More Farms, Smaller Farms

Now made with real fruit!I'd like to respond to Josh's last post by modeling what I see as the obverse. Economies of scale in agriculture are desireable when the alternative is crippling poverty. Nevertheless, in developed economies where starvation remains of secondary concern to self-inflicted overeating, more food of less homogeneous nutritional composition and higher quality even at higher costs is sorely necessary for the public welfare. Looming over all of this, the Mathusian insight that gave birth to both modern agriculture and modern economics remains true - the human population will always increase at a greater rate than food production efficiency. (My theory is that the Mathusian condition is an emergent consequence of the tendency for humans to be unrealistically optimistic about the future.) 

For this reason, in developing economies, it remains prudent to hedge against economies of scale in agriculture and some of the evils born of placing ourselves too far from the source of our sustenance via extreme and unnatural occupational specialization. (Indeed, it's possible that all of culture comes from food. And "you are what you eat" is wise on several levels.) The Summer 2011 issue of Lapham's Quarterly does a good job of balancing and weighing all the complex considerations at the intersection of development, agriculture, poverty, and nutrition.

The short version of my counterpoint to Josh is that what we need in America is different than what we need for countries that can't feed themselves. It might even be that there's a natural developmental arch that all civilizations must follow, and the stage that a particular civilization is in determines what course of action that country should take to maximize welfare: first (1) there's a community wrought of nature based on equality and living harmoniously, where everyone is a subsistence farmer or hunter/gatherer and everyone lives and dies at the whims of the seasons; then (2) primitive accumulation goes down and a primitive capitalist society develops - whether this is a result of contact with other capitalist societies or natural forces, it's safe to say this is where Africa is; next (3) capitalism matures until it can mature no more - intra-industry national power emerges concentrated in few hands, and these hands - instead of toiling honestly to coordinate supply and demand for the well-being of all - begin to build walls and moats around their citadels (see regulatory capture, patent over-filing, health insurance tethered to corporate employment, credentialing and licensing, etc.); (4) diminishing returns compel a premium to be placed on solving social problems or coerced egalitarianism - this is the stage where the United States and other mature social democracies find themselves; Marx went on to speculate that societies after this stage advance to (5) perfect, blissful communism as the profit motive is grdually removed from aspects of socety where it is (deemed) detrimental to the general welfare. Many others (generally social democrats) think (4) is as far as we can and should go. I think these intellectual frameworks are dangerously naïve and/or cowardly; we can combine lessons learned from (3) and (4) in a self-similar federalist/libertarian/anarchist structure that allows for unfettered individual expression and positive-sum cooperation while minimizing the effects of individual recklessness and coercive association.

Anyways, the last twenty or thirty years have given us the opportunity to see that food suffers from some of the same problems as health care and many other sectors: we've regulated it so much that we've created a system where having institutional knowledge carries an advantage over having real knowledge (This is the story of modern America if you ask me): economies of scale have progressed beyond the point of diminishing marginal utility to increasingly negative utility in the form of companies spending a plurality of revenue on branding or marketing or building bureaucratic walls around themselves and not devoting efforts towards selling food, but towards selling nutritional components rehashed and assembled from other components bought from the lowest bidder and fortified with just enough sugar and salt to siren consumers into the neutron-star-gravitational-pull of the "bliss point".

It is precisely because of the success of the capitalist structure that food has become what it is today; that we have to apply the special label "organic" to anything not created in a lab instead of vice-versa speaks volumes to just how unnatural our diet - and by extension our sense of what's normal - has become. That the label "organic" has itself become a brand adds new twists and turns to our labyrinth of cynical existence. The otherworldly body shapes that spring up from the ether around us manifest the system's back-end (pun intended).

That all may be rather confusing, so I'll use more basic parlance: economies of scale is the idea that as a particular company gets larger there is less investment in capital equipment and fewer inefficiencies necessary to produce more of a product, hence the product gets cheaper to produce as more is produced. To produce five ears of corn may cost three dollars an ear, but to produce five-hundred ears of corn costs thirty cents an ear. Economies of scale is the basic premise behind Josh's argument, that concentration of means of production results in more-cheaply-produced food, and that this is the key to feeding Africa. This is fine up until food companies come up with ever-more-clever ways to reduce costs. Instead of paying thirty cents an ear to produce "corn", which then can be sold as "corn" and net a revenue of $10,000, companies can pay thirty cents an ear to produce "corn" which is then sold to chemical processing refineries which extract the individual components, remix them, and resell them in profitable ways to generate a revenue of $25,000. Add some shady chemicals pushed through FDA-approval processes to prevent spoilage and net revenue approaches $40,000. The result is that the "iced tea" in my fridge is not composed of ice or tea at all, but it is composed of water, high-fructose corn syrup, citric acid, lemon juice concentrate, sodium hexametaphosphate, natural tea flavor, phosphoric acid, potassium sorbate, acesulfame potassium, gum arabic, glycerol ester of rosin, calcium disodium ethylenediaminetetraacetic acid, marketing, graphic design, a well-paid team of competent lawyers and brilliant scientists, and an amoral c-suite and board of trustees.

This is our civilization. It is precisely because we are so successful at food production that our children, who cannot make up their own minds about what is fit to put in their own bodies, are being diagnosed at an alarming rate with metabolic diseases normal for individuals age fifty or sixty. In the succinct words of David Quammen (admittedly writing about something else entirely): "ecological disturbance causes diseases to emerge."