First application of the peasant economics research

In Survival Podcast Episode-802- Permaculture Misconception vs. Reality (@29m45), Jack Spirko talks about reducing the size of the average farm so the average farmer can make a living on 40-80 acres like they used to. Currently, farmers with a thousand acres might earn $25,000 including subsidies. Permaculture would mean growing 4 acres of premium corn and lots of other things, as well, and earning a decent living doing it. Jack states that the farmer would have to hire people to pick instead of using machinery, which would cost more but be good for the economy and make a more sustainable local economy.

Theory from the research on the economics of peasant farms:

• This will drive food prices up
• which will decrease the purchasing power of wages in other sectors
• but will probably drive wages up in those other sectors due to less competition for jobs
• which may decrease activity in those other sectors
• but either way it will provide more employment on the land
• which will encourage migration out of other sectors and back to agriculture and into the countryside (this would be true in the U.S., now, since rural areas are now so sparsely populated, whereas in the Old World the same dynamic would have checked the initial migration into industrial employment and encouraged people to stay on the land)
• BUT, it's possible we've reached a tipping point where we can no longer depend on ongoing industrial growth and need to move people back into the country to take up the surplus labor from the city
• ALSO, the farmer may not have to hire a bunch of laborers for harvest, because he will have the labor necessary on site to handle the harvest, as 4 acres of corn is not an overwhelming amount and sufficient labor can be kept employed the rest of the year at other tasks due to the diversity of on-farm operations; e.g. livestock, forestry, fiber, homestead activities (fixing the roof), etc.

Jack also suggests people start producing 10-25% of their own food locally, so farmers don't have to make as much for us.

So what would it mean to move people back into agriculture?

It might look like this:

Agriculture would need to become more labor intensive if more people were to be employed farming. To have stable employment on the land, you would need a diversified family farm-type model, otherwise you will need large labor inputs at particular times which means a large demand for migratory labor, which is problematic. A diversified family farm would likely result in better soil fertility and higher yields - along with more work but the work would be spread more evenly throughout the year. More farm income would be re-invested back into individual farms, which traditionally prevented capital accumulation, but chances are good that industry is well-enough developed at this point that capital would still exist for useful large-scale infrastructure projects, though on credit. Cooperatives could play a strong role in this if we'd rather keep creditors, the state, and large-scale capitalist agribusiness out.

The price of food would go up but wages in all other sectors would also go up due to less labor competition in other sectors. This would be the inverse of the scenario Doreen Warriner demonstrates in her book. Probably the price of food would rise more than wages, so the proportion of income a family spent on food would increase. The consumer would be paying for farm biodiversity and soil conservation. Some of the additional costs of labor-intensive agriculture, however, would be defrayed by the fact that the farmer would also be providing for more of their own needs, due to the availability of their own labor during the down periods of the farm cycle. In other words, they would need less disposable income because they could be growing and making more of their own stuff, or via a cooperative enterprise (e.g., a community-owned biogas plant for transforming farm waste). A diversity of on-farm enterprises would also create economic resilience for individual farms.

Support for this theory from Warriner: In the scenario (c. 1939) where Western European tariffs were removed, Eastern European wheat would come in at half the cost (I assume the equilibrium would be reached for both at around 75% the pre-tariff cost)...

In Western Europe the industrial population would gain through cheaper food, but would find the adjustment in the labour market through the influx of labor from the land a very serious one...Free trade inside Europe would inevitably mean a big displacement of labour in the West. (p197)

We can assume that the original decrease of food costs as a result of large-scale mechanization had a comparable impact on the population of the U.S., sending many farmers into the industrial labor pool. We need only reverse this pattern to see that sending people back out of the industrial labor pool and onto farms would have the opposite effect of increasing food costs and decreasing labor competition. Food prices go up, wages go up. In fact, in the foreward, she notes the reversal that came as a result of Eastern Europe becoming a net importer of grain in the years between 1939-1964:

So the priorities of 1939 are now reversed. Then industrial development was the first; now it is increased food production. The movement of population into industry creates a demand for food which agriculture cannot supply, partly for lack of capital, and partly for lack of incentive.

A big potential issue affecting the livelihoods of the new small farmers, however, would be land ownership. If the massive tracts of land currently owned by agribusiness were rented out, or if farmers were hired on as independent contractors working a chunk of land in a way that's dictated by the landowners, you would have virtual serfdom. The landowners could charge enough to make farming anything but lucrative. Farmers would need to own their land for this to work well. It's the difference between the Bulgarian peasants (land-owning, organized) and the Hungarian peasants (landless, disorganized) in the 1930s. It's hard to imagine this working in the U.S. without some sort of land reform, which is tough to imagine at all. Even in an era of smaller-scale farming (due to peak oil or what-have-you), the large land-owning agribusiness giants could easily turn into something like feudal lords.

