The return of the peasant: or, the history of the world in 10½ blog posts. 7. Capitalism, the state and historical progress

Continuing with my history of the world…

Earlier, I characterised the emergence of capitalism in relation to the transformation of the four medieval figures of the lord, the peasant, the merchant, and the king. But I haven’t yet said anything about the king – except in relation to the strengthening of royal houses under absolutist state-forming enterprises which prefigured capitalist development. By the time the star of capitalism was rising, kings had largely lost their medieval role as military strongmen. And as we enter the early modern epoch, the idea of royal sovereignty in the form of an embodied individual – the monarch – started giving way to something more figurative, the fertile but troublesome idea of the sovereignty of the people. Classics of early modern political philosophy such as Thomas Hobbes’ Leviathan enable us to peek under the bonnet and watch the workings as the king was thus turned into the modern state. So, likewise, I’ll interpret the question of the role of the ‘king’ in capitalism more figuratively in terms of the role of the state.

The basic point is that despite our contemporary post-socialist tendency to counterpose ‘the market’ of the capitalist economy with ‘the state’, capitalist development has always been a state project, albeit in partnership with private actors. Without the state, there’d certainly be no capitalism, and probably not even all that much of a ‘market’ in the sense of places where people come together to buy and sell goods. The commercial ventures of early European capitalism both within and beyond the subcontinent’s borders were joint public-private efforts. Their success made countries like Britain and the Netherlands the richest tax-states the world had yet seen. An important feature of them was that state exchequers no longer functioned as the essentially private booty of warrior aristocracies but were redirected towards the aggrandisement of the state as a more organic national body. It’s not necessary to succumb to the delusion that capitalist states held the wellbeing of all their constituent people in equal regard in order to acknowledge this broad difference between a modern state grounded in the idea of the sovereignty of the people and a medieval one grounded in the idea of the sovereignty of the monarch. But whatever the rights or wrongs of the early modern capitalist states, it does seem to me that all the potential jockeying between lord and yeoman, yeoman and labourer, merchant and lord and so on implicit in my preceding account could easily have gone in directions that would have interrupted the smooth progress of capital accumulation. The fact that it didn’t testifies to the importance of the state in mediating between these various factions in the interests of capital.

So to summarise, when it comes to deciding who among our cast of medieval characters – the king, the lord, the peasant or the merchant – was the prime architect of capitalism, my inclination is to let the historians keep arguing among themselves, and say with a shrug ‘all of the above’. But if I were forced to choose, I’d go for the merchant, with a little help from the king. Perhaps this makes intuitive sense inasmuch as one thing we can surely say about contemporary capitalism compared to its medieval forerunners is that ‘the market’ looms much larger in the former, and markets are what merchants are all about, right? Well, yes – except that under capitalism ‘markets’ in the medieval sense (traders selling their wares in a market square, or middlemen clinching hard-wrung business deals in harbour-front warehouses) have lost ground to vast vertically- and horizontally-integrated corporate enterprises whose very modus operandi is, with the collusion of the state, to defeat competition and destroy the market.

Now, as I mentioned above, one of the main ways that champions of the capitalist economy justify it is in terms of the stuff it produces – the wonderful panoply of consumer goods and technological marvels that it makes available to ordinary people. And two of the main ways that its critics counter this argument are by suggesting, first, that this wonderful panoply is socially dysfunctional, and, second, that it’s environmentally unsustainable. But a third criticism is that it’s economically unsustainable in its own terms. Going back to the definition of capitalism on p.18, I want to note that the driving force of the system is capital accumulation, which secures the reproduction of society only as an ‘unintended side-effect’. The incentive in a capitalist economy is to accumulate capital in whatever way is easiest, and only in certain special circumstances does that involve manufacturing goods, improving the technical efficiency of goods production and spreading the resulting stuff generously among ordinary people.

Consider William Cronon’s history of Chicago. In the 1830s the city was a fur-trading post of the early capitalist kind – a merchant capitalist enterprise linking foraging peoples of the world system’s outer periphery to the international clothing market. By the 1850s, the fur was mostly gone and Chicago was in its agrarian-industrial phase, using technological developments in transport and storage to link its prairie hinterlands with global markets for meat and grain. Part of this package in the 1850s included the invention of futures markets by the Chicago Board of Trade to help ease the flow of trade in agrarian commodities afflicted by ecological uncertainty. By the 1870s, Chicago was trading about $200 million in actual grain, but $2 billion in grain futures markets where the actual price of grain and the ecological factors affecting the crop no longer mattered. In this virtualisation of the productive economy, the debt state was (re)born in its modern guise – and at what a rate! Karl Marx described capitalism as a process of M → C → M’ (money is turned into commodities, which in their turn are transformed into more money than you started with). But why bother with that troublesome middle ‘C’ if it becomes easier simply to turn money into more money? Well, here’s one reason: Giovanni Arrighi argues that the status of the world’s leading capitalist country has passed from the city-states of Venice and Genoa, to the Netherlands, then to Britain and latterly to the USA. In each case, the period of decline was marked by a growing financialisation in which physical trade or manufacture was supplanted by a virtual economy – a process that seems far advanced in the declining capitalist powers of Britain and the USA today. So maybe there’s a case for keeping the market real. And for remembering that capitalism isn’t fundamentally about ‘the market’ in the sense of furnishing the goods and services that people want, although sometimes it does have that side-effect.

But I’m running ahead of my chronology once again. So a final point about the emergence of capitalism – it had some kind of relation to science, technology and the notion of ‘progress’. But what kind? A common self-conception in the west often conflates various political, economic and intellectual strands into an indissoluble nexus: democracy and political freedom, capitalism, economic efficiency, increasing scientific knowledge and engineering skill, rational enquiry – all flying under the banner of ‘progress’. This particular assemblage came together in the French Enlightenment of the 18th century and has been a pretty immoveable part of the furniture of western thought ever since. According to Immanuel Wallerstein, only a few decades prior to the French Revolution the argument that historical change was desirable and generally moved in a positive direction would have seemed ridiculous to most people, whereas after the Revolution and through to the present the reverse has become true – hence such contemporary panegyrics to modernity as the Ecomodernist Manifesto with its tendentious claim that “humanity has flourished in the last two centuries”. I guess it depends what you mean by flourishing. Certainly, there are a lot more of us than there were two centuries ago. Then again, there are more people suffering malnutrition today than even existed in 1800.

