When The Frogs Start Singing, We Could All Croak
I've been on a mental dive down the ant hill lately. Ant hill? Don't I mean "rabbit hole?" No, I do not. I strongly suspect we get that term "down the rabbit hole" from Alice's Adventures in Wonderland, and if so, that would mean that a logical, rational exploration of a topic would be simply to run along with the Red Queen; the faster you run, the slower you get; all logic gone. So, while I love the deliberate whimsical suspension of logic for purposes of allegory and entertainment, I'm leaving the rabbit warrens unexplored. Go read Watership Down if you want to dive into a bunny nest.
Ant hills, though. That's another story.
They are complex, far more complex than most realize. Of course, my ruminations might be simplistic by comparison to the excavated dwelling for a decade-old super-organism, but still. At least I won't be chasing a white rabbit.
I don't know if I mentioned it here, but I recently got interviewed by KMO over at his podcast, the C-Realm. That was both a complete surprise and an honor, given how long I've been listening. KMO had been ruminating for some time about "technological unemployment," the tendency for improvements/changes in technology to displace workers, thus exacerbating unemployment. As we get more tech, that tech does work we don't have to do. Ah, but if your job is one of the things society no longer has to do, what then? Do you move on to another profession (provided one exists), or, like Ned Ludd and wooden shoe throwers from another part of the globe, sabotage the machinery?
By complete coincidence, I had just tripped over what I thought might be the oldest citation for the term, a John Maynard Keynes essay from 1930 called The Economic Possibilities For Our Grandchildren. What Keynes had to say is most all in the podcast, so I won't bore you with that. He did have one concluding thought which never made it into our conversation, one that concerns the profession of which he played a part:
If economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!
I don't know for certain, but I feel this was a less-than-subtle jab at others in his profession who were, at that time, wandering into political weeds. This was the period where economists were desperately trying to appease their masters, those who oversaw the colleges and underwrote the university chairs to which these econ pros aspired. To do so, they were crafting ever-more elaborate theories on how things worked in the "economy" and trying their best to remove the once-common appellation "political" from the beast. Really, since any economy functions by the laws of the society in which it can be found, any economy is therefore really a political economy.
But to get their professions elevated to the "hard" sciences, those disciplines that prove the same no matter where they are practiced, the neo-classical economists were moving into wildly-elaborate formulae and other strange flights of fancy. In doing so, these theorists were making prescriptions, like doctors might do, saying things like "because the economy is like this (everywhere), people (everywhere) should do this."
Keynes wasnt' the only one to comment on this weirdness at this time.
Now in economics proper the word ought has no place. Its business is to study what tends to happen, to trace the connection between causes and effects, to analyse the interplay of conflicting forces. It is a positive science, not a normative science. It is concerned, like physiology, to discover what effects various drugs will produce, not, like medicine, to prescribe what drugs ought to be taken. So soon as an economist begins to prescribe remedies and palliatives for social evils he is quitting the narrow boundaries of his science.
(A.C. Pigou, Economics in Practice, Macmillan & Co., 1935, p. 107, emboldening mine.)
Let's back up a bit on our ant tubeway in the dirt and take the turn back to technological unemployment. John Michael Greer is in the midst of writing an extended fiction positing alternative ways of doing things. One of his "Retrotopia" entries notes that we currently subsidize equipment, but penalize employment, when we don't have to. We could do things as they do in this fictional realm:
"First off, there’s a tax on automation to pay the cost to society of coping with an increase in unemployment. Then there’s the cost of machinery, which is considerable, and then there’s the natural-resource taxes-if it comes out of the ground or goes into the air or water, it’s taxed, and not lightly, either. Then there’s the price of energy."
(I'll just briefly point out that that "natural-resource" tax mentioned above sounds an awfully lot like the tax Henry George proposed way back in 1879 in his book Progress & Poverty. According to Mason Gaffney, George and his book were the reason the wealthy were paying the neo-classical economists to spin such elaborate pages of bullshit. In fact, also according to Gaffney, we wouldn't have the term "neoclassical" if it weren't for this onslaught. Back to the previous ant-way.)
Since we in the US have gone completely the other way, taxing employment and allowing purchasers to depreciate the costs involved in equipment, we have fueled an innovation engine when it comes to gadgetry, one that leads toward continuing technological unemployment. We are in the throws of Kurt Vonnegut's Utopia 59, a novel later re-named Player Piano.
