Comparative disadvantage

When I make the case for greater local self-reliance in agriculture I quite often come across the counter-argument that Britain hasn’t been self-sufficient in food since the early 19th century. This is true, but what’s not so often noted is that we’re now not self-sufficient in different kinds of foods to those we weren’t self-sufficient in 200-odd years ago. Back then we were self-sufficient in most things except for staple grains, whereas now we’re mostly self-sufficient in staple grains while we’re not self-sufficient in most other things, our greatest food-trade deficit being fresh fruit and vegetables.

The reasons for this switch aren’t hard to find. As a result of crop-breeding, mechanisation, the development of artificial fertilisers and other agro-chemicals, along with the EU’s productivist aims and subsidy regimens, cereal productivity nationally, and per hectare or per hour of human labour, is now much greater than it was in the early 1800s. So despite a six-fold population increase since then, we’ve become pretty much self-reliant in cereal grains – though it’s a fragile self-reliance, based to a considerable degree on imported fossil fuels. But the cost of labour and the opportunity-cost of agricultural land is now also much greater, while the relative cost of energy is much lower – all of which mean it’s cheaper to import bulky, labour-intensive products like fruit and vegetables than to produce them domestically as we did a couple of centuries ago.

Wait, scroll back. Did somebody mention the EU? Britain voted to leave that creaking old juggernaut years ago and then struck out boldly on its own, right? The answer to that is yes and no, my friend, yes and no. Yes, we did narrowly vote to leave the EU more than two years ago, but no we haven’t left yet. Instead, we’ve had two years of epic fudging, as the government has tried and largely failed to work out how to leave the EU without tanking the economy, while simultaneously dealing with vast amounts of other fallout, such as the Irish border question. Perhaps I’ll write another post soon that runs the rule over this monumental waste of political energy, but here I’d like to focus on just one aspect of the aforementioned fallout, namely post-Brexit agricultural policy.

The government’s consultation paper Health and Harmony: the Future for Food, Farming and the Environment in a Green Brexit set out its post CAP policy thinking, receiving a response from me and, apparently, about 43,999 other people and organisations. I don’t think I was the only one to notice that there was precious little about food or farming in the paper. The government seems to be planning some kind of environmental payments scheme to farmers on a ‘public money for public goods’ basis, but the notorious single farm payment subsidy regimen is soon to be history, with nothing to replace it. This was predicted long ago on this website – not that it was a hard prediction to make.

Well, the SFP was a bad scheme, and it won’t be mourned by many. Though much as folks like to bang on about the way it enriched people who didn’t need enriching and turned farmers into subsidy-junkies, the truth is the real junkies were retailers and consumers grown reliant on rock-bottom farm-gate prices. I won’t further plumb that particular line here, but it’s worth noting the implications of the SFP’s demise. There’s to be no emphasis on national food production or security, instead just a thoroughly neoliberal commitment to making British agriculture globally competitive. Which it probably won’t be across almost all dimensions of food production, with the possible exceptions of things like whisky and smoked salmon. My guess is that in the short-term we’ll see farmers getting out of farming and becoming landscape managers, while retailers and consumers continue getting their cheap food fix by importing more from abroad, regardless of the longer-term consequences – something like the ‘bad rewilding’ scenario I outlined some time ago. Farms will prioritise chasing money for wildlife management and visitor attractions, while we export the responsibility for producing our food to other countries willing to sell on global markets (and possibly less anxious to protect what remains of their own wildlife).

Nothing wrong with all that, according to mainstream economic theory. If each country focuses on what it’s best at producing and imports what other countries are best at producing, then everyone gains – this was all explained long ago by David Ricardo in the theory of ‘comparative advantage’ set out in his Principles of Political Economy and Taxation (1817).

Comparative advantage is still routinely invoked as a justification for free trade today, so it remains sadly necessary to explain why it’s a poor foundation for contemporary economies. If investors who are unable to freely put up their capital outside their own country – which was generally the case when Ricardo was writing – wanted to obtain the best possible financial returns, then it made sense for them to invest in their local or national industries with the greatest comparative advantage. But since Ricardo’s day, the entire drift of global financial policy has been to remove the trade barriers that pushed investors to seek comparative advantage, and also to virtualise the economy away from the production of physical things and towards the increase of money itself. So while an English capital-holder today may be better advised to invest in cloth than wine (Ricardo’s original examples) if they want a high return on investment they’re almost certainly even better advised to invest in derivatives on Wall Street. This replacement of comparative advantage by absolute advantage fundamentally changes the economic game in ways that quaint Ricardian theories of international trade are powerless to model.

Meanwhile, national and local governments have numerous responsibilities. Trying to maximise fiscal flows and foreign exchange earnings are certainly among them, but there are many others – the health and wellbeing of the populace, the resilience of infrastructures (including soil health and food security) and so on. Global policymakers nowadays seem to be gripped by a huge Hayekian delusion that all of these things are best secured by hawking them on global commodity markets. Even so, most wealthy countries take steps to protect their agricultures and ensure that their farmland remains productively farmed. You can certainly criticise the way they go about it – as in the EU’s common agricultural policy – on numerous grounds, but the basic motivation behind it seems sound. It’s unusual, and I think ill-advised, for a country to cast out its agriculture as Health and Harmony does in favour of the religious mantra that ‘the market will provide’.

Eighteen months ago I was pilloried on here by a couple of commenters for supporting continued British membership of the EU on the grounds that the latter is committed to neoliberalism. But it seemed obvious then, and it seems even more obvious now, that aside from a few misty-eyed nationalists the main impetus for Brexit within the Conservative Party came from people dissatisfied with the EU because it wasn’t neoliberal enough. The Health and Harmony paper seems confirmatory of this point. A case could have been made for a ‘progressive’ Brexit, but it would be stretching a point to say that that case has even been a marginal part of Brexit politics. In this sense, though I don’t like to use the term, people who supported Brexit for its progressive possibilities strike me as essentially useful idiots for neoliberalism. Though it’s possible, if fortune smiles on them, that they may yet have the last laugh.

In the short term, though, Britain is putting itself at a comparative disadvantage in pursuit of ‘competitiveness’ in the global agrarian economy. It’s worth bearing in mind that agriculture currently contributes less than 1% of Britain’s gross value added economic output, and under any realistic medium-term economic scenario it’s hard to see that increasing in any major way. But Britain could more or less feed itself from its existing agriculture if the government chose to make that a priority. To me, that seems a much wiser option than trying to wring another few million quid from a more ‘competitive’ agriculture.

Meanwhile, another aspect of Ricardo’s economics is looming ever larger. Ricardo supported international free trade because he perceived that in a protected capitalist market landowners would be able to extract economic rent – an excess return over production costs – as a result of increasing food demand. Essentially, he construed a scenario in which labourers did honest work to earn their wage and capitalists did honest work to earn their profit, while landlords pocketed an increasing share of the economic surplus thus generated without lifting a finger.

