, season after season, of tens of billions of dollars in aid (more, recently, than has gone to food stamp recipients, who are nearly 20 times as numerous) has also changed the public's view of the agricultural sector. Much good feeling has been squandered. If the notion ever roots that agriculture is peopled with free riders, farmers will pay a terrible price.
Already this may be happening. Farm Bureau officials report that in debates over how farms ought to be treated when they are handed down to heirs, they sometimes hear the argument that since government subsidies helped farmers get rich, it's only fair that estate taxes should take a big hunk back at the time of inheritance. Similar logic is increasingly applied on environmental questions and development issues. Activists argue: "We've been paying farmers all these years. Now we can start demanding they give us some say in how their operations proceed, and how their land is used."
Growing numbers of farmers recognize the grave dangers in the subsidy route. Still, there is a reality rub that mutes their response. As Iowa Cooperative Extension agent Mike Duffy puts it, thousands of midwestern farmers look at their income statements these days and say, "Look, of every $100 profit I made last year, $75 came from Uncle Sam. How can I say the programs hurt me?" Answers to that question, many people who follow farm programs now realize, lie somewhat below the surface.
For one thing, a lot of money spent in the name of tillers actually ends up in the pockets of various hangers-on. The U.S. Department of Agriculture pays generous salaries and benefits to 120,000 full-time employees (there are only about 500,000 full-time farmers in the country). The department's annual budget was $51 billion last year—more than the total net income of American farmers.
Nor is there any reason to assume that the market prices currently supplying 25 percent of our composite farmer's income would stay that low in the absence of government programs. Subsidies create chronic surpluses. These, in turn, depress trading prices. Under a freed-up market in equilibrium, payments to farmers for many agricultural products would be higher than they are today.
Other prices would be about the same. Some would be lower, but even this wouldn't necessarily hurt farmers. Many farm products—such as, dairy products—would be consumed in greater quantities by Americans if prices fell. That obviously would be a nice thing for moderate-income consumers. It would also give growers a chance to gain in increased sales what they gave up in high prices.
As we pointed out in the first article in this series, there is ample evidence that unsubsidized agriculture can be profitable for farmers—most farm production (beef, pork, chickens, most vegetables, most fruits, minor grains, soybeans) already exists more or less free of government aid. (See "Plowing Under Subsidies," Oct.) Indeed, unentangled sectors tend to be more lucrative. Bankruptcy rates over the last decade have been higher among farmers of program crops than for free-market farmers.
And of course government funds come with a price tag—in interference and surrendered decision-making power. "Other than a few choices in what land we'll use to meet 'set-aside' requirements, we're totally locked in as far as production," says corn grower Hurst. "We make almost no cropping decisions, they're all made for us. We can't drain wet spots or change the location of drainage ditches. The USDA tells us what to plant, how much to plant, where to plant."
Very few Americans realize how utterly fettered and unfree the government-overseen part of our agricultural economy is. There are about 2,800 agricultural counties in this country, and each one has an office of the Agricultural Stabilization and Conservation Service, the Ag-police. Every single enrolled farmer must present for approval a marketing plan, multiyear crop rotation reports, detailed field surveys, and so forth. An industry has sprung up just to help farmers understand and comply with the requirements.
"There is only one other organization in the world that has anything like the supply control powers of our Commodity Credit Corporation, and that's the Soviet Union's central planning agency, GOSPLAN," states Robert Thompson, dean of the Purdue University School of Agriculture. European governments, he says, are amazed by the level of grassroots-to-treetops authority the USDA exercises over the farm economy. "For all their love of manipulation and interference in their farm sectors, they couldn't micromanage the way we do if they wanted to."
And American politicians—Republicans and Democrats alike—show no hesitancy in making use of this control network. "It's not just every five years in the farm bill that our politicians tinker with the flow of farm commodities," declares John Hosemann, senior economist of the American Farm Bureau Federation, "they do it by the hour." A vigorous man with no appetite for minced words and a copy of The Wealth of Nations on his desk, Hosemann bemoans the constant manipulation of stocks, the annual dart-throw by which target prices are set, and the other intrusions that prevent farm commodities markets from achieving any long-term balance.
But the constantly changing ground rules are unavoidable, given the assignment. When Congress writes a five-year plan, it just sketches in general outlines, aware that such variables as world economic conditions, weather, and political events will regularly destroy its initial assumptions. To allow for adjustments, Congress gives the secretary of agriculture astonishing powers to reorder his fiefdom. Without question, the agriculture secretary has more personal discretion and authority over his segment of American society than any other cabinet officer. Not even close.
Administratively matching buyers' and sellers' interests as efficiently as markets can would be impossible even under the best of conditions. And U.S. farm policy is further twisted by the confusion of conflicting purposes. Politicians have never decided exactly what they want to accomplish with farm programs. Some measures increase production. Others attempt to hold it down. A costly and confusing tug-of-war is the result.
Centering all this power in one place has another effect: It creates a lobbying explosion. Early on in the life of our farm programs, William Faulkner wrote, "Our economy is not agricultural any longer. Our economy is the federal government. We no longer till in Mississippi cotton fields, but in Washington corridors and Congressional committee rooms." With stakes recently rising into the billions of dollars, influence-mongering has ratcheted up in turn. Many farmers' associations now find that trying to influence the federal programs has become their single most important undertaking.
"If they didn't scream, we didn't worry about them," one individual involved in drafting the Senate version of the 1985 farm bill told me in explaining how bill writers had set priorities. Such a process is ill-suited to most farmers, and custom-made instead for the various processors, suppliers, and other agribusinesses that feed off of agriculture. "There are now more people employed in the industries that supply farmers with inputs than there are on farms," reports Purdue Dean Thompson, and seven times as many in the food processing sector.
When Congress lays its wallet on the table, all these groups dive for it, and farmers sometimes come out short. "Chemical people want us to farm as many acres as possible, for obvious reasons, and they have better lobbyists," observed one farmer to me over breakfast. Another pointed out that warehousers—who make their money storing surpluses—are all for subsidies. The six big grain processors are thrilled that the government holds down the market prices of cereals and guarantees their supplies.
Rather than negotiating the terms of their living in an open economic market where their output would give them leverage, farmers are forced to scrabble in a political arena, to their disadvantage. The marketplace is right next door, the political arena is far away. The marketplace looks only at the value of your specific product. In the political arena, farmers of one crop are pitted against farmers of another. The marketplace demands your attention only when you enter it. The political arena passes its judgments even if you are not paying attention. Like many small business owners, farmers are ill-equipped for such demands. Running an influence-seeking show is not their forte. And even if farmers could master the political game, one discombobulating certainty would remain: The rules all change again in five years—next time in 1990.
Perhaps it shouldn't surprise us, then, that relatively little of farm spending goes to cultivators who could be considered poor or threatened. The 1986 Economic Report of the President, released when farm aid was nearing its all-time peak, reported that farmers falling in the USDA's "most financially troubled" category received just 11 percent of all direct government payments. The next most distressed group received only another 13 percent.
Congress has never been able to mount a program of narrow assistance to the heavily indebted farmers in whose name it claims to mercifully act. And even if it could, one might well wonder why the nation would want to underwrite its least efficient growers.
And as I've already hinted, the tubbiest of the over-eaters at the farm subsidy trough aren't even farmers at all. The favorite fat guy for most waste-watchers is the Archer-Daniels-Midland Company, based in Decatur, Illinois. There is no worse example of a corporate welfare queen in North America. ADM President Dwayne Andreas hands out political donations like Ronald McDonald flings french fries. His beneficiaries include everyone from Bob Dole to Mikhail Gorbachev.
The company makes most of its money from corn sweeteners (beneficiaries of a massive farm-aid boondoggle too depressing to get into here) and corn-distilled ethanol—the ultimate government-made product, an alcohol motor fuel about which you are going to hear a lot more in the future. Ethanol production is underwritten twice—once through the $5 billion America spends to keep corn prices low and once via a 60-cents-a-gallon federal tax break. (The feds have also donated free grain and even paid for one plant; plus 28 states provide subsidies.)
ADM controls nearly 70 percent of the U.S. ethanol market and earns almost half its income from the stuff. Total value of the federal chits it has pocketed over the last four years, according the House Ways and Means Trade Subcommittee—over $4 billion. Amidst a boozy reek, I journeyed through the grim maze of rail sidings, elevators, and chain link fences in Decatur to ask ADM's vice president, very politely, what it all meant. He threw me out. Farm aid boosters: Meet your local salt of the earth.
There are two more, very fundamental, reasons why farm programs hurt American farmers. One is that the programs make what farmers have to sell too expensive for one of their most important markets—foreign buyers. The other is that government programs make what farmers need to buy too expensive.
First the exports problem. It is conventional today to state how important foreign sales are becoming to U.S. producers. In agriculture this is gospel truth. In 1981, before damage was done by two successive farm bills, U.S. farmers exported the production of two out of every five acres, bringing in $44 billion dollars in foreign currency. Agricultural exports provided about a fifth of the country's total trade earnings.
Even today, after some world-class blundering, we still export about three-fifths of our wheat, half of our rice, two-fifths of our cotton, soybeans, and tobacco, and one-fourth of our corn and sorghum. We provide half of the world's grain exports. For the last 20 years, the overall health of U.S. farm income has directly followed the level of our exports.
The damage done in the first half of the 1980s had two sources: prices pushed too high and too many controls on production. Both problems were caused by government programs. As the globe's most efficient producer, the United States stands to benefit greatly from an unfettered flow of farm products from low-cost to high-cost growing areas. But the 1981 farm bill pegged price supports high for most commodities. By buying up crops at artificially high prices, the government sheltered foreign growers from U.S. competition. Not surprisingly, a lot of marginal land around the globe that never would have been farmed under free markets suddenly came into production.
As Don Paarlberg puts it, we "held the umbrella for the cotton growers of Brazil, the wheat growers of Australia, the corn growers of Western Europe and the tobacco growers of Africa." Once the operations freeriding on our price supports are under way, they aren't easily displaced. As the penalty for a few years of elevated returns, American farmers then face a permanent new group of antagonists who were set up in the business by Uncle Sam.
The other way farm programs have hurt exports is through acreage use restrictions. To qualify for government payments, farmers must typically agree to retire a chunk of their land, usually around a fifth. This is intended to reduce output and force up prices. It does. And as Robert Thompson points out, it also "means in effect that we ask every firm in the industry to spread its total fixed costs over 80 percent of its potential output. This raises [our] cost of production relative to competitors, who suffer from no such constraints."
And there is an even more awkward problem. The government allocates rights to grow program crops in the future on the basis of how many acres each farmer grew in years past. Among other problems, this makes farmers very chary about pulling land out of safe "program crops" to grow something for the export market, even when the prices offered are very high. To do so means surrendering rights to shift back again easily.
The most tragic recent example of the damage this can do is seen in soybean exports. American farmers basically invented the soybean market, spending a small fortune promoting new uses for "the gold that grows." Soybeans are now used as ingredients in thousands of food and industrial products, and they are the nation's second-most-valuable crop. They have been an export cash machine for American farmers for decades.
Soybeans are by and large unsubsidized, but they compete directly for land with corn, which is heavily supported. Normally, farmers rotate between the two crops for disease-control and soil-conservation purposes. But in the last few years very high price guarantees on corn, combined with inflexible program regulations on crop shifting, made it so much more profitable to plant corn than soybeans that an astonishing 13 million acres switched production. Twenty U.S. crushing plants closed, and other soybean infrastructure collapsed.
With American farmers standing on the sidelines, locked into subsidized corn production, foreigners have jumped into the soybean supply breach. The Brazilians and Argentinians have increased their production by—you guessed it—13 million acres. American farmers' share of the soybean market fell from 75 percent to 45 percent in six years. The business we pushed offshore is worth about $2.5 billion annually, and even if Congress eliminated our production-warping subsidies tomorrow, that trade is probably gone for good. The Latin American investors who cut down rainforest to put in soybeans are in for the long haul.
And the double pity is, corn is a sluggishly traded, under-demanded feedgrain, with annual market growth of only 1 or 2 percent a year. Demand for soybeans, on the other hand, is exploding globally at 4 to 5 percent a year. "If you'd taken a guy on an island and asked him to design a set of government priorities, he would have done exactly the opposite of the current U.S. program," says Allen Johnson, director of the Iowa Soybean Association.
And soybeans are only the latest case in point. Price supports and related interference have regularly damaged other exports, including those of wheat, rice, cotton, tobacco, and other U.S. program crops. The same distortions that clobbered soybean production recently cut U.S. oats output, too. Oats are easy to grow, and drought resistant, require hardly any chemicals, and cost farmers only 30 percent as much as corn to raise. And thanks to recent findings of anti-cholesterol benefits, consumer demand is rising fast. Yet American farmers are not producing oats in sufficient quantities, because other subsidized crops are more lucrative and secure. Once again, the beneficiaries have been foreign growers, stepping in to take over markets that used to belong to American farmers—until their government decided to do them a favor.
There is a final, giant, reason to doubt farm subsidies are actually in the best interests of most farmers: There is no evidence that the payments actually increase farmers' income, once all expenses are accounted for. The principal economic effect of farm subsidies, say economists, is not to make working farmers wealthier but to push up the price of land and other farm inputs. Most of the benefits are immediately, to use the technical term, "capitalized."
The economic returns offered by farming are set not by government schedules but by the willingness of individuals to stay out there working in the fields even when the money isn't great. "Farmers will keep hanging on with less profit than any business I know of," says Hurst. "The job is one of those powerful afflictions that not even failure can cure," states John Hosemann, only half in jest. The reluctance of practitioners to leave the occupation is the main cause of farming's narrow margins, a fact no flow of government checks can change.
In the first year that payments for a crop are initiated or increased, producers enjoy a brief uptick in income. Soon, though, the increased returns draw in new resources and new operators from an ever-eager pool. Returns fall. To recover the briefly experienced high income, subsidies must be ratcheted up again. Repeated several times, this cycle can consume enormous amounts of government aid without significantly improving farmers' welfare.