So, here's a question: If the energy to run these machines runs short, will (over enough time) the market incentive to use muscle power return workers to a greater bargaining position and thus increase their wages and positions?
That's a neat theory. Let me put it in a thought experiment.
For that, we should visit the inspiration for this post's title, the Singing Frogs Farm in Sebastapol, California. I found out about this place from the Peak Prosperity Podcast. The farmers, a couple new to farming, were having problems. From the transcript:
Paul Kaiser: Those were a miserable first couple of years trying to use tillage and tractors and disks and plows and breaking our backs to get…one crop per season followed by a cover crop in the winter and then all that tillage all over again in the spring for one more crop for the summer and then till it all under in the fall and do another cover crop-that was break backing work with such low productivity and the soil was just getting worse and worse the more we did that.
Elizabeth Kaiser: Yes. We were noticing that the soil was getting worse, we were noticing that there were a lot less animals-both the large scale animals as well as the small scale animals-we would notice that we would till a field and afterwards our dog, our barn cats, the birds, all these animals would just line up around the edge of the field waiting for the feast that we had just killed it in this field and they would dig in a find it. And it just felt wrong.
Paul Kaiser: Yeah tillage wipes out snakes, wipes out gophers, wipes out ground nesting birds, wipes out the native bees, which are almost all ground nesting, tillage physically destroys macroorganisms, as well as the microorganisms, fungus, bacteria, protostomes and that’s only half of why tillage is bad.
Of all the technology to question-your GMOs, your pesticides, your insecticides-I bet you didn't think I was going to target the age-old practice of tilling the field, did you? It turns out that this decision to not till is the secret to their success. For one thing, their water usage is way down, a benefit for any California farm.
Revenue-wise, we should direct our attention to other farm operations in their area:
Paul Kaiser: The vineyards around us are only doing about eleven thousand per crop acre, per year-that’s the Sonoma County average. And that’s actually the California State average for small scale, diversified, direct market family farms like ours. It’s also about eleven to twelve thousand dollars per crop, per year as the average. Good farmers, friends of ours, neighbors, other people in the county are doing more like fourteen to twenty two thousand dollars per crop acre, per year....
So, others they know in the area are doing at best $14K - $22K per acre/per year. And Singing Frogs, with their rusting plow? "We are producing about ninety-five to a hundred thousand dollars in gross revenue per crop acre, per year."
Seriously, how could I not put that in bold type?
Of course, the worst fly in any ointment one can find is one that flew in some time ago, one that was missed initially. They earn that long green, that fat cash, yes: but that was, again, "in gross revenue." As in before expenditures. We should talk about those.
If the plow is parked and the tractor only sometimes run, how does a farmer pull food out of the ground? Well, the answer is in the phrasing. The farmer pulls food out of the ground. And puts seeds and starts in. And pulls weeds (Singing Frog is organic, after all). And lays down compost, and weed fabric, and irrigation lines.
And anything the farmer cannot do on his or her own, the farmer must hire someone to do.
So the Singing Frogs Farm has substituted the equipment and fuel costs for human labor costs. From the sound of things, they are still doing well, paying $15/hour for those who come to help. (Sorry: I read that fact in doing research, but have since mislead the article from which it originated and cannot find it.)
Which is unusual. You see, most all of the "alternative" methods of agriculture also come with this curse of requiring helping hands. And the trend lately is to let those hands help themselves to labor without pay. There is a hunger right now for knowledge, such that traveling from organic farm one after another in the hopes of apprenticing and starting one of one's own has become a "thing." And farmers are not only taking advantage of this, they kind of have to take advantage of it. Because unlike the Kaisers at Singing Frogs, they can't afford to pay the help they need.
As long as farmers keep plowing, and as long as (again, according to the Kaisers) that plowing leads to diminishing soil fertility and productivity, these more traditional farms will never realize enough revenue to pay the help the farmers need.
So, in essence, we've reached a bit of an impasse. A little mechanization applied to help an individual farm a goodly-sized plot forces that person to mechanize all the way, diving into the chemical and pharmacological armamentarium-the pesticides and insecticides and so on-that further reduces the need for farm labor.
As long as there is cheap fuel for the tractor and cheap enough land for expanding the scope of the farm, the advantage in scale-ability goes to the mechanized. If a farmer wants to realize more profits to pay off the equipment, that farmer need only expand, letting the machines run a bit longer to do the work.