This dynamic of Ricardian rent has largely been in abeyance for many years in the rich countries. Food prices have been low and rural landownership has rarely been a royal road to wealth. But as industry and economic growth stalls and inequalities widen, the prospect of the economy falling into the grip of landlordism grows. If we extend the logic beyond agricultural land per se, it’s already happened. It’s already happened from a poor country perspective in terms of the extraction of Ricardian rent by rich countries in controlling access to the global economy (this is one reason to welcome exit from the protectionism of EU agricultural policy – but Britain unilaterally falling on its sword in this way probably won’t benefit poor people globally a great deal). And it’s already happened from a rich country perspective in the substantial exit of businesses from matters of production in favour of battling to control the means of circulation – intellectual property rights, branding and so forth. The emergence of a rentier capitalism which has no interest in putting capital to work in service of material improvement (always a minor theme at best in earlier capitalist iterations in any case) has a thoroughly Ricardian resonance.

The way I see this panning out is a period of tricky trade wheeler-dealing that won’t be more economically beneficial to Britain than EU membership was, but may inaugurate a brief honeymoon of cheap, low-quality imported food and possibly improved wildlife habitats at home (we’ll conveniently ignore the consequences for ghost acres abroad). Then as climate change begins to bite in the global breadbasket countries and calculated self-interest looms larger in the global political economy, I think we’ll be in for a major food crisis where it’ll suddenly seem like a good idea for the government to be supporting the local production of food, and where large landowners in possession of lightly-farmed estates may start to feel some class-aligned political heat.

At that point, the government will start casting desperately around for solutions to the self-inflicted problem of its Ricardian nightmare. Luckily, Small Farm Future will be here for it, shining a guiding light that will help it overcome the Ricardian perils of our age with this simple two point plan:

  1. A new protectionist economics, focused around local production for local use. This protectionism won’t be of the tit-for-tat, ‘my country first’ kind being reinvigorated by idiotic politicians like Donald Trump. It will take the form of an internationally agreed, convivial kind of protectionism in which collective strength is gained from individual difference.
  2. A new anti-landlordism economics. But not in the traditional socialist or capitalist manner of alienating people from the fruits of their own work on the land, because the benefits of this ‘globalising’ move will no longer be paying out. In this situation, the most obvious form of anti-landlordism is of the if-you-can’t-beat-‘em-join-‘em variety, in which more or less everyone becomes their own landlord.

The result of this protectionist, anti-landlord economics would look a lot like the small farm future I’ve long promulgated on this blog. What a funny coincidence. Undoubtedly, figuring out how to deliver this future from the unpromising present is a major conundrum. Happily, here at Small Farm Future we have all the answers – and we’ll start revealing them soon. But not just yet. First I have to go and pinch out my tomatoes.

36 thoughts on “Comparative disadvantage

  1. The good, the bad, and the ugly…

    If your prognosis is sufficient there could be some silver linings…
    English land currently “under the plow” should benefit from the less strenuous actions of rewilding, tourism… essentially idle ley type management. So if all went well when the edge of apocalypse approaches and when local faming must return, the health of said soils should be much improved.

    Those stubborn local food producers who march against the tide will eventually find they alone possess the experience to grub a carrot or a pinched tomato from the earth. And the even rarer anthropologist/sociologist/blogger among this latter cohort is sure to find himself or herself in steep demand. Quid pouring in from all quarters in search of advice and council.

    Alas, not all views are so welcome as the wholesome fruit (and vegetables) from the small farm veranda. Our obstinate self-relier may find their experience of surviving on very little is not the sort of training necessary when such mountains of currency flow in their direction. And while an honest “I told you so” might puff out the chest a little, it hardly helps the larder.

    Indeed, the ugly spot on this scene’s horizon has already been forecast by the Romans many centuries in the past. Gaius Furius Chresimus narrowly escaped a horrible outcome at trial… his successes in agricultural production deemed magical, or that he was somehow stealing away the production of neighbors.

    Here is hoping that this sort of history will not repeat itself. Perhaps my opening gambit could be modified to: The good, the glad, and the smugly…

    • I might agree with you that perhaps rich countries like Britain should give up on farming entirely, let their land go back to nature to regenerate fertility and wait for the day when local production is needed to obtain sufficient calories for its people. But if that day comes quickly, it may be too quick for the long and steep learning curve people must go through to become productive farmers.

      In that case, the very least that a forward looking government should do is subsidize a large number of small farmers as a sort of “seed-crop” of expert small farm teachers who will one day become essential to a nation’s food security. I’m sure that there are lots of young people who would love to get their toes in the soil by joining the Small Farm Corps.

      On the other hand, perhaps the neoliberal solution would be to wait until small farm experts are really needed and then just pay to import them from countries where small farmers are plentiful, say to Britain from southeastern Europe. The danger there is that farming-teacher immigrants might want to relocate permanently. The same risk would apply to the US with small farm experts from south of the border. Since immigrants are apparently now out of favor in both countries, a national Small Farm Corps it must be.

  2. The largest point which I cannot come to grips with here is your concern with landlords. Landlords essentially act as insurance entities over property: landlords profit from maintaining and increasing the quality of the land they own because it attracts renters; if a renter is productive, then landlords want to keep them around because it means they will pay rent reliably, thus keeping rates competitively low; landlords dissuade renters from harmful practices (i.e. banning harmful waste dumping) to maintain their property value. Conscientious renters can manage these things pretty well themselves, yes, but landlords function as insurance against short-sighted renters. You speak as though landlords provide no service whatsoever, when in fact they provide a service as stewards. In a free market this is how disputes are settled, in general. That is, you don’t need regulations saying “The quality of water in this town must be maintained at this level”, you just let residents take out insurance against diminishing water quality; in this way, the insurance provider has a financial incentive to maintain high water quality. This all comes without the overhead of government bureaucracy and taxes. If anything, it is the risk of a handful of bad landlords in an economy of competing landlords which can be selected at-will vs. the risk of having a government with a body of laws that it maintains by force, risking trade-wars over protectionism etc. Maybe two world wars weren’t enough to teach us that governments are more dangerous than landlords …
    Hyperbole aside (I’m sorry, I love them so), you seem to presume that the best, most conscientious farmers will somehow wind-up with the land they need. In reality, the world is full of people who are either malicious and want to exploit the land for short-term gains or who simply can’t cut it as a farmer (i.e. they are too lazy, too short-sighted etc.). And landlords basically make it so the most qualified people get the highest quality land. This sorting process doesn’t just happen magically. It’s like how record labels scout and sign the most talented performers: if there weren’t record labels doing this for us then there would basically be no music industry. And this is simply a strength of the free market–the free flow of information in the form of prices, allowing for the best allocation of resources.This is essentially another facet of the service landlords provide. And governments have never been able to do this on a sufficient scale: see the Five Year Plans. Planned economies are rife with shortages far greater than any minor scarcity that has ever cropped up in a free market.