So it’s important, I think, to question the narrative of progress empirically, but it’s even more important to question its generative logic. One of the hallmarks of the modern epoch is its tendency to think that there’s a singular logic to history, usually described with a spatial metaphor. So, according to various modernist schools of thought, history moves ‘forwards’ (progressives), ‘backwards’ (romantics), in circles (Spenglerians) or dialectically (Marxists). I don’t think any of these assertions are wholly true, though doubtless they all capture something of value. The progressive view of history, that it moves ever ‘forwards’, is much the most pervasive in our culture – with the pernicious result that it becomes difficult to suggest there’s anything of value in past ways from which we could learn in the here and now without being indicted for wishing to ‘turn the clock back’. To me, the motion of history seems more multiple, pulling apart the ‘progressive’ nexus of capitalism and Enlightenment: capitalism isn’t intrinsically related to democracy or political freedom, and the pursuit of reason (scientific, technical or political) isn’t always ‘progressive’. But there does seem to be a certain kind of mechanistically reductionist thinking (which I don’t necessarily mean pejoratively) that emerged in Europe coterminously with the rise of capitalism, modern science, and ideas of rationality and social progress as part of the same cultural assemblage. Clearly there are linkages between these phenomena, but I think they’re complex and not simply co-determined – and I’m inclined to pretty much leave that thought there, except for a couple of remarks.

First, the physical and biological sciences in the Enlightenment and the preceding ‘Age of Reason’ made such great strides by looking for hidden, universal patterns in the relations between things that thinkers in the social and political sciences have consistently been in thrall to reductionist, scientific universalism ever since – with results that, by comparison, vary from the disappointing to the disastrous, prompting various counter-movements against universalist reason. But second, on the other hand, one of the features of the modern epoch has been the emergence of a public sphere involving “rational-critical debate about public issues conducted by private persons willing to let arguments and not statuses determine decisions”. This has been quite consequential for the way that notions like ‘public’ and ‘private’ are construed in contemporary thought, but is also consequential politically – for example, in the mobilisation of middle-class English people (women, especially) against colonial slavery in the 18th century. This wasn’t necessarily the decisive, still less the only, reason for the abolition of slavery, and it’s common to dismiss the significance of such ‘chattering classes’ and their bourgeois concerns for decency – much the same is true today when it comes to issues like climate change and the Transition Towns movement (in both cases the issue turns on the linkages between public culture and private consumption, respectively of sugar and carbon). Though I share this critique of the public sphere up to a point, my feeling is that it can easily slide into complacency, or indeed connivance, regarding the diminished prospects in the absence of a strong public sphere for an information society that can hold power to account, for activism, free association and critical inquiry. Perhaps the modern public sphere has the same function in a virtual realm that the town had for medieval peasants in a physical one – a space unorganisable by coercive power which is therefore able at some level to hold it to account. And while the ‘coercive power’ that I refer to certainly encompasses the kind of formal state power that historically has so often been directed against peasant society from without, it also refers to the more diffuse kinds of power that operate within peasant society – seniors against juniors, men against women, families against individual members threatening their ‘name’, and whole networks of traditional authority operating both independently of and in concert with external power dynamics. My main focus in this essay is on recuperating a version of small-scale, local agrarian society as a vital force for the future prosperity of the world, but the version that I want to recuperate also requires defences against the negative tendencies intrinsic to such a society.

In one way or another, then, the various correlates of capitalism, modernity and ‘progress’ involve political tensions between the universal and the particular. So perhaps more important than the spurious notion of objective historical ‘progress’ is the idea of progress that animates modern thought. In an earlier post, I enthused about the late Marshall Berman’s book All That Is Solid Melts Into Air, not least for the way it captured the excitement prompted by the concept of the ‘modern’ – the concept of ‘progress’, effectively – for a vast swath of humanity of humble origins who for the first time were able to conceive of themselves as world-historical agents. I was taken to task by various people, not least New York academic Anthony Galluzzo, for falling under Berman’s spell and endorsing his conception of modernity. Anthony – who I confess knows far more than I do about modernist literature and culture – drew my attention to Perry Anderson’s critique of Berman, and registered his own displeasure with Berman for what he saw as a complicity with modernity’s destruction of the non-modern, the violence of ‘progress’ in the face of the non-progressive.

Now, I probably shouldn’t get too side-tracked into this debate here but it raises issues that are relevant to my theme. To my mind, Berman isn’t guilty of a simplistic teleology, a narrative of ‘modernity as progress at all costs’ – rather, he’s interested in tracing some of the new ways in which an idea of ‘the modern’ enabled non-elite people to construct a sense of agency or self-determination in their lives. And in this I think he gets the better of the exchange with Anderson, who has a more elitist and teleological sense of historical progress as a complete overcoming of the disappointing and alienated present: “the vocation of a socialist revolution”, says Anderson, “would be neither to prolong nor to fulfil modernity, but to abolish it”, thereby betraying an ironically modernist urge for radical renewal, rather than a more workaday juggling with the potentialities of the here and now. But perhaps there’s also a paradox in my position inasmuch as ordinary people don’t actually need to conceive of themselves as world-transforming historical agents until they’re enmeshed in a world-transforming historical ideology like modernity. I’d argue that convincing responses to the problems of a given social order do have to be dialectical, subsuming the form of the ideology that they’re striving to overcome. So if the notion of ‘progress’ is the problem, then we need to progress beyond progress! The most promising way of doing so that I can see is via an agrarian self-determination shorn of any ideas about epochal ‘progress’ or ‘regress’. But to achieve it we need a modernist sense of world-historical agency, of collectively bringing something better into being – a better future which is better because it’s not directed to future betterment but because it enables self-realisation in the here and now.