Where does the money go? Into the things that farmers buy, primarily land. "If they doubled the price of corn tomorrow, and guaranteed it for 10 years, the price of land would double or triple around here, and my margins would be the same," says Hurst. Iowa Cooperative Extension Agent Mike Duffy agrees. "Land costs jump directly with government programs. Anytime you put more cash in the pockets of Iowa farmers you see an increase in land prices."
The 1986 Economic Report of the President estimated that crop subsidies push up land costs by several hundred dollars an acre, depending on the crop grown. That makes land by far the farmer's biggest expense. And high land prices in turn spawn high equipment costs, as farmers push to get maximum production from each costly acre. Farmers spend three times as much on machinery, equipment, and buildings per unit of production as the average for all U.S. businesses.
In other words, payments supposedly for the benefit of farmers actually have their main effect in making the planter's "main ingredients" enormously expensive. Landowners, the people who build and sell farm equipment, and fertilizer and chemical merchants are the big gainers. The farmer's living wage eventually ends up at about the same level, only the table on which the transactions take place has been raised.
As economist Bruce Gardner puts it, the winners in the subsidy game are not those who produce the products, but those who possess the resources. "Farm operators themselves…serve primarily as conduits through which higher returns are passed back."
The high costs that subsidies bring have hurt farmers in many ways. For one, interest is now the biggest annual expense for most of them. Given the tendency of interest rates to swing sharply, this makes farming an even more insecure and unpredictable industry than its relation to weather and other factors already makes it.
Accelerating the substitution of capital and machinery for human labor also artificially hastens the shrinkage of the farm population. "If we want to maintain an agrarian sector in this nation, and we ought to, then we shouldn't push land prices up," says Duffy.
Another drawback is that farming has become one of the hardest of all occupations to enter. Quite simply, it takes a bundle of money to set yourself up today. Young people often have no chance. Many resort to methods like those used by David Magness. "When my father went into agriculture he bought his place, but that's hard now. I farm 2,000 acres, and the 5 acres under this house are all that I own. Half of my fields belong to people in Dallas, and half are in the hands of old farm families."
Landowners are by far the biggest beneficiaries of today's farm aid, and for all their virtues they are, to use Gardner's words, "not a class of poor people." A third of U.S. farmland is held by persons other than farm operators. Of the remainder in farmers' hands, much was acquired, and must be serviced, at high cost. The beneficiaries there are again nonfarmers—credit providers.
Chopping the work table down to a more human height would suit farmers like Magness just fine. Without subsidies, their revenues would be somewhat smaller, but their expenses would be a lot less gaudy, too. Their bottom line would stay pretty much the same. Only the whole act would take place a lot closer to earth, where the entries and the exits are a lot easier, and the falls aren't nearly so hard.
Contributing Editor Karl Zinsmeister is a Washington, D.C.-based writer and an adjunct research associate at the American Enterprise Institute. This article is the second in a four-part series. Next: farming, subsidies, and environmentalism.
The post Bitter Harvest appeared first on Reason.com.
]]>Luckily I've got him trapped in a pickup. The CB radio crackles with messages between combine cabs, mobile managers, and farm offices. The cellular phone chirps irregularly. As we bang along the field roads, we come upon an evening harvest. Eight migrant laborers and a fleet of machines stuff four mesh-sided tractor trailers with fresh spinach—sloe green and smelling like money. Within an hour the still-bleeding leaves will be swept away to West's 10-minute tunnel freezer. By early the next morning the entire great mound will be locked in crystalline suspension.
The farm lies on the Delmarva peninsula, a dangling tonsil of land rimmed with saltwater—the Chesapeake Bay to the west, the Atlantic Ocean just five miles east. The coastal land is as flat as a calm sea, which is critical for vegetable culture, since field moisture must soak in evenly and mechanical pickers need absolutely level terrain to jostle their quarry out of ground-hugging vegetation.
We circle to a nearby field where three massive, matching eight-wheel-drive tractors drag 10-point plows, shoulder to shoulder. As we watch, this 1,000-horsepower flying wedge turns a hundred acres of sandy earth into a dusty cocoa-colored powder. "Vegetables are terribly hard on the land," West booms above the telecom cackle. To put humus back into the soil and break pest cycles, he alternates vegetables with more-traditional field crops. "After growing spinach—hey—barley or wheat or soybeans are like an antiseptic on a sore. We plant them for that reason, though we don't expect to make money on them."
West and his son, Stanley, farm 8,700 acres, nearly two-thirds of that in multiple crops of peas, lima beans, sweet corn, cucumbers, carrots, and spinach. Their Milford, Delaware, operation is the second-largest vegetable farm in the 23-state northern region, according to American Vegetable Grower magazine.
Vegetable growing is big business—accounting for 15 percent of total U.S. crop receipts these days and growing fast. It is also far and away the most demanding segment of farming. Eighty-five percent of West's land is irrigated by massive spray booms. That investment has proved a godsend in the heat and dryness of recent years, but it is expensive. Vegetable farming costs from $500 to $1,000 per acre, compared to $400 to $500 for the next most intensive crop (rice), and approximately $200 to $300 per acre for wheat or corn. Growing vegetables also makes heavy demands on management skills, and it requires hired labor. Charles West Farms employs 26 full-time workers and 22 seasonal hands.
But there is a lot of money to be made in return for these efforts. West started from nowhere, leaving a furniture store job in 1953 with nothing but a $24,000 loan he somehow talked a local banker into staking on a lima bean visionary. Today, his farm grosses $4.2 million a year; his packing operation brings in another $ 10 million. So where are the local imitators of this one-man farming tornado?
In the main, they're farming something a lot less risky: government row-crop subsidies. Though vegetable growing has greater profit potential than any other type of agriculture, its rigors scare away lots of farmers. As a result, two-thirds of our broccoli and cauliflower are now grown abroad, as well as much of our green beans, peas, strawberries, and other produce crops. West evinces little sympathy for his more-timid brethren.
"It's simple: They're lazy," he barks. "It's easy to grow corn, any half-wit can do it. Most of those guys on the programs only actually farm for 9 to 12 weeks of the year. They don't want to have to think about anything during the winter. They don't want to mess with hiring labor. They'd rather get a boat and go to Florida."
What frustrates West most is the way government programs encourage warped farming. Since he built his freezing plant he has had an opportunity to deal with many of his neighbors from the vantage point of a processor as well as a fellow farmer. "Look," he says, "there are no vegetables in the country right now available to packers. There isn't any sweet corn, no limas, no peas. None to speak of. If I want to make up some mixed vegetable bags at my freezer plant I've got to look for supplies outside the country.
"Right now, I got a load of peas in from Poland—full of snails! Junk. But you can't tell until they come in. If I had my choice I'd never deal with those particular suppliers again. But we will, because we can't get enough American farmers to grow this stuff!"
He continues, "I've also got some frozen Polish green beans a grocery store chain brought me for packaging. They were supposed to be snapped in 1½-inch lengths. Well, they arrived in 4-inch lengths. We can't fit them in the boxes! We have to put up with this kind of quality crap all the time, because American farmers are all too busy growing wheat and corn and other subsidized stuff so much in surplus we don't know where to put it, instead of growing unsubsidized vegetables.
"I used to have 8 or 10 growers in this area who ran their stuff through my freezing plant. This year they all dropped out because they can make more growing crops with government payments. So I had to go out and lease some land and get another harvester to keep up with my customers' demands for frozen vegetables. I'm currently packing 22 million pounds of product in my plant. I've got capacity to pack 28 million pounds. And I could sell 55 million! If I could get it."
Asked for his opinion on the best solution, West is even blunter. "These guys all want to do things like they always have, instead of getting with the times, specializing, taking some risks, hooking up in co-ops. The only thing to do now is starve them out. Put 'em on the street. It's this simple: There should be no subsidies in farming."
One of this nation's deepest and broadest collective attachments is to what one observer has called "agricultural fundamentalism." American romantic devotion to the image of the "family farm" is nearly universal. The power of that attachment is illustrated by the fact that every five years or so, in this country's only extended dalliance with economic central planning, we formulate a top-down national policy influencing even the most minute details of farm existence, then put billions of dollars behind it.
The 1990 version is being cobbled and quibbled over even now. And if the past is any guide, it will be founded in many places on some breathtakingly faulty assumptions about who farmers are and what they need. As we will see in this and subsequent articles, present farm subsidies and controls are inflicting heavy penalties on U.S. agriculture. We've long known the financial costs of farm programs to taxpayers and consumers. They are measured in the tens of billions of dollars annually. More recently, farmers themselves have learned that there is a price tag: in increased costs, distorted production, lost markets, lagging technology, unsound conservation and environmental practices, decreased long-term income, and diminished independence and self-worth.
When the executive director of the Australian National Farmers' Federation visited Capitol Hill in the spring of 1989, he told dozens of members of Congress that he is a farmer and he is against subsidies. "They refused to believe me," Rick Farley told me. "They insisted it was a contradiction to both be a farmer and be against government subsidies. An economist, OK, but not a farmer."
Anyone who actually goes out and talks to American farmers today, however, will quickly discover the members of Congress are badly mistaken. Though their views may not be reflected in the Washington offices of the farm lobbies, a large and growing number of farmers now believe that an intrusive, expensive farm policy is the last thing agricultural America needs.
Most of the public and many politicians don't realize that most of American agriculture already operates free of government entanglement. Only about 30 percent of U.S. farms participate in direct payment programs. The unsubsidized two-thirds of American agriculture includes more than 200 commodities, and not coincidentally this segment is the healthiest, the most profitable for farmers, and the most efficient for consumers.
Nothing fundamental requires one part of agriculture to be protected while the rest is not. Dairy producers say their product is too perishable to be traded on a free market. That may once have been true, but it isn't any longer in an age of refrigeration, reconstitution, and fast roads. Besides, eggs are also perishable, and unprotected by farm programs, yet that hasn't prevented any Americans from having access to fresh eggs.
California and Arizona orange growers claim they couldn't possibly get their crop to buyers in an orderly way and at a reasonable price without government marketing orders, which artificially restrict supply. Yet Florida orange orchardists do just fine without any help, as do livestock and poultry growers, most vegetable and fruit producers, and others in market-based sectors. The competitive successes of America's unsubsidized farmers confound the claim that agriculturalists cannot survive in a free economy.
Moreover, measures enacted for the benefit of one group of farmers often penalize another. Farm policy is a vast, tangled, often internally contradictory web. Iowa Rep. Fred Grandy (R) likes to say that "farm policy subdivides more times than a chromosome." Very often the constituent parts end up pitted one against another.
When the federal government paid for the slaughter of a million cows to support milk prices for the benefit of dairy farmers, beef prices tumbled. Cattle ranchers—independent and free of handouts—suffered for more than a year. When Charles West goes out to lease more land for his operation, he must bid against row-crop farmers whose margins are fattened by a yearly government check. When pumping water out of his wells to slake his cucumber fields, he must compete with counterparts in California who have the benefit of water subsidies. Those same subsidies allow California rice growers to discomfit Gulf Coast farmers, who must flood their own paddies.
One clear example of the differential effects of farm programs concerns feed-grain farmers and animal raisers. About half of U.S. farm income comes from animal production. Poultry, beef cattle, and hogs primarily eat corn, as well as milo, barley, and other program crops. Feed costs account for about two-thirds of the expense of pork production. The figure is even higher for beef, slightly lower for poultry.
Obviously, then, changes in government price supports on corn and other feed grains can make or break unsubsidized livestock farmers. "Whenever low grain prices give poultry farmers a chance to make big profits," Virginia poultry producer R.H. Strickler told the Wall Street Journal, "there's this inclination to do something for the grain farmers." Yet "the government never does anything to reduce the cost of grain to those of us who have to buy it."
Texans are notably open-minded about speed limits, and as you flash south out of Dallas it doesn't take long until you begin to get into some hilly, tree-covered land. Approaching Richland (Pop. 260) the spaces are wide open and the very air vibrates with agricultural rhythms. The ditches and roadsides along Farm to Market Route 3194 are thick with great splashes of Texas wildflowers: buttercups, primroses, fiery spikes of Indian paintbrush, and yellow tumbleweed blooms. And of course bluebonnets, the lupinelike natives that stain entire pastures an unnatural azure and drench the air with a sour, cloying perfume.
As I pull up the gravel road leading to Bobby Wilson's small split-level, the visual music unexpectedly glissades even higher. The house perches on the edge of a great faultline, and down below a valley stretches forever, dotted with tree clumps and watering holes and cattle. Bobby Wilson's cattle.
Wilson is a thin sandy-haired man, quick to make a point, with the cautious and skeptical temperament you might expect from a father of four daughters. He runs 150 cows with some bulls and every year they produce a crop of offspring that he either sells for fattening or grazes himself to yearlings. At any one time he has up to 600 head of stock on hand.
Wilson is a small-scale but respected rancher in the nation's leading ranching state, where 12 million cattle are sold every year. He is active in the Farm Bureau and the Cattlemen's Association and is up on the latest developments in breeding, marketing, and exporting. And he knows exactly what he wants Washington to do for him in the next farm bill: "The best thing the government could do is stay out of the way," he says quietly.
The constantly changing rules, the subsidies for competing products, the elevated costs of inputs, the distorted markets—these are his experience of farm programs. And Wilson worries that thanks to the increasing politicization of American agriculture, the next farm bill will become a target of the burgeoning swarm of Washington-based environmentalists. Then he will be saddled with a heavy load of new controls and regulations, despite never having received a government check in his life.
The feeling of political vulnerability is growing among all farmers. They realize that in an era of long-term fiscal pressure their subsidies—which grew at a faster rate than any other part of government during the early 1980s—are being eyed hungrily by all manner of budget wolves. They know that although farm income is now near an all-time high, it is a highly artificial accomplishment. Seventy-two percent of Iowa's net farm income last year came in the form of government checks. In Illinois it was 94 percent. Nationwide, Uncle Sam provided 36 cents of every dollar of agriculture profit.
"These programs are simply costing too much and not doing us a damn bit of good," worries Illinois farmer Ray Cheline. "Judgment Day is coming."