By contrast, if Kaisers of Singing Frogs wish to expand, they would have to hire more workers at probably substantially more expense than the increased cost of fuel for the iron horses pulling plows over at their neighbors' farms.
Which explains farming today, I guess.
So let's monkey wrench this fucker and see what comes of it.
Let's assume an alternative future much like the one the Archdruid is contemplating, minus the civil unrest. Let's put a fuel crisis into the early stages and see what might come of the farms.
Let's further recognize that the Singing Frogs Farm model is a direct threat to the more traditional plow-centric model of farming; that is, where people farm like the Kaisers, those people produce more food to sell-or do with as they see fit-than the tractor riders.
For a final stipulation, let's assume the workers of the SF farm have living facilities either on site or near enough for them to walk to work. In a fuel-starved scenario, that would be critical.
After the market for fuel gets into crisis, one of the first things to go hay-wire is going to be money. Fuel in our economy produces the things one can sell for money; look what happened in 2007 when fuel spiked to $4.50/gallon and many workers who drove a long way to and from work and home could no longer afford that commute to the distant house they bought as cheaply as they did simply because they took the advice of so many real estate professionals and drove until they qualified. Around here at least, those houses in the distant suburbs fell to foreclosure first.
That monetary crisis, like the last one, could be worse. Why? The banking laws have changed, for one. We won't have a government-sponsored bail out. The new laws passed after the crash mandate instead a bail-in, meaning banks will legally be able to seize depositor assets and move them to cover the banks' liabilities.
(In case you haven't been paying attention, "depositors" in this case means "anyone with money in the bank." Do you have money in the bank? If you do, and it is over the $250K that the FDIC will cover, and the FDIC remains liquid through the crisis, don't worry, be happy.
(That last "and", though, is in scare-quotes for a reason. Just sayin'.)
So now we have created a future starved both of fuel and money for spending and paying off debts and paying workers. This should if not idle the tractors, at least put a premium on food (just like it did back in 2007; remember?).
But the Kaiser model has an advantage; they can pay their farm hands in something other than money. In a scenario where work is scarce (remember 2008?), and fuel is expensive, they need only take delivery of a few supplies and use a bit of fuel to get the cash crop to market. That crop they don't sell can feed the people who helped bring it to the table.
Which is something those riding tractors absolutely cannot do. Try shoving a corn cob into a gas tank and seeing how far it will pull the plow. Get back to me after you've tried it.
So here we have a situation where, at least temporarily, farm workers can take pay in room and board, skipping the money system's now-integral role. When others with farms start bemoaning their lack of success with topsoil made less and less productive from their years of plowing, perhaps they will give the Frogs a Sing.
But that will mean idling expensive equipment that is, in all likelihood, not yet paid off. The fallacy of previous investment will likely kick in, forcing tractor riders to keep on plowin', at least until they can't.
And maybe more farmers will go no-till.
What will happen then?
Here, times might get interesting in the Chinese sense.
After all, we here in these United States of America have long had a tradition of working and getting ahead. Work hard, get ahead, have children, repeat. We're not used to just getting by. When we're just getting by, something is wrong. After all, for as long as people can remember they got ahead, not by.
So when the labor-intensive farming model becomes the dominant technology, and the formerly-advantaged technology of the plow and tractor is abandoned, those farms that do not practice the highly-complicated but highly-productive tillage-free farming methods will need more workers, workers likely found in houses nearby that have abandoned their tractors (at least until things get back to "normal"). But there won't be wages at those a cappella lily pads, at least not wages like those people are used to getting. No, they won't starve, simply because they will be raising the food that will feed them; but there's something wrong with a situation where an asset gained in employment can't be banked at interest and increased with no additional labor.
I recently finished the third book in James Howard Kunstler's World Made By Hand series, A History of the Future. In it, a character has hit rock bottom. He has no money, no food, not even drink enough to make him forget his other wants. He does something rash. After this rash action, someone thinks to ask a neighbor who is doing well farming if the rash actor ever sought employment. The neighbor with the prosperous farm actually offered the rash actor a job, but rash actor refused. "I ain't no peasant," was the refusal reason.
That's what people who worked on farms only for subsistence were called, peasants. It's not a pleasant word to be called today, conjuring up all as it does manner of derogatory aspersions.
