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.

John,

1. It’s not my case. It’s Kevin’s case. He gives the argument for it in his book and a series of articles which I’m certainly not prepared to reproduce in full here in the comments thread. My point so far has simply been that specific criticisms Will has offered as a reply to the case are in fact crude misrepresentations of the case he’s allegedly replying to.

My own view is that Kevin probably overreaches on the extent to which centrifugal effects on agriculture will result specifically in sustenance kitchen-gardening. But I’m not prepared to wave that off as “bullshit” in the absence of a reply to the evidence he gives, and I’m not about to try and make the case that he overreaches based on the (clearly false) claim that he just denies the existence of benefits from specialization or economies of scale.

1. That said, it’s also simply not true that centralized growing of fruits and vegetables “aren’t subsidized” in the U.S. They receive far less in the way of direct federal subsidies (in the form of domestic price supports and export subsidies), compared to (say) cereal grains, soybeans, sugar, etc. But many vegetables (e.g. potatoes, onions) are bought up heavily through government purchase and donation programs (school lunch program, military procurement, etc.), many are included in government agricultural export financing and promotion programs (e.g. the Market Access Program), the market is just as heavily regulated as the cereal markets in favor of large incumbents by means of USDA and state and local regulations, they are covered by federal crop insurance bail-outs, and — this happens to be awfully important in the agricultural markets near where I live — benefit very heavily (especially with crops like melons, which are now mostly grown in the Southwestern desert) from government irrigation subsidies and engineering projects.

Moreover, Kevin’s point is not simply concerned with the effects of direct government subsidy to producers. It’s part of a larger case which significantly has to do with (among other things) the suppression of potential competitors and substitute goods, either by government-enforced cartelization, direct legal suppression of the product, by direct legal suppression of necessary inputs, or by the ripple-effects of economic distortions that make the inputs artificially expensive compared to how they’d be in a free market, or that make the inputs for centralized business models artificially cheap.

Is all of that enough to demonstrate that there’d probably be a large scale shift towards home food production in a free society? I dunno. In any case, we’re still talking about a really heterogeneous set of products (the economics of tomato growing are quite different from those of cantaloupe farms, and both are awfully different from banana plantations), and all this is no doubt beyond the scope of this comment thread. But it’s certainly a reason for believing that the market we have to look at now is pretty damn skewed, and so that pointing to revealed preferences under those market conditions is not a very reliable guide to what would be economically efficient in a genuinely free market, which was my point in mentioning all this stuff in the first place.