To try to pull together my rather abstract message from the last few paragraphs with a specific example, perhaps I could invoke Roger Scruton’s conservative elegy for the “hard won consolations of the English yeoman farmer” in his book News From Somewhere. There’s much about Scruton’s characterisation of a self-reliant and deeply-rooted local farm community that rings true and would doubtless resonate with agrarian people in other parts of the rural world – a small-c ‘conservative’ world regardless of the more activist political conservatism that Scruton wants to justify from it. But what’s missing from it is the ghost of class conflicts past that delivered this particular version of yeoman England. The difficult job for a modern agrarian populism is to reckon with the reality of contemporary rural life rather than trying to dissolve it, while at the same time remembering that it has a specific history, only one of many possible histories, in which some people’s interests and visions were effaced. It’s easy not to remember this – as, for example, in Robert Macfarlane’s essay on the eeriness of the English countryside, which doesn’t once mention its historical class politics. Well of course it’s eerie – it’s full of defeated ghosts! In the early 19th century, William Cobbett developed a conservative-rural-radical vision for an economy of local self-reliance in the countryside that nevertheless cast a pitiless eye over the exclusionary rural class alliances that immiserated farm labourers, while delivering the world of the yeoman farmer. It’s scarcely been bettered since – certainly not by Scruton, or by other contemporary representations of the ‘countryman’. Ah well, at least we have The Land magazine.

Anyway, let me try to draw the threads of this long analysis of capitalism and the development of the early modern world system together by asserting the following “six things they don’t tell you about capitalism”:

  1. Capitalism isn’t about free wage labour
  2. Capitalism isn’t about political freedom or democracy
  3. Capitalism is achieved by centralised states, not decentralised markets
  4. Capitalism isn’t about science, technology or ‘progress’ – at least, not in any simple sense
  5. Capitalism wasn’t the unique achievement of Europeans
  6. Peasants are the universal class – probably

I hope that the first five points, counterintuitive though they are to the usual stories we tell about capitalism, will make sense on the basis of what I’ve written thus far, even if they might not command your agreement. The sixth may need some further explanation.

Addendum: I’m appending a picture of some soybeans. Clem will explain why below…

 

27 thoughts on “The return of the peasant: or, the history of the world in 10½ blog posts. 7. Capitalism, the state and historical progress

  1. Hmmm… I might be inclined to tilt at your characterization of the Chicago Mercantile and the value of a futures market. But before I go there I’m curious about your experience with Vallis Veg and in particular the effort involved in selling your produce. If you had to develop a spreadsheet to account for all the costs [land, inputs (whether bought in or produced on sight at fair market value), labor, packaging, marketing, losses to waste, spoilage, discounts] Are there opportunities for insurance against severe risk? How much time/effort are allocated to market analyses – such as price trends at retail, fashion issues within the market (upscale customers are particularly finicky in my experience).

    With some respect for all the various skills required to: advertise/promote your particular farm and its products; husband multiple crops and livestock; basically run a complex business in a less than friendly political environment [built on the political skills of negotiation, persistence, compromise].

    I realize these matters “should” be less significant to a peasant economy (ecology might serve better) but I’m still not totally persuaded.

    The reason I bring these up is to lay the table for a different type comparison between fresh food (produce) and commodity grains (simple storable grains that can be turned into food through several processes such as milling for human consumption or fed to an animal). Commodity is a very simple word used to imagine a very complex subject… even though on the surface it might seem a somewhat simple concept.

    • Thanks for that Clem, interesting comment. Would it be fair to paraphrase it as “futures markets are a form of crop insurance, and crop insurance is a good thing for farmers to have”? If so, I wouldn’t disagree with the sentence, but I’d probably want to add that futures markets aren’t a good kind of crop insurance because they too easily escape from the day job and spend too much of their time in nefarious nighttime moneymaking pursuits. I agree that commodities are complex, but one of the things we learned in 2008 is that complex financial instruments aren’t quite as complex as we thought, and ultimately there are only so many ways of inventing claims over actual resources.

      However, the issue of credit and crop insurance in a peasant society is interesting and not easily solvable. Traditional methods include extensive family networks, and cultivating relationships with local notables – neither ideal for the reasons I mentioned in the essay above. The basis of hierarchical patron-client relationships in peasant societies is the local notable who bails you out of hard times, but with strings attached. I’d welcome any further thoughts on this.

      I’m also interested in your distinction between fresh food and commodity crops. The latter surely have something more of the dual character of money – not only a means of exchange, but also a form of capital that transcends its immediate generative context. Generally, I’m of the opinion that capital formation has got wholly out of hand in the modern world, and this is one major reason why I’m in favour of a more local fresh food agrarian economy. But I realise that that isn’t the end of the issue – it’s only the beginning. So again I’d be interested in further thoughts.

      • Futures contracts as one aspect of a commodity trading market might be imagined as a sort of crop insurance I suppose… but I tend toward seeing them as a supply hedge instrument instead. As a commodity producer myself (of a peasant scale, but still…) I can (and do) participate in a crop insurance market. The US government is a significant participant in this marketplace, as it is in other insurance markets – but for crop insurance the USDA is shall we say, more invested (invested beyond regulatory oversight). I can (and do) also avail myself of the activities on the CBOT – the futures market for grains such as corn and soy. The futures market helps me market the grain produced (in terms of finding prices and predicting what prices might be available at some future time). The ability to use the futures market as a risk hedge against unfavorable market moves (thus a type of insurance) is different from the production risk of say a drought or hail. One can peruse the futures market signals for a coming growing season and determine whether corn, soybean, or wheat are likely better crops to allocate to one’s acreage. And if you determine in April of 2018 to plant soy because the November 2018 delivery contract is at a level that would allow you to profitably produce your 2018 crop you can then “sell” forward to lock in (or hedge) the market price on that day in April you make that determination (assuming the market is open for trading and you have hired a broker or agent to facilitate said trade). So even before you plant a seed you can sell the grain it will produce. Worth understanding is that you (actually your broker or agent) cannot make this trade unless another agent in the market place is willing to take the opposite side of the transaction. The other agent may well be a tofu manufacturer in Osaka, Japan who wants to hedge her November 2018 raw materials purchases from going too high if there were drought or other production calamity causing higher prices. But the other agent might be a day trader with a fat wallet who gets a thrill buying/selling soybeans. The latter is a speculator, and such a person may have no clue how to grow a soybean or how to make tofu… but this agent does supply liquidity to the system. Liquidity may start to ‘ooze’ into the realm of the market dynamics you dislike, but there is still a value to their participation. The simplistic overview just offered here doesn’t bother me. Where the futures markets, like any other marketplace, can present issues for the rest of us is when it is gamed by capital holders merely for the satisfaction of their greed. Hiding under the cloak of “providing liquidity” (a real value) when all an agent really wants to do is fatten a wallet by trading in micro seconds vs the milliseconds other participants might have available. Not sure this can be described as “too easily escape from the day job and spend too much of their time in nefarious nighttime moneymaking pursuits”, but this is the angle where greed gets into trading (and trading of all sorts I might add – the copper in your computer was traded in the same way).