    • Thanks for that comment. I’ll try to lay out some brief responses to some of your main points.

      1. Your argument is very similar to the critique of Ricardo made by Malthus. And, without meaning to be overly provocative, it’s also quite similar to what’s known as ‘the myth of the benevolent master’ in slavery studies. Ricardo (and I) didn’t dispute that some landlords might diligently improve and husband their land, but Ricardo got the better of the argument with Malthus by revealing the underlying, structural logic of the system – even landlords who neglect their land and make no effort to secure long-term potential or viability gain from increased food prices. There’s nothing in the inherent logic of the landlord-tenant relationship that incentivises wise long-term husbandry by the landlord – rather there’s an incentive for land prices to inflate according to their current best productivity, and for landlords to charge rent accordingly. The same logic applies to housing development, which is why so much of the new houses on estates in the UK are incredibly expensive, very crowded and shoddily built.

      2. Or to put it another way, what does landlordism as an economic arrangement deliver that owner-occupation doesn’t deliver better? The only thing I can think of is the potential for landlords to have more liquid capital available for infrastructure improvements than small owner-occupiers. But where does that capital come from, and what incentivises them to use it for land improvement rather than, say, personal aggrandisement or establishing themselves as potentates in a clientelist system? You write “the world is full of people who are either malicious and want to exploit the land for short-term gains or who simply can’t cut it as a farmer” – if that critique applies to owner-occupiers, I think it applies a fortiori to landlords.

      3. You seem to be counterposing a society of landlordism with one of centralised government control. But landlordism requires centralised government to enforce its particular regime of property rights. The alternative I’m proposing isn’t a centrally controlled world of 5 year plans, but one of widespread owner-occupation. That also requires central government to enforce property rights – but historically less so, I’d argue, than societies characterised by landlordism.

      4. I disagree with your assertion that landlords ensure the best qualified people get the best land. ‘Best qualified’ in what sense? The history of tenant farming in Britain can be told in terms of people farming on small scales for subsistence and producing small fiscal surpluses (and therefore rents) over a long period being replaced by people farming on larger scales for profit and producing larger surpluses and rents, but usually over a short period and without much regard to the long-term welfare of the land. Who is the ‘best qualified’? My sympathies are largely with the former. But whatever view one takes, the answer to this question is normative and not objective.

      5. You have a very rosy view of ‘free’ markets – especially insurance markets, which are rife with market failure. Taking your example, suppose I live in town X and there are no mandatory drinking water standards. A mining company moves in upstream and fills the water with mine tailings. I try to take out insurance for good water quality. ‘Where do you live?’ the insurer asks me. ‘Town X’ I reply. ‘Sorry, can’t insure that’. If I’ve taken out insurance prior to the mining company moving in, then the fiscal interests of the insurance company are at odds with those of the mining company. Who wins? Well, that depends – but there’s nothing in the logic of their contest to suggest that clean water will be the outcome. And when you talk about the avoided overhead of bureaucracy and taxes, you’re forgetting the costs imposed by private administration and company profits. The private healthcare system in the USA spends much more money on administration than countries with tax or social insurance systems where you don’t need to exhaustively track individual claims, and it provides poorer population coverage because its basic motivation is profit rather than, say, population health. Hence private insurance tends to oversupply (or, if you prefer, provide premium quality) goods to people who are rich and/or low risk, and undersupply them to people who are poor and/or high risk. Personally, I don’t favour public, private or commons solutions as intrinsically the ‘right’ one. Each has strengths and weaknesses, which are more or less to the fore in different situations. However, I can’t really see how you can square landlordism with a truly ‘free’ market – the rent-taking opportunities are too powerful. The owner-occupation I advocate above is surely closer to the spirit of a ‘free’ or private market.

      • I readily admit that there are good and bad landlords, and that the same is true of farmers and bureaucrats. Difference being you can opt out and say ‘no’ to landlords and farmers of course. In the present economy, landlords seem to do very little in the way of stewardship, but that is simply because we already have a hefty stack of regulations in place doing that job. And even if a landlord can do nothing and benefit from rising food prices (and if food prices go up, more productive farmers + better landlords will swoop in to benefit from it and drive prices back down), he will always be out-produced by the more conscientious landlords and their renters, until he either emulates them or capitulates to them (as there is always a financial incentive for better landlords to enter the market). Whereas the corrupt bureaucrat is able to simply offer favors and short-term incentives at no cost to himself because he is backed by a police force and a military which can extract money by taxation. Therefor in a government, the most corrupt people win by virtue of offering the most. So yes, all people have potential to be conniving and exploitative, but a free market safeguards against these tendencies by allowing people to not associate or do business with those who are overly predatory.
        I don’t particularly like the example of US insurance markets because it is of course hardly free. Because companies are explicitly not allowed to compete outside of their state-appointed jurisdictions, they have no reason to try to attract business. Administrative costs and profits are relatively high because they don’t need to invest in anything else: there is basically no competition due to state regulations, so why bother? In the case of a mining company moving in upstream of a small town, its interests and that of the water insurers can be both be satisfied, still. If it costs the mining company slightly more money to safely dispose of waste or regulate emissions, then the insurance company pays them in order to offset those costs.
        However I am curious as to what you mean by landlords benefiting from a system of property rights enforced by larger governments–the third point. I certainly see the cases wherein landlords benefit from state interference in the economy: the aforementioned enforcement of environmental regulations at no expense, as mentioned previously; as well as abnormal scenarios like the government mandating low-interest loans be given to unqualified borrowers. The latter resulting in a cheap construction boom/bust a decade ago that allowed landlords to scoop up dirt-cheap properties in the aftermath. Perhaps landlords in their current form within a regulated economy do benefit from this interference, just as corruption in general is incentivized and encouraged by state-regulated economies. But unless I am misreading you, a system of government that does away with landlords is essentially one wherein if you own land, you are not allowed to rent it out to people. This is why I compare against a controlled economy, because it does frankly sound like the alternative to a free market is a government telling people what they are allowed to do with their property.

        • I’ll try to clarify where I think we differ.

          In opposing ‘landlordism’ I don’t mean to suggest that any kind of private rental agreement over property must always be prevented. I mean that creating a society in which private rental of property is a major or the major form of tenure should be prevented – and it will happen unless steps are actively taken to prevent it. Ricardo supported international free trade because in early 19th century England landowners, who dominated parliament, set tariffs on grain imports that enabled them to extract economic rent from the rest of society, effectively holding it to ransom. Anybody who advocates economic protectionism in terms of public good for the many, as I do, needs to appreciate that it can very easily create the conditions for the private gain of the few.

