California is in its third year of a severe drought. Some scientists believe this will be the driest year in the last five hundred. Among other measures for dealing with the water shortage, the state has announced it will not provide subsidized irrigation water from dams this year.
The large-scale capitalist agriculture model touted by Norman Borlaug devotees (like Reason magazine’s Ron Bailey) is based on so-called “Green Revolution” seeds. These selectively bred seeds — “high yield varieties” — produce considerably higher output than traditional varieties, but also require much higher inputs of irrigation water and chemical fertilizer to produce those outputs. For this reason, corporate agribusiness critic Frances Moore Lappe prefers to call them “high response varieties.” They are far less hardy than traditional varieties — particularly those developed over the centuries by native populations to suit local conditions in the Third World — in the face of drought and other marginal environmental conditions.
As such, they are suitable primarily for large-scale, export-oriented cash crop operations — the sort which are carried on mainly on land stolen from former peasant cultivators and enclosed into giant plantations by local landed oligarchies in collusion with transnational agribusiness corporations. They require large-scale inputs of subsidized water — the kind which tends to be directed disproportionately to large agribusiness operations on such land.
Meanwhile, state-subsidized and -protected fracking operations require billions of gallons of water, depleting aquifers in some of the most drought-stricken areas like California and Texas. And to top everything off, government subsidies to fossil fuel production and long-distance transportation (like the cross-country shipping of subsidized agribusiness produce from California) encourage the generation of the greenhouse gases that contribute to the drought.
The same principle is at work behind a wide spectrum of resource-input crises. Market prices, when free from subsidies and other distortions, are a sort of feedback system that tells those consuming an input the real cost of providing it. Artificially lowering the price sends distorted signals to the consumer — much like holding a candle under your household thermostat and winding up freezing.
Corporate capitalism is built on subsidized inputs, and profitable in large part because of them. It achieved growth in the 20th century through the extensive addition of subsidized inputs, like subsidized fossil fuels and large tracts of cheap land previously preempted (stolen) by the state, rather than the intensive approach of using existing inputs more efficiently.
A basic law of economics is that when you subsidize an input, people tend to use more of it. And businesses will tend to substitute that artificially cheap input for other inputs. The distorted price system gives an artificial advantage to firms most heavily dependent on that input. For example, subsidies to long-distance shipping infrastructure tend to benefit the firms with the largest market areas and the largest-scale production facilities shipping their output the furthest distance. It makes them artificially competitive against smaller, more localized — and more efficient — forms of production. It creates artificial economies of scale at levels where they would otherwise have leveled off, leading to an economy of artificially large firms serving centralized markets.
At the same time, such responses to the availability of inputs at less than the cost of providing them means demand for them outstrips the government’s ability to provide them. The state exhausts its fiscal resources trying to keep up with demand, and when it reaches fiscal exhaustion, businesses most heavily reliant on the subsidized inputs hit the wall of resource depletion and spiking input prices.
So we see subsidies to superhighways and airports generating further demand for them, and the building of new local freeway systems to “relieve congestion” generating even more congestion, leading to a situation where the state is fiscally exhausted, demand outstrips supply, and the need for maintenance of existing highways and bridges is four times the revenue appropriated to fix them. And we see giant, inefficient agribusiness operations that are heavily dependent on water, using up the water till there’s no more.
The end result is that this model of state-subsidized capitalism has built-in crisis tendencies which will destroy it. That means a radical relocalization of manufacturing and agriculture, and a radical shortening of supply and distribution chains, and small producers that make efficient use of resources. The current model of corporate capitalism, allied with the state, far from being a natural or inevitable state of affairs, is a historical epoch with a beginning and an end. It’s digging its own grave.
Citations to this article:
- Kevin Carson, Capitalism’s Running out of Water — and Everything Else, Easley, South Carolina Progress, 03/06/14
While this is a decent article, I have qualms with your use of the word 'capitalism'. With pure capitalism, there is no such thing as subsidies or any sort of manipulation. Instead of calling it 'corporate capitalism' and tarnishing the word 'capitalism', call it 'corporatism' which essentially is a form of socialism as it uses wealth redistribution and government manipulation to achieve its goals. Capitalism is the only form of economy that can work in a stateless society because every other form of economy relies on manipulation which in turn creates a de facto government. To call yourselves 'Center for a Stateless Society' and then denigrate capitalism is rather intellectually dishonest.
You might want to do some more reading around the site, or perhaps read the anthology Markets Not Capitalism, before getting into this argument. Not only is capitalism not "the only form of economy that can work in a stateless society," but capitalism by definition requires the state.
How does capitalism require a state? Since capitalism is nothing but the free and voluntary exchange of goods, it would seem to me that capitalism can't function WITH a state.
kanuuker,
Well, like I said, you might want to read the body of work you're responding to before responding to it, instead of making people walk you through stuff that's already been said many times. But I do have a free moment or two this morning, so I'll give you the quick version of the education you could get for yourself any time:
Everything between the word "since" and the following comma in your comment above is contrary to known fact and history.
Capitalism was coined by Thackeray, was popularized by Marx and is still understood by most human beings to refer to a "mixed, state-regulated industrial economy."
You can't have a state-regulated economy without a state.
And you can't have free and voluntary exchange of goods with one.
You can have capitalism or you can have free markets. You can't have both.
"3. 'When anarcho-capitalist say capitalism they mean a FREE MARKET, not a regulated one.'
I’m sure they do. That’s what they need to extract crania from recta, learn some English and some history, and stop saying 'rat poison' when they mean 'cheesecake.'
Thing is, I attempt to give “anarcho-capitalists” maximum benefit of doubt and assume that they are anarchists in error rather than capitalists doing cosplay."
James Tuttle
This excerpt from Wikipedia might clarify some of these semantic issues, especially when dealing with this author (Carson):
In response to claims that he uses the term "capitalism" incorrectly, Carson says he is deliberately choosing to resurrect what he claims to be an old definition of the term in order to "make a point." He claims that "the term 'capitalism,' as it was originally used, did not refer to a free market, but to a type of statist class system in which capitalists controlled the state and the state intervened in the market on their behalf."[6] Carson holds that “Capitalism, arising as a new class society directly from the old class society of the Middle Ages, was founded on an act of robbery as massive as the earlier feudal conquest of the land. It has been sustained to the present by continual state intervention to protect its system of privilege without which its survival is unimaginable.”[7] Carson argues that in a truly laissez-faire system, the ability to extract a profit from labor and capital would be negligible.
Capitalism, in most of it usage, also implies a specific arrangement of production: Large resource holdings (land, factories) employing masses of people with wages. It is the left-libertarian position that this sort of economic arrangement could not have arisen without state intervention (particularly in the initial acquisition of property).
The anarchist critique goes even further: That is type owner/renter and worker/boss, relationship is founded upon athouritarian power should be opposed on the same grounds for opposing the state. A truly voluntary society would have a very different arrangement of power.
So one critique is that capitalism is illegitimate because it's arrangement of production requires the state, and another (more compelling in my opinion) critique is that capitalism is illegitimate because the authority involved is indistinguishable from the state.
Decent? That was not the word that came to mind when I read it. Water distribution has been the domain of the state for a very long time. There is nothing market oriented about it. And isn't it time the left stopped attacking Borlaug but recognized his contributions as the positivity that they were. The trouble with California is not Borlaug but a climate that can have persistent periods of drought that can last for centuries. While it is possible to have a system that will provide water that system will not work when government bureaucrats are calling the shots.
And the last time I looked we did not have a right to try to grow rice or lettuce in a desert environment.