        You raise some other excellent points, but have to run… will return to them as possible.

  2. Chris said:
    I agree that commodities are complex, but one of the things we learned in 2008 is that complex financial instruments aren’t quite as complex as we thought, and ultimately there are only so many ways of inventing claims over actual resources.

    Perhaps I’m getting TOO pedantic here, but I’m not prepared to conflate a commodity (whether a bushel of corn or a kilo of copper) with a complex financial instrument. How one buys and sells such could involve a complex financial instrument… but that is a different issue. So perhaps the real issue(s) is/are the form of market composition, the trading rules, the enforcement of those rules, the oversight to be aware of new forms of gaming those markets, political and social acceptance/rejection of changes in market behaviors (not all new approaches to the market will be seen as evil attempts to ‘capitalize’ upon the good faith of others… though many likely are). Insider trading, identity theft, spoofing (eg. spreading fake news) – these are the actions of miscreants whose ability to access complex markets should be severely curtailed. Shorting a market, while legal in most situations I know about, starts to swim toward the edges of the pool… and I’m not against it in principle, but I would like to see more care spent in how it is regulated. All these market issues exist regardless of whether we are buying and selling soybeans, iron, or pounds British Sterling. Oh, there’s a futures market for you… the currency itself. Buy tomorrow’s pounds today – no generative conflict there.

    On the generative aspect of a commodity grain… I’m not absolutely sure I’m tracking the difficulty you have there. It is true that one can purchase a future’s contract for a commodity grain (as a hedge) – then go into a physical market and buy actual grain at the spot price… and if the grain is still viable one could process the grain into seed (clean out any debris for instance) plant the seed and grow another crop. Try doing that with a kilo of copper. So there is the generative aspect of the viability of seed. But I’m beginning to imagine the issue of scale might have something to offer us here. For instance, I’m having a tough time figuring how a peasant might benefit from the futures markets as they exist in practice (not the concept of a futures market… just the present implementations). For instance, the smallest soybean contract that can be purchased (or sold) on the CBOT today stands at a thousand bushels (and this is actually called a mini-contract as the standard contract is 5,000 bushels). A peasant family of 4 with associated chickens, hogs and a cow or two wouldn’t use a thousand bushels of soybeans in a year. Oops, just dawned on me.. one needn’t actually be a participant in the market (buyer, seller, speculator) in order to take advantage of the market. As I indicated above, the futures market helps to predict what a large and invested segment of our fellow humans think is going to happen. A wisdom of the crowd sort of thing. So our peasant (like me) can watch the market and if she believes the market is fair and realistic she can plan her future actions in relation to it. Of course she is also welcome to completely ignore the market, or to watch it but deliberately act against it … the market itself doesn’t care. If she were to need to borrow in order to do something (say an operating loan to buy seed and inputs to raise a crop) then her lender might stipulate that she have some hedge or insurance to protect their investment. If she is truly independent, then the market has very little (if any) consequence in her choices or in her success.

    Still haven’t gotten to the fresh produce vs. commodity grain issue… please bare with.

    • Thanks again Clem. As a grower who’s never gone anywhere near a futures market in anger, so to speak, I’m finding your comments very informative. I meant ‘generative context’ not in the biological sense of grain as generative of more grain but in the sociological sense of the immediate social context within which the economic interaction is generated. One of the features of the development of capitalist society is that, increasingly, the social context of interaction never is ‘immediate’. This, I think, is a problem that needs to be remedied – but all of the remedies I can think of bring problems of their own. Still, for me your distinction between a speculator introducing some useful liquidity into the system and a capital holder gaming the system out of greed is a slightly tricksy one. The road to hell that we’ve been hurtling along for a good many years now is surely paved with the corpses of many a small-scale farmer who fell victim to a speculator’s useful liquidity, and the distinction between useful liquidity and rent-seeking greed will surely only have much traction in the face of rigorous national and international market regulation of a kind that runs counter to the whole drift of neoliberal economic policy…

      Similarly, in relation to commodities and derivatives – well yes, perhaps it’s fair to insist on distinguishing between the two. But then again a commodity, as excellently discussed by Marx at the start of ‘Capital’, is an object that’s already been torn from much of its real-world referents. Commodification is already a highly virtualising step – perhaps one marked with the kind of violence that Eric was discussing in the previous post of this series. So in my book, once you have a commodity, a derivative is only just around the corner. Cronon talks about this interestingly in his book on Chicago which lies behind this discussion. Originally, he says, grain from prairie farms was marked by its farm of origin and marketed as such. The key commodifying move devised by the elevator companies was combining it all into a single (or only slightly differentiated) ‘liquid’ commodity. For my part, as a small-scale grower selling locally my whole business model depends on a market akin to that pre-elevator situation. The moment my vegetables become ‘just vegetables’ the game’s over for me. Unless I don’t actually depend on the market for my livelihood – which is certainly what I’d advocate for any sustainable agrarian society.

      Currency as a futures market…indeed, here we have the whole problem of money as both an enabling and a destructive force. I guess what I’m trying to trace here is the history of how it’s got to be so enabling and so destructive. As to the future…all suggestions gratefully received.

      • For my part, as a small-scale grower selling locally my whole business model depends on a market akin to that pre-elevator situation. The moment my vegetables become ‘just vegetables’ the game’s over for me. Unless I don’t actually depend on the market for my livelihood – which is certainly what I’d advocate for any sustainable agrarian society.