          Land is a limited good. High quality agricultural land situated close to markets is an even more limited good. Therefore your notion that increasing food prices will encourage more landlords to ‘swoop in’ to the market and lower prices is ill-founded. It may work for non-limited goods, but not for land. There is nowhere for new entrant would-be landlords to swoop. In a capitalist society, the people who hold the best land will cash in. That is, I think, the irrefutable logic of Ricardian rent.

          Your take on landlordism potentially works in a domestic housing market situation, where there are a lot of houses and landlords and where would-be tenants have other options. But you’re neglecting the monopolistic tendencies of the system (which again stem largely from Ricardian rent, and government support for it). In Britain today, for example, very few people under the age of about forty have much opportunity to raise the capital to buy a house, unless they inherit it. They will end up paying much more for their housing over the course of their lives than owner-occupiers, and at the end will have no capital asset. If I understand your take on private property rights correctly, your response to that would be to say “tough crap – the owners own their property, and nobody else has a right to stake any claim over it”. I disagree with that because I don’t think private property rights have descended to us from heaven. They’re a social convention, which take the form they do only so long as people choose to reproduce it. Historically, it often happens that monopolies and inequities build up, the few haves get richer, the multitudes of have-nots get poorer, until the inequity gets restituted by class violence against landlords. Once things reach that stage, no amount of argument about the efficiency of private markets or the natural rights of property owners will save the landlord’s ass. I think it’s a good idea not to get to that stage.

          So to your question about what I mean by landlords benefitting from government enforced property rights I’d say it’s an exact parallel with your comment that “the corrupt bureaucrat is able to simply offer favors and short-term incentives at no cost to himself because he is backed by a police force and a military which can extract money by taxation.” The landlord is backed by a legislative framework – and ultimately by a police force, judiciary and army – historically at minimal cost to himself which enables him to extract money by rent. The whole tenor of recent property legislation in Britain backs that up – the abolition of rent control, the introduction of assured shorthold tenancies, the criminalisation of squatting etc. I acknowledge that there can be a ‘corrupt bureaucrat’ problem in state-ordered provision. But it’s exactly paralleled by a ‘corrupt patron’ problem in landlord-ordered societies. Indeed, ‘corruption’ is a superfluous word in the landlord situation, because while the bureaucrat is at least theoretically supposed to apply some kind of impartial arbitrage, that’s not the case with the landlord – except inasmuch as he otherwise risks violent usurpation.

          On the mechanics of private markets, while I agree that in some instances they’re the optimum solution (small-scale farm owner occupation, for example) I disagree that they inherently always deliver the optimum solution. In the mining/insurance company example, the insurance company paying the mining company to clean up its act is only one possible outcome, and not the most likely one. The modus operandi of contemporary capitalism isn’t free markets but corporate monopolists exerting major leverage over public legislatures – if we’re going to talk about corrupt bureaucrats, I think we need to acknowledge that the source of much public corruption is the power of private money which has mostly accumulated from the extraction of economic rent.

          When you write “it does frankly sound like the alternative to a free market is a government telling people what they are allowed to do with their property” I don’t shy away from that reality – a government that represents some notion of public morality and regulates issues like water quality, child labour, workplace safety and inheritance tax seems to me inherently a good thing in our contemporary society as a bulwark against unscrupulous private gain. Completely untrammelled private property exists nowhere, and it wouldn’t last five minutes if it did. But that’s not to say I’m a fan of ‘big government’. The default mode of stateless agrarian societies is something akin to small-scale proprietorship within a wider network of mutually agreed rights and limitations – neither centralised control, nor landlordism – and I think there’s a lot to be learned from these examples.

    • Good grief. There was music long before there were companies hawking records. There was agriculture long before landlords.

      I’m not suggesting there is no value proposition whatsoever to gatekeepers – the more sophisticated our technologies and our ways of living become then the more value specialists can offer to those who are too distracted, or too lazy to keep their own gates.

      Just as government bureaucrats come in many stripes – from capable to corrupt, so landlords present themselves. Absentee landlords in particular suffer the most in this regard perhaps – their not being present enough to provide a proper level of ‘insurance’. Market forces and the vagaries of the weather and pests impact a producer more directly than they do a landlord (and for the same logic – more than consumers who procure their food from middlemen). At least in the market here in Ohio, USA, a tenet farmer goes to a separate insurance agent to look for risk management tools. Landlords typically don’t provide this service.

      Now it is worth adding to this discussion that there are different forms of rent that can be negotiated. And a crop share rent does put a landlord at some risk in the production equation. And in some jurisdictions the tax liability of a landlord is different for the various forms of rental agreements.

      Perhaps the most significant aspect of land tenure and land stewardship where land holders are not the workers on the land (are landlords) comes to the longer term security of individual workers on the land. If you have no security that improvements you might make will eventually benefit you, why make them? If you rent on a year to year basis (a very common situation here) why would you invest in soil building?

      I have some land of my own, and I rent some land. On rented land I try my best to take good care… and part of my motivation is as you suggest – that the landlord might look for a different tenet if I don’t. But I also work hard to maintain the landlord’s fields because there will someday be someone else hoping to raise food from that land and my use should not stand in their way. The land I own, however, is different. I not only steward it for this cropping season, but look forward to the benefit of enhancements I can make now.

    • Seems to me like you’re describing a situation where landlords must compete for tenants, in the same way that record labels must compete for musicians. I’m not sure that the two markets work in quite the same way…

  3. I’m very curious about how ‘convivial protectionism’ is supposed to work, especially if there really is comparative advantage. Are Spanish citrus growers going to willingly give up Britain as a market so that local British greenhouse operations can supply a protected market? Perhaps the favor will be returned by letting the Spanish raise their own salmon in refrigerated ponds?

    Or perhaps Brits will agree to limit their diet to products that can be better grown in Britain than anywhere else, so nobody else would bother to compete? But with shipping costs so cheap, there is probably nothing grown in a rich country that can’t be delivered more cheaply from a country with a similar climate and lower labor costs. I’ll be patient and wait for your post that explains how it will work.

    • Well, I certainly need to write that post, but you may indeed have to draw on some reserves of patience before it appears.

      In the meantime I can offer just these broad outlines of a response:

      Spain and Britain have natural advantages in producing respectively citrus fruit and salmon. If capital investment in the two countries is largely restricted to the domestic economy, then they have comparative advantage in these products. If it isn’t, then they don’t – British investors may be better off investing in the Spanish citrus industry. And with financialisation, they may be better off investing in a New York hedge fund. Throw cheap energy into the mix, and you get a system where economic decision-making hinges largely on global market prices, which is not conducive to making sustainable local land-use decisions.