One of the first things one notices when studying the U.S. farm programs is how very little they have evolved in the more than 50 years since they were born, in the same Depression spasm that gave us the National Youth Administration, the Civilian Conservation Corp, the Works Progress Administration, and other perishables. "Agricultural stabilization" (described by New Dealers as "the greatest single experiment in economic planning under capitalist conditions ever attempted") may be the only portion of the vast New Deal legacy, other than Social Security, that continues to operate in more or less unaltered form.
Having walled off a significant number of farmers from the rest of the economy for a half century, insulating them from both negative pressures and positive innovations, the programs have led many to avoid hard choices and new thinking. "Farmers don't cut back as much as you might expect—as much as they ought to—when prices are bad," one Kansas farmer told me. An Indiana grower reported, "I tend to think in terms of a five-year average before I start considering changing something." Even given the environmental fluctuations that complicate farming, that is a very slow uptake, one that would lead to ruin in nearly any other economic sector.
Some farmers aren't even sure when they are making money and when they aren't. Specialists who consult with farmers on financial matters estimate that only 10 to 25 percent know their true costs of production. As Iowa extension agent Mike Duffy points out, "Corn farmers around here don't really need to know their costs today. Government support levels are set so high even the poorest performers can cover their expenses."
Nor are some farmers inclined to adopt business practices. "Most farmers chose their occupation thinking that it didn't require office work," notes farm consultant Eldon Hans. "They think: This is a job where you can work in the open air and run machinery. They don't want to be students of business management. They don't want to sit at a desk."
Part of the problem is generational. Literally since the nation's founding, as an intrinsic part of industrialization, the number of farmers has been shrinking. As a result, agriculture is always top-heavy with older practitioners. The 1980 census found that 23 percent of the nation's farmers were age 65 or older, and 41 percent were between 45 and 64. Only 36 percent of all farmers were under 45. By contrast, more than 70 percent of all other U.S. workers are under 45.
Older farmers understandably tend to favor traditional ways. Many grew up with the deeply imbedded notion that industrial America aims to exploit rural America and that farmers cannot compete on free terms. They often distrust processors, commodities traders, bankers, consultants, and brokers, and sometimes fear antifarmer conspiracies.
Many are skeptical about market-based solutions to agricultural problems. They tend not to be as export-oriented as their younger fellows. They are usually not attuned to the idea that farmers must increasingly create markets as well as grow crops. They are nervous about attempting new production and conservation techniques. They are not information-oriented. Some of them feel they were led to believe that the government would take care of all these things, and they are frankly bewildered.
Leo Zilik is a hearty, unkempt, friendly man. Though strongly opinionated and possessed of a colorfully filthy vocabulary, he is naturally good humored and verbose. From his Slavic ancestors he inherited a love for the polka and the waltz, and many Saturday evenings find him on the dance floor in one of the rural halls that sustain Texas swing music. Handing me a plastic cup of iced tea across his kitchen table, he begins to wind up.
Zilik (not his real name) grew up in another era and feels betrayed by modern times. A series of ill-advised and careless blunders have kept his farm in trouble for years. Broken down in his yard is an advanced tractor too complicated for him to maintain and too costly for him to have serviced. He borrows a neighbor's equipment much of the time. A hasty decision a few years ago to try growing rice, a high-paying but difficult-to-husband crop, ended in disaster. Stumbling toward the retirement he has craved for years, he keeps hanging on to pay one more set of bills. A few years ago the bile he nurses for a world rushing by him perforated his ulcer, so he now indulges his grudges in short fits only.
Zilik's golden age came during the fatly subsidized 1950s and '60s. Since then, things have become too complicated and too costly, and he doesn't understand why someone doesn't do something about it. Any farmer who works hard, as he clearly does, deserves a good living, Zilik believes. It's only that the goddamn city people and the politicians and the rich are trying to starve the farmers out with a "cheap food" policy.
"The guy that wants to work needs what? A lunch bucket and a car!" screeches his wife from under her rollers. "The farmer—look at what he gotta invest! It ain't fair."
A member of the Texas Farmers' Union, a follower of controversial Agriculture Commissioner Jim Hightower, and a self-described "populist," Zilik prescribes an aggressive, even violent, politics. He believes that all prices are set in offices somewhere and that only by "fighting the sonsabitches" will farmers get a "fair deal." In this he represents the same strain of sentiment that led the American Agricultural Movement, the one-time "tractor-cade" organizers and current enthusiasts for "supply control" as a route to agricultural salvation, to demand in 1978 that Congress simply pass a law decreeing that wheat could not be traded for less than $5.00 a bushel (market prices were about $2.50 at the time).
This idea, after all, is not radically different from the way farm programs already operate, and that is where the sadness comes in. Zilik has obviously suffered genuine humiliation from his farming travails. Mostly, he feels abused and manipulated by the failure of the government to deliver to him the automatic prosperity he feels the farm programs promise.
Once he tried to give up farming and make a go of it as a welder, a trade at which he is quite skilled and from which he no doubt could have supported his family with pride. But he was lured back by the delusions of a guaranteed income and false hopes inspired by a brief uptick—the ephemeral prosperity that periodically surges through rural America, thanks to government policies that presume to suspend the laws of economics and human nature. Eventually discovering he remained susceptible to economic gravity after all, he hardened into a bitter, tragic figure.
Today the chatty dancer has abandoned even life's most sacred loyalties. He openly resents the money he must pay on his ailing wife's health insurance. He vents his reluctance to pass the farm on to his son—who has labored beside him for years—threatening instead to sell it for cash proceeds. He vituperates against his nation, his Texas, his neighbors.
Happily, for every Leo Zilik there are several Loy Snearys. Son of an asphalt contractor in Dallas, Sneary grew up assuming he'd end up in his father's business. He went to college at Texas A&M, majoring in sociology and psychology, and chuckles to think that at one point he thought about going to work in urban planning. But he got himself a wife and her daddy was a rice farmer, one of the pioneers who farmed with mules in the early years after the industry took root south of Houston during the 1920s. The father-in-law offered the newcomer a chance to become a rice grower.
Weighing their options carefully, Sneary and his wife decided to split their furniture and get two apartments—one in Dallas, where Loy coated parking lots during the winter, and one in Bay City near the Gulf Coast, where he flooded fields and grew rice plants all summer. Eventually, he made rice his life.
Sneary is now one of the leading growers in Texas, in many ways the nation's most important agricultural state. In the afternoon of the day we met, he was scheduled to head off to Austin to participate in a Texas Farm Bureau project on the role of government in farming. The group is charged with making recommendations to the state's farmers on what their priorities ought to be in the 1990 farm bill and beyond.
Sneary has a 350-acre rice base, but the plant can be grown economically on a particular field only once every three years, so he rotates his plots over a much larger spread and pastures 500 head of cattle on the fallow land. Rice farming is a tricky, scientific undertaking. To achieve a uniform flood on the paddies, the earth must be precision-leveled using laser-guided land planes. A lot of seeding and chemical application is done aerially, at high cost and considerable danger, and water expenses are high. In this area, the sources are deep wells, 1,100 feet down, which cost more than $100,000 to sink.
As I follow Sneary on his morning rounds, he carefully lubricates, then starts the large new diesel engine he has installed to power his pump more economically than an electric motor. Soon an 8-inch pillar of icy groundwater is pounding out and coursing through the intricate network of routing canals.
A handsome, athletic man with salt-and-pepper hair, Sneary seems to be able to work without rumpling his spotless khaki shirt and crisp jeans. He is a precise person who states repeatedly, "We need to get educated on this…," or "I tried to educate myself on that.…" Water flow rates, fuel costs, chemical usage levels and suchlike are on the tip of his tongue. He is an advanced, forward-looking young producer, one of the impressive number of farmers I met during my 12-state wanderings who could have made successes of themselves in any occupation.
But his is not a typical industry. At the moment, rice is one of the most heavily subsidized of all American crops. Farmers are getting $10.80 per 100 pounds of rice they produce. Of that amount, less than two-thirds comes from their market sales. The rest arrives in the mailbox from Uncle Sam. As market prices fluctuate, the reliance on federal payments varies. But the current situation clearly leaves Sneary uneasy. "To be honest, if I was a construction worker in Dallas instead of a rice farmer, and I paid income tax and saw what farmers got, I would have lots of problems with that," he says.
"There's no way I can say that most farmers haven't lost some self-respect, whether they admit it or not," he sighs. "Don't get me wrong—I'm critical of the programs, but I participate in them. So long as they exist, I've got to." His position is similar to that of the person who continues to claim an objectionable tax deduction while campaigning against it. So long as it is on the books, available to competitors and distorting underlying economic relationships, most business owners have no choice. That is why it is so important to think clearly about the incentives we set up in federal farm programs—because as soon as they are in place, they dictate the required behavior.
"No question, I think government ought to be a lot less involved in agriculture than it is," says Sneary. "When I first started farming more than a dozen years ago, the talk among farmers was positive—yields, new products, growth. Now everything is defensive: What are the new government programs going to do? What will the target price be?
"I'll tell you," he concludes, "the efficiency of American agriculture has been reduced so much in the last 10 years thanks to paper shuffling it isn't funny."
Sneary knows whereof he speaks. He is one of three farmers elected to serve on the citizen review committee of the local Agricultural Stabilization and Conservation Service (ASCS) board. There is an ASCS office in each of the nearly 3,000 agricultural counties in the nation. They are the local government entities that police and implement this nation's farm policy, and they have staggering authority over the nittiest gritty of farm production—what will be planted, where, when, and so forth. Doing a term on the ASCS panel is a kind of obligation of good citizenship for leading local farmers. For several of the growers I spoke with, their service led to a turning point in their thinking.
"In the last three years, the number of hours required of our [ASCS] committee probably tripled," says Sneary. "Between the federal, state, local, and county requirements, it's mind boggling how much interference there is with our production decisions. It's definitely getting worse."
Some of this growing intrusion stems from calculated bureaucratic expansionism. The rest is just an unavoidable complication of the spiraling of a planned economy. Take tractors, explains Sneary. When the Congress pushed crop support prices way above market prices beginning in the early 1980s, some individual farmers got very gaudy payments from the taxpayers. The killer from a public relations standpoint came when a distressed family farmer named the Prince of Lichtenstein got a check for a million bucks to help his East Texas spread scrape by. In the aftermath, Congress established a cap of $50,000 as the most any one farmer can receive in direct payments.
That doesn't sound so bad. But rice, as we've seen, is a capital-intensive crop. There is a lot of cash flow when a rice farmer sells his harvest, but there is also a lot going out every week in expenses. A $50,000 federal payment cap means that the largest operation that is economical is only around a couple hundred acres. Which gets us back to Sneary's tractor story.
"There were lots of guys who were geared up to grow 1,200 acres of rice. They'd sunk the wells, they'd bought a bunch of big tractors and combines, and so on. Suddenly they had five or six times as much equipment as they could effectively use." Why didn't they just drop out of the federal program and farm as much as they wanted without any government payments? Because the federal programs by their very nature depressed market prices to the point where they didn't adequately cover the costs of production. As a result, a lot of family farmers who'd stretched themselves to get modern had to take several steps back down the efficiency ladder. Back toward Sneary's father-in-law and his mules.
Even without perverse farm program incentives, it can be hard for farmers to adapt to the high-tech, fast-moving demands of modern agriculture. For every instinctive progressive like Loy Sneary, there is another farmer who needs a jolt to help him break old ways and try something new. A little less than two years ago, Randy Justiss lost an 18-year-old daughter. "I spent a lot of time just sitting here, thinking about that, and about a lot of other things." His grief and period of withdrawal seem to have led eventually to a fresh willingness to approach old problems in new ways.
That winter he finally sat down and learned to be comfortable with the IBM PC jr. he had bought four years earlier and never used. Today he follows real-time quotes of commodities futures and options prices in Chicago and Kansas City. He can punch up a weather advisory or a crop report at his office terminal. Recently, he and a brother-in-law became partners in a grain elevator. They bought local farmers' output on forward contracts and immediately sold the promised goods back to brokers in the commodities centers.
With his son and one Mexican-American helper, Justiss farms 2,700 acres of wheat and milo. He is one of only about a dozen farmers left in fast-growing Dallas County, but he has found a way to prosper in spite of the high land prices development has brought on. Except for the site of the barn where he stores his three tractors, two combines, and other vehicles and rigs, all of his land is now leased. He is gradually going to lose access to his fields, he knows, as subdivisions and industrial parks creep outward from Big D. Meanwhile, though, he is able to do quite well—because speculators keep rents low so they can take advantage of agricultural-use property tax reductions.
Market prices for wheat are rising toward the high government-guarantee levels—thanks to tight supplies brought on by last season's drought—and Justiss has dropped out of the federal wheat program. He is planning to lease as much land as he can lay his hands on next year and put it all in wheat. He is also considering buying put options in the futures market to hedge much of the crop. In short, Randy Justiss is bursting out all over. He is running his farm like the capital-intensive, speculative, highly modern business it is.
A barrel-chested, deep-voiced man in a plaid shirt and a cap, Justiss is a model of the new American farmer—hardworking and rugged as ever, but also fastidious and attentive to mental detail. As I sit watching in his tidy office he tickles a price quote for July wheat out of his computer. "It's easy when you're a farmer to just keep on doing things the way you've been doing them," he admits. But habitual ways are beginning to change all across agricultural America, in some places fast.
Ignorance is no longer an excuse. American agriculture has always had a superb technical dissemination wing for new production techniques. For years, land-grant colleges, the USDA's Agricultural Research Service and field agents, and various private groups have empowered common farmers with the latest research in an astonishingly successful way. When it came to the financial and business end of farming, however, the resources were thinner.
But farming is now jumping into the entrepreneurial age. Justiss is hooked up to an on-line service offered since 1981 by the American Farm Bureau Federation to any of its 3.7 million member families. For $20 to $40 a month, any farmer can have toll-free access to all the national financial exchanges, a national news wire from Washington, D.C., a local and state news service, a 5-day, 10-day, and long-term weather forecast, a database of government reports with all current releases, a Farm Bureau advisory service, and more. With a satellite dish the farmer can get it all even more cheaply. The Farm Bureau will also sell any farmer a computer, at a reduced rate, and supply three days of training right at the farm.