        You’ve anticipated me sir… this remark of yours forms the very essence of the dichotomy between fresh produce and a commodity grain. There are other aspects and angles, to be sure. But this is the nut I was hinting at in the first comment above where I enquired about the various ‘non-production’ costs and skills that go into your farm situation. You chose a vege box scheme, but could also rent a shop in town and sell fresh vegetables as a green grocer, you could form a cooperative – say within Frome, maybe call it Frome Fresh – and the coop could advertise, promote, widen circulation to increase volume, you could hire a salesforce, and on and on. Many of these suggestions are mere crap. But any way you look at it, marketing fresh produce is FAR more than merely producing it in the first place. Whole different set of skills. A green thumb might help you grow a better carrot, but a green thumb may not help you sell it. And herein too lies the greatest excuse for wholesale vs retail. Retail often takes on the stigma of middleman, broker, and others not intimately involved in the production function. Perhaps the negatives are well deserved in some instances. But I think one should admire the field to fork producer/marketer for the entire set of skills on display. The commodity grower… doesn’t want to (likely is not capable) try to ‘sell’ his product. He has to meet certain grade standards, delivers his product at an agreed price (where VERY little negotiation is possible… the market has spoken) and gets his check. After delivery the commodity might be turned into something for a chicken, or a pig, or you or me… he cares not. He has no need of brand management, no advertising, promotion, and so on. He does have to ensure that his costs of production are not out of line with the remainder of the marketplace. This is the essence of his business model. Solving for that he is clear and good to go. In your business, having produced a fine carrot, you have only gotten started. How much is that carrot worth? Could you have predicted with any confidence on the first of February what retail carrots would bring in July? Please know I’m NOT knocking your efforts. Admiring them actually. But you are not a typical farmer.

        The Illinois farmers of the early 19th century were not master marketers. Some farms may well have sold their production with a farm name. But these would have been rare, and as the cities grew, fewer and fewer city folk would have had direct access to a farm. The merchandising process grew, stores in the city expanded and would have preferred fewer vendors… elevators as accumulators and brokers (indeed, merchandisers) would have filled the role to make the products of the farm frontier flow to the city. Wheat was actually the first big cash crop on Illinois farms. Nearly all the wheat was for human consumption. But for consumption wheat must be milled. Flour has a shelf life far shorter than wheat grain. Milling for a baking industry is also a skill beyond the reach of many a peasant farmworker. And so it goes. Elevators could bear some stripes for their role in commoditization, just as the enormous stock yards (also founded in Chicago) could bear some stripes (ala The Jungle by Upton Sinclair). Butchering can be done on a farm, but if done poorly it can result in bad outcomes.

        There were bad actors then, just as there were bad actors before Alexander the Great. There are bad actors today. I think it takes a more nuanced view of market developments than to hold up an industry segment and tar and feather it because we don’t like its look.

        • But the reason I don’t like its look is not because it has bad actors, but because it has bad structural outcomes. I mean, I could play up the moral murkiness of it – as in Peter Robbins’ discussions of the way that tropical commodities buyers bid down prices by fractions of cents in the knowledge it means people will go hungry, kids won’t go to school etc. But the point is those are the rules of the system they have to play by. So it’s a bad system – for that reason and for numerous others. What really matters is the system structure, not the moral standing of its individual players. I agree that it’s hard to make a marketing model like mine fit with the demands of an urban, de-localised, commodity-oriented food system. However, that system wasn’t foreordained – ultimately, it was a political choice, and a bad one. The political choice I think we should be making now is to start reversing the dysfunctional levels of urbanisation we have and creating a less monopolistic food supply system. I’d agree, though, that there would still be a role for middlemen. The key is that the middleman stays in the middle, rather than capturing the flow of value. How to achieve that? Well I’m interested in any ideas. The kind of things that spring to mind for me are to create a very large agrarian labour force with strong collective organisation but low barriers to entry, strong anti-monopolistic regulation and a cultural emphasis on producerism rather than consumerism.

          • Thanks for the Peter Robbins ref. – have only taken a peek at some of the online available content. This does treat the issue(s) of commodities in a much different light than where I’ve gone (or in my own experience of the commodities markets). One of the remedies I see Peter proposing sounds much like a command economy. Is this something you would expect to be of use?

            The struggles for producers outlined by Mr Robbins are egregious, no doubt. And I’ll go along with you that a structural phenomenon is partly to blame. But I’m still concerned that there may be other angles at work that we are still not appreciating (complicit behaviors by government agents within affected geographies for instance).

            I’m also now rethinking a couple of my comments in the thoughts shared with Jahi in the previous posting here (On George M) in the light of what Robbins is shining his torch on. I’m guilty of being too parochial in my analysis – considering only the situation I can see first hand. Though I have traveled in less developed countries, I have not participated in their markets directly. Reading about them is not the same thing.

            So while I’m not (yet?) convinced Peter has all the t’s crossed and i’s dotted, I am going to have to take a closer look at differences between a US commodity market for something like wheat, corn, or soy …. and the markets for coffee, tea, and cocoa. [BTW, sugar and groundnuts – on Peter’s list – are going to have a different outcome as these can be and are produced in the US as coffee, tea, and cocoa are not. Actually a comparison of the former to the latter may well be enlightening]

          • As a cattle producer, even when playing in “the commodity space, I’ve never had much use for the whole hedge/put thing. The hassle outweighed the potential benefits and it made more sense just to take care of things on the ranch so that my break-evens were as low as possible. And from what I understand the intrusion of high-frequency traders in the CME has made it even more difficult for a real cattle producer to get any benefit, since the market doesn’t reflect cattle-producing realities and can be distorted randomly.
            Re-localizing our cattle market has been something I’ve been involved in with quite a bit of benefit. But that isn’t easy either.
            I think your vision of “a very large agrarian labour force with strong collective organisation but low barriers to entry, strong anti-monopolistic regulation and a cultural emphasis on producerism rather than consumerism” is awesome. As they say in country & western songs: “You’re my kind of crazy!”

          • Michelle,
            True enough, the participation of high frequency traders does seem an arrogant intrusion. But my hunch is if you watch (which to be sure, watching is an opportunity cost) if you watch the futures market for a time you will see real trends that reflect real issues in the world of livestock in your case. Are these reflections relevant to your particular situation? Perhaps not – at least not in a way where buying or selling futures contracts might make any sense. But even without buying or selling – you can ‘use’ a futures quote to lend some comfort that your local market is not cheating you; or it may give you a heads up to start looking at and thinking about an issue you would otherwise overlook. Note too there are lags between the futures and what will occur in a local market, but it is rare the disconnect itself doesn’t harbor some sort of intel worth owning. Market quotes are very inexpensive here (“free” in a sense if you know where to look). But spending the time to pay attention is NOT free, so there is that.