      I’d prefer to see a situation more akin to Ricardian comparative advantage, particularly one with a relatively low degree of financial capitalisation such that the trade in citrus fruits and salmon was the icing on the cake of an agrarian economy geared to relatively local consumption, rather than the cake itself. I think the benefits of this would be numerous – not least here in Somerset helping to reinvigorate our apple culture. Though I’m not averse to the occasional orange as a special treat – as, for example, in the traditional Christmas pudding, with its candied citrus peel.

      Cheap energy and cheap capital militate against this localist solution, but increasingly don’t look like good long-term bets – as voluminously discussed with you and others on this site. I think it would be good if we started planning now for the positives to be gained from this reality, rather than waiting for the negatives to impress themselves upon us.

      • Here’s to Somerset apples, which are being chainsawed by the thousands at the moment…I’m ordering a number of your varieties, just to make doubly sure.

      • Thanks for your informative post and replies. Could you please elaborate a wee bit more on why you are advocating for protectionism? Since “cheap energy and cheap capital…don’t look like good long-term bets”, then shouldn’t the comparative advantages be able to stand on their own? (For example, as energy costs increase, transport costs can have a similar effect as a tariff, favouring local production.)

  4. Hello Chris
    Your conversation with Pollen gives me further confirmation of my view that Americans ideologically now see property ownership and the extraction of rents from said property to be Capitalism, not the making of stuff i.e. philosophically America is now a rentier economy, not a capitalist one. And further, as the USA has not had a revolution, civil war, or invasion for a long time, which have very strong tendencies to redistribute property to friends of the victors, these threats to property rights have faded and the state loomed large. But it is the mighty state who defends property rights in its courts, and on its streets with a heavily armed police force and even heavier armed military at its borders. Wither the state, wither property rights. Americans of the ‘right’ be careful what you wish for. Rentier societies tend to great division, when the revolutionary mob came for the French King Louis XVI his Swiss guards (foreign mercenaries) defended him with their lives, the French Guards joined the mob.

    Sorry for getting so far off the farming topic. Last point, funny how free market economist so despise small property owners and traders, usually with the cry that they are inefficient, yet their very ideology requires that there be many byers and sellers so that no one participant is large enough to pervert market prices to its advantage. Free market economists today seem to believe that the purpose of markets is to produce rich winners, not prices equitable to all participants which was the original ideological claim.

    And Yes Chris I am all in favour of your small farm agrarianism. If market prices are rubbish and the crop not worth the cost of harvest, feed the surplus to the pigs and look forward to the extra bacon this winter. Obviously this option is not available to the renter who has to sell because they need the cash to pay the rent, which further drives prices down. Market societies only tend to stability if people have other options when the market offers them poverty.

    Best Regards Phil

  5. And further, as the USA has not had a revolution, civil war, or invasion for a long time, which have very strong tendencies to redistribute property to friends of the victors, these threats to property rights have faded and the state loomed large.

    Going to need another set of eyes to get to this conclusion. The American Civil War didn’t accomplish a whole lot of property redistribution. There was the ’40 acres and a mule’ project. There would have been some redistributions needed within families and communities with very large casualty figures (fathers and sons not coming home). But with the opening of the ‘West’ there was plenty of space for new starts and migration from Europe such that land tenure upheaval such as you allude to was not on display widely. One can logically suggest the conflict between the Old World American descendants and the Native peoples on the Great Plains was more of a land redistribution conflict than the Civil War which preceded it.

    The caution to rentier capitalism makes sense – and I have no beef with the main point. But I don’t imagine holding up a very bloody war that was contested over issues of race relations (or property rights where the property is a fellow human being) and State’s Rights (debates over relative merits of Federalism) – is a good way to stage an argument about land tenure and rights to land as property.

    Where I sense some similarity between a modern European worldview (which I have to assume from the outside looking in) and a modern American worldview is over current matters surrounding immigration. This might result from the more ‘filled up’ sensibility here in the US. As mentioned above, following our Civil War there was plenty of land to expand into. Now there still remains some space, but much less compared to what we do have living memories for.

    But immigration debates here in the US today tend toward employment opportunities, social program costs, paths toward citizenship, internal security matters, and so forth. Very little mention of land access ever occurs. Indeed, landed agricultural folk tend to favor immigration for sources of labor where human hands have yet to be replaced by machines.

    Could the US do with some land tenure rethinking? Surely. The already raised issue of absentee landlordism here comes immediately to my mind. Inheritance issues might well be revisited (these do pop up on a fairly regular basis here). But I remain hopeful these matters might be dealt with short of suffering invasion, civil war, or bloody revolution.

  6. Good post and some good discussions. I agree that local food production by small landholders is of fundamental importance to our lower energy future and a better way of ensuring a good livelihood for the majority of people as opposed to a rentier class exploiting the majority of people.

    The problem with landlord-ism isn’t whether or not they take better care of the land, it is that the system too easily allows for great disparity of wealth, which ultimately destabilizes society. Landlord-ism is an economic system of wealth extraction that allows some people to exploit the labors of other people. At a small-scale it may be tenable. But if allowed to become rampant, eventually the exploited revolt and society is destabilized. Unchecked the system grows from a positive feedback loop; the more a person can profit from exploiting others, the more wealth they accumulate. The more wealth, the more opportunities they have for greater future exploitation.

    In previous comments I referred to this phenomenon as greed and some commenters took exception to this. I prefer to use the term greed (even with it’s moral connotation) because I think is clearly defines common negative human phenomena. Greed: intense and selfish desire for something, especially wealth, power, or food. synonyms: avarice, cupidity, acquisitiveness, covetousness, rapacity. It is a very destructive human characteristic.

    Some humans develop an obsession for increasing wealth, power, or food (or any resource). This rapacious state of mind creates a feeling in which enough is never enough. More is always better. This behavior is currently rampant in the financial industry. It has been a problem throughout human history. I think it becomes a significant social problem when we develop new techniques that allow us to rapidly exploit a larger share of resources. For example, the agricultural revolution that began with irrigating grain fields in Mesopotamia, the industrial revolution that began with the invention of internal combustion engine to dewater coal mines, the invention of electronic such as the T.V. which created advertising, the automobile and interstate highway system and lead to American’s mass consumption binge (now taking over China), the invention of information technology that began with the computer and internet and lead to financial globablization. Like a person who wins the lottery humans can get caught up in the exuberance of new found abundance, the opportunity to acquire more.

    Through history there have been various forms of cultural practices and institutions that have tried to curb our greedy behavior and prevent it from becoming a problem that destabilizes society. As someone pointed out in an earlier post older cultures used teasing or even shaming to keep heads from swelling. Modern cultures pass laws against usury or business monopoly.