State extension services continue to be tremendous grassroots resources in rural America. Fourteen states also have chapters of the Farm Business Association, a nonprofit private group that offers a wide range of specialized consulting for a nominal fee (about $500). Among other services, its consultants will visit a farm to advise on tax planning, diagnose animal diseases, suggest crop rotations, or aid with bookkeeping and sales decisions. The bottom line: Probably no other small business sector in the American economy has as much competent and low-cost technical advice available to it as family farming.
And farmers are picking up on it. They are computerizing. They are beginning to form marketing clubs with pooled money and information as a way of initiating themselves into private commodities trading. They are setting up accounts with brokers. They are diversifying into new ventures. They are adopting new technologies. They are self-insuring against weather hazards and price downturns. "As people get started," says Justiss, "word of mouth spreads. And when folks get so they understand it and realize what's now possible, I guarantee they will be interested."
After years of relying on others to guard their economic security, farmers are taking measures to increase their competence and flexibility, to protect the birthright of their farm equity, to increase their economic independence and cut their reliance upon the federal sugar teat. A privatized structure of agricultural income support is at last beginning to rise.
Contributing Editor Karl Zinsmeister is a Washington, D. C.-based writer and an adjunct research associate at the American Enterprise Institute. This article is the first in a four-part series. Next: Why billion-dollar government programs hurt farmers.
The post Plowing Under Subsidies appeared first on Reason.com.
]]>Recent years have seen a spate of books on social decline. Allan Bloom pointed to moral relativism as a source of cultural decay. Robert Bellah and company fretted over decadent individualism. Paul Kennedy cautioned about the long-run effects of military spending imbalances.
A sleeper companion to these much-touted books is a somewhat less ambitious but duly intriguing and original contribution by a mathematician and Silicon Valley software developer named Robert Sheaffer. In Resentment Against Achievement Sheaffer presents a quirkily interesting alternative thesis to explain why nation-states go into eclipse.
"Throughout recorded human history, the ebb and flow of the love of achievement—and the resentment against its success—have been major forces behind the rise and fall of civilizations," Sheaffer writes. "While a civilization is in ascendance (which is to say, when the morality of achievement has the upper hand), people tend to derive their cultural and social ideals from the class above them.…But if and when resentment-morality gains the upper hand, civilization enters a slow decline.…lower-class values begin to spread upward." "If the achievers," he argues, "begin to identify more strongly with the complaints of these losers than with the accomplishments of people like themselves, they will become paralyzed by guilt, and the future will look bleak."
Sheaffer doesn't tie his argument closely to contemporary American events, but many readers will recall the last month of the recent presidential campaign, when Michael Dukakis discovered resentment politics. The smug "experts" who take scientific polls show me trailing, said Dukakis, and "the rich are already popping the champagne corks in their penthouses." But come election day, he warned, the righteous masses will deal a blow to these highfliers.
This mix, which the media called "populism," was absolutely classic resentment rhetoric—attacking the twin demons of financial success and intellectual achievement. And Dukakis wielded it as a potent weapon, sharply closing the gap on George Bush.
But resentment and revenge, Sheaffer says, are ultimately fruitless impulses. Successful societies, he argues, are those in which the less successful aim to imitate, rather than pull down, the high achievers.
Sheaffer reinterprets a wide range of social phenomena—from the causes of poverty to Soviet-American relations to environmentalism to rock music—in terms of resentment against achievement. "Poverty," he says, "is not 'caused' or created: it is the default condition of the human race, the absence of advanced economic development.…It is wealth that must be 'caused.'" His definition for the latter term is concise: "In a capitalist, free society, wealth is the consequence of a lifetime of commitments honored." Achievers tend to assume, Sheaffer states, that people who fail "were never offered a chance for success. The notion that the poor are simply living in accordance with their lower-class values never occurs to achievers."
Sheaffer argues against equality. "If all must be equal, then why should anyone ever strive to succeed? And if no one strives to succeed, then what becomes of civilization?"
He makes the case that the two main institutional reflections of achiever-resentment today are socialism (obviously) and (less obviously) Christian morality. He presents some trenchant criticism of Christianity's celebration of wretchedness ("Blessed are the poor") and hostility toward achievement (harder for a rich man to enter heaven than for a camel to pass through the eye of a needle).
Unfortunately, he mixes this with cartoonishly crude caricatures of religious belief. Sheaffer's religion is all miracles and fanaticism, a virtual synonym for ignorance and lassitude. Just one example of the inadequacy of such a characterization is Sheaffer's own citation of Fyodor Dostoevsky as a great achieving genius, overlooking the fact that Dostoevsky's writing is entirely suffused with his profound religiosity.
Not only here but elsewhere, Sheaffer has a tendency toward overassertion. He draws few distinctions between forms and grades of achievement. For him, achievement is essentially interchangeable with income level. Noneconomic successes and accomplishments (like, say, raising happy children) do not merit his consideration. Nor do situations in which income fails to represent real value. Obviously, the fact that Joyce Brothers and Jackie Collins sell 200 times as many copies of their books as does Robert Sheaffer doesn't mean their work is 200 times more valuable. The relative incomes of rock stars and engineering instructors are not faithful reflections of their achievements and contributions to society. And I would argue that there is even some basis for resentment in such instances.
It doesn't seem fair to reduce all objections to existing reward structures to "childish complaints emanating from adult bodies." (Sheaffer believes the roots of achiever-resentment lie in childhood chafings against adult control.) By failing to differentiate more carefully and acknowledge occasional distortions in our existing approximation of meritocracy, he weakens what is in the main a compelling thesis.
Moreover, a close examination of achievement really ought to grapple with some hard cases. What if a high-achievement ethic leads individuals to abandon their children, spouses, friendships? How are we to temper moneymaking when it threatens cultural heritage, historical treasures, or community ethics? (A very successful developer recently tried to build a nice shopping center in the midst of a Manassas battlefield, site of thousands of solemn American deaths.) Surely not every community verdict against "achievement" springs from resentment.
And I am not sure that Sheaffer accurately identifies the locus of achievement resentment. He points to "proletarian values" and the lower classes. Yet resentment, particularly as an ideological force, may be even more deeply rooted among certain of our highest-achieving classes—such as professors, artists, bureaucrats, and others who feel underappreciated in an individual-achievement society.
Karl Marx bent the term proletarian to describe industrial workers who lived exclusively by their labor. In the modern context, workers who get out of bed every day for hourly wages are not powerfully resentful. They are generally more interested in becoming J.R. Ewing than in sacking his estate. History shows that that proletariat is not the revolutionary class.
The original Roman meaning of proletariat was the nonpossessing, basically nonworking, class (heavily dependent upon the public dole) that served the state only by producing offspring (proles). That group, to which today's urban underclass is in many ways analogous, is indeed a resentful, and dangerous, class. But history again shows that unless it acts in concert with members of upper classes, this faction cannot seriously threaten societal productivity and order.
I therefore look toward alienated parties within the achievement classes themselves as the primary promulgators, apologizers, and transmitters of any resentment ethic that has force sufficient to impair social functioning. Resentment may be a primitive impulse of vulgar origins, but it flourishes only when it is fed and sustained from above. It is a pity that Sheaffer didn't turn his spotlight on upper-class achievers themselves and examine how some of them lose contact with the values and principles by which they attained their own success and society's prosperity.
Just the same, there is much to counterbalance the soft spots in this book. Its clear, brave, and timely message will engage anyone concerned with individual excellence and cultural achievement.
Karl Zinsmeister is a Washington, D.C.–based writer and adjunct research associate at the American Enterprise Institute for Public Policy Research.
The post Nothing Fails Like Success? appeared first on Reason.com.
]]>But one of the remarkable facts of modernity is that those kinds of environmental vagaries no longer need threaten life. Humans have developed a whole range of hybrid seeds, pesticides, chemical fertilizers, and planting and tilling techniques to avoid catastrophic crop failure. They have learned to irrigate and rechannel water. They have discovered how to conserve soil and rotate crops. These things can be done in either an expensive, technology-intensive way or in a cheap, labor-intensive fashion; they are by no means the province merely of the rich nations. And, of course, for the worst cases, man has developed a whole series of storage, communication, and transport mechanisms so that when disaster does strike, outside relief can prevent starvation.
By these various means, most of the peoples of the world keep nutritional want well at bay. But in some places, efficient and dependable methods for producing and distributing food have not taken hold. In almost all cases today, the reason can be traced to one root: politics. The heavy hand of the state is prominent in nearly every famine of the last 50 years.
In some instances, despots employ starvation directly, as a decapitating weapon of political struggle. Other times, feeding the citizenry is subordinated to ideological ends. And in still other cases, bureaucratic centralism and foolish economic policies slowly strangle food production.
The worst starvation calamities of recent times combine all of these errors.Their results show how terrifyingly high the stakes can be:
Soviet Union
1930–33, 10–15 million dead
China
1960–61, 25–30 million dead
Nigeria (Biafra)
1967–69, 1 million dead
Cambodia
1975–1980, 2 million dead
Ethiopia
1984–85, 1 million dead
The most recent cataclysm took place just three years ago, when more than a million Africans, most of them Ethiopians, perished in quiet misery on that continent's tortured grasslands. Yet despite an avalanche of attention and concern, most of the world failed to recognize the simplest truth about the Ethiopian famine: the deaths were needless, entirely avoidable. The famine was largely man-made.
And here's an even sadder fact: because we have failed to understand the political roots of contemporary hunger, because we are blind to the brutal patterns of recurrence, because we refuse to read aloud the signature on modern-day famine's calling card, it will continue to return. Even at this moment, hard on the heels of an outpouring of global outrage and assistance, Ethiopia is once again starving. At least 6 million Ethiopians are at risk. As appeals go out for 1.3 million tons of Western food donations, Americans are asking, How can this happen again so soon? The answer, missed by most of the famine reporting, lies very near the surface of recent Ethiopian history.
In June of 1974, a group of military officers known as the Dergue toppled Ethiopia's long-ruling Emperor Haile Selassie. Moderates were quickly purged from the regime, and following a climatic bloody gun battle at junta headquarters, Lt. Col. Mengistu Haile Mariam emerged as ruler. In one of his first acts, he smothered the elderly emperor with a pillow.
Later, in 1975, Mengistu nationalized all land. At first, peasants gleefully seized plots from former landlords. But they soon learned that rather than being made owners, they were about to be collectivized. Peasant unrest resulted. This combined with student protests, a revival of several festering secessionist movements, and finally a Somali invasion. The new regime was soon teetering.
Then in 1977, following a U.S. rebuff, the Soviet Union delivered a billion dollars' worth of arms to Mengistu, allowing him to defeat the Somalis, check the various resistance groups, and consolidate his power. In the 10 years since, the Soviets have continued to pour weapons in at the rate of half a billion dollars' worth a year. With about 300,000 troops, 2,000 Soviet military advisors, and 7,000 Cuban fighters in the capital and along the Somali border, the Ethiopian military is now the largest and best equipped in black Africa.
In exchange for rescuing the Dergue, the Soviet Union and Cuba began pushing them for "greater Marxist orthodoxy" in their revolution. With the assistance of East German secret police, Mengistu launched a purge of opponents—beginning at the University of Addis Ababa, a hotbed of resistance. More than 3,500 students (out of 5,000) were killed. And, starting in 1979, the collectivization program, announced four years earlier, began to be enforced against recalcitrant peasants.
Most family farmers were forced into collectives where, in classically Stalinist fashion, almost everything produced belonged to the government. Large plantations that had been expropriated were run as state farms, with laborers paid a subsistence wage. Those few independent farmers who remained were allowed to sell their surplus crops only to the government, and at government-dictated prices that were below the cost of production. Private markets in food were closed down down, and as The Economist reported, Ethiopians were shot for "hoarding" (storing grain between harvests) and "profiteering" (shipping grain to places without food).
In the face of such measures, all incentives for rural dwellers to labor over their crops disappeared. Not surprisingly, production of teff, Ethiopia's main food grain, fell by 60 percent from 1975 to 1982. Cattle herds were slaughtered or sold across the borders. Reserves that might have forestalled famine evaporated. Three million Ethiopians—8 or 9 percent of the population—fled the country.
At the same time that socialist bungling was stultifying the agricultural economy, two other programs were creating mass hunger in a different way. The first is the so-called villagization scheme. In a typical operation, government troops arrive in an agricultural hamlet, arrest the traditional chiefs, requisition all private property (crops, livestock, tools), then force the locals to break down their huts. They are then force-marched, carrying pieces of their houses on their backs, to a new central location. There, they are required to set up new homes along with other groups who have been similarly gathered. The old sites are bulldozed.
In this way, over 4 million Oromos from eastern Ethiopia, for instance, have recently been uprooted. By the mid-1990s, the government hopes to have relocated nearly all of Ethiopia's 30 million rural dwellers. Very often, villagers resist the move, and they are met with violence, beatings, rapes, and death. The central location to which the peasants are transported often lacks adequate water supplies and is usually far removed from old fields. Much previously cultivated land is neglected and abandoned as a result.
Ethiopia's government has its reasons, of course, to compel these bizarre relocations. For one, it is the simplest way to enforce the farming collectivization that peasants resisted so fiercely so long as they had access to their own lands. Dr. Myles Harris, an Ethiopian relief worker, has reported that unless their parents have proper papers from the local village and "farmer's association," even dying children can be refused admission to hospitals. Centralized dwelling also allows for easier indoctrination and surveillance than when farmers are strung across the countryside. Each new "village" comes equipped with a guard tower and party banners, if little else.
More generally, the villagization program breaks down traditional sources of authority that compete with state power. For instance, in Emperor Selassie's day there were 20,000 separate parishes of the Ethiopian Orthodox Church, and all villages with 100 people or more had a church. These rural churches, and many mosques in Moslem areas, are being systematically razed. No replacements are allowed in the new villages.