            For myself, my own farm is too small for the futures market to be any help as a buyer or seller. But the business where I work is actually required to have market access. My exposure to it there has been quite rewarding – I have a much better feel for whether to sell my crop now or wait a few months. I do have the advantage that soybean or corn in a silo does not change… whereas a steer has to be fed if you want to wait a month for a better price.

            BTW, animasoul is interesting looking… kudos!

          • Thanks for those comments. Glad I’m somebody’s kind of crazy… Michelle, I’d be interested to hear more on your experiences of relocalizing your cattle marketing, and the difficulties you experienced.

            Clem, I’ll look forward to your further reflections on the different commodity markets. I’ve found your thoughts so far informative. My recollection is that Robbins was calling for the (re)introduction of marketing boards, commodity price floors etc. I’m not sure if that’s what you mean by a ‘command economy’ – in a predominantly agrarian society it’s really about social welfare, and I’m not sure it’s any more ‘commanding’ than welfare payments. Generally, I’m not very sympathetic to market distortion type arguments because what matters to me is social welfare, not a market that functions in the way that economists say it should. But that said, and going back to an earlier discussion, I’d be happy to take expert economic advice on the likely impact of the various measures available for securing the welfare of poor farmers before unilaterally imposing them in my capacity as supreme leader of the Peasants’ Republic of Wessex.

  3. Capitalism as the investment of surplus in the means to increase production has always been with us. But although even ancient agrarian peasant societies practiced capital formation and investment (terraces, canals and barges, composting shelters, cartpaths), since the annual surplus was relatively small, the rate of net capital accumulation (investment exceeding depreciation-decay) was very small.

    It was only with the large pulses of newly available surplus from New World resources and fossil fuels that the rate of capital accumulation expanded dramatically, ushering in the industrial revolution and the fantastic rates of ‘development’ and population expansion we have become used to in the last 250 years.

    Forgive me again for bringing up energy supplies, but I still think that the fact that the foundation of modern capitalism is an unsustainable exploitation of a one-time energy surplus is more important than the various means by which capital is accumulated and production distributed. Modern hyper-capitalism in all its forms will end soon, when the energy flux that sustains it fades away. We will eventually return to a circumstance where “universal peasant class” surpluses will again be very marginal and capital accumulation will be very slow, but sustainable.

    Just think of how different the world would be if we had maintained our pre-industrial society, stabilized its population and spent as much of the fossil fuel surplus as possible on capital appropriate to the enhancement of the universal peasant class’ means of production. By “appropriate”, I mean works that could be maintained in perpetuity using only part of the surplus their creation makes available. As long as population increase was kept in check, everyone could have lived with far more abundance than that required by Malthusian equilibrium.

    But that would always be an impossible dream. Any group willing to squander their share of the surplus on their military could have easily walked all over people who only invested in future sustainable productivity. In fossil fuels, humanity had a one-time gift of fantastic value and we blew it.

    • Thanks for that Joe. Much I agree with there, but where we maybe disagree is on a kind of chicken or egg ordering of capitalism and energy use. Agreed, capitalism as the investment of surplus in the means to increase production has always been with us – but that’s not capitalism as I’m defining it here, because increased production is embedded in wider social (non-capitalist) goals. The decisive feature of capitalism is essentially that capital accumulation itself becomes the social goal. So relating that to energy usage, coal for example was used industrially in China as early as 200BCE, but China didn’t exhibit truly ‘capitalist’ levels of coal extraction and consumption until the 1980s. My view is that capitalism wasn’t an economic ideology that was invented in order to make maximum use of fossil fuels, but that fossil fuel use took off as a consequence of capitalist ideology emerging – therefore, trying to understand the logic and origins of the ideology independent of its energetic entailments is important. I think you’re right though that where we’re now at involves an independent causality running from fossil fuels – essentially there’s a marriage made in hell between capitalism and fossil fuels, and should events take the turn you’re predicting doubtless a future archaeologist might plausibly conclude ‘they burnt it, then they blew it’ … but I think there’s a more complex independent genesis of capitalism that this story misses. Smil in his history of energy points out that each energy transition has been funded by the preceding energetic surplus (eg. coalmining originally from human and animal power). So if your prognosis turns out to be wrong, it’ll be because humanity built out the next (solar? nuclear?) transition from the present fossil fuel one. I’m not sure you will be wrong though – your predictions seem fairly likely from where I sit. And even if you are wrong, the nature of the capitalist accumulative logic is such that there are a host of other problems in store.

  4. Chris, terrific chapter, but I’m struggling to understand this point: “reductionist, scientific universalism [led to] results that, by comparison, vary from the disappointing to the disastrous, prompting various counter-movements against universalist reason.”

    Can you give me some examples of those results and those counter-movements?

    • I guess the most obvious disastrous result was a Darwinian selection-inspired racial science of the 19th century which tried to show that ‘whites’ were the evolutionarily ‘fittest’ race, criminality and poverty were biological traits etc. I suppose it had an upside in matters of human measurement – Pearson’s correlation coefficient is still with us, Pearson’s dubious racial theorising less so, thankfully. The disasters of this 19th century cod evolutionism led the social scientists of the early 20th century to drop any kind of historical, developmental thinking entirely – which was also disastrous intellectually, albeit to a lesser extent. So then notions like function and structure loomed large as single universal keys to explaining human societies, but proved unequal to the task. Academic Marxism brought a welcome reintroduction of history, but again with a single explanatory key (class – or structure and function by another name) and a lot of accompanying pseudo-scientific pretensions. All of this was increasingly critiqued by non-universalist modes of thinking arising, among others, from romantic philosophy and the concept of culture that found its way thence, especially through Boas and US cultural anthropology, and various related nationalist movements attempting to found distinctive national intellectual traditions, along with figures like Nietzsche and Freud who inspired various anti-universalist movements like post-structuralism, postmodernism and postcolonialism from the 1960s – eg. Lyotard’s “incredulity to meta-narratives” that I mention later in the essay. The result was some well-honed critiques of ethnocentrism and universalism in the human sciences, and an awful lot of pretentious twaddle. That, at any rate, is a brief history of the social sciences up until about the year 2000 when I ended my professional involvement with it. I haven’t really kept up with social theory since, except in relation to specific things that personally interest me. However, I doubt that it’s made a lot of ‘progress’ since then – which is probably a good thing. Hawthorn’s book ‘Enlightenment and Despair’ offers a good if quite detailed overview of this general history, though it’s quite old now.

