F.A. Farm

One of my readers asked this question. "How do you suggest working on sustainability if you own no land, and cannot work in primary production?"

The basic mantra of sustainability is Reduce, Reuse and Recycle (in that order). It is important to stop consuming so much and ramp down energy usage. Reusing what we already have is next in importance. There are already plenty of buildings. Do we really need to artificially inflate the construction industry by continuing to build new buildings? As Howard Odum has pointed out, there is a lot of stored/embodied energy lying about in cars, buildings, tools, etc. that are already built and that could be reused. Finally recycling has a lower entropy than mining new ore to make things.

Sustainability then, can be a goal to work towards in gardening on vacant lots, reclaiming nonfunctioning buildings and tools, and recycling the massive amounts of waste all around us. If a person already has a fulltime job, there are always weekend projects. The main change may be to start thinking along sustainability lines and then look around for what you can do. Each person is the best judge of what they can contribute.

Here is my take on new wealth, or capital creation. Capital is a term of art for humans. It doesn’t apply to animals. For instance, a squirrel has storage in nuts, but no capital. This is because capital implies investment. Capital comes from a natural resource that is changed by human effort into a form that can be invested. You can grow food to be converted into value-added breakfast cereal, or cut down trees that can be milled into lumber for houses. Of course, consumption of the original capital, like eating the produce or burning the wood to cook the produce, is also an investment because it provides energy to the human. The point is that capital applies to humans, just like culture applies to humans. [Even though some anthropologists now apply culture to chimps, bonobos and even macaques, it can easily be shoehorned into a numbers game – 3 behaviors for macaques, 10-100 behaviors for chimps, 600-1000 behaviors for humans. But I digress.]

Once a human “touches” the resulting new product to make another product, it is no longer new wealth. It no longer has a sole input in nature. It is a human product that is now being used by a human to make another human product. This is where zero-sum economics works very well. The interactions are human and thus can have a measureable price placed on them. Now all of a sudden we can talk price, since it is easy to measure the human effort needed to make the secondary product. Up until a human “touches” a product, it has no price. We can talk about values, but they are in the realm of aesthetics rather than economics. Here is the strongest argument in favor of modern economics and its reliance on dismissing so-called “externalities.” In other words, value is not price. Many people still place no value on leaving nature the way it is. They only think about carbon sequestration in old growth forests, for instance, instead of the intrinsic value of having trees. If you are only concerned about price and not value, you can easily dismiss the “externalities.”

Another point that might be useful is to think about what wage labor really is. Many people, including myself, have dismissed Marx as a product of his time and as a philosopher, but no economist. However, Marx’s real contribution was the theory of surplus labor, which he did not invent but did popularize. New value is created by production and the owner of the factory/workplace skims this off and gives a pittance back to the laborer. This is also an example of leverage. Note that the concept of surplus value is not a concept of surplus capital. We have no surplus capital. It is all being used, thus zero-sum economics. We can destroy it, through emissions for example, and we can create it by converting a natural resource into a human product. Extractive industries, like drilling for fossil fuels, mining, and timber, use up natural resources and don’t put anything back even remotely equivalent to the destruction they cause in extraction. [Putting a 12-inch sapling on a steep slope to compensate for the 100-foot redwood you just cut down is not equivalence in any sense of the word.]

Farming is an extractive industry when you take more out of the soil than you put back. The question is, “How do we measure it so we know the input/output ratio?” Thus the use of calories. As an example, let’s consider making sauerkraut out of cabbage. If the sauerkraut maker increases the energy value of cabbage by his/her input AND the output is higher than the input, it will be sustainable. I find that unlikely. Sauerkraut has value as a food and as a cultural item, but it is not sustainable. Even the sauerkraut industry is dependent on petrol and cheap prices from the farmer. I get $1.00 a pound for my cabbage and there are 5-6 pounds of cabbage in each quart of sauerkraut I make. High-quality sauerkraut in the supermarket retails for about $6.00 a quart. There is a significant amount of shredding involved in making sauerkraut, so if my raw material cost is nearly equal the retail price, there is no compensation for the time and energy used in shredding the cabbage, nor the time for daily skimming and packing the kraut. If on the other hand, the sauerkraut maker does not pay a fair price for the cabbage (say 25 cents per pound), then the farmer is forced to use petroleum energy, economies of scale, and maybe even exploit his/her workers to sell cabbage at a low price.

The same goes for the butcher, the baker and the candlestick maker. If they start with sustainably produced inputs and their work is completed with mostly manual and animal labor and with any additional energy collected efficiently from current sunlight, they certainly could be sustainable IF their inputs are lower than their outputs. I find this unlikely. The upshot is that value-added products are value-added because they are measured in cultural or economic terms. I like sauerkraut, so I make my own. I add value because I like sauerkraut. Nevertheless, I am adding more energy into making the kraut without adding extra calories. The process of making kraut is entropic. Likewise with every other secondary industry. There is an awful lot of energy use involved in value-added products. The real value of value-added products is getting the farmer to take his/her own commodities and turn them into retail products. Farmers do not get a fair commodity price, so the hope is to get them to add value, thus increasing their original margin through a small amount of increased processing. This still does not address the energy usage however.

The upshot is that virtually EVERYTHING we do is unsustainable. This includes so-called “sustainable” organic farming using tractors. You can measure it easily by using calories and keeping track of how many gallons of gas/diesel you use, add in your human labor, and compare it to your output. As I continue to say over and over again, we are in a transition between the modern and the postmodern business models. What we are using now may not be usable in the postcarbon world, so it is to our advantage to work on sustainability right now.

Farming and extractive industries (which includes industrial ag) are primary industries, manufacturing goods and providing services are secondary industries, and using money to make money (like banking and derivatives) are tertiary industries. Only primary industries create capital, since they use natural resources. Everything else manipulates capital already in the system and draws it down (entropy). Even the human capital that increases the value and the price is based on food energy and draws down the energy already in the system. One of the great fallacies of economics is that we cannot escape the zero-sum that works so well in the secondary and tertiary industries. The win-win situation exists, but you have to be willing to do the sweatin’ and gruntin’ under the merciless sun. This means a primary industry that is sustainable.

Green economics is the same as the “raw materials economics” of Benjamin Franklin and Thomas Jefferson. They were both keen on a nation of farmers. I suggest 20% farmers as our first target. Here’s what Ben Franklin said in “Positions To Be Examined,” dated April 4, 1769.

12. Finally, there seem to be but three Ways for a Nation to acquire Wealth. The first is by War as the Romans did in plundering their conquered Neighbours. This is Robbery. The second by Commerce which is generally Cheating. The third by Agriculture the only honest Way; wherein Man receives a real Increase of the Seed thrown into the Ground, in a kind of continual Miracle wrought by the Hand of God in his Favour, as a Reward for his innocent Life, and virtuous Industry.