September 27, 2002

Comments

Matt, it's easy for Nick Denton and others in urban areas to talk about how evil our protectionist measures are. Here in Louisiana, though, rice, sugar and cotton are still large industries. I can walk five minutes from my house into a cottonfield. What is to happen to the people here connected with those industries?

Posted by: Janis Gore at September 27, 2002 10:44 AM

Janis -- The short and brutal answer is that they will have to look for different work. With luck, they will drift toward jobs that better exploit America's natural advantages -- productivity, technology, design, a big-ass 280 million market, etc. Without luck, they'll go an unemployment, and the region will be hammered.

Your line of argument, which I understand completely, was used often in Southern California just after the end of the Cold War, when local military bases were shut down and Defense R&D -- which used to employ at least 200,000 local engineer types, including my father -- was brutally slashed. So what happened? A lot of people lost their jobs in the short-term; many fled to Phoenix & Portland, and the 40-year real estate bubble burst. Cue riots, earthquakes, fires, immigrant-bashing and Mike Davis books.

But the economy quickly diversified (especially into light-manufacturing, if you can believe it), Hollywood continued to boom, biotech boomed and the dot-com thing happened, at least somewhat. It was a jarring process, and it radically changed the face of already-dynamic L.A. seemingly overnight. But in the end, I believe it was a good idea to cut Cold War levels of defense spending locally (money that wasn't exactly doled out according to free-market principles), and exchange that for a far more diversified mix of far more competitive industries.

I am willing for American cotton farmers, coal miners and steelworkers to be thrown out of work, if it means poor countries (especially our pals in places like Central Europe) can become richer, and America can become more competitive. We could spend our tax money in more productive ways, and continue to lead the world in economic dynamism.

But, you know, thank God I don't hold office & all that.

Posted by: Matt Welch at September 27, 2002 12:09 PM

I wouldn't mind you holding office at all. I don't disagree with you. I dread the upheaval. Louisiana is in dire shape as it is. The Baton Rouge Advocate has been running a series called "Leaving Louisiana" this year, describing the drain of educated and talented workers to states with better opoortunities and higher paychecks. Reversing that outflow is an enormous problem.

Posted by: Janis Gore at September 27, 2002 01:57 PM

hey gaylord, didya hear the Angels made the playoffs for the first time in 16 years?

Posted by: Ken Layne at September 27, 2002 02:57 PM

I've been on the deadlines, bro! Then I had to go kiss the pigs! Now I've got to go to the Big A the next three days to watch Pete dance with the Rally Monkey. Will exhale, and tell some funny Angel stories, right soon.

Posted by: Matt Welch at September 27, 2002 03:52 PM

"I am willing for American cotton farmers, coal miners and steelworkers to be thrown out of work, if it means poor countries (especially our pals in places like Central Europe) can become richer, and America can become more competitive."

This statement encapsulates your confusion Matt. By equating coal mining and agriculture as merely economic activities you commit a category error and ignore a massive number of externalities. Farmers produce more than food and fiber, they also provide essential ecosystem services that would otherwise need to be funded from the public purse. They are not directly paid for these services but are indirectly paid through a variety of subsidies and protections.

Ecological ignorance is likely the source of fuzzy thinking about agriculture. The common urban attitude is that land not farmed would revert to a 'wild' pre-columbian state and naturalize. The pre-columbian state was not natural, it was a highly managed hunting park maintained by a population larger than that of Europe. 95% of them died over the next 200 years from disease and the environment degraded in their absence.

Paleo-ecomonic thinking such as you voiced above is being improved by the work of eco-economists that consider the interaction of societies and landscapes. It is now known that neglecting land is both environmentally damaging and hideously expensive when emergency interventions are required (fire, invasive species, disease, flood etc...).

Sound economics makes a distinction between industrial, extractive activities such as coal mining and steel making, and eco-managment activities such as farming. Lumping them together as if they were similar leads to silly policies. Farming is not an industry in the sense of steel making and the industrial attitudes and methods applied to farming over the past few decades have proven to be an ecological, and so ultimately an economic, disaster.

It's not that the use of modern technology is a problem, it is the use of industrial techniques that are frankly no longer even useful in industry. Mass production is giving way to superior techniques owing more to information technology than Ford's assembly line. This is true in agriculture too. Modern technologies rather than heavy metal, steam think technology is more appropriate. We are maturing into bioengineers and coming to understand the sophistication of the pre-columbian bioengineers that died out 2 centuries ago.

