Economics Volume II: Modern Economic Problems

by Frank A. Fetter

§ 8. #Prospect of more intensive cultivation of land in America#. As the aggregate need for food increases in America there must come a steady pressure upon our stock of land uses, resulting in decreasing returns to labor in agriculture, unless this movement can be counteracted by the spread of better methods in agriculture—not European peasant methods, but new American methods consistent with high labor-incomes. A good deal of our farm land is undoubtedly too intensively used now in view of present and prospective commodity prices and wages. Maladjustment of land uses has resulted from mistaken judgment, from changing conditions as to prices, transportation, and markets, and from loss of soil fertility. There are thus, on nearly every old farm, some fields that would better be in pasture and much hillside pasture that would better be woodland. It is often declared extravagantly that our country could support easily the total population of China, or as great a population per square mile as that of Italy. If it did so it would be only on the penalty of lowering wages toward, if not quite to, the level of the Chinese coolie or of the Italian peasant. Great metropolitan dailies gravely present as an argument in favor of unrestricted immigration, the proposition that "if" the cheaper immigrants would but go upon our "waste" land (which they refuse to do), and raise food by European methods the problem of the rising cost of food in the cities would be solved. This urban ideal of a frugal, low-paid agricultural peasantry can hardly be adopted in America as the national ideal. Rather, it would seem, any movement toward more intensive agriculture that necessitates a lowering of the standard of living of the masses of the American people will, when it is recognized, be condemned and opposed.

§ 9. #The new agriculture#. Agricultural method, the technic of farming, has been constantly progressing for two hundred years in Europe and in America, Were it not for this, the great growth of population on this combined area would have been quite impossible. But the betterments since about 1890 in America have been especially great. They are mostly the first large fruits of the scientific study made possible by the land-grant colleges and agricultural experiment stations fostered by state and national, legislation. These many diverse improvements are grouped under the general title of "the new agriculture." Its chief features are: new machinery and other labor-saving methods; better methods of cultivation of the soil; better selection of seed; introduction of new plants and trees from abroad to utilize low-grade lands; plant-breeding to develop new varieties of better quality, heavier bearing, or immune to disease; more efficient and economical ways of maintaining soil fertility; better methods of marketing; and better technical education of the individual farmer. Each of these topics, and a number of other minor ones, would require a chapter in a complete treatise on agricultural economics. Here this mere enumeration must be allowed to convey its own suggestion of far-reaching results for the whole political economy of the nation and of the world.

Indeed, so much has been written in a Barnumesque way of the wonders of the new agriculture, that its actual results and further possibilities are in many minds absurdly exaggerated. It has not as yet been potent enough to prevent diminishing returns in respect to the great staple foods and raw materials obtained by agriculture. It apparently has barely kept pace with the needs of the growing population of Christendom. It has enabled a larger population to exist in about the same, if not in a worse condition, on the same area, while progress in cheapness of goods has come almost entirely from the side of the chemical and the mechanical industries. It does not give the promise of an indefinite amelioration of the lot of an indefinitely multiplying population. But to a population slowly increasing, a new and ever newer agriculture, utilizing constantly the achievements of the natural sciences and the mechanic arts, ensures the possibility of a steady betterment of the popular welfare in city and in open country alike.

§ 10. #Difficulty of coöperation among farmers#. Rural communities are proverbially conservative; the American farmer is proverbially an individualist. No wonder, then, that the new ideas and plans of coöperation in business matters have made headway in agriculture slowly and with difficulty. The need of mutual aid among American farmers is especially great, for, as has often been, said, isolation is the problem of the farm as congestion is that of the city. On the frontier a coöperative spirit manifested itself frequently in mutual helpfulness, in house raising bees, husking bees, threshing bees, and other similar gatherings.