A slightly different program with similar results is the resettlement campaign. During 1984 and 1985, 600,000 residents of the rebellious, guerrilla-harboring northern provinces were resettled to the south. The practice was uncovered when journalists who were in the country to report on the famine noticed people being jammed into trucks and stripped-down Antonov air transports and then whisked away.
This resettlement typically took place amid much brutality. A major investigation by the nonpolitical anthropological organization Cultural Survival found that 40 percent of the relocated tribesmen were beaten, 85 percent were permanently separated from a member of their immediate family, and 60 percent saw people die or be killed in the course of the resettlement. The Cultural Survival research corroborates a later estimate by the French relief organization Medicins sans Frontieres (Doctors Without Borders) that fully 1 out of 6 of the Ethiopians who were forcibly relocated died in the process—a total of more than 100,000 individuals. For many Ethiopians, journalist Robert D. Kaplan and other witnesses report, the first experience of hunger did not come until after villagization or resettlement.
Following international outcry, the resettlement program was suspended in early 1986. But it apparently restarted last November, and the government has announced that it aims to resettle 300,000 persons this year. On February 8, at a food distribution center in Korem, government troops fired on thousands of unarmed peasants who were in the process of being resettled. Twenty of the resisters were killed, and scores wounded.
This incident illustrates one of the dilemmas of current famine relief programs. Initially, the Dergue resisted Western efforts to establish food stations in the northern, rebel-controlled provinces, even though they were among Ethiopia's hungriest areas. Indeed, as Kaplan, who has written extensively on the famine, reports: "For years Soviet MiG fighter jets have taken off from government bases and bombed anything that moved in guerrilla areas, including food convoys."
When the United States began channelling aid to the northern provinces across the Sudanese border, however, Mengistu changed tactics. In 1985, he agreed to cooperate with the Red Cross and other relief groups to establish food depots in northern garrison towns. The effect, he realized, would be to lure people from the resistance-dominated countryside to central camps, where they could be registered and controlled.
Correspondent Jonathan Tucker has written in The Nation that "since all able-bodied young men from the rebel-held areas are considered potential guerrilla recruits, they have been conscripted into the Ethiopian Army or forcibly resettled in distant parts of the country." In other words, food aid is being used as bait for the regime's resettlement trap.
Tucker quotes a Western relief worker in Ethiopia who states that "the program is admittedly saving some lives, but by contributing to conscription and resettlement, it's also causing additional casualties. In a sense, the program offers logistical backup to Ethiopia's military campaigns."
Apparently because they have come to similar conclusions, rebel groups last fall began attacking food convoys headed north, destroying hundreds of tons of grain in several cases, to Western outcry. The Eritrean and Tigre People's Liberation Fronts (both of which are themselves dubious Marxist-controlled groups, like most of Ethiopia's resistance movements) have claimed that food convoys are often used as a screen for the transportation of war materiel. They have declared that the government must rescind its resettlement policy before they will once again guarantee the safety of food convoys on rebel territory.
Mengistu claims the villagization and resettlement programs are merely responses to famine, a way to relieve human pressure in the dry districts. But most observers agree their primary aims are political—to consolidate central government control, enforce collectivization, and deprive rebels of popular support. The relocation campaigns "are ways of dominating and regimenting society, putting people in one place and controlling them," says Dawit Wolde Giorgis, Ethiopian commissioner for relief and rehabilitation until he defected to the West two years ago. In the process, they have become a primary cause of Ethiopian starvation.
The 1984–85 famine was clearly manipulated—some investigators even say engineered—by Mengistu as an instrument of genocide. Even through the height of the dying period, the army and air force were destroying granaries and farms, commandeering relief vehicles, and seizing Western grain shipments. At least half of the 1984–85 victims resided in areas controlled by either Eritrean or Tigrean guerrillas. Many of the other victims were economically independent peasants whom Mengistu, echoing Stalin, bitterly denounced as kulaks. In the early stages of the famine, before it was "discovered" by BBC television, Mengistu not only failed to get help, he actually concealed the problem from relief agencies.
The primitive Stalinism that caused the Ethiopian famine was a macabre throwback to the original Soviet model. In 1929 the Bolshevik Revolution was little more than a decade old and Josef Stalin was still solidifying his control of the world's first—at that time, only—Communist state. Most of the peasant farmers who made up the bulk of the Soviet populace had until then been able to resist major changes in the rhythm of their daily lives. Many of the traditional patterns of tillage and husbandry, worship in the village church, and communal and social life continued as they had for generations.
But late that year, Stalin ordered the collectivization of Soviet agriculture. Tens of millions of small landholders were dispossessed of their plots and forced back into communal servitude for the first time since the great Serf Emancipation of 1861. Only this time they were indentured to the Communist Party rather than a landlord, and this time they were organized for political, not economic, purposes. All tools, farm animals, and even personal food stocks were seized, and all future agricultural production was declared property of the state. Naturally, food output collapsed.
Seeing an opportunity, Stalin combined the collectivization of agriculture with a campaign to liquidate "enemies of the revolution." These were defined to include the more prosperous peasants (kulaks) as well as members of certain other groups that Stalin found threatening—particularly the troublesome Ukrainians, the anti-Soviet Cossacks of the Northern Caucasus, and the Kazakh nomads. The result was a violent disruption of rural life throughout the Soviet Union, the destruction of agriculture in what had been Europe's breadbasket, and the death—in total absence of any natural disaster—of 10 to 15 million people, mostly by famine and forced labor.
Authorities carried out a vigorous campaign of grain confiscation even at the height of the famine. "Bread Procurement Commissions" probed barnyards and thatched roofs with thin sticks, searching for and seizing any private grain stores. The starving were bodily prevented from leaving the famine zones and were transported back if they were discovered in cities or in adjoining (nonstarving) provinces. News of the famine was suppressed, and when it trickled out nonetheless, offers of food aid from foreign nations were refused by Soviet leaders.
The famine was one part state pogrom, one part a failure to understand economic incentives, and one part a product of central-planning idiocy (the entire staff of the state meteorological office was arrested and charged with false weather forecasts at one point). In all cases, however, the direct responsibility of the Communist government is clear.
If there was a lesson in the Soviets' collectivization famine, it was lost on their socialist brothers in China. One year after gaining power in 1949, China's Communist rulers confiscated all land from anyone who owned five acres or more and distributed it among poorer farmers. Between 16 million and 28 million landowners are believed to have been slaughtered in the process.
The confiscations were barely completed when a new program was unveiled. Lands continued to be privately owned, but they were grouped into agricultural cooperatives. Ten million existed by 1954. At the end of 1956 these were further centralized into 700,000 collective farms, containing almost all agricultural families.
Over the next two years, the remaining private ownership of land was ended, and when Mao's Great Leap Forward began in 1958, the 700,000 collective farms were grouped into 25,000 communes. Farmers became simple wage earners. Not only all work but also eating, raising children, and other private functions were made communal. Social control by the central government was virtually complete. Personal incentives for food production disappeared.
At the end of the 1950s, China's annual grain production had totaled 270 million metric tons. In 1960, one year after the Great Leap, the figure is estimated to have fallen to 150 million tons. It did not exceed that level for a decade and did not exceed pre-collectivization levels until very recently. As one might expect, there was catastrophic famine in China during 1960–61. Based on census data, it is now calculated that an incredible 25–30 million people died of government-inflicted hunger in a two or three-year period.
The similarities of the Great Leap Forward disaster and Stalin's collectivization famine are manifold. At root, both were caused by a determination to subordinate even life-sustaining production to political goals. While insecure cynicism animated the Soviets, the Chinese were driven by revolutionary utopianism. The results, however, were every bit as deadly. And the damage was tragically long-lasting. Even through the 1970s, famine remained a common part of life in much of rural China, despite official and academic propaganda to the contrary. (See Steven W. Mosher, Journey to the Forbidden China.)
Not until the reforms of Deng Xiaoping in the late 1970s and early '80s—where most peasant households were given a small plot of private land, some choice about what to grow, and the partial right to sell products in free markets—did Chinese farming begin to recover. From 1978 (when the reforms began) to 1984, Chinese grain production rose 34 percent, to a record 405 million tons. China actually became a small grain exporter.
But grain output has levelled off and today China once again faces serious shortages of cereals, as well as other foodstuffs. Apparently, the modest liberalizations undertaken up to now have imparted as much kick as they can. Part of the problem is that grain, whose price the government strictly controls to placate urban consumers, is now unprofitable compared to vegetables, herbs, and medicinal plants, which can be sold on free markets. China's farmers have developed a powerful taste for entrepreneurial incentives, and it is unlikely that food production can be raised significantly again unless China's leaders are willing to risk more market-based reforms.
News of the 1960–61 famine was suppressed so completely that only recently did the world learn of its existence. And not until the last few years, when outside observers gained access to new demographic data, did the catastrophic scale of the loss become clear. That 25 million famine deaths could, first, occur, and then be kept secret from the rest of the world, has important political implications, as Indian scholar Amartya Sen observed in The New York Review of Books:
"In India even a fraction of that death toll would have immediately caused a storm in the newspapers and a turmoil in the Indian parliament, and the ruling government would almost certainly have had to resign. Any government keen on staying in power would have had to avoid such starvation deaths from taking place at any cost. Thus the question of food and starvation is not unrelated to the issue of liberties, of newspapers, and ultimately, of democracy."
A look at the worldwide famines since 1960–61 bears out the accuracy of this observation. In 1968 famine was induced in Nigeria as part of the Biafran war. The (non-Communist) Nigerian military government destroyed and poisoned food supplies, blocked relief, and wielded starvation as a weapon. The Biafran rebel government also interfered with aid efforts. A political famine was created, and up to a million perished.
Less than a decade later, after Cambodia's fall in 1975, Pol Pot's doctrinaire Communists inaugurated a homicidal regimen of "re-education" and "mobilization" throughout the nation. Residents of Phnom Penh and other cities were forcibly relocated to undeveloped parts of the countryside. The predictable pattern of confiscations, collectivizations, and purges wracked the agricultural economy. Starvation was soon rampant. Two million of Cambodia's eight million citizens died in subsequent months, many of starvation.
Not long afterward came Afghanistan. Since the Soviet invasion, Soviet and Afghan government troops have waged war not merely on the mujaheddin guerrillas but, as a Helsinki Watch report puts it, "on every element of the food production system." They have poisoned wells and destroyed irrigation systems. They have cut down fruit trees and strafed cattle and domestic animals. Grain has been burned in fields and storage facilities with phosphorous bombs. Gardens and terraces are bomb-cratered and mined.
Wheat berries brought in from Pakistan have at times been the only nourishment for many Afghans, and British studies suggest 20 percent of all children in northern provinces suffer from serious malnutrition. Of course, the government forbids the International Red Cross from distributing aid in the countryside. Though no official death totals are available, the London-based group Afghan Aid estimates that half a million or more Afghans have been threatened with starvation at various times in recent years. Those who have avoided such a fate did so primarily by leaving the country, surrendering to the process that has made one out of every two refugees in the world today an Afghan.
In Mozambique—a country blessed with rich agricultural lands and large mineral and energy deposits but cursed with a hapless government—famine killed 100,000 people in the early 1980s. Six million more currently face starvation, according to the United Nations.
From the time the Portuguese left in 1974 until the early 1980s, the Mozambican government controlled food prices and directed all agricultural investment to large state farms. Peasant and private commercial farmers had their supplies of seed, tools, fertilizer, and animal feed cut off. Today, idle tractors, trucks, and pumps litter the countryside, immobilized by parts and fuel shortages. Hoes, axes, seeds, and fertilizer are difficult to find. "People want to produce, but they need tools," says a CARE worker.
The government has brought such suffering to the country that a resistance movement has been able to put 10,000 guerrillas in the field and retain a measure of public sympathy, despite its own lack of ideological coherence and a record of frequent brutality, including destruction of food convoys.
Having failed to identify even some of the most egregious famines as the cruel and avoidable events they are, the world, not surprisingly, is often blind to the more subtle forms of political hunger. Most of the nations of Africa, and some other parts of the Third World as well, are currently in the grip of ideological forces which, while less nefarious than those operating in China or Ethiopia or the Soviet Union, also have deadly effects.
In many developing countries, governments have so stultified their rural economies that they are unable to produce anything efficiently. This is often a bipartite process. On the one hand, government functions such as the maintenance of roads and infrastructure and the disbursement of technical assistance are neglected. And on the other, a whole series of taxes, tariffs, marketing orders, subsidies, and regulations distort prices and prevent markets from operating effectively. The result is slow-motion misery.
Perhaps the best way to illustrate the problem is to contrast the experiences of Kenya—one of Africa's rare success stories—with those of Tanzania—a quintessential failure. The two nations have a common border and are climatically and topographically similar, with Tanzania enjoying greater resources. Kenya and Tanzania share several common ethnic populations, and their precolonial and colonial histories were closely intertwined.
But upon independence, Kenya and Tanzania took widely divergent political paths. Under Jomo Kenyatta, Kenya explicitly rejected large-scale nationalization and confiscation of private property. The national slogan became "Harambee" ("self-help"), and private ownership and industry were strongly encouraged. Individual enterprise was considered each citizen's responsibility and the best way to eliminate poverty. Kenya blundered into some of the destructive policies common in newly independent Africa—for instance, persecution and expulsion of the Asian immigrants who are Africa's leading agents of modernization. But the overall economic program was liberal and strongly market-oriented.
In Tanzania, on the other hand, Julius Nyerere became a leading advocate of full African socialism. Banks and industry were nationalized, and compulsory government service was introduced. Nyerere's politico-economic philosophy was based on what he called Ujamaa (Familyhood) Socialism—Tanzania would be transformed from a nation of individual peasant producers to a society of small-scale communalists. Here we have a classic shibboleth of political leftists and utopian purifiers. To quote a European proponent: "It [has] not been understood that the reform of farming should begin with the reform of man."
Nyerere was no tyrant, but his socialism led him into a giant villagization scheme, forerunner to the Ethiopian version, that resulted in forced relocation of over 90 percent of the rural population to new central hamlets. Unlike his Ethiopian counterparts, Nyerere seems to have been motivated less by security considerations than by the naive belief that pushing people into large central facilities would make it easier for them to act collectively and speed the arrival of clinics, schools, new wells, and other artifacts of modernism.