      • I suppose I should add an acknowledgement of the universalist tendencies that animate my own thinking – essentially a belief that humans are strongly motivated by power, status and prestige, and that it’s a good idea to ensure these qualities are thinly spread, and always in cognizance of ecological constraint. If anyone would care to critique those notions, I’d be interested.

      • I would point to your average American freeway as a literally concrete example.
        And I would recommend reading Bruno Latour’s “The Pasteurization of France.” Just because.

      • Well said. You will not get a critique of your universalist notions from me.

        Though you might from others. I just had a lunch-room conversation with a coworker who said that he didn’t think hard working people should be punished with high taxes just because they make really large amounts of money. This conversation was part of the effort I make to keep up with what passes for political thought around here.

        But I am not certain that I understand universalism enough to have an opinion one way or another, though I often feel that majority-made decisions leave out my point of view, notwithstanding my being a member of the dominant cultural class. This is probably normal.

        The scientific reductionism though, keeps nagging at me. Maybe if scientific reductionism was confined to specific acts of measurement, instead of becoming universalized(!) to underpin politics and economics and even religion. For instance, my mother believed that she had logically proved that God exists. That is crazy. If God submits to logic, what use is He to anyone? Similarly, if all of Nature can be quantified, can’t we just exchange some of the terms of the equation and have all those ‘ecosystem services’ done by machines?

        I have a feeling that this kind of hubris and confusion is a product of the vast energy abundance that Joe mentions above. We have the horsepower to pave over all those spiky little details. And the energy overabundance is made possible, as you say by the kind of worldview you are talking about in these posts. Reinforcing each other, until they don’t.

        If all of us had to come by our sustenance honestly, my hope is that we could put more value on living among the immediate and particular, and be less prone to making the kind of generalizations that allow us to use up and throw away the world around us.

        • Thanks Eric, interesting points as ever. Perhaps I should have stressed more at this point in the essay the distinction I think you’re highlighting between science and scientism, on which I’ve written elsewhere. Mechanistic reductionism is OK for science as a form of intellectual practice, but not so much as a form of practical design – at which point it becomes the ideology of scientism, and just as you say tends to ride roughshod over the spiky (but important) little details.

          The universalism I was referring to above was mostly of the philosophical kind – ie. can human societies be understood everywhere with reference to the same kind of explanations? But your point about political universalism is important too. I touched on it in the essay above in relation to the public sphere – ie. what happens when we win or lose a political argument? I hope to write some more about this presently.

          Interesting to hear about your political discussions at work. Interesting, too, the way that so many people so readily conflate ‘having a lot of money’ with ‘working hard’. I guess there’s more to say about that too…

  5. Commodity grain.
    Thanks to our host for appending the photo of soybean seed above. In the photo are three samples of soybean seed (Glycine max). The most obvious difference among them is their color. So if we play the children’s game – which of these three is not like the others – which do you suppose is really different than the other two? If you picked the top (yellow) sample, give yourself a point. Why is it different? It can be marketed as a commodity grain.

    All three are members of the same species, and are cross compatible. One might imagine a Beagle, a Rottweiler, and a Poodle as the canine comparables. But in comparison to the dogs then, only one of the breeds would be fit for commodity status.

    In our example the yellow soybean fits the description for US #2 Yellow soybean. The legal description of this commodity class specifically disallows soybeans of other color (as well as rocks, seeds of other species, moldy seed and a host of other non-soy items) beyond certain per-centages. There are market grades (numeric… so #1, #2, #3 etc). The grades are an artificial stricture set up and agreed upon – even having political standing and international treaty status – so that a buyer and seller can negotiate price over long distance without having to have a sample to hand (so quality is defined to some minimum and not debated in the negotiation). To further the commodity angle, price is then largely determined on a trading floor where ‘traders’ hold an auction of sorts to buy/sell large quantities of the commodity for the benefit of producers (farmers) and users (millers, feeders, tofu manufacturers, etc). But this market feature is only one part of the benefits/costs to the designation.

    I could also supply a photo of three soybean samples, all yellow, that look identical to the eye, but have entirely different seed attributes such as protein and/or oil content. The seed protein content might range from as low as 36% to as much as 54% on a dry matter basis. But these latter differences in the various products does not impact their designation as a commodity grain – at least to this point in history.

    By setting up this system we now have a situation where a soybean grown in Ontario Canada has the same market classification as a soybean grown in Arkansas, USA or in Mata Grosso, Brazil [though ‘Country of Origin’ legislation might one day modify this]. Still, an Ohio grown bean is marketed just as one from Iowa or Illinois. The benefits for this simplifying designation? Millions of folks can participate in this marketplace with some confidence that they aren’t buying rocks, moldy seed, etc. when what they want are soybeans.

    On the flip side of the benefit/cost dichotomy – the costs – a discounted value for quality beyond the minimum. One might,quite legally, take an inferior grade of product and blend it with a superior grade of product and so long as the resulting blend meets the minimum standard they can market to the minimum.
    If you have a quality product and wish to capture its value (prevent blending to the minimum) you have to negotiate a premium. This can be done, but it adds its own costs to the formula. Identity preservation is not free. [another potential can of worms for consideration here is that GMO grain does meet the definition of US #2 yellow soybean… and if one wants a non-GMO soy then Identity preservation is needed, costs are incurred… complications abound].

    To our current consideration of commodity grain vs fresh produce… our modern consumer – ultimately the individual who will eat a plant product – is not likely to come into direct contact with a commodity grain. She will buy a bag of flour (milled wheat for example), or she might by a protein bar (blended ingredients of several types – many commodities such as sugar, or processed commodities such as cotton seed oil, soybean meal, high fructose corn syrup, and so forth). If she wants a carrot, she will go to the produce aisle and select a carrot. She will not open the flour sack to inspect for insect parts or color of the flour… our market system won’t allow it. She may well be allowed to handle the carrots before she makes her choice.