But this spirit seems to have almost disappeared in the older communities, the more rapidly doubtless in the period of decaying agricultural prosperity.[2] To-day, for example, it is impossible on a certain Pennsylvania road for one more progressive farmer to get his neighbors to coöperate in so simple a matter as hauling their milk cans to the creamery, and so every day in the year ten horses are hitched to ten delivery wagons carrying two or three milk cans apiece, and driven by ten drivers along the same road to and from the railroad station. One driver and two horses could easily carry as much or more, as is done now in many other dairy districts. Even of successful coöperation among farmers sympathetic critics are forced to say: "Many students of rural economics assert that coöperation as applied to the distribution and marketing of farm products is not very successful unless it is founded upon dire necessity. When the records of the organizations of the country are analyzed it becomes almost necessary to accept that statement. So long as farmers do fairly well in their own way they are not inclined to coöperate."

§ 11. #Rapid growth of farmers' selling coöperation#. Despite what has just been said, coöperation among farmers now is more developed and is growing faster than all other kinds of coöperation in America. This is most marked in farming communities in the West, especially in California and in the Middle Western or Northwestern states (e.g., Minnesota and Wisconsin). There the farmers are younger, and many have been educated in the state agricultural colleges. They all produce nearly the same kinds of crops of staple produce which must be shipped to distant markets. The need of uniting to get what they thought would be fair treatment from the railroads, and to protect themselves against the abuses of the competitive commission salesagents, seems to have given the first impetus to farmers' coöperation.

The most notable developments were those of the California Fruit Exchange and of coöperative societies of the Northwest for marketing grain. The membership of the former is made up entirely of the local citrus growers' associations in California. It has a complete organization of selling agents in the Eastern cities and a remarkably efficient, tho simple, system of equalizing and expediting shipments. Now the agricultural coöperative associations of various kinds are multiplying all over the country, for shipping live stock, fruits, butter, cheese, and other farm products. Coöperation for these purposes called forth new activities; packing houses were built, and grain elevators and creameries and dairies, and now a goodly number of the simple manufacturing processes are undertaken by these societies, now numbering thousands.

§ 12. #Some economic features of farmers' selling coöperation#. This type of producers' selling coöperation is proving in America to be far more successful than producers' coöperation among workingmen;[3] and certain important economic features in it should be noted. The local producers' selling coöperative society is composed of farmers who as enterprisers own and carry on their own separate businesses; they are not, as in the other case, wage workers. Any productive processes undertaken by this kind of society are subordinate to the main business, being such as picking, packing, drying, preserving, and making boxes for packing. This form of coöperation with the related form of consumers' coöperation that is fostered by it, promises to have a wide extension.

Some of these societies, as those dealing in citrus fruits, regulate with some success the picking and the marketing so as to distribute them more evenly throughout the year. They watch the markets and direct their agents by telegraph to divert cars en route away from markets that are glutted with products and into markets where prices are higher. They take some of the products, as eggs in the spring at the period of low prices, and pack or refrigerate them, to be sold when prices are higher. For thus withholding the supply they are said by some to exercise a monopolistic power. But this is a more than doubtful view. So long as only the seasonal variations are equalized and the total supply of the year is not reduced it is, on the marginal principle, an economic service to the consumers, comparable to insurance in its utility. Any reduction of the area planted or of the entrance of others into the industry would be a monopolistic act but this as yet has not occurred.

§ 13. #Coöperation in buying.# Coöperative buying (called also consumers' coöperation or distributive coöperation) has had a large growth in the British Isles, since 1844, when the society called the Rochdale Pioneers was founded by a group of factory workingmen. The coöperative stores, both in Great Britain and on the Continent, have continued to develop mainly among the industrial classes in urban centers. However, this has not been exclusively the case, and particularly in Denmark and Ireland coöperative buying has increased in agriculture in connection with selling associations. Since 1890 the growth of consumers' coöperation among European industrial wage-earners has been phenomenal, especially in Belgium, Germany, and Switzerland. American wage-workers, however, have made few and feeble efforts in this direction.