I'm sure no one will deny that my university was a liberal place. Washington University in St. Louis, a.k.a. WashU. We held the 2000 presidential debate when I was a sophomore and I attended it. The College Dems had a goal of getting Gore/Loserman signs up in 80% of dorm windows for the debate. It wasn't such a stretch - keep in mind that our Students for Life group had only 9 members (so I heard... I didn't know anyone in that club. I don't think anyone did).
When the war started, someone spray-painted all over the library "Bombing for peace is like fucking for virginity." Better yet, my Chinese civ prof taught Chinese history by comparing just about everything in every dynasty to how much Bush sucks. And religious right? What religious right? The campus priest, minister, and rabbi participated in a WashU TV show called "Missionary Positions" in which they got together once a week to talk about sex on air.
I didn't realize it at the time, but one place in my university wasn't liberal. The econ department.
This diary is fundamentally about WHY supporting family farms is economically sound and how some Democrats - and some bloggers - are totally missing the boat on how to fix the system... bear with me, we've gotta talk econ before we get to food
Before I jump into what I want to say - let's take a second and talk about YearlyKos and the Farm Bill and why this topic is relevant to food.
First of all - what did my econ teacher lie about? Free trade. Free trade was our savior, according to my prof. Now when I hear a candidate praise free trade, that's as good as hearing them say "Please don't vote for me."
Why's this relevant to food? It's impossible to talk about food in the U.S. without talking about food all over the world. For one thing, other countries accuse us of subsidizing our commodities so that our farmers can scrape by while the price remains below the cost of production, thus putting foreign farmers who can't compete out of business.
Aside from that, everyone in the world has to eat and food's a large part of the global economy. When you start talking about things like trade agreements, you're inherently talking about food as a part of that.
OK, but what's that have to do with the farm bill? You might have read a recommended diary by Farm Bill Girl earlier this week (one guess what the diary was about) where she explains why she doesn't feel that the Kind/Blumenauer "Farm 21" approach is the way to go to reform our food system. In her words:
The question is, do we want to preserve what's left of our sustainable family farms and Rural America, or do we want factory farms and cheap imports from China and Mexico to be the future of our food system?
I think most Kossacks want the former, not the latter. The question is what is the best solution, and how do we deal with such a huge and sprawling subject as the Farm Bill, which is really your food bill.
More on that later.
Last, what about YearlyKos? The Food Panel is a go! (I'll have a diary with more about it in the next week or so) Perhaps that isn't news to you because I've said a few things about it throughout the year but I tried to avoid saying much since I wasn't planning it and I didn't want to accidentally blurt out information that the planners didn't want to make public yet.
Well, YearlyKos is Aug 2-5, and the 2007 Farm Bill has to be passed by September 30. I'm starting to slowly get my head around the whole thing (with MUCH thanks to Natasha, Farm Bill Girl, and others) and hopefully we can all help each other get up to speed in the next few weeks.
If we can manage that, we'll be able to use our time together in Chicago well and make sure our Dems don't do something boneheaded (which it sounds like they might well do) before the Farm Bill goes through and we're stuck with it for another five years.
OK, back to the topic at hand...
The Development of an Informed Critical Thinker
Just to give you an idea of my point of view about free trade back in college... well, I bought everything I was told.
China was joining the WTO and that was big news in Chinese class. I remember reading newspaper articles in Chinese and having to learn how to write "World Trade Organization" in characters. So what's the big deal about that? China's taking it's place on the world stage. After the rotten time it had economically in most of the 20th century, wasn't that great news? No one ever said otherwise.
Over in the B-school, I had to take 2 econ classes. First, microeconomics, which has very little relevance here. Second, Global Economics. Now, college is supposed to teach you to think critically, but my best skill was thinking critically about how I could get A's in my classes by doing the least amount of work. Add to that the fact that I thought buying books was a rip off and avoided it to the extent possible.
I'm pretty sure I attended Global Econ. Usually. I know I didn't buy the book. After a guy on my floor flunked the first test, he dropped the class and loaned me the book for the semester. I didn't open it until the week before the final. I got a good grade because my classmates got all the answers even more wrong than I did and the grading was curved. Yep, that's some critical thinking for you. Phi Beta Kappa, baby!
I remember that much of the class was devoted to teaching us about the IMF and the WorldBank as well as various acronyms like FTAA and GATT and NAFTA (CAFTA wasn't around yet). And I remember writing down and memorizing a long list of Why Free Trade is Good and How To Debunk Myths That Say It's Bad. I might as well have been watching Fox News and repeating talking points fed to me by Hannity. I mean, how would I have any idea that my professor was teaching me pure crap?