    I think its clear that as we face the situation of declining fossil fuel usage we will need food production to become more localized and diversified. Like others I believe that localized food production done by a majority of small landholders who control their own livelihood stands the best chance for social stability and resiliency. We need farmers to become better stewards of their land and water resources. We need more local shop keepers and craft persons to provide goods and services.

    Whatever food production system we chose (SFF or landlord-ism) both will require productive natural resources. The fundamental issues we face are loss of productive natural topsoil and clean water. This will be exacerbated by climate change; harsher weather events at the extremes of drought or floods, heat or freezes. In the absence of cheap surplus energy needed to maintain and manage the system, industrial agriculture will fail. The future of food production will require much more human input and even at some point animal power once again. A resilient system widely distributed could provide the food resources we need.

    Yes, we face a problem of access to land/capital and skilled farmers/landholders but I don’t actually think this is as significant a problem as the resistance to hard physical labor by much of the wealthy citizens of the developed nations. Unfortunately Americans are the biggest consumers and most people think they stand to lose our cherished lifestyle. Looking around it is easy to see that wealth disparity has already removed much of the middle class security Americans once had. Most people have never worked in a garden or on farm and don’t want to labor that hard. And in the US I might also add that a great number of our population may not be physically healthy enough to do such work. But when needs become necessity these will be overcome if people want to eat.

    If we want to live in stable and equatable society we are more likely to find this in a wide spread system of small communities as opposed to gigantic urban cities with enclaves of wealthy citizens protected with walls and guards. Small communities would contain landholders, shop keepers, and craftspeople who own and operate their business holdings. Anyone who is able to start living this way now is ahead of the game.

  7. Thanks for the further comments. Sorry, only time for quick replies right now, but having just popped a shear bolt I thought I’d briefly retreat to the virtual world of Small Farm Future where farm days always run as planned.

    So, Steve – Yes, energy (and capital) descent may help us move towards a more localised economy in terms of the production of low value, bulky food goods. But I think it’s worth bearing in mind the extensive commercial operations of the capitalist powers prior to the substantial use of fossil fuels and the way that they thoroughly reconfigured agrarian production – I’m not sure that energy descent alone is enough. And from a poor country perspective, or even from a general local/food sovereignty perspective, there’s much to be said for developing your industry as you wish, rather than as dictated to you by more militarily or economically powerful countries on the basis of over-generalised arguments about efficiency (ones that we don’t hear when it comes to who gets to use the fertiliser…) Without attending to the structure of agrarian society, irrespective of levels of energy or capital, I’m not sure the forms of local production that emerge will necessary promote long-term sustainability and wellbeing.

    Phil – I was wondering what US readers might make of your intervention and I think Clem makes some good points, but to your general line of argument about rentier capitalism I’m pretty much on your wavelength. It does seem strange to me how pervasive the idea is that contemporary capitalism is based on ‘free’ markets, and how the likes of Smith and Ricardo are appropriated by the right. I also think it’s time to move beyond the endless arguments about whether public, private or common property regimes are the best, when it seems so clear that we need all of them, in different circumstances.

    Michael – Somerset thanks you for your custom.

    Joshua – Small Farm Future agrees.

    And finally, full disclosure, like Ricardo I am myself a landlord (and also a famous political economist, truly the similarities are uncanny). Call me a hypocrite if you like, but government policies tend to push people – farmers in particular – into rentierism, rather than making a living by producing food (…which brings us back to the protectionism). I like to think I’m a fairly benevolent landlord – and some of my landlordly ventures, such as hosting a forest school on our site, are a source of genuine pride – but in a sense this underscores my point: a society that structurally incentivises landlordism and then hopes for good outcomes on the basis of landlord benevolence is asking for trouble…

  8. Chris,
    Better a shear bolt than a shaft! I just read your piece on re-wilding, thanks for bringing to our attention. I haven’t seen much impulse towards that movement here in the US. Perhaps here we have had the luxury of more unfilled space and developed more park systems even in urban areas. Unlike Teddy Roosevelt, who was an avid outdoors-man and hunter, Trump who grew up in luxury hotels Administration is determined to reduce our national park system. Everything Trump does points towards favoritism for the fossil fuel industry.
    Anyway, I liked your piece. It made me think about how I’ve moved towards a sort of re-wilding of my urban landscape. When we stopped spraying the lawn for weeds and started mulching and composting landscape beds and gardens I was amazed to see the number of insects, spiders, butterflies, birds, and toads that moved back in. We put in small ponds where rain water can collect and frogs followed. This year I’ve seen more snakes as well. We got a cat who hunts mice and rodents and for the first time I’ve not seen hawks hunting across our lawn. So I guess I understand how our habits do affect wildlife. But iIt will be hard to convince my husband to give up his cat!

    Gathering wild edible plants is very interesting. I can make wonderful healthy dishes using lamb’s quarter, nettle, purslane, dandelion, etc. There are many more plants I can gather from around my home all because I stopped killing “weeds”.
    I’m sure next to my neighbors manicured, chemically treated mono-cropped lawns, my doesn’t look as attractive in their eyes. But the clover, dandelion, and violets spreading throughout my grass provide nitrogen for the grass and a long buffet of pollen for the bees and insects! I’ve begun to see more clearly that my neighbor’s lawns are like a green desert, devoid of food for wildlife that includes insects, birds, or reptiles. They might have the occasional trespass of rabbits or deer but they are simply on their way from one patch of food to another, which are steadily diminishing as the countryside fills with green deserts.
    I wonder if those people who thought you shouldn’t live on your farm because of the impact on wildlife have lived in an urban environment too long. I think perhaps many people are disconnected from nature and long for re-connection but don’t know how to achieve it. They idealize some pristine idea of nature and their political agenda is a bit silly, it being shaped by a romanticism that has little to do with the reality of being actually living a wild life.
    I find the connection to the land I live and work upon most strongly when go walking outside and gather plants from lawn and garden to make a wholesome dinner! I am more aware than ever of the bounty the earth provides quite willingly if I just stop eradicating every weed in sight!

  9. As others have pointed out, basically not many of us ‘own’ land/houses we either have to rent it or pay a mortgage.

    It seems to me at any rate that the Peasants Republic of Wessex needs to think about how we organise access to land. Given that ‘The State’ needs an income, and farmers need access to land, renting it from the PROW offers the possibility of affordable land for the user and revenue for the ‘State’

    • The Peasants Republic of Wessex could use the Community Land Trust model. Farmers could lease the land (from the Land Trust) while owning the infrastructure and improvements, and resale values for those improvements could be limited to reasonable gains (accounting for some inflation, for example) to keep the farms affordable.