Yet without the fuel to make stuff; without the prospect of stuff to make money (through lending, as it is done); and without money to pay people, that might be the only imaginable way forward. There will be people with land, and there will be people that help people with land work that land-land which, again, will not belong to most of those who work on it.
Back to the podcast, KMO asked me whether I thought a future with fewer mechanical laborers could bode well for employees, as they would be needed to do the work once done by the machines. I didn't think so. After all, we have a long and storied feudal history, one peopled by lords in the manors surrounded by peasants in the fields. Without changing the incentives, the policies, the laws, the customs-without a drastic change in society itself, I doubt the wealth would accumulate with people who did most of the work.
Instead, that wealth is going to be sucked upward, just as Thomas Picketty's book observes. There will be people with farms who need labor and can only pay with room and board, and there will be people who need room and board and, perhaps, some spending money. How much those in the former position actually give to those in the latter will depend on a lot of factors.
Who am I kidding? How much compensation owners of land give to those they hire to work their land will depend upon how much society in general demands those workers get paid. They have the land, after all. The bargaining power is therefore theirs.
If the workers don't like the terms, they can keep walking.
Bottom line: Keynes was wrong. In his essay, he thought the start of the Great Depression was an example of technological unemployment, a hiccup, a intermediate delay in matching desired productivity with available labor. It wasn't, not by a long shot. Instead, it was a pile of accumulated debts that went bad, bad paper that took the dollars created by those debts with it.
But Keynes was even wronger in his essay. He supposed that in a hundred years, after we had finally given in to letting the machines do the work, that we would all look down on people who loved money, who acted as if money were the be-all and end-all of their existence.
I see us free, therefore, to return to some of the most sure and certain principles of religion and traditional virtue-that avarice is a vice, that the exaction of usury is a misdemeanour, and the love of money is detestable. . . .
The reality? Those machines which we depreciate on our taxes make more value than they create specifically so that we can get rich from the work they do.
Oh, let me change that a bit. As I wrote it above, it can be a bit confusing, and I wouldn't want anyone confused. I'll make the changes contract style, with the underlined portions additions and the struck-through portions deletions.
Those machines which we those that buy machines depreciate on our the purchaser's taxes make more value than they create specifically so that we the purchaser can get rich from the work they do.
Those machines, after all, are not purchased by some mysterious entity called "society," society which probably includes yourself and myself. Therefore, grandiose and ultimately misleading statements like "Technology betters our lives" must be put into greater clarity simply by asking "Who is this 'our' being discussed?"
Those machines, purchased by people associating themselves perhaps individually, perhaps in collectives such as companies and corporations, may or may not be driven by "the most sure and certain principles of religion and traditional virtue". Those that own those machines may simply be greedy mother fuckers who want a shit-ton of cash on which to bed down with hookers covered in lines of blow.
In fact-and this might be the most demoralizing point I make in this winding hill of ant paths yet-the law says these individuals, if incorporated in a publicly-held company, must do that, give into the greed and ravenous desire to get money.
Did you ever hear the phrase, usually uttered by the CEO of some huge-astic company, "enhance shareholder value"? Truth is, that CEO has to make the lip music thusly. Why? It goes all the way back to 1919 and Dodge v. Ford. Quoth the Michigan Supreme Court:
A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the non-distribution of profits among stockholders in order to devote them to other purposes...
So, if the Frogs Sing, if no-till farming in my scenario catches on, and perhaps some farms are consolidated, the owners keeping title to the land but allowing a really good manager to make the big decisions about what is to be planted and harvested and who is to be hired to do that work and how these people are to be treated, a manager, like the director of "a business corporation", may not be legally able to give a bit extra to the workers if that extra might somehow profit one of the land owners that actually has title to the dirt being poked with digging sticks.
And Dodge v. Ford is just one example of a hurdle to creating greater equity, greater equality in society, whether or not that society has a bunch of machines doing its work or not.
Let me wrap this up.
No matter what you might call the problem, be it technological unemployment or the more fashionable term technological displacement, the problem is not necessarily one that has anything to do with the technology. It has everything to do with our society and how it demands a few things:
That last bit, about the non-labor source, concerns natural resources and land, land like the farms being farmed with or without plows in my scenario. It is the concern of Henry George's Progress & Poverty, and it has observations and conclusion that are enormously relevant to this discussion, even if not all of his recommendations are considered.