For me, the real critical thinking started AFTER college. Towards the end of school, I discovered Michael Moore. I randomly picked up his book Stupid White Men, which looked good because I was mad at George Bush and the war and I didn't watch the news because I figured the media was probably lying anyway.
I became a permanent fixture in the bookstore, reading one liberal book after another for free while sitting in a chair in the back. These books gave me the first hint that maybe my econ teacher was lying to me. It reminded me of a Nader rally I went to the day of the presidential debate. People there were expressing political views I'd never heard before, and some of them were pretty shocking to me.
At that time, I wasn't sure yet that the econ stuff I learned was actually wrong. Maybe all of these people at the Nader rally, etc, just hadn't taken economics and hadn't memorized the same list of reasons Why Free Trade is Good like I had.
Why this is relevant: If this is how the next generation is being taught, can you even wonder why so many people just accept free trade without questioning it?
The Economics Theory They Teach in School
I'll just take a moment to go through some of the stuff that they teach you in school. First up, comparative advantage.
Let's say that America can make a widget for $5 and China can make one for $1. Well, wouldn't it be better for everyone to buy all of their widgets from China? America's widget-makers are inefficient and they would do best to find a different career.
However, what if America can make a gadget for $2 and China can't make them for less than $6. Now we've got something here... America can make 100% of the gadgets and China can make 100% of the widgets and then they can trade. Everyone saves money!
Enter the tariff... America wants to protect its widget makers. Sure, they are inefficient, but they've got a strong lobby in Washington and they are calling for a tariff. So now a $4 tariff gets slapped on every Chinese widget coming into our country. Suddenly, the prices are equal. A $5 American widget or a Chinese one for $1+$4. Now we can coddle the inefficient American widget-makers instead of putting them to work in a more useful job (like gadget making).
(Obviously this is hypothetical, because most likely China can make all of the widgets and gadgets for $.01 apiece even if America can't do it for less than $5. American widget and gadget makers better go back to school and get some computer skills.)
Economic theory like this is pretty harsh, kind of like Darwinian natural selection. The invisible hand of capitalism works its magic and all of the world's manufacturing gets transferred to China where labor is dirt cheap while America meanwhile develops a strong service economy, doing every job from cutting hair to practicing law that can't be outsourced overseas because they depend on delivering the service here at home.
Why This Isn't As Cool As It Seems
The #1 priority expressed above is efficiency. How do you achieve efficiency? Well there are a lot of wonderful ways they teach you in business school. Six sigma quality, just-in-time purchasing, efficient supply chain management, etc. And I would agree that a company doing all of these things well deserves to be patronized over one that doesn't.
The problems arise when various governments allow businesses to gain false efficiency. For example:
- The government can loosen OSHA regulation so that corporations are no longer pressured to provide safe and healthy workplaces for their employees.
- The government can loosen environmental regulations, so that the company can pollute the land, air, and water without paying to clean it up.
- The government can look the other way when the company hires undocumented workers and pays them under minimum wage.
- In fact, the government can just keep the minimum wage insanely low in the first place so that companies can pay their workers nothing legally.
- And - one method discussed here at length - the government can subsidize the company.
Can Wal-Mart claim an increase in efficiency when it was achieved by forcing workers to work off the clock for no pay? They shouldn't, but they DO. Can banana companies claim efficiency for heavy pesticide use that increases production, even when they are exposing workers to that pesticides and harming their health? Again, they shouldn't, but they did. Now they are in court over it, hopefully getting in trouble.
Those are problems we can try to enforce in our country, to put all companies on a level playing field. But what about laws and their respective enforcement in other countries? Not much you can do there. So now let's say that China gains its efficiency in widget-making by abusing its workers and trashing its environment. We could make widgets here for equally cheap if we did those things, but we as a nation wouldn't be better off for it, so that's a bad idea.
How do we keep from rewarding China for its practices by allowing their products to flood our market? We can ban the import of Chinese widgets. For example, when I was working in London back in 2002, I learned that the E.U. had banned the import of any Chinese bee products at that time because they had turned up with antibiotics in them.
A second method would be to slap a tariff on Chinese widgets. China can go ahead and trash its environment if that's what it wants, but it won't gain any extra share of the American market for doing so. When the day comes that China cleans up its act, we can remove the tariff.
A Gray Area
I'd like to add here that there are a few ways of adding efficiency into producing food that fall into a gray area. I'm talking about economies of scale.
An economist might support economies of scale by using the following model. Let's say there are two identical farms that each produce corn. In fact, they produce the same amount per acre, exactly. Farm A is 600 acres and Farm B is 300 acres, so Farm A can produce double the corn of Farm B.
Well, both farmers need a few things in order to stay in business. For some things, like seed and fertilizer, Farm A's costs will be double Farm B's (maybe less than double if he or she gets a bulk discount). For other things, like a tractor, they both pay the same price.