  10. Agree on the anti landlordism. Not sure, however, how a small farm OWNERSHIP in a market economy will pan out? Ultimately, if land can be used as collateral for loans, sold and bought, the in-built incentive for increasing inequality will convert some of the more successfull small-holders into landlords. It seems to me that collective/common ownership of land or in some other way regulated access to land where landownership is restricted and land can’t be used as a capital asset is the way to prevent land from being accumulated in few hands (referring to discussions above, this has nothing to do with 5-year plans or Government farms…)

    • Land trusts (including Community Land Trusts) are some ways to keep farmland as farmland, and prevent speculative ownership, even within a capitalist system.

      “Agricultural land trusts have a particular focus on protecting our nation’s working landscape. These land trusts work with farmers and ranchers to keep farmland free from development and available for agricultural use.”

      “Community land trusts were first developed to address affordable housing issues but have been adopted to tackle the issue of affordable farmland as well. Community land trusts own the land and lease it to farmers with a 99-year renewable lease while the farmer owns the infrastructure and improvements. This allows the farmer to build equity while enjoying secure land access. These arrangements typically utilize formulas to determine the resale value of the property improvements in a way that compensates the seller while keeping the farm affordable for future generations.”

  11. Jody, John, Gunnar – thanks for those thoughts. I’ll respond, but it may take a few days because once I’ve fixed the shear bolt they’re letting me leave the farm and go walkabout.

  12. I believe that there are controls on agricultural land ownership in several countries including in some cases purchasers have to be approved by the relevant authorities

    • In Hungary you can buy agricultural land if you’re a Hungarian with a degree in agronomy, and local farmers already working the land are given first choice on purchasing any farm land for sale via a 60-day window, after which the sale can go ahead to the qualified Hungarian new entrant who wishes to buy. Non Hungarians can rent farmland in Hungary if they then farm it, and if they do so for I think it’s seven years, they may then be able to buy it. No doubt various loopholes still get utilised, but that’s basically the system here. Furthermore the government also keeps an eye on sale prices to keep them within reasonable bounds (county land price averages based on soil quality, location, slope, drainage etc) in order to ward off any sales that fall into the category of ‘money doesn’t talk, it swears’, ie if a wealthy individual or corporation expects their big wads of cash to open doors, they may be disappointed as the land ministry could turn down the sale.

      • Furthermore the government also keeps an eye on sale prices to keep them within reasonable bounds (county land price averages based on soil quality, location, slope, drainage etc) in order to ward off any sales that fall into the category of ‘money doesn’t talk, it swears’

        Simon – any idea how the government accomplishes this sort of price control? Are most of the agricultural hectares owner operated then, or is there still a fair degree of rented land? Are rents controlled to some extent by the government?

          • Clem, re the Hungarian government’s role in ag land sales, two years ago the current Fidesz government brought in a ‘land committee’ whose board consists of local large landowners who oversee and approve land purchases. It’s all part of the government’s reach into the countryside; if you don’t own land already in some parts of the country, you can’t simply buy land without certain people giving implicit or explicit nods. So if you do pay land value that’s well over the current local value it will get some attention from ‘the top’. Land above a certain size must be advertised when sold so that people with similar rights to purchase (other agriculturalists in the area) have a right to buy or object. As they have prior rights due to their standing in law, ag land sales have to go through a transparency listing.

            Both sorts of tenure arrangements (owner occupier and tenant) can exist within a single farmholding, a situation complicated due to the incomplete return of lands from the time of cooperative farms, though it’s increasingly the private model – ie outright ownership.
            Farmland rental prices are usually private affairs but it’s an open secret/practice that they are usually related to the going subsidy rate for the year (usually the owner’s asking price is the subsidy rate, while the farmer gets to keep everything he can make from the land above that). While there’s a lot of geographic variation with that, there’s no need to record rental prices in the same way, that’s a private affair between contracting farmers.
            Finally, regarding subsidies, the highest levels are available to farms certified organic and those farming ‘high nature value’ areas, particularly Great Bustard areas (to the tune of around 400 euros per hectare I am told).

    • Yes, sure there are loads of examples of how government control ag land ownership. In Norway you have to live on the land, i.e. you can’t be an absentee landlord. In Sweden, where I live, we had quite strict government control of land sales before, but the objective was to support the proper use and “structural rationalisation” of agriculture, i.e. create bigger farm units.

      In most tradititional societies land is not really owned in a modern capitalist sense, communities, villages, clans or other social structures determine who can use what land. For me, putting control of land and nature resources closer to the communities seems like a desirable move, as opposed both to private ownership and government control.

  13. Still a regular reader, just don’t have many comments to add in most cases, but I felt I should reply to this since I’m probably one of the commenters from 18 months ago you mentioned. First off, I did express those sentiments, but I hope I didn’t come across as “pillorying” you. Apologies if I did, it wasn’t my intention to be confrontational or rude.

    I definitely see where you’re coming from regarding the EU dilemma, and in many ways I don’t envy you Brits having to make that choice in the voting booth. If I’d been a Brit I’m not sure I could have brought myself to hold my nose and vote Remain. On the other hand, you’re probably right that a sober, rational and thorough evaluation of the whole situation would lead to the conclusion that the EU is the lesser evil and Remain the “correct” choice. Pretty depressing that the main argument in favor of Remain (at least among Green/”alternative”/anti-neo-liberal types) tends to boil down to “the UK Conservative Party is even worse”, though.

    That said, I’m still not convinced it’s possible or worthwhile to reform the current EU (along the lines of Varoufakis et al., for instance). I’d much rather see an entirely new, looser and leaner European cooperative association of some sort, but I know that’s about as likely as the inauguration of the Peasants’ Republic of Wessex 🙂

    I’m still glad my own country (Norway) never joined the EU, even though we ended up with “membership light” in the end. For what it’s worth polls have shown staunch opposition to EU membership, on the order of 70%, for almost a decade, even though the actual referendum in 1994 was close to 50-50.

    An aside on rewilding since it came up: that’s been tried here with wolves, and the result has basically been an enormous controversy that’s one of the most charged and emotional topics in politics over here. It’s usually framed as clueless urbanites destroying rural livelihoods and quality of life, with the main point of contention being economic losses from wolf attacks on sheep. Also keep in mind that the officially designated “wolf zone” affects relatively few people since it covers a very sparsely populated part of the country, but it’s still managed to cause a huge fuss in national politics.

    Finally, thank you for your continued hard work and consistently thought-provoking posts. I’m very much looking forward to more details on “convival protectionism” since I’m pretty fed up with the conventional repose that protectionism is always and automatically bad, while acknowledging that there’s potential drawbacks to navigate too.

