George Morse writes:
>A "friend" of mine - no, make that acquaintance but not in this
>department or college- has hypothesized that the "agr crisis" and the
>failure of some small farms probably is good for small towns.
The "education crisis" and the failure of some small economics
departments is probably good for education.
>she recognizes that the loss of a farm by a fourth generation owner is
>personally devastating, she argues that it is good for rural
>communities. Her heretical reasoning runs as follows:
While we recognize that the loss of a job by dedicated educators is
personally devastating, we argue that it is good for education.
> 1) When a small farm fails, the land will remain in agriculture
> (unless pulled out by urbanization). She assumes that the land will
> be bought by a larger farmer. So the only negative impacts on the
> community come if larger farms buy fewer inputs locally and spend less
> on consumption goods locally. (Call locally a 20 mile radius of the
When a small economics department fails, the students remain in college.
They will simply choose to go to a larger college or university.
The only negative impact on the educational community is if students
going to large colleges tend to take fewer courses.
> 2) On the input size, farm size appears to be related negatively to
> the percent spent locally but unrelated to the total amount spent per
> acre locally (Chism and Levins, Minnesota Agr. Econ., 676-1-4, 1994).
> So there should be few or no negative intermediate spin-offs.
Students going to large colleges don't tend to take fewer courses.
> 3) Consumer spending is shifting away from small towns toward trade
> centers by all types of consumers. The small farm families already
> spend little of their consumer dollar locally and much of what they do
> spend goes to mass-merchandisers who drain the profits from the
> locale. So the loss of small farmers has little negative consumer
> spending affect locally.
Student enrollment is shifting away from small colleges toward diploma
mills, so the loss of economics departments won't be noticed.
> 4) Especially in livestock, the loss of small farmers and replacement
> by large ones leads to enough greater efficiency that net income from
> the land increases (over long run). Further, she suggests that a
> little spin of the treadmill is good for encouraging the adoption of
> new farming practices. Higher net income (while temporary gains
> from the treadmill) leads to marginally more local spending and
> higher tax collections.
Especially for agricultural economic students, the loss of small
departmens and replacement of large ones leads to enough greater
efficiency that profit per student increases. Besides, students who
get less personal attention will tend to work harder to get recognition.
> 5) With the extremely tight labor markets, she argues that the labor
> released from small farms can be put to better use (at higher wages)
> outside farming. She argues that even before the farm crisis, 75% of
> the small farmers claimed their primary occupation is outside of
> farming. So what happens in the rural non-farm economy is equally as
> important to small farmers as what happens on the farm. Due to the
> tight labor market it is often hard for small businesses in rural
> areas to find good help. A little additional labor could provide
> greater stability and growth for a lot of non-farm businesses and thus
> benefit many other small farmers (who need to earn enough off the
> farm to keep their small farms alive.)
With extremely tight labor markets, students released from defunct
economics departments can put their efforts to better use. Most
economics students worked part-time anyway, so what happened at work
was equally important to what happened at school. Getting a job will
increase the tax base on which larger colleges and universities depend,
making the larger economics departments better funded for other
students still in school.
> So in the end, she concludes that the failure of a some small farms is
> good for rural areas!!!
So in the end, the elimination of your "friend"'s job would be good for
I don't suppose my primary crticism will hold much water among
economists, but here it is anyway. Whether something is a good or bad
thing has very little to do with the economics of the thing. The
one-dimensional analysis described is, to a large extent, beside the
point. Weighing the marginal economic benefit she claims for rural
communities over the cumualtive "personal devastation" of the small
farmers is done without blinking. Those same people become "labor",
simply a number of hours to be added to the pool. Their contribution
to the community is reduced to "inputs" and "spending". Does she apply
the same ethic to determine the quality and extent of care of her
Dean Nelson, Ph.D.
Laurel View Farm
"I recommend this matter to your serious pondering, for it is certain
that the prevalant fear of poverty among the educated classes is the
worst moral disease from which our civilization suffers."
William James (1902)
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