As I told KMO in our interview, unless there is an incentive to do so, people won't if they don't want to. I'm sure I didn't put it like that, but that's the gist of it. If they want to keep the money and there are no tax incentives prodding them to not keep the money, then they will keep the money, even if as a result it means someone else will not get a job.
Whether a machine is involved in that transaction is really quite beside the point.
Ant hills, though. That's another story.
Click to viewThey are complex, far more complex than most realize. Of course, my ruminations might be simplistic by comparison to the excavated dwelling for a decade-old super-organism, but still. At least I won't be chasing a white rabbit.
I don't know if I mentioned it here, but I recently got interviewed by KMO over at his podcast, the C-Realm. That was both a complete surprise and an honor, given how long I've been listening. KMO had been ruminating for some time about "technological unemployment," the tendency for improvements/changes in technology to displace workers, thus exacerbating unemployment. As we get more tech, that tech does work we don't have to do. Ah, but if your job is one of the things society no longer has to do, what then? Do you move on to another profession (provided one exists), or, like Ned Ludd and wooden shoe throwers from another part of the globe, sabotage the machinery?
By complete coincidence, I had just tripped over what I thought might be the oldest citation for the term, a John Maynard Keynes essay from 1930 called The Economic Possibilities For Our Grandchildren. What Keynes had to say is most all in the podcast, so I won't bore you with that. He did have one concluding thought which never made it into our conversation, one that concerns the profession of which he played a part:
If economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!
I don't know for certain, but I feel this was a less-than-subtle jab at others in his profession who were, at that time, wandering into political weeds. This was the period where economists were desperately trying to appease their masters, those who oversaw the colleges and underwrote the university chairs to which these econ pros aspired. To do so, they were crafting ever-more elaborate theories on how things worked in the "economy" and trying their best to remove the once-common appellation "political" from the beast. Really, since any economy functions by the laws of the society in which it can be found, any economy is therefore really a political economy.
But to get their professions elevated to the "hard" sciences, those disciplines that prove the same no matter where they are practiced, the neo-classical economists were moving into wildly-elaborate formulae and other strange flights of fancy. In doing so, these theorists were making prescriptions, like doctors might do, saying things like "because the economy is like this (everywhere), people (everywhere) should do this."
Keynes wasnt' the only one to comment on this weirdness at this time.
Now in economics proper the word ought has no place. Its business is to study what tends to happen, to trace the connection between causes and effects, to analyse the interplay of conflicting forces. It is a positive science, not a normative science. It is concerned, like physiology, to discover what effects various drugs will produce, not, like medicine, to prescribe what drugs ought to be taken. So soon as an economist begins to prescribe remedies and palliatives for social evils he is quitting the narrow boundaries of his science.
(A.C. Pigou, Economics in Practice, Macmillan & Co., 1935, p. 107, emboldening mine.)
Let's back up a bit on our ant tubeway in the dirt and take the turn back to technological unemployment. John Michael Greer is in the midst of writing an extended fiction positing alternative ways of doing things. One of his "Retrotopia" entries notes that we currently subsidize equipment, but penalize employment, when we don't have to. We could do things as they do in this fictional realm:
"First off, there’s a tax on automation to pay the cost to society of coping with an increase in unemployment. Then there’s the cost of machinery, which is considerable, and then there’s the natural-resource taxes-if it comes out of the ground or goes into the air or water, it’s taxed, and not lightly, either. Then there’s the price of energy."
(I'll just briefly point out that that "natural-resource" tax mentioned above sounds an awfully lot like the tax Henry George proposed way back in 1879 in his book Progress & Poverty. According to Mason Gaffney, George and his book were the reason the wealthy were paying the neo-classical economists to spin such elaborate pages of bullshit. In fact, also according to Gaffney, we wouldn't have the term "neoclassical" if it weren't for this onslaught. Back to the previous ant-way.)
Since we in the US have gone completely the other way, taxing employment and allowing purchasers to depreciate the costs involved in equipment, we have fueled an innovation engine when it comes to gadgetry, one that leads toward continuing technological unemployment. We are in the throws of Kurt Vonnegut's Utopia 59, a novel later re-named Player Piano.
So, here's a question: If the energy to run these machines runs short, will (over enough time) the market incentive to use muscle power return workers to a greater bargaining position and thus increase their wages and positions?
That's a neat theory. Let me put it in a thought experiment.