When we mature enough to see the whole agricultural system, to stop ignoring the externalities, we will make better economic policies. World trade agricultural issues are vastly more complex than you have presented them. LDCs are being misled by global organizations to think that their path to development is through agriculture. What was useful 500 years ago when explorers risked their lives to transport tiny amounts of valuable spices, and what was useful 200 years ago when slave economies produced once rare foods and fibers such as sugar, cotton and tobacco, is not appropriate for an age of supertankers and container ships. Commodity prices are far too low to be useful for development. Countries that follow that path never develop. This is doubly harmful since the eco-management activites in developed countries are undermined and the economies of less developed countries remain feeble and subject to wild fluctuation.

Agriculture is not the same as steel making.

Posted by: back40 at September 27, 2002 06:40 PM

Agricultural subsidies and tariffs cause crops to be grown in places where it's not efficient. That means that things are grown where it takes more inputs, more energy, more fertilizer, etc. All your incorrect non-economics aside, that means that it's worse for the enivironment.

Farming is an industry, and follows the same laws of economics as anything else. Mass production is not the most viable strategy to the same degree as it is not in other industries-- when consumers become wealthy and technology advances, it becomes cheaper and more efficient to produce a wide array of different products, and people will pay for the distinct products.

The pre-Columbians, as you refer to them, were particularly harsh on the environment. We know that their habits of slash and burn agriculture were quite bad on the environment. They would exhaust the nutrients in an area after a short number of years and have to move on. Not in any way sustainable for a high population. In nearly all locations in North American, the pre-columbian agriculture was worse than that of medieval England, with little to no crop rotation, protection against erosion, or nutrient replacement.

LDCs are best off in producing things in which they have a comparative advantage. Distorting that through tariffs is NEVER good for a country. No professional economist, nor I, can a priori say what is the best thing for a country to produce. But we can say that distorting subsidies and tariffs will not help. They will cause a country to waste its energies on inefficient industries, where it lacks a true competive advantage. Real economists have gotten past the antiquated mercantilism that you apparently believe-- they got past it several centuries ago. Countries need to produce where they have relative advantages; that is the basis for wealth. It is your suggestions, back40, that are most likely to leave a poor country in poverty.

Posted by: John Thacker at September 28, 2002 08:02 AM

Another note on free trade-- Erskine Bowles, the Democratic candidate for the NC Senate seat (running against Libby Dole), is apparently making his campaign an anti-free trade campaign. I was home a week or two ago, and both TV and radio ads I saw for Bowles were anti-free trade. They talked about how free trade was bad for NC's textile and furniture worts-post">Posted by: back40 at September 28, 2002 10:14 AM

I lived in south Louisiana for several years. The main "ecosystem service" provided by the sugar farmers was to cover the region in a pall of smoke every November when they burned their slash.

Posted by: Paul Zrimsek at September 30, 2002 05:51 AM

It can be the service most apparent from a detached perspective and is not always an effective method. Smoke, and the CO2 it contains, can be a problem but the alternative, rot and the methane it produces, can be a problem too. It's complicated.

Posted by: back40 at September 30, 2002 08:34 AM
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ducing things in which they have a comparative advantage.'

No, LDCs are best off producing things that develop their societies in useful ways. Everything from natural resources to cultural preferences must be considered in order to make sound decisions. Consideration of comparative advantage is one aspect of good decision making, a tie breaker to help choose between equally desirable choices rather than a guiding principle.

'Distorting that through tariffs is NEVER good for a country.'

Another shouted dogma.

'But we can say that distorting subsidies and tariffs will not help. They will cause a country to waste its energies on inefficient industries, where it lacks a true competive advantage.'

But they may well help produce a better life for the members of such a society. When you drop the ideological blinders that prevent consideration of whole systems for long time frames it is easier to make sound decisions. Economist have learned this over the last few decades and now do a much better job of quantifying and considering what were once ignored as externalities. It isn't that economic principles were wrong, they just didn't have the ability to measure and value whole system attributes. This is still difficult but only the dimmest of paleo-economists now fail to see the necessity to attempt such quantification.

To equate simple activities like steel making with such a complex activity as agriculture is obvious nonsense even before considering the details. The error is magnified the more one understands those details.

Posted by: back40 at September 28, 2002 10:14 AM

I lived in south Louisiana for several years. The main "ecosystem service" provided by the sugar farmers was to cover the region in a pall of smoke every November when they burned their slash.

Posted by: Paul Zrimsek at September 30, 2002 05:51 AM

It can be the service most apparent from a detached perspective and is not always an effective method. Smoke, and the CO2 it contains, can be a problem but the alternative, rot and the methane it produces, can be a problem too. It's complicated.

Posted by: back40 at September 30, 2002 08:34 AM
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