Terry Jones' Medieval Lives: The Peasant

Terry Jones talks about the value of the political education that comes from organizing locally to deal with localized issues (~8m).

Conditions under which peasants can attain a good standard of living (c. 1930s, E. Europe)

The best peasant villages in Transdanubian Hungary are those of the German settlers. In the Bakony hills, in counties Tolna and Baranya, these have achieved a good standard, dependent, as in the Banat, on large farm units and family limitation for some generations back. They carry more live stock to the hectare than the big farms, but cultivate land equally well. They are well organized in milk co-operatives... Farms in these villages average 15 hectares in size, the original unit of settlement in the eighteenth century. Such farms keep 2 horses, 2-3 cows, 2-3 young cattle to feed to a weight of 500 kgs, 6-7 pigs for fattening to a weight of 100-150 kgs, selling 3 or 4 and eating the rest. In addition, they sell milk and eggs. Little corn is sold, usually only a few quintals of wheat. Some of the larger peasants, with farms of 25 hectares, specialize in lucerne production for seed and in horse and cattle breeding. Lucerne is the basis of their field system, taking one-third of the area, and has increased in recent years.

The good standard of living in both these regions, it is apparent, depends on live-stock farming; on the maintenance of fairly large peasant famrs, i.e. of at least 15 acres in size; and on a low population density due to rapid industrialization.

Thus the conditions under which peasants can attain a good standard of living are as follows:

1. Corn yields of 15-20 quintals per hectare.
2. A cattle density of 30 to 60 per 100 hectares.
3. A farm population density of 50-55 to the 100 hectares

This combination of factors of production gives a corn output of 20-30 quintals per head and a meat output of 5-9 quintals per head; the total output of corn, meat, and milk per head amounts to 25 quintals in Hungary, 50 in Bohemia.

~p109, The Economics of Peasant Farming, Doreen Warriner, 1939

Marie Mies on capital accumulation and unpaid subsistence labor

The issue was: what does housework mean in capitalism? Why isn't this work seen as work? Why isn't it paid? Why is it non-paid labor? We recognized that in capitalism this work can't be paid, because if it were, the accumulation model would collapse...

And then we discovered...that the small farmers' work also has something to do with housework and both have something to do with the work in the colonies. Then this concept emerged, as all three of us were in the Third World for extended periods. I was in India for many years, my two friends were in Latin America, and so we realized: if entire countries hadn't been exploited as colonies for long periods of time, then there wouldn't be any capitalism. And if they were treated equally today, all of the work in the "colonies" - I still call them "colonies" - well, then there wouldn't be much to accumulate. And that's why we call all of these relations colonial relations. The man-woman relationship is colonial, the relationship between the small farmer and industry is also colonial, and naturally, the colonial relationships between metropolises and colonies are definitely colonial.

...with these activities - even if they take place at a very low level - people rediscover their sovereignty, their own authority to produce their lives, as we call it. That is no shortcoming, it is something very positive to discover, that we are entirely capable of collectively producing and organizing our lives together, with others. Naturally, you also need money. I don't want to deny that at all, but exclusively working for money is not the best thing - that is only one side of it. The other is that subsistence production, or subsistence orientation, satisfies needs in a much more comprehensive way than purchased products ever could.

- from P2P

The economics of neosubsistence vs. traditional subsistence

Traditional subsistence farming communities that are not connected to an industrial economy nearly always become poor and destitute, as a result of pressure on the land from a growing population. At its worst, this leads to starvation when once-adequate household farms are subdivided over and over again for generations of heirs until the acreage of individual farms becomes insufficient for subsistence. Long before the worst, the diminished farms fail to provide a significant disposable income, and people, though well-fed, are poor for lack of manufactured goods. Where there is an industrial town or city nearby, the excess population can migrate as industrial labor.

I tend to think that agricultural development policies often function to force people off land into towns as cheap labor for industry. On reflection, it is possible that in the absence of an industrial economy, rural standards of living would decrease indefinitely toward a state of degradation. If population remained static, this would not need to be the case, and before high mortality rates were arrested by modern medicine and sanitation, perhaps there was more stability in peasant farming communities, though De____'s accounts of starving masses of peasants in old Europe suggests otherwise.