Because Farm A can stretch its overhead costs (i.e. paying for a tractor) over twice the corn of Farm B, Farm A can sell corn for cheaper. Our economist might think it's entirely fair if Farmer A puts Farmer B out of business. Is it?
I say that depends. The big farm didn't do anything illegal in this case - but studies performed over the last half a century show that enormous farms aren't the best for communities. (Email me if you want the document I've got that I'm using as a source.)
I'm going to use the words family farm and industrialized farm loosely here... many small "family farms" incorporate as a way to limit their liabilities, and many enormous farms are owned by families. However, I'm referring to the way the farm is run in spirit.
When I say "family farm," I mean one where the same group (often a family) manages the entire operation, works the land, and often owns the land too. They use family values while running their farm, practicing good stewardship for the land and caring for all of the people who live and work there. Typically these farms tend to be small to mid-sized. Beyond that it would be hard to manage them in this fashion.
When I say "industrialized farm," I mean one where there's a corporate structure, with one group managing the operation and another less-well-paid group doing the work. Imagine an enormous farm in California where you've got a bunch of poorly paid immigrants bent over in the hot sun all day picking strawberries for poverty wages. Typically these operations are larger, because they have the infrastructure to manage a large operation and the economies of scale gained from growing larger increase their profits.
According to a majority of studies done on the matter, family farms bring more benefits to their communities than industrialized farms. The root causes here are both income inequality and lower community employment, both common results of industrialized farms, and those bring crime, social conflict, family instability, and other negative social consequences.
So is it a crime to operate an enormous farm, so long as you follow environmental regulation, don't hire undocumented workers, and pay at least minimum wage? No. But that doesn't make it a good thing either. Just because that operation is super-efficient doesn't mean we want to encourage enormous farms like that to pop up all over the place.
Within our country, we can make sure the small and mid-sized farms have access to credit as well as educational materials or other training that can help them start up, provide grants to small and mid-sized farms for conservation efforts, give them access to farmers markets, or allow them to market their goods under the umbrella of a statewide marketing program. The government can also encourage these types of farms by purchasing from them for prisons, schools, etc.
One last important thing the government should do (and doesn't!): get rid of one-sized-fits-all regulations that act as barriers to entering the market for small operations. Here's an example of what I mean:
Most states' dairy codes read like an obsessive compulsive's to-do list: the milking house must have incandescent fixtures of 100 watts or more capacity located near but not directly above any bulk milk tank; it must have employee dressing rooms and a separate, permanently installed hand-washing facility (even if a house with a bathroom is ten steps away) with hot and cold water supplied through a mix valve; all milk must be pasteurized in a separate facility (not a household kitchen) with its own entrance and separate, paved driveway; processing must take place daily; every batch must be tested for hormones (even if it's your cow, and you gave it no hormones) by an approved laboratory. - Animal, Vegetable, Miracle by Barbara Kingsolver
Naturally, these are the actions we must take to fight for a more sustainable food system in our own country - but we can't make the rules in other countries. When we decide that the country that can grow the cheapest food should do so, we pressure our own country's farms to turn into the enormous farms that tend to hurt their communities.
So... What's This Mean?
I'm not proposing an overall solution to foreign trade here, I'm just pointing out why it's downright stupid to accept free trade as gospel. There is NO WAY to write a trade agreement in such a way that you address every single little detail that guarantees your trade agreement actually does promote efficiency and economic prosperity as it is supposed to. Period. Even if you include environmental and labor protections like liberals often claim we should. (There's an old diary by Bonddad calling bullshit on such a claim - I recommend taking a look... especially if you are reading this and you are a member of Congress.)
This is relevant now because, as Farm Bill Girl pointed out, some bloggers are getting hoodwinked into support the Kind/Blumenauer Farm 21 approach that embraces the bullshit of free trade and condemns subsidies as the root of all evils.
As Farm Bill Girl put it, subsidies aren't the problem, they are the symptom. (Reminds me of that When Harry Met Sally... quote:
Jess: Marriages don't break up on account of infidelity. It's just a symptom that something else is wrong.
Harry Burns: Oh really? Well, that "symptom" is fucking my wife.
</tangent>
In other words, removing the subsidies (as Reps. Kind and Blumenauer suggest) does not change the fundamental structure of the system, the fact that all of the false forms of "efficiency" are rewarded, both at home and abroad, and that the kinds of farms that promote the kind of values we believe in AND DO IT EFFICIENTLY are barely able to compete.
I don't want to see any more headlines like this one in The Hill: Kind, Blumenauer hope netroots deliver support for new farm bill.
UPDATE: If you want to see more of what I mean when I refer to Kind and Blumenauer, check out this article. Thanks to Farm Bill Girl for sending me that link!