There is a great line in Nutrition and Physical Degeneration where Weston Price quotes Ernest Thompson Seton on the motive of American Indians as being “fundamentally spiritual, his measure of success is , ‘How much service have I rendered to my people?’”. The importance of such an underlying motive is that it underscores community. And I would like here to introduce a fundamental concept on the nature of wealth. It is not free markets and investment capital that generate wealth; it is communities.
I should define here what I mean by wealth. Wealth is not what we typically think of in the form of money. Wealth is the net sum of all our resources, both human and natural, and it cannot be measured directly. Money is simply a form of purchasing power, and as such, is a claim on existing wealth, not a direct representation of wealth itself. We have many misguided concepts of wealth which have always registered a sort of cognitive dissonance with me. It is my exploration of these concepts that leads me to my current beliefs.
I remember getting upset a few months ago over a dinner conversation, a conversation I was not participating in directly. A friend of mine seemed to be advocating the need for income disparity as it is the wealthier, capitalist class that creates wealth through investment. Investment and ingenuity, it is believed, are what create wealth. I contend that this view warrants a much deeper investigation.
First off, the investment capitalist is looking for a return on investment through no direct effort on his part. In other words, he is looking to extract wealth from an otherwise profitable venture. His justification in doing so is by providing the means for production but in reality it is simply through control of purchasing power. Farmers and small businesses, through inadequate access to purchasing power are dependent on lenders to keep operations going.
This might sound like an attack on capitalism. It is and it isn’t. Despite a fairly free market in goods, I do not believe we have a genuinely free market in capital. To explain this, let me know turn to the concept of money. Money in our economic system is basically a form of debt. It is purchasing power owed from one person to another. Money could also be a medium of exchange backed by a commodity such as wheat or gold.
Where I get interested in the concept of money is with rural communities. There is no reason rural communities couldn’t be entirely self-sufficient, but most often they are heavily interfered with through federal policies and access (or lack thereof) to capital. But why, if they should have access to all the means of production, should they be unable to produce or be self-sufficient? Let us explore the idea of lack of access to capital.
Money does not need to come from outside sources. Indeed, if I write an agreement to pay out on a certain date, such an agreement could be treated as capital. In fact, this is largely what money is, although it operates under the legal framework of the banking system. It would take a community of trusting participants or some form of local currency system to make such a system work on a local scale. But when such a system is not in place, and there is no access to local sources of capital, and credit markets are tight, that is when non-local investors are able to leech the wealth out of a community.
We may view what has happened to rural communities over the past several decades as the inevitable march of progress, but I see it as an unfortunate loss of wealth. Not only of that, but of a way of life. This gets back to the quote I opened with. The net result of viewing capital and labor in the abstract is the devaluation of community. Without the protection of community, time-honored practices are lost in the name of narrow-minded business interests. I will expand on this in later posts, but I would argue that much of the change brought on in agriculture is not producing better food and is not even more efficient, unless efficiency is defined in very narrow terms. It is however highly profitable for a few collected interests.
But why should we honor old practices if they are outmoded or outdated? We should not, and I am not a traditionalist. But we should still leave it to communities and organizations working directly with them to determine what new practices are best. Much of current agricultural policy and beliefs are the result of a few heavily vested interests.
But we should also value community for community’s sake. When I say community, I don’t mean a bunch of self-interested homeowners living in proximity. I mean a network of people that share their lives and values. This is the concept of quality of life over standard of living and it is something many of us would trade for given the choice. The problem with global capital markets, in their devaluation of community, is that they always favor measuring success in terms of standard of living over quality of life, which is much harder to measure or define. They also tend to actually take the choice away from us.
But we should also understand that it is communities that protect and create wealth. The current agricultural model is more akin to a mining paradigm than anything sustainable. Every year nutrients and topsoil are lost while being powered by fossil fuels and supplemented by chemicals. It is input intensive (and as such in my view grossly inefficient) yet this all adds to GNP and is thus viewed as economic strength and therefore wealth. Much of what occurs in our economy operates this way. Not only is wealth being actively destroyed here, what little there is is being siphoned off to urban areas and foreign capital interests.
Communities will naturally protect their own self-interests, and thus will protect their means of creating wealth. But there are some important anti-capitalist concepts that are engendered by communities. They don’t size each other up over petty differences and they lend a hand when others are in need. It’s not self-sacrifice so much as mutual self-interest.
And one final concept I would like to touch on. Valuing quality of life means valuing down-time and leisure-time. It is through this where connections are built and people can find a sense of purpose and meaning. It is a time when people can explore interests and values, connect with each other, or simply unwind. As markets are increasingly liberalized, with credit sources becoming more remote, the pressure is always to increase production. This applies to all industries, not just farming. And I would posit that it is equally destructive in all industries (more or less). It is to the short-term interest of a creditor and the detriment of the longer-term interests of a business, farm, city, nation, etc. There is an excellent book for business managers called Peopleware that delineates exactly this problem. Although geared towards Software Engineering, the principles are general enough to apply to many industries. The central concept is that investing in employees is the same as investing in the company and that trust, mutual self-interest, autonomy, and balanced employee lives lead to the greatest long-term productivity. Of course one or more of these values can be sacrificed in the short-term for a limited amount of increased productivity, say to meet a deadline. But this invariably induces a rebound. The problem when is a business or system chronically operates in this mode.
So carrying this concept forward to farming (one of the main generators of wealth) and to the economy as a whole, it would start to appear that too great a disparity in wealth is simply not going to be a good thing for a nation as a whole. Investors are almost the definition of short-term self-interest. Working for a small contracting company this becomes all the more apparent. Whatever idea a new startup may have, whatever its value to society, the bottom line is always return on investment.
It’s the people that matter, and the communities they create. Take care of that and wealth will take care of itself.
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