The problem with industrializing an economy as a solution, of course, is that most industrial activity currently practiced is unsustainable, predicated on endless growth, and so if growth stalls, or turns negative, the urban population faces unemployment or depressed wages. As we are likely reaching unsurmountable supply constraints to industrialization (exhausted oil supplies, etc.), I believe there is a real risk of indefinitely-stalled growth. Where does the excess population go when the cities fail to absorb them? Even if population levels stabilize, exhausted supplies (and political instability) may make our current model of industrialization--specialized mass production coupled with lengthy supply lines--untenable.

In economic terms, industrialization creates externalities in the form of pollution and depleted common-pool resources (natural capital).

How does neosubsistence differ?

Marcin defines neosubsistence as such:

"Neosubsistence: The combination of advanced material and information technologies introduces a new economic option that we call neosubsistence. This is modern day means to livelihood where wise use of advanced technology and ready access to information allows one to spend a small amount of time in self-sufficiency production. This leads to a high quality of life where higher skill provides more resources in-house, reduces the need to 'work to make a living,' and opens up time for other pursuits. It is a route to promoting a bioregional economy, which relies more on its own resources rather than uncontrollable global market forces. This promotes accountability and reduces the necessity of war."

Thoughts:

Suburbia was perhaps the first attempt at neosubsistence. I have old pamphlets from the thirties and forties describing food production on quarter and half acre lots, directed toward the early car-owning ex-urbanite. But suburbia not only chose lawns over chickens and orchards, but turned out to have serious externalities: rapid exhaustion of oil supplies, congestion, community fragmentation, pollution. The infrastructure required to sustain the suburban project is a grossly inefficient use of capital which requires a constant inflow of new capital to operate.

In effect, the updated rendering of neosubsistence as offered by Marcin and currently bandied about the DIY community appears in the context of (a) the information age, and (b) the promise of flexible manufacturing at the household or village level. Is it possible that these innovations could re-empower independent, subsistence lifestyles? Birth a new movement of superempowered peasants? If industry can occur at a smaller, more local scale, minus the oil use, the congestion, the pollution, and with a renewed emphasis on community cohesion--could we have our proverbial cake and eat it, too? Can we accumulate the necessary capital to empower farming households, and could we absorb the excess labor on site as it's liberated by the increased productivity of agriculture brought by capitalizion? And, of course, can trade and cooperation be adequately facilitated over distance by the internet?

Some key terms here:

Flexible fabrication
Community capital
Networked communities

"the liquidation of the peasantry"

Doreen Warriner uses this phrase to describe the effects of inclosure on the English peasants, which was to force them out of a subsistence lifestyle and into the industrial workforce. Resources (people) that were tough to move around were rendered flexible by political force. Flexible labor inputs were freed up to accompany the increase in capital to bring an increase in production.

Capital accumulation - a thought experiment 3

Part 1
Part 2

So how does labor result in capital accumulation?

You are a hunter-gatherer living in the forest 10,000 years ago. When you wake up in the morning, you have approximately 16 hours before you go to sleep again, which is your available time per day to do things, to labor. The amount of work you put into anything can be thought of as a product of the amount of time you spend on it and the amount of effort you put into it. LABOR = TIME * EFFORT. For simplicity, let's say that effort is simply the energy, in calories, that you expend doing the work.

(Preview of coming attractions: PRODUCTIVITY = LABOR * CAPITAL... a product of how hard you work and your training, available tools, etc.)

Only once you have done everything you need to do to ensure your survival until the next day can you move on to other things. Your labor is first and foremost dedicated to your immediate survival, after which you move on to ensuring your ongoing survival to the best of your ability. Immediate needs include not starving, not freezing, not being eaten by a tiger, and so on. These tend to be reactive. Ensuring your ongoing survival means expending additional effort to proactively plan for ensuring these needs are met in the future. This might mean laying (or making) a trap line, gathering storable tubers, building a hut, or tanning a hide.

Let's consider this in terms of stocks and flows. Your basic needs are a stock that needs to be kept at a certain level to ensure your immediate survival, and your labor is the inflow which maintains this basic level of stock. Labor is also an outflow, in that work takes energy--you get energy from the food you work to procure, and spend some of that energy procuring food. Generally it more than pays for itself, which results in surplus. The difference between how much energy it takes you to procure food and how much energy the food gives you is the first labor surplus, a surplus of energy.

CALORIES GAINED FROM PREY - CALORIES EXPENDED DURING HUNT = ENERGY SURPLUS

If you're below the line here, you're in trouble, and aren't going to live for very long. If you're above the line, however, you have your first bit of extra energy which can be used for another activity. What are you going to do with it?

