Markets & Private Sector: View from the Farm

Against the Current, No. 205, March/April 2020

John Vandermeer

FROM INTERACTING WITH small-scale farmers in Mexico, Puerto Rico, and Michigan, I have come to understand some of their problems and some of the ways in which they analyze the world. From this perspective, recent proclamations from national politicians and local academics alike have caused me to reflect on certain basic features of contemporary capitalism.

Recent comments about markets and the private sector suggest an incautious use of language. The actual operation of small-scale and peasant farmers* as background shows that the very nature of such operations are clearly within both the private sector and market participation, but hardly correspond to the common meaning of either under current capitalist logic.

When Elizabeth Warren made the enthusiastic claim that “I am a capitalist,” she explained herself by defending the idea of markets, noting that historically markets had promoted entrepreneurship and led to great advances in technology and the provisioning of goods and services. This is confusing to be sure, since regions claiming to be one sort of socialism or another have always had markets, and by definition have explicitly claimed not to be capitalist.

I invite her to visit Cuba where a claim to be socialist (and anti-capitalist) intersects freely with farmers’ markets that include offerings of both state-supported products and products that arrive directly from the farm and sold to consumers by the farmers. A suggestion that somehow they didn’t have markets would be bewildering to the folks participating in them.

A seemingly independent proclamation from some of my academic colleagues at the University of Michigan was equally perplexing. In response to student objections to the School for Sustainability’s cooperative relationship with the giant brokerage firm Morgan Stanley, several professors noted that it is important for those of us concerned with sustainability that we engage with the “private sector,” and not be “anti-corporate” lest we restrict the options for the students we are training.

After all, they argue, all corporations have dirty laundry and funding the Dakota Access or the Keystone XL pipeline, as does Morgan Stanley, may be bad, but other corporations do similar things.

If the farmers I engage with were presented with this notion of the private sector and corporate cooperativeness, I fear there would likewise be a sense of bewilderment, stemming from the very sense of the framing itself — feeling they are indeed in the private sector, but certainly not guilty of the sorts of malfeasance characteristic of many corporate actors.

Back to Basics

It is unfortunate that in the current global ecological crisis, those who claim to be advocates for the planet fail to fully understand the nature of the interactions that exist among the most important inhabitants of that planet, which is to say the cultural, economic and political nature of saving the planet. At the center of this failure is a rather narrow, cold-war mentality of what capitalism actually is (socialism too).

A return to basics is perhaps in order, as I think many of my farmer friends might suggest. Karl Marx taught us of the “evils” of capitalism, to be sure. But his point was not that markets are bad, but rather that the fundamental structure of capitalist production (i.e. a “market-based economy” where an idealized notion of “the market” dictates all economic activity) carried with it the seeds of its own destruction, indeed the inevitability of destroying the very markets on which it was initially based.

Marx was attempting to analyze capitalism in a way that was clearly influenced by the materialism of Enlightenment thinkers (to say nothing of earlier sages, such as Epicurus), and his project was designed to make the analysis of macroeconomic structures somehow akin to the analysis of gravity or the electromagnetic spectrum. While his success at doing so is contested by many, it certainly cannot be said that he was somehow arguing that markets were inherently bad.

Indeed, it is evident to me that his view of capitalism was actually that he thought of it as a temporary stage of macroeconomic development which would, by its internal contradictions, cause its own destruction, much as had the internal contradictions of Feudalism before.

Although Marx said little of socialism, it was clear that he saw socialism emerging from that inevitable fall of capitalism. However wrong many of his historical predictions may have been (e.g. the reality of the Bolshevik Revolution), he saw markets as a real thing, indeed as a positive component of the historical replacement of feudalism through the bourgeois revolutions.

The post-World War II indirect East-West or “Roosevelt/Churchill versus Lenin” intellectual debate — i.e. the foundational contradiction of the underlying sociopolitical structures that led to the Cold War — contained few points of agreement. But one stood out, although there seems to have been little concern with advertising it since it was simply an underlying assumption of both sides: Small-scale, and/or peasant, agriculture would disappear.

The West saw it disappearing as agriculture became subsumed by the “efficiencies” that the capitalist system would bring, while the Soviet bloc saw it disappearing as agriculture became subsumed by the “efficiencies” that the socialist/communist system would bring. There was little disagreement about the “fact” of it disappearing.