  14. Time for a brief response to the additional comments.

    Kim – thanks for commenting again, and for your appreciation. No, it wasn’t you I was referring to in my ‘pillorying’ comment – polite disagreement is always welcome! I think that if, like you, I lived in a European country that had never joined the EU, I’d probably also conclude that we were best keeping out of it. However, that’s different from haphazardly deciding to leave it after 40 years of membership. There are numerous dysfunctional aspects of the EU, but I think British problems and global problems run much deeper – the Brexit process strikes me as largely about evading these deeper issues and/or finding scapegoats for them.

    Apologies, by the way, for the delay in approving your comment. I was offline yesterday at the Ecological Land Coop AGM, where I was elected as a director…

    …which sharpens my interest in Community Land Trusts and other such mechanisms for keeping land affordably in agriculture. The ELC model is similar to CLTs. The main problem these models face is that, in a landowner-friendly capitalist society with rural land as a market good, it’s prohibitively expensive to obtain land in the first place in order to ringfence it from development…

    …so the various ideas mentioned from different countries about how to to limit speculative inflation of rural land are interesting. I’m cautious about limiting land purchase to ‘local farmers’ or ‘qualified farmers’ – I appreciate the logic of it, in some circumstances more than others, but I think it raises all sorts of boundary issues. Who gets to define who’s ‘local’, who counts as a ‘farmer’, what counts as ‘qualified’ – and who is excluded in this process? Generally, I think we need to be widening access to land, not narrowing it.

    I agree with Gunnar that putting control of land closer to communities rather than governments or landlords makes sense – though one of the tragedies of modernity is that I think few communities now have enough collective knowledge about farming to make wise decisions. And of course no ‘community’ is ever really unified. Perhaps the first hurdle is to take the heat out of the speculative gains to be made from land, so I agree with Gunnar there – although I’d choose to emphasise the problems herein with a capitalist society rather than a ‘market’ society as such.

    Jody – there’s much I agree with in your comment, including the fact that greed is a human universal which historic societies have usually tried to curb or channel. One of the problems of modernity is that we labour under the troublesome ideology that greed is good via myths like Adam Smith’s invisible hand. However, I don’t myself think it’s useful to attribute our modern problems to ‘greed’ as such. I don’t think people today are any greedier than people in the past, in the individualised moral sense that you invoke. The difference with modernity isn’t fundamentally that it promotes greed but that it fixes values on the amplification of material things. For me, that’s where attempts to transcend our present predicaments are best located, rather than in pleas to be better people and to transcend greed, which as you say is an ancient and universal human problem.

    • Fascinating… and congrats on being elected to the ELC directorship position. Yet more responsibilities beyond Vallis Veg carrot and tomato grubbing (or thought processing). But one supposes the vantage point potential of it will merit the effort.

      Not so much CLT activity in my neck of the woods. Though I imagine we might point to some kindred souls if the American Farmland Trust is held for example, or some other groups that advocate for independent small farm operations.

  15. Chris,
    “I don’t think people today are any greedier than people in the past, in the individualised moral sense that you invoke.”

    I’m not suggesting that the majority of people in the Western culture are any greedier than people in the past. Yes, we consume too much but I don’t see that as greed as much as a failure to recognize the true impact of our consumption. We are comfortable in our lifestyle.
    No, I’m talking about a small group of people in the world who control the majority of the wealth and most of the financial industries. A short summary will perhaps explain what I mean. Over the last several decades the US has witnessed a rapid increase in debt and a shift towards financial control over business, government, and private lives. Financialization refers to the increase in size and importance of a country’s financial sector relative to its overall economy. It occurs as countries shift away from industrial capitalism. The importance of the financial sector in the world increased rapidly with the development of computers and spread of the internet (see “The Rise of the Network Society” by Castells Vol. 1 (2010).
    As the US has moved away from an economy dependent on making things to an economy based on monetizing things people who control the financial sector raked off larger and larger share of our economy. These are the people who I call greedy. I am referring to a small percentage of our population who have concentrated wealth. As wealth concentrates in their hands the trend of income inequality accelerates.

    Here’s a specific example of the trend I’m talking about. I have witnessed specific instances where groups of venture capitalists have purchased a thriving business and run it into the ground because they over-extracted money from the business. A profitable business that supports dozens of families can’t make enough profit for these new owners. The new business managers who skim off ridiculously large salaries and benefits keep raising the companies “profit” requirements, and in order to meet new quotas they reduce employee benefits, reduce personnel, eliminated business investment until the business starts to fail. Then they sell it and use their profits to buy another company. Their motive for purchasing businesses is not to own a profitable enterprise, but to extract a high short-term rate of return as quickly as possible. They don’t care if they harm or even kill the business. This is called “maximizing shareholder value” and unfortunately it is rampant in the US. It’s hard to see this behavior as anything other than greed because it does not benefit anyone other than the venture capitalists. It is hard to claim your benefiting the economy or creating jobs when your actions are actually destroying good businesses!

    So I politely disagree with you in thinking that greed isn’t contributing to our modern problems. But I’m not saying in general that humans in wealthy Western cultures are any more greedy than our predecessors. Greed is a reason for excessive profit seeking. It continues to rear it’s ugly head in human history and it becomes a significant problem when income inequality is at its highest. It is easier to become greedy when resources have become monetized. In some people’s mind rent seeking isn’t about creating productive business or improving land it is simply an opportunity to extract more wealth! Greed feeds on itself and ultimately is a self-destructive behavior.

    • Well yes, I agree that the financialisation of capital has increasingly rewarded short-term greed and promoted people motivated by it to the top, whereas various other societies have put more effort into keeping such people in check. However, I think the kind of practices you describe are part of a systemic logic of economic growth in capitalist societies which permits few other trajectories, so it’s not just a matter of weeding out the greedy ones at the top but of fundamental systemic change. So long as the structural impetus to maximise net present value – pretty much a short-form definition of capitalism – remains, then financialisation and its attendant practices that you describe will persist. If we want to retain productive local enterprises, then we’ll need to protect them from such practices – but that kind of protectionism is hard to square with the structural logic of advanced capitalism.

  16. Chris,
    It may not need to be the only trajectory capitalist economies take. I run a small business in which I make a living without taking excessive profits at the expense of my customers. I also treat my employees the way I would want to be treated. I am a business owner that operates my business. But my husband’s job provides us with access to health insurance, which would be cost prohibitive for me through my business. In the US the lack of socialized health care, the exorbitantly cost prohibitive medical costs we face, the “profit seeking” behavior of insurance and medical companies are making it impossible for people to start small businesses including farming. If the US could get socialized healthcare and eliminate health insurance companies we could demand better healthcare services as well.
    I agree with you that the cost of farmland is prohibitive and I would look for ways for people that own farmland to partner with young farmers wanting to get into farming but don’t have the experience or capital. Perhaps your work as Director of the Ecological Land Cooperative will yield promising results in this direction. I know of several couples in my community that own 50 to 100 acres and would love to partner with a few young farmers!

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