For that, we should visit the inspiration for this post's title, the Singing Frogs Farm in Sebastapol, California. I found out about this place from the Peak Prosperity Podcast. The farmers, a couple new to farming, were having problems. From the transcript:
Paul Kaiser: Those were a miserable first couple of years trying to use tillage and tractors and disks and plows and breaking our backs to get…one crop per season followed by a cover crop in the winter and then all that tillage all over again in the spring for one more crop for the summer and then till it all under in the fall and do another cover crop-that was break backing work with such low productivity and the soil was just getting worse and worse the more we did that.
Elizabeth Kaiser: Yes. We were noticing that the soil was getting worse, we were noticing that there were a lot less animals-both the large scale animals as well as the small scale animals-we would notice that we would till a field and afterwards our dog, our barn cats, the birds, all these animals would just line up around the edge of the field waiting for the feast that we had just killed it in this field and they would dig in a find it. And it just felt wrong.
Paul Kaiser: Yeah tillage wipes out snakes, wipes out gophers, wipes out ground nesting birds, wipes out the native bees, which are almost all ground nesting, tillage physically destroys macroorganisms, as well as the microorganisms, fungus, bacteria, protostomes and that’s only half of why tillage is bad.
Of all the technology to question-your GMOs, your pesticides, your insecticides-I bet you didn't think I was going to target the age-old practice of tilling the field, did you? It turns out that this decision to not till is the secret to their success. For one thing, their water usage is way down, a benefit for any California farm.
Revenue-wise, we should direct our attention to other farm operations in their area:
Paul Kaiser: The vineyards around us are only doing about eleven thousand per crop acre, per year-that’s the Sonoma County average. And that’s actually the California State average for small scale, diversified, direct market family farms like ours. It’s also about eleven to twelve thousand dollars per crop, per year as the average. Good farmers, friends of ours, neighbors, other people in the county are doing more like fourteen to twenty two thousand dollars per crop acre, per year....
So, others they know in the area are doing at best $14K - $22K per acre/per year. And Singing Frogs, with their rusting plow? "We are producing about ninety-five to a hundred thousand dollars in gross revenue per crop acre, per year."
Seriously, how could I not put that in bold type?
Of course, the worst fly in any ointment one can find is one that flew in some time ago, one that was missed initially. They earn that long green, that fat cash, yes: but that was, again, "in gross revenue." As in before expenditures. We should talk about those.
If the plow is parked and the tractor only sometimes run, how does a farmer pull food out of the ground? Well, the answer is in the phrasing. The farmer pulls food out of the ground. And puts seeds and starts in. And pulls weeds (Singing Frog is organic, after all). And lays down compost, and weed fabric, and irrigation lines.
And anything the farmer cannot do on his or her own, the farmer must hire someone to do.
So the Singing Frogs Farm has substituted the equipment and fuel costs for human labor costs. From the sound of things, they are still doing well, paying $15/hour for those who come to help. (Sorry: I read that fact in doing research, but have since mislead the article from which it originated and cannot find it.)
Which is unusual. You see, most all of the "alternative" methods of agriculture also come with this curse of requiring helping hands. And the trend lately is to let those hands help themselves to labor without pay. There is a hunger right now for knowledge, such that traveling from organic farm one after another in the hopes of apprenticing and starting one of one's own has become a "thing." And farmers are not only taking advantage of this, they kind of have to take advantage of it. Because unlike the Kaisers at Singing Frogs, they can't afford to pay the help they need.
As long as farmers keep plowing, and as long as (again, according to the Kaisers) that plowing leads to diminishing soil fertility and productivity, these more traditional farms will never realize enough revenue to pay the help the farmers need.
So, in essence, we've reached a bit of an impasse. A little mechanization applied to help an individual farm a goodly-sized plot forces that person to mechanize all the way, diving into the chemical and pharmacological armamentarium-the pesticides and insecticides and so on-that further reduces the need for farm labor.
As long as there is cheap fuel for the tractor and cheap enough land for expanding the scope of the farm, the advantage in scale-ability goes to the mechanized. If a farmer wants to realize more profits to pay off the equipment, that farmer need only expand, letting the machines run a bit longer to do the work.
By contrast, if Kaisers of Singing Frogs wish to expand, they would have to hire more workers at probably substantially more expense than the increased cost of fuel for the iron horses pulling plows over at their neighbors' farms.
Which explains farming today, I guess.
So let's monkey wrench this fucker and see what comes of it.
Let's assume an alternative future much like the one the Archdruid is contemplating, minus the civil unrest. Let's put a fuel crisis into the early stages and see what might come of the farms.