Little appreciated at the time were the studies of Russian economist Alexander Chayanov, who, after extensive study of the pre-revolution rural sector in Russia challenged that shared notion that peasant agriculture was a “primitive” form that would be superceded by more advanced (capitalist or communist) structures.(1)

After detailed study of the Russian peasantry, Chayanov wrote convincingly that their operations were not in accord with what either side would eventually argue. Rather than religiously pursue the optimization of utility, peasant farmers planned their activities according to a schedule that included a host of conditionals, what Chayanov called “balances.”

Perhaps optimizing yield this year was one goal, but that would be tempered by a concern for how the long-term condition of the farm would be sustained. Similarly, adopting new techniques would be judged in the context of how much additional “drudgery” would be involved.

The vision of the peasant farmer as just a small-scale profit-maximizing entrepreneur was not in line with what actually happens in the world. They are formally in that socially constructed “private sector” to be sure, but hardly Morgan Stanley.

Now, three quarters of a century after this East-West non-debate, we see that both sides were surely wrong. Depending on sources, it is clear that most actual food people eat in the world is produced by peasant and small-scale farmers,(2) and that the industrial agricultural system which was presumed to end peasant farming either under capitalism or communism is mired in inefficiency and political controversy. The factories that supply its inputs and use its outputs as raw materials, have taken over its original purpose of food production.

On the relatively small fraction of the land devoted to agriculture in the world (perhaps about 25%), small-scale agriculturists produce the vast majority of the food that people actually eat.(3)

The political condition of this peasant farming sector is diverse when viewed across the world. However, a large section of it would most likely identify as “socialist.” Yet even those most militantly socialist are indeed in the “private sector” and engage in “markets.” I’m not sure how they would react if it were suggested to them that their private sector reality and participation in markets made them “capitalists.” Probably with some bewilderment.

Small vs. Corporate Farming

The complaints that the small farmers of the world have about capitalism are partially due to its functioning correctly (as theory would suggest), but mainly about its hypocritical corruption.

When J. D. Rockefeller was “participating” in the development of the early oil industry he engaged in practices that could hardly be described as fair. Charging railroads “drawbacks” (imposing a tax for every barrel of oil they shipped from competitors), predatory pricing in local markets (selling oil below the cost of production to drive competitors out of the market), bribes (lobbying) to political officials, were all part of his strategy to “compete.”

Small farmers see the same thing happening in areas where they are forced to compete with what they call the corporate farming sector. Using public research to modify traditional crop varieties which are then patented and sold profitably and exclusively; lobbying to have legal restrictions over what rural communities can collectively decide; tariff restrictions that limit access to markets — all these are viewed by the small farming sector as anti-competitive.

Yet these anti-competitive actions are precisely what those who religiously promote capitalism are best at, even as they preach a gospel of competition for others.

Perhaps worshipping the private sector is not what it seems to my academic friends, nor are free markets what they seem to presidential candidates after all.

At least that would seem to be the view from the farm — the farm across the street from the soybean field that stretches to the horizon, the farm looking to borrow $100 to repair the fence around the corral, the farm looking for help in paving the muddy road to the market — in short, the free-market farm that participates in those miraculous monopoly-free markets.

* The word “peasant” is being reappropriated by small-scale agriculturalists. So, for example, a serious journal, The Journal of Peasant Studies, now occupies center stage in academic debates. But that discussion is beyond the scope of this short piece. — J.V.

Notes

  1. An extensive discussion of this point is provided by Van der Ploeg, J.D., 2013. Peasants and the art of farming: A Chayanovian manifesto (No. 2). Fernwood.
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  2. There are a variety of reports on this, variable in terms of data sources and particularities of definitions. Recent sources include Graeub, B.E., Chappell, M.J., Wittman, H., Ledermann, S., Kerr, R.B. and Gemmill-Herren, B., 2016. “The state of family farms in the world,” World development, 87, 1-15, and Rosset, P., 2008. “Food sovereignty and the contemporary food crisis,” Development, 51(4), 460-463, and Altieri, M.A. and Toledo, V.M., 2011. “The agroecological revolution in Latin America: rescuing nature, ensuring food sovereignty and empowering peasants,” Journal of Peasant Studies, 38(3), 587-612.
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  3. GRAIN, 2014. Hungry for land: small farmers feed the world with less than a quarter of all farmland. GRAIN Report.
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March-April 2020, ATC 205

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