In practice, the Ujamaa collectives were a complete flop. The year after they were introduced, Tanzania had to import almost a million tons of grain to stave off famine. Communal farming soon had to be abandoned altogether, and private plots once again allowed, even required. But the damage was done. Villagization had destroyed old physical facilities and social networks without adequately replacing them. It had destroyed the security of private ownership. It had separated farmers from their land. The result was misery, impoverishment, hunger, and death.
The keys to agricultural production, like all production, are structure and incentives. In Kenya, the fertilizer, seed, and farm equipment businesses are all private. The supply of chemicals to farmers is handled partly privately, partly by the government. In Tanzania, the government controls all four critical agricultural inputs—and much less efficiently. In Kenya, Western investment and expertise have been welcomed. In Tanzania, foreign capital was nationalized. In Kenya, as in nearly all of Africa, the government buys up and markets most crops, but it pays farmers a world-market-based price. In Tanzania, prices are set politically, and they have been absurdly low.
Starting from the common, middle ground of tribal ownership, Kenya privatized landholding, Tanzania collectivized it. Kenya kept its currency exchange rates flexible and became an agricultural export powerhouse. Tanzania controlled its currency at high levels to make imports cheap and in the process destroyed its export industries. To support large public expenditures (three-fourths of Tanzania's salaried labor force is employed by the government), Tanzania placed very heavy taxes on farmers and other producers.
Because of its sensible free economy, Kenya is basically self-sufficient in food. When extended drought arrived in the early 1980s, it was much better prepared than Tanzania or most other African states: despite the terrible absence of rain, no deaths due to starvation were recorded in Kenya.
Other parts of the world have done better than Africa. Asian developing nations in particular latched onto Green Revolution techniques with a vengeance and have dramatically increased agricultural yields. India—not long ago considered hopeless, doomed by resource and population factors to rely forever on outside food supplies—is now a food exporter. The grassroots Indian economy is quite free and entrepreneurial; the government operates programs to bring farmers new technology and capital and assist them in setting up markets.
So there is hope, where destructive state meddling can be kept to a minimum. In just the last couple of years, several of the worst offenders, including Tanzania, Mozambique, and recently Ethiopia have either promised or begun market-oriented reforms. Under new president Ali Hassan Mwinyi, the Tanzanians have reduced price controls and strictures on private traders and devalued their currency to encourage agricultural exports. The Mozambicans have downgraded state farms. Several other African nations have acknowledged their almost universal error in neglecting farming (the continent's major "industry") in favor of showy factory and urban projects.
Aside from the desperate economic straits these countries faced, new promarket pressures from the World Bank and Western governments have been a catalyst for reform. Belatedly, the West is realizing that the only sensible use for its aid (outside of emergencies where the threat to life demands quick action) is as a carrot, or a stick, to induce structural change. Too often in recent decades, easy Western aid to developing countries has merely cemented the existing government in place and underwritten the continuation of anti-economic policies.
Unfortunately, that is what happened in Ethiopia, where more than $2 billion in official aid poured in over a two-year period, the largest portion from the U.S. government. What was most infuriating was the way it was necessary to "beg from the hangman the right to come to the help of the victims," as French political writer Bernard-Henri Levy put it. Mengistu was reportedly willing to let several million people die rather than capitulate on points of principle, so the Red Cross, the U.S. government, and other relief groups had to tiptoe about to avoid offending the Dergue. In the process, they became tacit accomplices in the regime's brutality. Food shipments were reportedly taxed at the rate of $50 a ton to finance the army, and grain was diverted directly to the soldiers as pay. The resettlement and villagization schemes were financed with donated funds and supplies.
The existence of world hunger evokes in many Americans and Europeans not only great sympathy but also a feeling of guilt. As the rich are wont to do, we sometimes try to "buy" ourselves out of this guilt by showering the poor with large amounts of unconditioned financial assistance. From 1970 to the early 1980s, official Western aid to sub-Saharan Africa increased by an average of 5 percent a year in real terms. In some countries, aid per person amounts to a third or more of income per capita, giving new meaning to the term dependency. If these nations got into trouble over the last decade and a half, it was for want, not of outside assistance, but of a sensible set of economic rules.
If we wish to help the world's poor, we must keep pushing their governmental masters to allow them more economic liberty. Even small pro-market reforms have already paid big dividends in several hungry countries, such as China. But the measures taken so far have mostly been very limited. No nation has dismantled its government monopoly on agricultural marketing. None has fully decontrolled prices, currencies, or trade restrictions. Few have been very congenial to the small family farmers who are the developing world's potential economic saviors. All retain bloated and intrusive government sectors.
Yet genuine interest in economic freedom is beginning to get a toehold in the Third World. During his 1986 visit to Washington, I asked Jonas Savimbi, the leader of the UNITA guerrilla movement fighting to rid Angola of Soviet and Cuban domination, what he would do in a free Angola to avoid repeating the disastrous economic errors of so many of his African neighbors: The government's role, he answered, is to build roads and create a marketplace, help with technical know-how and investment assistance, and then step back. Only individuals, and individual incentives, Savimbi stated, can create wealth: "When you leave people to work their own farms…they have an incentive to produce—Then I will get something for myself.' By getting something for himself, he will help his village…his district…his province…his country."
This answer, while commonsensical to Western ears, is dramatically iconoclastic coming from an African leader. If Savimbi's message (and the economic freedom and political democracy that alone can make it happen) eventually takes hold outside the safe sanctuary of American meeting rooms, it could provide a genuine alternative to the two decades of centralization that have strangled Africa's once-mighty productive capabilities.
The alternative is disaster. Ethiopia was once considered a potential granary for Africa. During Selassie's reign, the nation was an agricultural exporter, small farmers prospered, large plantations growing food and cash crops sprang up, an extensive network of private traders and investors took root. But all that was thrown away. And when the latest of Africa's regularly recurring droughts arrived, the destructive policies that were the replacement bore bitter fruit.
Outside observers might have anticipated that, given the recent history of mass starvations. Yet much of the world seems to have fatuously accepted the official claim that the famine and the one million deaths were, as Ethiopia's ambassador to the United Nations puts it, "adversities caused by environmental factors." This stems from deeply rooted contemporary belief that world hunger is primarily a product of natural failures: too little rain, too many people, mysterious "desertification," bad soil, bad luck.
Yet it took willful acts of men to turn acts of nature into calamity. Absent a larger, overriding political breakdown, environmental factors do not now cause people to suffer and die from malnutrition. Zimbabwe, for instance, suffered through the same dry spell but experienced few famine deaths, on account of its strong farm economy based on private ownership. Likewise, India is today in the midst of its worst drought in decades, but few will starve because the country has a regular food surplus, a prosperous network of private farmers and traders, and a good government-assisted distribution system.
Ed Hullander of the U.S. Agency for International Development put the Ethiopian case directly in 1985: "Fifteen years ago when I was in those high plains [in Ethiopia], I saw corn that was the envy of Iowa. You don't see that today. It was the policies that stopped agricultural production, stopped the availability of food per capita, that were the major precipitants of this famine."
Today (and it has been true for most of this century), famine deaths are political, not natural, phenomena. And it is political change that will end and prevent them.
Karl Zinsmeister is a Washington-based writer and consultant and an adjunct research associate at the American Enterprise Institute.
The post All the Hungry People appeared first on Reason.com.
]]>Within half an hour local blacks had manned a picket line outside the store. Chan was arrested for firearms violations and eventually sentenced to 100 hours of community service. But his store was closed down for several months by picketing, vandalism, and threats. It soon became clear that the gun incident had touched off a much deeper resentment. A witness to the incident reported that when she asked Carter why she was arguing with Chan, Carter replied that "she wanted to see the store closed anyway because Chinese don't suppose to be owning all these stores in the community."
The Rev. Willie Wilson, a local minister who became the leader and spokesman of the protest, put the argument directly: "The Asian community is the latest of a series of ethnic groups that have come into our community, disrespected us, raped us economically, and moved out at our expense." He urged blacks to "support our own" and called for the removal of nonblack businesses from black neighborhoods.
"Another Asian tenant in that location will not satisfy us," Wilson stated. "We're not saying we want to put all the Asians out of business, but we would like them to do their business elsewhere. Residents of Anacostia want to see Afro-Americans reclaim ownership of part of their community."
Several black leaders disavowed the protest, its anti-Asian sentiment, and its suggestion that small-business owners ought to be subject to political controls. The Rev. Lorren Hackett of the Anacostia Bible Church, for instance, decried the attempt to close the store as "a racial thing."
But Nadine Winter, the elected legislator representing the Anacostia district, declared in an October television interview that "the day of the Asian community occupying or getting the majority of business in a [black] neighborhood is over.…We are not going to burn down our community.…We are going to use our clout in city hall." She then advocated a government program to purchase businesses from nonblacks at their appraised price and install black "role models" in them.
Further evidence of how unabashed anti-Asian expressions have become in the black community came nine months later when Willie Wilson spoke at an outdoor political rally of prominent black supporters of D.C. Mayor Marion Barry. Calvin Rolark, president of the United Black Fund (a national organization that works in tandem with the United Way) and husband of another of Washington's city council members, introduced Wilson as "the man who had to get the boat people straight."
Similar incidents between Asian ghetto merchants and blacks have occurred in cities across the country. Nineteen eighty-five saw a series of confrontations between Korean businessmen and blacks in Harlem, where Korean-Americans own about a quarter of the shops on the main strip. Los Angeles has had a number of tense encounters, and in 1986 the Los Angeles chapter of the NAACP called for a "selective buying campaign" against Asian merchants.
Dozens of other incidents have been reported in cities such as Atlanta, Philadelphia, Chicago, New Orleans, Seattle Tacoma, and Providence. Some disputes have sprung from competition between blacks and Asians over jobs, social services, and housing. But in the greatest number of cases the troubles have centered on the opening and operation of small businesses.
The frictions between inner-city blacks and Asians also exist to varying degrees among other groups in close proximity across the country. There has been conflict between blacks and Cuban entrepreneurs in Miami, for instance, and between white blue-collar workers and Asians in Massachusetts and Texas. But the broadest, deepest, and most sustained economic animosity in American cities today—and the only conflict clearly getting worse, not better—is between blacks and Asian-American entrepreneurs in low-income neighborhoods.
The specific grievances put forth by blacks against Asian merchants are several, and they are virtually identical wherever they surface.
Blacks often claim that Asians are stealing business opportunities in America's inner cities. A series of articles in 1984 in The Sentinel, an Afro-American newspaper in Los Angeles, condemned Asian shopkeepers' "takeover" of businesses in black areas. In a letter responding to the series, the executive director of the Los Angeles Commission on Human Relations objected that throughout the articles, the term "Black community" was used "to describe a geographical area in which it seemed to be suggested that nonblack businesses were unwanted, almost an encroachment on private property."
A corollary to this charge is the claim that Asian businesses are unlikely to employ blacks. In some cases this is simply inaccurate. (Mr. Chan, who was so charged, numbered two blacks among his four employees.) The real problem, however, is in the nature of these operations: 8 out of 10 Asian-American businesses have no paid employees and rely exclusively on family members as workers.
There is an overarching complaint that Asian small-business competition is "unfair." Koreans, Vietnamese, Chinese—they work "unfair" (meaning very long) hours. As the director of the Vietnamese Fishermen Association in Oakland, California, put it, "They don't go in for a beer. They don't go in to watch football. That makes other people mad."
And their expenses are "unfairly" low—not only do they spend little on leisure, they live very simply and share houses. One commonly hears variants of the statement by one black truck driver that "they move one in, and within a week's time, they've got 10 of them living in one room."
For many inner-city blacks, the felt cumulative effect of all these factors is to make Asian entrepreneurs impossible to compete with. There is a widespread feeling among American blacks that economically hypermobile Asian Americans must be getting special assistance of some sort that is not available to other minority groups. Barrington Nicholas, a black Washingtonian who is himself a small-store owner, expresses a common sentiment when he says, "I know they get some kind of breaks, because I've seen it." Time and again an investigator will be told in whispered tones of federal programs, easy bank loans, special benefits of all sorts.
Perhaps tied to the perception among blacks that Asian merchants have an insuperable set of social advantages is the sensitive issue of "respect." Blacks sometimes complain that Asian businessmen, Koreans in particular, are arrogant and rude. Referring to Asian-American storeowners in her low-income area of Washington, daycare-center operator Yvonne Stewart says, "They can't seem to separate me from the men who hang on the corner."
The disrespect blacks feel from some Asian shopkeepers may grow partly out of language barriers or differences in cultural style. It may stem partly from the constant harassments any ghetto merchant, of any race, comes to resent: repeated hold-ups, pilferings, graffiti, burglaries, vandalism, and so forth. (Shortly after the Chan-Carter incident in Washington, a Korean shopkeeper was shot dead a few blocks away during a robbery.)
It also may well be that some Asian ghetto merchants simply are disrespectful. Incidents like the 1986 statement by Japan's Prime Minister Nakasone that minorities are a drag on American performance suggest that the societies from which some Asian immigrants come still harbor strong feelings of cultural superiority.
Whatever the case, there is no denying that wide cultural gaps often exist between Asian immigrants and their American neighbors. The proposed opening, in 1986, of an Asian-owned restaurant in a black area of Philadelphia led black radio personality and civil-rights activist Georgie Woods to denounce Korean merchants on his radio show. "They don't look like us, and they don't live like us, and they don't act like us."
In Revere, Massachusetts, the scene of ongoing conflicts between Southeast Asian immigrants and white blue-collar workers, a neighbor of one immigrant family says, "Immigrants used to come from countries nearly as civilized as the U.S. These people come from jungle communities." A former Revere city councilor confides in hushed voice that "the rumor, strictly a rumor, is that they eat dogs."