Let's further recognize that the Singing Frogs Farm model is a direct threat to the more traditional plow-centric model of farming; that is, where people farm like the Kaisers, those people produce more food to sell-or do with as they see fit-than the tractor riders.
For a final stipulation, let's assume the workers of the SF farm have living facilities either on site or near enough for them to walk to work. In a fuel-starved scenario, that would be critical.
After the market for fuel gets into crisis, one of the first things to go hay-wire is going to be money. Fuel in our economy produces the things one can sell for money; look what happened in 2007 when fuel spiked to $4.50/gallon and many workers who drove a long way to and from work and home could no longer afford that commute to the distant house they bought as cheaply as they did simply because they took the advice of so many real estate professionals and drove until they qualified. Around here at least, those houses in the distant suburbs fell to foreclosure first.
That monetary crisis, like the last one, could be worse. Why? The banking laws have changed, for one. We won't have a government-sponsored bail out. The new laws passed after the crash mandate instead a bail-in, meaning banks will legally be able to seize depositor assets and move them to cover the banks' liabilities.
(In case you haven't been paying attention, "depositors" in this case means "anyone with money in the bank." Do you have money in the bank? If you do, and it is over the $250K that the FDIC will cover, and the FDIC remains liquid through the crisis, don't worry, be happy.
(That last "and", though, is in scare-quotes for a reason. Just sayin'.)
So now we have created a future starved both of fuel and money for spending and paying off debts and paying workers. This should if not idle the tractors, at least put a premium on food (just like it did back in 2007; remember?).
But the Kaiser model has an advantage; they can pay their farm hands in something other than money. In a scenario where work is scarce (remember 2008?), and fuel is expensive, they need only take delivery of a few supplies and use a bit of fuel to get the cash crop to market. That crop they don't sell can feed the people who helped bring it to the table.
Which is something those riding tractors absolutely cannot do. Try shoving a corn cob into a gas tank and seeing how far it will pull the plow. Get back to me after you've tried it.
So here we have a situation where, at least temporarily, farm workers can take pay in room and board, skipping the money system's now-integral role. When others with farms start bemoaning their lack of success with topsoil made less and less productive from their years of plowing, perhaps they will give the Frogs a Sing.
But that will mean idling expensive equipment that is, in all likelihood, not yet paid off. The fallacy of previous investment will likely kick in, forcing tractor riders to keep on plowin', at least until they can't.
And maybe more farmers will go no-till.
What will happen then?
Here, times might get interesting in the Chinese sense.
After all, we here in these United States of America have long had a tradition of working and getting ahead. Work hard, get ahead, have children, repeat. We're not used to just getting by. When we're just getting by, something is wrong. After all, for as long as people can remember they got ahead, not by.
So when the labor-intensive farming model becomes the dominant technology, and the formerly-advantaged technology of the plow and tractor is abandoned, those farms that do not practice the highly-complicated but highly-productive tillage-free farming methods will need more workers, workers likely found in houses nearby that have abandoned their tractors (at least until things get back to "normal"). But there won't be wages at those a cappella lily pads, at least not wages like those people are used to getting. No, they won't starve, simply because they will be raising the food that will feed them; but there's something wrong with a situation where an asset gained in employment can't be banked at interest and increased with no additional labor.
I recently finished the third book in James Howard Kunstler's World Made By Hand series, A History of the Future. In it, a character has hit rock bottom. He has no money, no food, not even drink enough to make him forget his other wants. He does something rash. After this rash action, someone thinks to ask a neighbor who is doing well farming if the rash actor ever sought employment. The neighbor with the prosperous farm actually offered the rash actor a job, but rash actor refused. "I ain't no peasant," was the refusal reason.
That's what people who worked on farms only for subsistence were called, peasants. It's not a pleasant word to be called today, conjuring up all as it does manner of derogatory aspersions.
Yet without the fuel to make stuff; without the prospect of stuff to make money (through lending, as it is done); and without money to pay people, that might be the only imaginable way forward. There will be people with land, and there will be people that help people with land work that land-land which, again, will not belong to most of those who work on it.
Back to the podcast, KMO asked me whether I thought a future with fewer mechanical laborers could bode well for employees, as they would be needed to do the work once done by the machines. I didn't think so. After all, we have a long and storied feudal history, one peopled by lords in the manors surrounded by peasants in the fields. Without changing the incentives, the policies, the laws, the customs-without a drastic change in society itself, I doubt the wealth would accumulate with people who did most of the work.