    If I might return to the colored soybeans above before closing – the green soybean is green because the chlorophyll in the immature seed was not degraded and changed to other seed constituents as it matured – what the yellow soybean will do. This is not onerous to overall health of the soybean, and in fact the chlorophyll can add value to food produced from such a seed. But the current commodity market cares not.

    The black soybean is actually a very dark purple; the color coming from an anthocyanin pigment (much like flower pigments). Anthocyanins also have benefits in human diets. Again, no love from the commodity marketplace. But where the two colored soybean seed do derive some benefit from their yellow cousin – the market price determination. As they are soybeans, someone wishing to trade these can use the commodity market price as guide. So if the value of the green seed for instance is pegged at a 2% premium over the value of the commodity, then when the commodity is $10 per bushel, the green would be $10.20. If the commodity is $18 per bushel, the green would be $18.36 (BTW, I’ve made up the premium in this example… you want some green seed, you’ll need to negotiate with someone who has some).

    I might also add that all three of the soybean varieties in the photo above are non-GMO, were grown in Ohio, USA, and none would likely be producible in the UK (the black, being of the earliest maturity of the 3 might mature there, but my money is against it).

    Still more verbiage on the topic is available at Gulliver’s Pulse in a blog post I wrote a couple years ago (corn gets more attention there):
    https://gulliverspulse.wordpress.com/2015/04/09/two-edges-of-the-same-sword/

  6. Hi Clem, your are right, I should pay more attention to the futures market but then, while I was studying up, I probably would have to forego estimable blogs such as your own, and SFF, and the exceedingly high quality conversation you all engage in. Perhaps I can imbibe some futures market theory painlessly while hanging around here. 🙂
    Chris, so the re-localization story is a long story, but I’ll try to sketch it out briefly. An important context is that I am a cattle rancher in Hawaii. Living on relatively small islands makes it easier to conceive of a re-localized market because all that water just makes the point, and also makes it easy for people to grasp how messed up we would all be if our main harbor were damaged. On the other hand you have a very limited amount of very expensive land to work with. So that makes it difficult, no, impossible, to make your local product price competitive.
    The standard operating model for ranches in Hawaii, since the advent of containerized shipping de-localized our beef market, has been to raise calves in Hawaii as cheaply as possible on our year-round green grass and then ship the calves to the US mainland to be finished on grain in feedlots, mostly in Texas or the Pacific Northwest. The high cost of shipping is counterweighted by the year-round availability of grass, and it all mostly works out. Except that you are entirely at the mercy of the ups and downs of the commodity cattle market.
    So during one especially painful drop in calf prices, circa 2007, seeing the growing interest in local and grass-fed beef, we decided to keep some of our cattle back and start to develop a local market. To make a long story short, we were lucky to get some really great help from good-hearted people and the timing was good, such that we went from keeping back 100 head a year for our local market to keeping our entire calf crop (around 900 head a year) back. But of course that success came with new problems, because as more and more ranches started doing the same thing we hit a fairly hard limit on slaughtering capacity on our island. (It would cost about $30m to build a new one.) The other difficulty for our ranch of course was that we were keeping 1800 head more cattle at any one time, and although we did manage to find some new acreage, we are also losing acreage to development pressure quite rapidly as of late. So we’ve had to change back to having a foot in each world: we send half our calves to the US mainland, and keep half for the local market.
    On so many levels I much prefer working in the local market, (I like knowing who my customers are, I like having the cattle on grass, and I like having more input on the price I get) but there’s also some benefit to being in the more “normal” market again. I’m really glad not to be entirely dependent on the commodity market anymore. As mentioned above, it’s a lot more work to be in a local market and you have to have more skills than just being able to produce cattle, but having those skills also gives you more options. In case it all goes to hell.

    • Fascinating story Michelle. I’m guessing the containerized shipping was of mainland box cuts to Hawaii – and the shipping of live calves to the mainland for finishing… how is that accomplished? The journey takes a couple weeks or more, no? How are the calves kept during transit? I’d have guessed the logistics of this would never have penciled out, but then a lot of modern commerce does this to me.

      If it doesn’t take too much time/effort, I’d be interested to know how the whole calves to mainland thing was built up… Do buyers come to Hawaii to bid on animals (or have agents there permanently for such)? Risks are borne by whom? Finishing lots? You’re risk ends when the calf leaves the ranch?

      I’m not directly involved with how livestock are moved about here on the mainland (say one state to another), but I know some folks and it has always been a far bigger challenge for them than say a grain farmer who wants to move 900 bushels of corn from Ohio to Illinois.

      And your local slaughter difficulties… those we are familiar with. Would be nice if we could just tweet toward Washington: Sad, very sad.

      • Hi Clem, the calves go out in one of three ways: in specially adapted 40′ containers on the regular barge route from Honolulu to Oakland (about 6-7 days on the water), in ships designed for moving cattle (none in the US fleet, so if these are available the cattle have to go to Canada because Jones Act), or by cargo plane. Most of the cattle go by option 1, but we only ship by plane because it’s only a few hours versus days. It only costs a little more too, because it’s a back haul for the cargo planes. Weird right?
        As far as how it works, there’s a gamut of options. You can sell your cattle in Hawaii and an agent of a buyer takes care of everything or you can retain ownership right up until they go to the packers, and everything in between. There are various ways to finance the venture, such as being able to take a portion of the value when they arrive of the feed yard or you can finance your feed, or you can pay as you go. There are some ranchers that also buy other local ranchers cattle here. Some of them made a lot of money in 2014 when the cattle market was at an all-time high, and some of them lost a lot of money in 2016 when the market fell through the floor.

    • Thanks for that Michelle. Very interesting story. Living on a small island with the main harbour non-functional would be a good thought experiment for all of us to do, even if we don’t…

      • Or perhaps you want to look at it from a galactic perspective… from which planet Earth does sort of resemble a small island without much of a harbor? Scale and context. Hmmm…

  7. Didn’t Keynes play the markets when the bursar of an Oxford College in the inter war years? I am told that due to a boo-boo on his part he came close to having to take delivery of a large quantity of wheat that would have filled his ‘Glittering Spires……………’

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