In Revere, these kinds of "they're not like us" sentiments have led to violence, including rock throwing, serious beatings, and the Christmas Eve 1986 burning of a house sheltering 28 Cambodian immigrants. In Washington, D.C., 10-year-old Chinese-American Ho Cheung tells of taunts and beatings and the refusal of his black classmates to use his real first name, calling him "Chop Suey" or "Ching Chong" or "Chinky" instead.
The Justice Department reports there was a 62 percent increase in anti-Asian incidents in 1985. In Los Angeles County, Asians were targets of 50 percent of the reported racial incidents in 1986 (versus 15 percent in 1985). In Boston, 29 percent of racial crimes were against Asian-Americans in the latest year, compared to 2 percent five years earlier. These are very high numbers considering that Asian-Americans constitute under 3 percent of the population nationally.
Anti-Asian animosity has a long and dark history in this country. Throughout the century and a half Asians have been coming here they have always been distinguished equally by their inventive economic accomplishments and the remarkable backlash those achievements have sparked. The first numerous Asian immigrants to this country were the Chinese, who came to San Francisco in the gold rush of 1848. Between 1850 and 1882 (when the Chinese Exclusion Act went into effect), over 300,000 Chinese entered the United States, most of them unskilled peasants.
Almost immediately, Chinese miners faced physical attacks and discriminatory taxes and regulations aimed at depriving them of gold claims. As a result they specialized in mining low-grade strikes and extracting ore from abandoned tailings. In the late 1850s, large all-Chinese work gangs were recruited to build the western railroads, in particular the Central Pacific transcontinental link. (This put them in direct and unpopular competition with the Irish laborers laying down the rival Union Pacific line.)
With the completion of the major railroads, low-wage Chinese laborers began to disperse. Some went back to mining. Some became share croppers, others raised vegetables on reclaimed land and peddled them themselves. The Chinese also became factory workers, especially in the garment, shoemaking, and cigar industries. Early on, Chinese entrepreneurs established companies and workshops of their own in each of these industries. As a result, when anti-Chinese agitations came along, resulting in the firing of Chinese workers, most of those laid off could be absorbed by Chinese owned firms.
Anti-Chinese agitation never abated, however, and in 1882 union leaders, nativists, and groups in economic competition with Chinese entrepreneurs convinced Congress to cut off Chinese immigration. The move was a crushing blow to the Chinese presence in America, owing to the demographic peculiarity of Chinese immigration: it was made up almost exclusively of adult males. In the late 1800s, males outnumbered females in the Chinese-American community by about 25 to 1. As a result, there were few families, and without continued immigrant flows the number of Chinese soon dropped precipitously.
The exclusion of Chinese labor was an artificial edict of government, and soon American farms and industry were searching for a substitute. In the three or four decades after the Chinese Exclusion Act, approximately 300,000 Japanese arrived on American shores. Most replaced old and infirm Chinese as agricultural laborers in California. (Although never constituting more than a tenth of California's population, Chinese formed about a quarter of the state's labor force, since they were nearly all males of working age.)
The Japanese too soon learned how to translate low-wage labor into self-employment. Typically an immigrant would start as an agricultural field worker, progress to contract farming, then to sharecropping or leasing, and finally to land ownership and truck farming, an undertaking in which the Japanese quickly became preeminent. (In 1919, more than 10 percent of all California crops by market value were being raised by the relatively few Japanese farmers.) In cities, too, the small family-run business became a foundation of Japanese-American economic life. Japanese immigrants operated small shops, cafes, laundries, rooming houses, and the like. Others worked as domestics, which can serve as a kind of self-employment.
As Japanese economic success spread, demagogues pressed for further Asian business proscriptions. In the first two decades of this century California laws banned foreign-born Japanese from employing Caucasian women; made it illegal for Japanese to buy, inherit, or even lease land; made fishing license fees higher for Asians than for non-Asians; blocked foreign-born Asians from being licensed as realtors, beauticians, and so forth; and set special taxes on Asian immigrants. In addition, Chinese and Japanese-American children were banned from certain public schools, and Asians were forbidden from giving testimony against whites in courtroom trials.
This ever-tightening noose of restrictions on Asian presence and enterprise—Asian immigrants barred from citizenship in 1870, Chinese forbidden even to enter the country in 1882, informal quotas on Japanese immigrants starting in 1907, multitudinous state and local laws obstructing Asian business activity—culminated in the Alien Quota Act passed by Congress in 1924, which almost completely excluded Asian immigrants. (Except Filipinos, who as residents of an American territory had immigration rights, and so became the next wave. The ancient beat of legal restriction and market substitution went on.)
How is it that Asian immigrants to this country have prospered, in some cases mightily, in the face of these extraordinarily concerted efforts to block their economic progress? There has been no universal formula. Historically, for example, the Chinese have tended to retreat in the face of persecution, while the Japanese have pressed on.
Chinese immigrants often migrated when they became unpopular in a particular area. They tended to segregate themselves in urban Chinatowns wherever they settled. They hewed fairly closely to one of several lines of employment—laundries and restaurants being favorites—where they were not likely to be competing with Caucasian businesses. These factors tended to enhance the physical safety of Chinese immigrants and provided the cohesive cultural and family environment most conservative Chinese wanted—but at the cost of ghettoization. It sometimes became difficult for Chinese to take the second step in the economic cycle, away from the laundries and cheap restaurants and into the economic mainstream.
The Japanese, on the other hand, many of whom excelled early on as businessmen-farmers, were much more vulnerable. They were scattered across large areas of the rural west. They were in direct, and often successful, competition with powerful native economic interests. They did not hesitate to exert their advantage when available, for instance by conducting strikes. For these reasons, the Japanese were much less likely than the Chinese to remain in low paying service occupations. At the same time, the combination of political vulnerability and economic assertiveness helped produce cultural resentments against Japanese-Americans that were easily translated into internment demands after the sting of Pearl Harbor.
But, strangely, possibly even the trauma of the World War II relocation camps—and measured economically or, particularly, socially, the trauma was indeed massive—may have been turned by the Japanese to their own good. Sociologist William Petersen has suggested that the relocation, by breaking up and further dispersing the Japanese-American community, may have completed its integration into mainstream U.S. society. He points out that the Japanese in Hawaii, who were not interned, did not experience the same level of upward mobility after the war as did the mainland Japanese.
Despite important differences among various groups of Asian immigrants, there are distinctive common aspects of Asian-American economic success. Some immigrant groups have emphasized political organization, education, or other factors as the means to successful integration. Asians, while not neglecting these methods, generally placed them second in importance to financial success. Only economic security and self reliance, most Asian-Americans have believed, make other forms of social mastery lastingly possible.
And Asians are clearly energized by the experience of immigration itself. Cut off from all that is familiar and comfortable, immigrants have ever found solace, or at least forgetting, in overcompensating industry.
Moreover, an immigrant's very foreignness can help him get started in business. Immigrants have special consumer tastes that outsiders cannot easily satisfy: certain ethnic foods and groceries, specialized household goods and clothing, services—such as travel agency and insurance—transacted in an alien language. By filling these commercial niches in enclaves of their fellow foreign-born, a certain number of immigrants are able to become rapidly established as merchants.
The trick is to take advantage of those protected markets without becoming trapped in them. In Los Angeles, 46 percent of present Asian-owned businesses cater narrowly to other Asians, and the competition between them is often fierce. The likely pattern over time, however, is clear. Early in this century, more than two-thirds of Japanese retail trade was with other Japanese. By the 1920s, though, Japanese-American businessmen were doing a majority of their business with non-Japanese, and in a much broader range of industries.
Among the more recent arrivals, Korean-Americans have taken somewhat of a hybrid approach. By and large they have gone directly to general-market retailing, buying existing businesses with established non-Korean clienteles. Like most immigrant start-up entrepreneurs, they have found their own variety of a partially protected market: inner-city corner establishments that had been abandoned by other merchants because they were either too exhausting to run, too crime-plagued, or too low-revenue. By putting in long hours, using low-wage family labor, and being willing to bear often difficult conditions, Koreans have been able to squeeze reasonable profits out of these businesses.
Also contributing to Asian economic success is that they often work almost heroically hard. Chi Loi, a young Vietnamese who opened an Orange County fish market with her husband in 1982, says, "Some Americans don't like us, they think we came with gold and diamonds. I try to explain that we're not that kind of people. We work very hard, to save money." Referring specifically to the black-Korean cultural gap, a Washington, D.C., Korean merchant states, "The blacks, they think you just make money easy. It's not true. We never off a day."
Jerome Winegar, the principal of a mixed-ethnicity South Boston high school, argues that "for the American poor, it doesn't take too much hot weather [before] people are sitting around, drinking beer and feeling sorry for themselves." The "problem" with Asian immigrants has sometimes been the opposite. In response to complaints from white fishermen in Texas and Florida of round-the-clock trawling by Vietnamese, state laws have been passed restricting the hours, zones, even net sizes allowable for commercial fishing. It is argued this is necessary to prevent over-harvesting.
Harold Stevenson of the University of Michigan, who has studied school performance of Asian-American children, maintains that "there are no clear indications that Asian kids are smarter than anyone else. There are lots of indicators that they work harder."
Resilience has also helped Asian-American business efforts. As the Japanese proverb exhorts, "Six times down, seven times up!" Each new external pressure would produce a clever response: having had their prime gold claims stolen, they became expert secondary miners. When alien land ownership was forbidden, titles were transferred to front men. When other opportunities were denied them, Chinese and Japanese laborers and miners worked as strike-breakers in place of Greek or Irish workers. When established retailers abandoned certain neighborhoods, Koreans stepped in.
Asian-American success also owes much to extraordinarily close-knit community structures. Asian-Americans have extremely low rates of divorce and family break-up. What's more, they are disproportionately likely to live in extended families with relatives. Kin groups—the fong, kenjinkai, and so forth—have always been important. And blood or clan relationships allow a strength of connection in business undertakings that a simple cash nexus could never provide.
For example: Tina Nguyen was born in Vietnam and came to this country 12 years ago at the age of 16. Today both she and her sister Ann are successful professionals in the financial department of a national corporation that runs hotels and nursing homes. They still live at home with their parents—both of whom also work—an older brother, and two older sisters. All of the adult siblings contribute their earnings to their parents for family use. The result is an extraordinary pooled income. The Nguyen siblings may draw from the family funds whatever they feel they need for clothes, living expenses, education, even purchases of stock and other investments, but savings are paramount, and all major financial decisions are made jointly. All social activities center on the family as well.
Their tightly woven community fabric has contributed signally to one of the central successes of Asian-Americans: an ability to raise capital for business ventures. Neither banks nor government agencies set up to promote minority enterprise have had much role in this, for a simple reason: New small businesses are incredibly risky, with more failures than successes. Loan officers at big institutions don't often get involved with them because they can't make the subtle judgments about which entrepreneur has a good chance and which doesn't.
Uncle Marvin, however, can make those judgments. Family and close friends are in an excellent position to know who in a given circle has what it takes to make a go of it in business. And if they subsequently entrust their life savings to that party, they do so without much fear that it will be absconded with.
The implication of all this, as economist Thomas Sowell has noted, is that members of close-knit groups like Asian Americans—where individuals have intimate knowledge of one another's character—have greater potential resources to draw upon for seed capital. Black venture capitalist Ralph McNeal puts it simply: "People don't usually lend money to strangers."
Asian-Americans have piled up remarkable amounts of capital through family savings and other private means. The rotating credit associations they brought with them from their homelands have been important in this regard. Informal credit groups, known generically as hui ("association" or "club"), have been in existence in southern China for about 800 years. Similar organizations exist in Japan, called ko, mujin, or tanomoshi (the Japanese word tanomu means "dependable").
Korean-Americans have their own version of this institution. A 1986 New York Times article profiled one such pool. "Lee Wook Soo and his wife, Lee Jung Ja, gathered quietly one recent evening with 14 other Korean couples at the Young Bin Kwan restaurant in midtown Manhattan. They ate and they drank and they carried forward a centuries-old custom of mutual trust that has made it possible for hundreds of Korean immigrants to open businesses in the city.…
"The custom is called a gyeh, a practice in which a group of people pool their money to form something much like a credit union. Each month someone else uses the collected money—usually interest free.…
"The types of gyehs vary, though they generally include 12 to 30 people. Because large sums of money are at stake—monthly pools have been known to reach as high as $250,000—members must be trustworthy. Each month, the members contribute, say, $500 into the pool, and one member takes home the whole pot."
Korean "money clubs" like this also operate in Philadelphia, Washington, and many other cities. Eugene Kang, executive director of the Korean Produce Association in the Bronx, says there is "no way" a Korean immigrant with little money can get a business loan from a bank. "American society can't help an immigrant get started. The only real assistance is from the Korean community."
Another important asset of Asian immigrants—right up to the present day—has been their willingness to accept even the most miserable positions in order to get a start. From migrant worker to sharecropper to independent farmer, or garment stitcher to saleswoman to boutique owner—these have often been remarkably rapid transitions. Asian immigrants, without forgetting where they want to be, have been willing to accept where they are. In shorthand, this might be rendered as "Proud, but not too proud."
But probably the clearest contributor to the rapid advance of Asian-Americans has been their strong bias toward self-employment. Earlier in this century observers remarked that "the feeling against the Chinaman" on the part of American working men was "more bitter and intolerant than that against the Negro." This feeling often was translated into anti-Chinese and Japanese labor laws.
The Chinese and Japanese reacted to the inability or unwillingness of business owners to hire them by starting their own enterprises and employing themselves. By 1920 more than half of the Chinese in the United States were employed or self-employed in Chinese restaurants or laundries. In the same year, half the hotels and a quarter of the grocery stores in Seattle were Japanese owned. By the time of the 1940 census, a remarkable 40 percent of Japanese men in Los Angeles were self-employed.
Today, changed attitudes as well as equal-opportunity laws have eliminated most job bias against Asian-Americans. Yet Asian immigrants continue to migrate toward self-employment, for other reasons: Many foreign-born Asians have English-language deficiencies and less schooling—or at least different, nontransferable schooling—than native-born workers. They often have less job experience and fewer skills of the informal cultural type. These factors limit their usefulness as employees and lead them to small businesses, where they can tailor themselves a work situation that maximizes their talents and minimizes their weaknesses.