Option A: Build a better spear
Option B: Build a hut
Option C: Learn a cool dance move to impress a potential mate

Which you decide to do depends on which option you think is most useful and how secure you feel in your current predicament. If you're just barely coming out ahead, and your main problem is that you're sleeping outside and burning a lot of calories trying to stay warm, you might want to build a hut. If your main problem is that it took you ten throws before your spear pierced a deer, you might want to build a better spear. Either way, unless you're feeling pretty secure in your ability to consistently procure more calories than you expend procuring them, you're not likely to be focusing on cool dance moves.

Now, consider the scenario in which you decide to build a better spear. You now have two spears. If you don't want to be carrying both of them, you might decide to give the old one to your hunting buddy, who broke his last week. Two things just happened here:

1. your surplus of energy resulted in net capital accumulation for your little hunting society, which benefits both of you by (a) getting your buddy back in the game quicker, (b) getting your buddy back in the game quicker...the first for his sake and the second for yours

2. your buddy now owes you one. He may use some of his surplus energy sometime down the line to teach you a cool dance move.

This is net social capital accumulation. It occurs when your society captures the surplus value from work. The spear is the product of the energy of your labor and the materials used in its construction. Your surplus energy resulted in an extra tool. How valuable it is depends on not just on the time you spent making it but on how well it's made (skill, or human capital). Once brought into existence by your flow of labor, this tool increases your stock slightly above the level needed for bare survival, and frees up a bit of time for something other than spearmaking to occur. It also provides a buffer against disaster, in that if your new spear breaks, your buddy still has one (or if you kept it, you have an extra), and this can be all the difference in tiding you over till you get a new one.

To be continued...

Farm productivity (point of clarity)

Sustainable farming has the capacity to be more productive per acre, but will generally be less productive per farmer. Resource (land) productivity goes up while labor productivity goes down.

What's the sense in pursuing any other way of farming when we have so many unemployed? (Duh, increased labor competition = decreased labor wages.) It's asinine. And does sustainable, labor-intensive farming need to be miserable? That's the argument. I would guess no. I'll be developing this more in my series on capital accumulation.

Capital accumulation - a thought experiment 2

Part 1
Part 3

The traditional categories of economic inputs are labor and capital. To understand how capital accumulates we need to look at labor. Both begin with energy. Energy on earth comes from the sun, in the form of heat and light. Heat and light make plants grow, which feed animals, all of which feed and clothe humans.

Labor is our conversion of the sun's energy into work--e.g., we consume calories which plants and animals have made using sunlight, and then we use those calories as fuel to move about and do things. I prefer to think of capital as the accumulated mass of stuff that is the result of work. How this stuff is owned and distributed is one thing, but at its most basic level, capital is stored energy. Thus, we might think of labor as flow, and capital as stock. About stocks and flows, wiki says:

A stock in this broader sense is some entity that is accumulated over time by inflows and/or depleted by outflows. Stocks can only be changed via flows. Mathematically a stock can be seen as an accumulation or integration of flows over time - with outflows subtracting from the stock. Stocks typically have a certain value at each moment of time - e.g. the number of population at a certain moment.

A flow (or "rate") changes a stock over time. Usually we can clearly distinguish inflows (adding to the stock) and outflows (subtracting from the stock). Flows typically are measured over a certain interval of time - e.g., the number of births over a day or month.

In fact, to return to and amend the first paragraph, labor and capital not only both begin with the energy of the sun (flow), they also begin with the materials of the earth (stock). Plants use the energy of the sun to do work to transform the gases and minerals--the earth's raw materials--into stems, leaves, flowers, and seeds, and so on. The sun's energy is actually a stock in that there is a finite amount of gas, and as it burns, outflows from the sun become inflows to earth. This transferrence of energy gives plants the ability to do work, and their work gradually increases the natural capital of the ecosystems of the earth, which is the combination of earth's stock and the inflows of energy from the sun.

Natural capital is the earth's accumulated capital of stored energy, our inheritance. This includes all the wealth of diverse ecosystems, the water catchment of forests, and so on, as well as fossil fuels which are forests long gone. It's worth noting that fossil fuels have taken billions of years to accumulate (slow inflow) and are being depleted at a remarkably rapid rate (fast outflow). There are, in fact, only inflows and outflows in a given system at a given scale - the wider you look, the more this looks like circulation within stock. So, an outflow here is an inflow there. We all know what happens with the food we eat, and the rest comes out as heat energy.

