Comments Elsewhere

Will:

I sense you get pretty frustrated about the fact that you tend not to be persuasive to people with a background in relatively orthodox economics (or mildly heterodox economics).

Maybe. But if you use your sense of sight to read what Kevin wrote, it seems like part of what’s frustrating for him in the current exchange is that his views on benefits of specialization and economies of scale were misrepresented so that the crude cartoon version of his analysis could be waved off as “totally incompetent.” I don’t know about you, but I don’t find that a very auspicious beginning for a conversation.

There are lots of ways to discuss a view that you don’t find persuasive, and lots of people have criticized smaller or larger parts of Kevin’s writing on agriculture and local production. (I have, for one. William Gillis has, from a position arguably to the left of Kevin’s. Etc.) But there’s responsive criticism which attempts to clarify and hone in on the issue, and thee’s non-responsive attacks. What you’re doing in this most recent comment is something like the former. What you led off with is more like the latter.

And so I’m incredibly skeptical of the idea that more than a few people would find it worthwhile to support a restructuring of institutions to shift to a radically different structure of food production.

Well, the suggestion is not necessarily that lots of people would direct their economic activity towards restructuring etc. Some food faddists like that kind of thing, but the main suggestion here is that that would be an unintended consequence of the final prices for the produce of capital-intensive centralized agriculture with long-distance shipping rising relative to the final prices for the produce of more localized, informal, and labor-intensive county-scale, neighborhood-scale, or home-scale alternatives. (Note that you would see this effect even if absolute prices for all kinds of produce were to fall.)

The real price of food is declining. True or false? Real average wages are increasing. True or false? I think the evidence is very, very clear that both are true. And I think this largely explains the dramatic decline in the household production of food. But you apparently don’t. Why not? Would you agree that if the cost of food continues to decline as a percentage of the average wage, then the average-wage worker WILL hit a point where she is better off buying than growing?

1. What’s happening to real wages over time is a lot more complex than that, because, as I’m sure you know, modal workers don’t make mean incomes. When you separate it out by socioeconomic class, you get very different pictures for different kinds of families. Particularly over the last 35 years or so.

2. As specified, you haven’t yet given enough information to determine whether or not a wage-worker will or will not reach an equilibrium point where the trade-off of cash for saved labor is worth making. If tomato prices decline relative to wages for non-food-related wage-labor, then that would tend to favor doing the wage-labor, buying the tomato, and pocketing the difference — if there’s no comparable decline in the marginal time that it takes to grow the tomato yourself. But I don’t think that the antecedent of that conditional has been established.

And if your alleged facts are facts, why are they not exploited to create huge fortunes? If I’m a farmer with x acres, and I would get more output per acre by switching production techniques and substituting labor for capital, why wouldn’t I sell a bunch of my machines, buy a bunch of labor at the average wage or below, and make higher profits?

Well, if we’re just looking at the input side, and not the effects of (say) government action on competition, then Kevin’s alleged fact was that if you hold the acreage fixed, large-scale mechanized agribusiness will produce less total output than soil-intensive horticulture, but it will produce more output per marginal hour of labor expended on the acreage. The question then is whether it’s more profitable for the farmer to economize on the costs of labor or to economize on the costs of land and capital. For people with relatively little access to large, concentrated tranches of land and capital, the trade-off may go one way; for people with better access, perhaps even access that’s facilitated or directly provided by the actions of state or federal government, the trade-off may go the other way.