Instead, that wealth is going to be sucked upward, just as Thomas Picketty's book observes. There will be people with farms who need labor and can only pay with room and board, and there will be people who need room and board and, perhaps, some spending money. How much those in the former position actually give to those in the latter will depend on a lot of factors.
Who am I kidding? How much compensation owners of land give to those they hire to work their land will depend upon how much society in general demands those workers get paid. They have the land, after all. The bargaining power is therefore theirs.
If the workers don't like the terms, they can keep walking.
Bottom line: Keynes was wrong. In his essay, he thought the start of the Great Depression was an example of technological unemployment, a hiccup, a intermediate delay in matching desired productivity with available labor. It wasn't, not by a long shot. Instead, it was a pile of accumulated debts that went bad, bad paper that took the dollars created by those debts with it.
But Keynes was even wronger in his essay. He supposed that in a hundred years, after we had finally given in to letting the machines do the work, that we would all look down on people who loved money, who acted as if money were the be-all and end-all of their existence.
I see us free, therefore, to return to some of the most sure and certain principles of religion and traditional virtue-that avarice is a vice, that the exaction of usury is a misdemeanour, and the love of money is detestable. . . .
The reality? Those machines which we depreciate on our taxes make more value than they create specifically so that we can get rich from the work they do.
Oh, let me change that a bit. As I wrote it above, it can be a bit confusing, and I wouldn't want anyone confused. I'll make the changes contract style, with the underlined portions additions and the struck-through portions deletions.
Those machines which we those that buy machines depreciate on our the purchaser's taxes make more value than they create specifically so that we the purchaser can get rich from the work they do.
Those machines, after all, are not purchased by some mysterious entity called "society," society which probably includes yourself and myself. Therefore, grandiose and ultimately misleading statements like "Technology betters our lives" must be put into greater clarity simply by asking "Who is this 'our' being discussed?"
Those machines, purchased by people associating themselves perhaps individually, perhaps in collectives such as companies and corporations, may or may not be driven by "the most sure and certain principles of religion and traditional virtue". Those that own those machines may simply be greedy mother fuckers who want a shit-ton of cash on which to bed down with hookers covered in lines of blow.
In fact-and this might be the most demoralizing point I make in this winding hill of ant paths yet-the law says these individuals, if incorporated in a publicly-held company, must do that, give into the greed and ravenous desire to get money.
Did you ever hear the phrase, usually uttered by the CEO of some huge-astic company, "enhance shareholder value"? Truth is, that CEO has to make the lip music thusly. Why? It goes all the way back to 1919 and Dodge v. Ford. Quoth the Michigan Supreme Court:
A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the non-distribution of profits among stockholders in order to devote them to other purposes...
So, if the Frogs Sing, if no-till farming in my scenario catches on, and perhaps some farms are consolidated, the owners keeping title to the land but allowing a really good manager to make the big decisions about what is to be planted and harvested and who is to be hired to do that work and how these people are to be treated, a manager, like the director of "a business corporation", may not be legally able to give a bit extra to the workers if that extra might somehow profit one of the land owners that actually has title to the dirt being poked with digging sticks.
And Dodge v. Ford is just one example of a hurdle to creating greater equity, greater equality in society, whether or not that society has a bunch of machines doing its work or not.
Let me wrap this up.
No matter what you might call the problem, be it technological unemployment or the more fashionable term technological displacement, the problem is not necessarily one that has anything to do with the technology. It has everything to do with our society and how it demands a few things:
- How workers are treated;
- How much of the workers' labor must be given to the worker;
- How much of that labor can be kept by an employer; and
- How much value from a non-labor source the owner of that source can keep.
That last bit, about the non-labor source, concerns natural resources and land, land like the farms being farmed with or without plows in my scenario. It is the concern of Henry George's Progress & Poverty, and it has observations and conclusion that are enormously relevant to this discussion, even if not all of his recommendations are considered.
As I told KMO in our interview, unless there is an incentive to do so, people won't if they don't want to. I'm sure I didn't put it like that, but that's the gist of it. If they want to keep the money and there are no tax incentives prodding them to not keep the money, then they will keep the money, even if as a result it means someone else will not get a job.
Whether a machine is involved in that transaction is really quite beside the point.