Of course, there is a difference between individual capital accumulation and collective capital accumulation. Lifeforms do work, they create surplus, that surplus may increase their odds of survival either directly or indirectly, it may encourage other lifeforms to flourish that relate either as symbiotes or parasites. It likely creates more niches, which invites greater diversity and complexity, all of which allows for more and more life in an ecosystem. If life is wealth, this is how it's built.

his is all to demonstrate (1) that capital accumulation has a counterpart in nature, and (2) what it looks like and how it works in nature.

And remember, the role of labor in accumulating is that labor brings inflows. It is not the only inflow, and whether or not it results in accumulated capital for an individual or household depends on a number of things in addition to labor, but a consideration of the notion of accumulated capital in its broadest sense is a good place to start. Next let's look at labor.

Capital accumulation - a thought experiment 1

Part 2
Part 3

According to Doreen Warriner, a primary problem with subsistence farming economies is inadequate capital accumulation. Capital accumulation "refers to the gathering or amassing of objects of value; the increase in wealth through concentration; or the creation of wealth."

I can only understand her assertion to mean that the surplus of labor in subsistence farming households or communities doesn't amount to enough to form a viable buffer against disaster.

How much capital do you need?

Whether or not a buffer is adequate depends entirely on the context. In a non-competitive primitive society, having one full grain silo mortared into a canyon wall might be enough to get through a bad year. Where there is an ongoing risk of raids by a competing society, an adequate buffer might include a class of warriors supported largely by the women's agricultural efforts.

In contemporary society, it's hard to know what's necessary, and competitors tend to keep pace with each other just to feel secure. During the cold war, two competitive societies poured tremendous amounts of surplus capital into developing expensive nuclear arsenals and accumulating arms just in case. In the Soviet Union, they managed to extract this surplus of labor from a relatively impoverished society. In a hypothetical permanent colony on Mars, basic subsistence would involve a lot more than just growing food and making clothes, so there would presumably need to be very efficient mechanisms in place for taking care of these things so ample additional time could be freed up for troubleshooting life support systems. For the colonists, your surplus doesn't even begin until a lot more in the way of basic needs have been met--your subsistence is dependent on a lot more accumulated capital than a hunter-gatherer, and your surplus labor goes towards ensuring the continuity of this essential capital before you can begin to accumulate a buffer. (Note: this is just an exaggerated version of the difference between hunter-gatherer and agricultural societies--which I delve into more in part 3--in that farmers need more capital than h-gs because the surrounding environment cannot provide for their needs by itself...in other words, they can rely less on ecosystem services.)

A lot of our notions around self-sufficiency and idyllic, rural hamlet economies in the developed world arise in the context of massive capital accumulation occurring all around us. There is no village or inner city in the U.S. that is not impacted by the vast amount of capital accumulation in our society as a whole. For example, a family homesteading in rural Eastern Washington has a truck, a grain mill, a wood stove, etc. Where do these objects come from? They probably didn't make them. Even if they found the grain mill second-hand and fixed it up, it's existence in the pawn shop is still a result of massive capital accumulation in the surrounding economy. It is a relic of that economy and it's value (in this case: cheap) arises in that context--there are enough floating around out there (high supply), and not that many people want them right now (low demand).

As one example of differences in value relative to collective capital accumulation, my neighbor consistently puts old wood out on the curb with a FREE sign on it. Sometimes it sits there for days. I can promise you that wood would be gone in an instant in the highlands of Vietnam, or anyplace in the world where people routinely walk several miles to gather firewood, which are the same places that are poor, and without mass amounts of capital accumulation leaching out of the cities into the countryside. So, in America and all the developed world we are awash in material goods, which makes it easy to take for granted the value of capital accumulation...which we harvest, in the homesteading community, more or less as scavengers. (Quick note: there is nothing wrong with this; it is a very reasonable and ethical choice to make, but it is not a viable model for a sustainable economic structure, and ultimately that's what I'll be exploring here.)

That said, it is also abundantly clear that the distribution patterns of capital accumulation in our society have resulted in gross inequalities that are not the product of differences in how hard people work. Moreover, this has almost always been the case when agriculture yields a surplus. It's never been the productive farmers that call the shots, but those that live off the surplus of their productivity, e.g. the aristocrats taxing heavily for "protection" services. Jeff Vail's Rhizome Theory demonstrates how dependency which begins with the desire to pool risk by coordinating capital accumulation results in (a) heirarchy, which (b) drives unsustainable competition between social actors that (c) results in resource destruction and oppression.

But of course capital accumulation is necessary for a secure society and decent standard of living! So the big question is: how do we accumulate capital without the associated inequalities and deprivations? Here begins the thought experiment.