When last tallied in 1982 there were 256,000 businesses owned by Asian-Americans. (Blacks, who were over seven times as numerous, owned 339,000 businesses.) The Chinese (53,000) and Japanese (49,000) have been joined by Koreans (32,000), Filipinos (26,000), Indians (26,000), Vietnamese (5,000), and others. Koreans run about 85 percent of the small corner grocery stores in Washington, D.C., and 900 of the 1,600 located in New York City, where they also operate over 200 dry-cleaning establishments. Indians manage 800 of California's 6,000 motels. Along the Gulf Coast, Vietnamese—almost all of them having arrived within the last 10 years—own more shrimp boats than whites.
It is easy to get carried away when discussing Asian-American entrepreneurship. To avoid misconceptions, it is important to appreciate precisely what kinds of businesses are at issue. Although a fair number of Asian Americans have set themselves up as professionals (there are, for instance, more Filipino doctors than black doctors in the United States), the overwhelming number run small, labor-intensive neighborhood stores. Sole proprietorships account for 92 percent of Asian American firms, partnerships for another 6 percent. Only 2 percent are corporations.
Almost 70 percent of Asian-American businesses are in the services and retail sector, with the largest groups being food stores, restaurants, miscellaneous retail, health services, service stations, and auto dealerships. Only about 20 percent of Asian-American businesses have any paid employees. As of 1982 (the most recent survey), the average business had gross receipts of $70,000.
On the whole, then, these are quite modest operations, often involving traditional ethnic products and requiring long hours of unpleasant work by entire families. Despite upward movement, many Asian entrepreneurs remain heavily ghettoized in their occupations: Chinese in restaurants, Koreans in 7-Elevens, Vietnamese in jewelry stores, and so forth.
Few foreign-born Asian entrepreneurs are getting rich—look across the cash register in most establishments, and you are looking at the owner. In fact, if the family's second generation held to the same pattern as the first—doing grubby, difficult work all day for low wages and then going home to a cramped apartment at night—few of us would describe these families as clear successes. But of course the second generation will not live as the first.
In many places today it is becoming difficult to find an inner-city Jewish shopkeeper or Italian or Greek grocer. Believe it or not, in 30 years it may also be difficult to find a Korean greengrocer or Indian motel owner. Second-generation Asian-Americans are doing one of two things. Either they are joining the flood of talented Asian-origin students currently pouring into American colleges and universities, or they are taking their family businesses to the next level.
One sees this latter development in the Washington, D.C., metropolitan area (one of the major receiving points for the post-1970 wave of Asian immigrants), where Vietnamese, Chinese, and Koreans are franchising or opening chains of successful service businesses, are getting into real estate development, and are establishing a strong new presence as regional wholesalers of food and merchandise.
The formula is well-proven in America. Yet it is a sad story in some ways—an entire generation sacrificing first its sense of place and then its own well-being, all so that successor generations (inevitably of somewhat alien values) may know the physical comfort and personal satisfaction forgone by the first.
Figures are often cited showing that Asian-Americans have high average incomes—higher than whites even. These comparisons usually fail to note, however, that 90 percent of Asians live in high-cost metropolitan areas; that Asians average more workers per family (2, versus 1½ for non-Asians) and that they work longer hours; or that Asian-Americans have higher than typical levels of education (among third-generation Japanese-Americans, 88 percent are college graduates). When demographic adjustments are made, one finds that the relatively high earnings of Asian-Americans are simply a function of their high levels of training and effort.
Furthermore, Asian-Americans often have heavy expenses. Their families are, on average, large. Because of their tendency to sink capital into small businesses and education, they often face stiff demands on their incomes. And many Asian-Americans, particularly the nearly one million refugees from Southeast Asia, send substantial sums to relatives and friends in desperate need back in the home country. (Packages of food, medicines, and merchandise mailed regularly by expatriates in the United States may constitute up to a tenth of Vietnamese personal consumption.)
One other thing is missing from most discussions of Asian-American economic success: acknowledgment of the flip side. In 1980, 18 percent of Chinese families who had immigrated in the previous decade were poor, as were 15 percent of Koreans and 35 percent of Vietnamese.
For nearly 100 years, Asian-Americans were stereotyped in a monolithically negative way. It is possible that in the last 40 years we have inverted that view. Asian-Americans are often portrayed today as uniformly devoted, hardworking, responsible, and consistently—sometimes almost effortlessly—successful. A Chicago-area study by education professor Barbara Schneider found that Asian students in public schools were perceived by their teachers to be smarter and better behaved even when they were not. There is the danger that setting up Asian-Americans as a pet minority will inspire resentment among competitors.
And of course such thinking makes things psychologically difficult on the many Asian-Americans still struggling to make it. It has been reported that as many as 18 out of 20 small businesses started by Indochinese refugees will fail within the first year. Success is anything but automatic. What's more, there are important differences among various groups of Asians. Many Americans would be surprised to hear from San Francisco Vietnamese leader Tran Tuong Nhu that "as a rule, Vietnamese are not goal- or success-oriented, which makes them particularly unsuited for the rhythm of American life. Most are not pushy, most do not know what it means to 'get ahead.'"
The shifting composition of Asian immigrant groups is having important effects. "The Chinese kids from the mainland we are getting are not the same kids as the ones we got from Hong Kong and Taiwan," one school principal in New York City's Chinatown reports. "In terms of productivity, we are finding that the kids who lived under Communism lack motivation. It's really amazing to see the change."
Among the Chinese arrivals of the last decade or two are many who, while still referred to as Hong Kong Chinese because that was their point of embarkation, are actually mainlanders. Because they know little English and are from areas with dialects different from earlier Chinese immigrants', few can communicate with established Chinese-Americans. What's more, many are uneducated and have no occupational skills. A few are reported to be ardent propagandists for Maoism. All of these factors have isolated them from both American and Chinese-American society, and some of the young males have become involved in an outbreak of gangsterism in Asian-American communities across the country.
Other problems derive from difficulties the post-1979 "boat people" and other refugees from Southeast Asia have had in coping. For instance, the 60,000 U.S.-based Hmong—hill-dwelling subsistence farmers from Laos who didn't even have a written language until 30 years ago—have had an especially tough transition.
In a few places, particularly rural settings, they have settled successfully. Half the Hmong living in McDowell County, North Carolina, for instance, have bought houses, most have jobs, some are going to college. But in cities in California, Wisconsin, Minnesota, and elsewhere the more typical pattern is that from 65 to 80 percent of the Hmong are receiving some form of public assistance.
And it is not just the Hmong. Three out of 10 Southeast Asian families in California, where this issue has aroused considerable animosity, have received aid for 4 to 10 years. Part of the problem is California's system, which has welfare payments 65 percent above the national average and a dependency rate for Southeast Asians about twice as high as in the rest of the country. More generally, refugees have been pushed toward public aid by social workers. This has damaged their community fabric, particularly by undermining the economic role of men.
Even in the area of welfare dependency, though, Asian immigrants have displayed some interesting entrepreneurial tendencies. Hmong welfare families in California are known to be leasing land and working it day and night to produce vegetables and fruits for sale. Transactions are made through front men to avoid disqualification from public assistance. In Los Angeles, New York, and other cities, Vietnamese women on public assistance often work up to 14 hours a day, 7 days a week at underground jobs as seamstresses, receiving payment in cash to avoid detection. Caseworkers think that most Asian-Americans on public assistance may be working on the side.
It is not clear whether this entanglement with welfarism will wreak significant long-term damage on the refugees' economic prospects. Until fairly recently (with the vast expansion of the nation's welfare system), Asians have been very light consumers of public aid. In 1933, in the teeth of the Great Depression, only 1.2 percent of Chinese-Americans in New York were on relief, compared to 9.2 percent of the white population and 23.9 percent of the black population. It is a good guess, though, that thanks to cultural disciplines and their recent contact with a bracing Third World survival ethic, Asian immigrants will be better immunized than most American poor against the long-term, enervating dependency that is welfare's main affliction. A California refugee administrator grudgingly observes, "You've got to give these people credit. They've developed the underground economy because they're ambitious. They're not content to get that welfare check, kick back, and watch a ballgame." As one Vietnamese woman told the Los Angeles Times, "The extra money that we make we use very carefully. We use it for the future."
Even otherwise antagonistic groups, notes Thomas Sowell, can interact harmoniously in low-income areas when there is a shared economic interest. In his book The Ghetto, Louis Wirth cites a case from earlier in this century: "The Poles and the Jews in Chicago…detest each other thoroughly, but they live side by side on the West Side.…They have a profound feeling of disrespect and contempt for each other, bred by their contiguity and by historical friction…but they trade with each other on Milwaukee Avenue and on Maxwell Street."
Black Americans and Asian immigrants, too, have achieved a partial commercial accommodation. Ghetto blacks desperately need the stores and services that nobody else but Asian immigrants seems able to supply. And clearly Asians need black patronage. But their symbiosis is a very uneasy one.
Some of the mutual bafflement is captured by an anecdote from Providence, Rhode Island, home to both a sizable black community and a large number of Southeast Asian immigrants. According to the New England Monthly, a Providence Laotian was tending his car on the street. A black man approached and demanded to know how long he had been in America. Three years, answered the Laotian. The black man asked him how he'd been able to afford the car. The Laotian responded by asking his interlocutor how long he had been in America. Insulted, the black man said he'd been born here, to which the Laotian responded, "If you've been here your whole life, why don't you have a car?"
The gap between poor blacks and Asian-Americans grows out of a whole host of cultural divergences, and it yawns wide with no sign of closing. Building on their traditions of hard work, strong families, and petty enterprise, Asian Americans will undoubtedly continue in their extraordinary pattern of economic mobility. But quite likely, the antipathy from less-successful groups to which that success exposes them will also continue, and possibly grow worse before it gets better.
Karl Zinsmeister is a Washington, D.C., writer and commentator for Radio America. He writes frequently on social issues.
The post Bittersweet Success appeared first on Reason.com.
]]>Historically, international family-planning efforts aimed simply to bring new contraceptive services to people who wanted them. The programs extended human choice. Recently, however, this long-standing commitment to strict voluntarism has waned. Important parts of the international family planning apparat have begun to veer dangerously toward social control and coercion.
In a widely cited 1984 report, the population division of the World Bank presented one of the first mainstream rationalizations for taking the voluntary family-planning movement a step further, into active efforts by national governments to suppress reproduction through financial, political, and social pressures. "Ensuring that people have only as many children as they want…might not be enough," the report asserted. Where "privately desired" childbearing exceeds the "socially desired" level, government ought to step in.
In 1986 the U.S. National Academy of Sciences issued another influential study. "When a couple's childbearing decision imposes external costs on other families," argued the Academy professors, a case may be made for policies that go beyond voluntary family planning. These policies could include "persuasive campaigns to change family size norms" and a variety of financial incentives and penalties. Making the case for "drastic financial or legal restrictions on childbearing" is "more difficult," the report allowed.
Readers with a respect for private liberties and a sense for realpolitik will detect in these developments a chilling door-opening for massive state intrusion into the most private of human choices. Starting a family, having children—it is hard to imagine more intimate and fundamental rights. None but the most determined brave-new-worlder would want to see these delicate decisions transferred from the private to the public realm.
The idea that the social costs and benefits of childbearing could be objectively measured is ludicrous. Even more troublesome are the practical political exigencies: these most sensitive of judgments would have to be entrusted to a government potentate. According to the authoritative Freedom House, only 29 out of 135 Third World nations display a modicum of political freedom today. Mechanisms for effective citizen recourse against official injustice are few to nonexistent in most developing nations. In such countries, are we to encourage further state intrusion into individuals' lives?
This is not merely a hypothetical concern. In 1976 the Indian government declared, "Where a state legislature, in the exercise of its own powers, decides that the time is ripe and it is necessary to pass legislation for compulsory sterilization, it may do so." In the six months following, over six million Indians were sterilized, many thousands forcibly. The episode inspired such fierce resistance that the Indian government—a rare Third World democracy—fell, and the program was repealed.
Residents of less democratic states have been less fortunate. "Beyond family planning" measures are currently in effect in China, Vietnam, Singapore, and South Korea. China's program is particularly ugly. By government edict, most couples are forbidden from having more than one child. Perhaps 3 million Chinese women are forced to have an unwanted abortion every year. Many millions more are sterilized under terrific pressure. In some hospitals, according to the Washington Post, attending obstetricians are under orders to see that newborns do not survive if they are second children.
Tens of thousands of infants are also killed by parental infanticide. No wonder: the penalties for having a child without government authorization include job loss, an end to land access for raising food, and fines equivalent to three years' income. (All this in a country where the government is far and away the major employer.)
The distinguished demographer Richard Easterlin has written tellingly on the hazards of allowing control over procreation rights: "We have had sufficient experience now with population programs to realize that they can easily become a vehicle for elite pressure on the poor. I fear that the elevation to legitimacy of 'beyond family planning' measures lends itself to precisely such pressure.…Of course, one might claim that such measures are in the 'ultimate' interest of the poor, but this view leaves one in the uncomfortable position of having to define the person, group or institution that is better able to judge the interests of the poor than the poor themselves."
(That judgment is not one that United Nations officials have shied from. When the first UN medal for family planning achievement was awarded recently, its joint winners were—you guessed it—the heads of the Chinese and Indian programs.)
This is an issue that ought to be of paramount concern to advocates of liberty and private choice. But by and large, criticism of the Chinese program—and creeping coercion in the family-planning movement generally—has come not from libertarians but from other quarters: the right-to-life movement, moral traditionalists, antitotalitarians.
Persons interested in promoting personal freedom would do well to recognize that that sometimes requires defense of its incubating institutions: neighborly networks, local sources of authority, the family in particular. Protesting attempts by international controllers to further circumscribe human choice by coercively dictating family size would be a good place to start.
Karl Zinsmeister is a Washington, D.C., demographic analyst and a commentator for Radio America.
The post Viewpoint: Baby Haters International appeared first on Reason.com.
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