All Commentary
Wednesday, May 1, 1991

Perspective: Agricultural Policy

Agricultural policy in the United States is in a mess, to put it mildly. It is costly; it is controversial; it is counterproductive.

Federal income transfer payments to farmers have been at near record levels, but news stories persist of farm failures, pressures on agribusiness firms, and the need for new rural development initiatives.

Commodity group is set against commodity group as grain producers seek higher prices and livestock producers grapple with artificially stimulated feed prices.

Our grain and cotton producers are geared to produce for the export market, but they are tied to governmental price and production programs designed primarily for the domestic market. Their first market, too often, is essentially a government bin or a government warehouse.

In several states last year, farmers got more than half of their net cash farm income in the form of a government check . . . .

It is instructive to note that only about 40 percent of U.S. farm commodities are under effective price support. Non-price supported commodities include cattle, hogs, poultry, fruits and vegetables and, until recently, soybeans. These commodities, in the main, have been profitable. They don’t cost the Treasury large sums of money. Producers are free to expand or contract as they choose. They need not seek “permission” from the county ASCS office to plan the scope of their operation. They have expanded their markets.

The troubled areas are precisely those commodities that have had the largest degree of governmental price intervention. These include feed grains, food grains, cotton, peanuts, sugar, and tobacco. These are the commodities that have suffered market loss and have borne oppressive production and marketing controls.

Basic Observation: The higher the degree of governmental involvement in pricing and marketing, the deeper the economic pit in which the commodity wallows.

—Earl L. Butz, Dean Emeritus of Agriculture,

Purdue University. This is from a summary of his

remarks delivered on July 28, 1990, in

Abilene, Kansas.

Meeting of the Minds

Drink tea, and you give a friendly pat on the back to the people of India or Sri Lanka. Eat a banana and you stroke the people of Ecuador or Costa Rica. Bite on a bar of chocolate and you help add dignity to the people of Ghana or the Ivory Coast. Fly Lufthansa, Alitalia, or Japan Air and you advance our relations with our former adversaries, the once-Axis Powers of Germany, Italy, and Japan. Motor down the highway and you just may be something of a goodwill ambassador to Saudi Arabia, Venezuela, or Indonesia.

Even local frictions and antagonisms tend to be smoothed over and calmed down through marketplace voting. Catholics and Protestants trade with each other—i.e., vote for each other!—in Belfast, as do Malays and Chinese in Kuala Lumpur, Hindus and Moslems in Bombay, Arabs and Jews in Jerusalem, blacks and whites in Johannesburg. For to a very great extent, the marketplace is color-blind and bias-free in a one-on-one global meeting of the minds.

—William H. Peterson,

speaking at Gettysburg College,

September 27,1990

The Chess Men

Adam Smith, in The Theory of Moral Sentiments, compares central planners to chess players: “The man of system . . . is apt to be very wise in his own conceit; and is often so enamored with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong preju dices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chessboard have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, al together different from that which the legislature might choose to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.”

As we examine U.S. policy in the Middle East, Smith’s words return to mind. Do not, in fact, State Department strategists view the Middle East as a giant chess-board, as they decide whom to subsidize, whom to arm, whom to attack, and whom to try to turn against whom?

Central planning has failed around the world. Trying to play chess with nations hasn’t worked very well either.

—Brian Summers

Soviet Freedom of the Press

The current situation is that the state possesses a monopoly on printing presses, paper, and distribution facilities; and the success of a publication depends less on the marketplace than on its relationship with the state. Such freedom of the press is no more than a Soviet propaganda bluff unless the owners of new media enterprises gain entrepreneurial freedom. There is little point in having the right to reach a mass public without also having the fight to organize the effort so that it can endure. A free press will not long remain free if its editions appear only on state paper and are printed only on state printing presses at the pleasure of state agencies.

—Alexander Podrabinek, writing in the June 26, 1990, issue

of the Express-Chronicle, a pro-democratic

newspaper published in Moscow.

Translation by the Center for Democracy in the U.S.S.R.,

358 West 30th Street, New York, NY 10001.

Reader’s Digest Reprints China Article

“Kun Shou You Dou: Even a Cornered Beast Will Fight,” by Marcella Smith, has been reprinted in the March 1991 issue of Reader’s Digest. This article originally appeared in the December 1990 issue of The Freeman.

Freeman readers may obtain copies of the Digest version of the article by writing to FEE

  • William H. Peterson (1921-2012) was an economist, businessman and author who wrote extensively on Austrian Economics. He completed his PhD at New York University in 1952 under the supervision of Ludwig von Mises.