Earlier I mentioned the Vatican position paper saying that developed nations should reconsider their farm subsidies and agricultural trade barriers so that those in the developing world won’t be hurt by them.
Unfortunately, protectionism is a perpetual risk for every nation, including those in the developed world.
After all: What politician doesn’t want to be able to please certain segments of his constitutency by offering it subsidies and protectionistic trade barriers to keep the prices it can charge for what it makes high?
Jonah Goldberg has an interesting analysis of how the U.S. has been able to ward off the kind of protectionism that has hurt Europe’s economies, as well as a warning about what may be on our horizon.
He writes:
The beauty of the American free-trade consensus over the last few decades is that it split two outlooks that tend to go together: nationalism and socialism. In terms of economic policy, nationalism is indistinguishable from socialism. When you nationalize an industry, you socialize it. And what is the difference between socialized medicine and nationalized healthcare?
Liberals are naturally sympathetic to socialistic arguments, conservatives to nationalistic ones. But to everyone’s benefit these two outlooks have been quarantined in different parties. Conservatives have been culturally nationalistic but economically liberal (in the classical sense). Liberals have been economically nationalistic — on healthcare, regulation, taxes, unions — but culturally liberal. Although it’s been quite painful for them, this cultural liberalism has kept the Democratic Party in favor of free trade and immigration. Protectionism hurts foreigners and poor Americans, after all.
Indeed, to be fair, the Democratic Party has been heroic in bucking its base — the economically nationalistic labor movement — on free trade. FDR, Truman and Kennedy were all consummate economic nationalists. Free trade was tactically in their interests for a long time because it dovetailed with labor’s interest. When the United States stopped being the manufacturer to the world, the Democratic Party struggled — not always successfully — to stay pro-trade on principle, even at the cost of votes. Meanwhile, the GOP has had the opposite challenge: to stay pro-free trade even as its ranks swell with working-class voters enamored with their paychecks, not Adam Smith.
Now, a win-at-all-costs Democratic Party has realized that this is the perfect moment for it to re-brand all of its economic ideas in the language of patriotism. Many Republicans are determined to fight the Democrats for this turf. So they too are bending their economic policies to fit their cultural conservatism.
And if we let them follow this path, we’ll have the same problems as Europe in no time.
Ending farm subsidies will eliminate the family farm from history after a several-thousand year go. Hurting the very poor that the Church says to protect.
Your food prices will increase dramatically, and this too, will hurt the poor.
The whole farm subsidy/production control arrangement is a very sensitive balancing of forces that is not going to be understood by a city slicker such as yourself, Jimmy, nor in sound bites.
Why must a family own a farm? WHy not a company? Why would poor farmers need ‘extra’ protection, but not poor ‘blacksmiths’ or poor ‘phone message takers’?
Outsourcing agriculture to another country and then permanently destroying the farmland might be a bad idea. But I think the romanticizing of farmers and farm life is humorous. My grandfather farmed most of his life. I did like to visit the farm. But he did it becuase it’s what he knew how to do. None of his kids followed in his footsteps.
Mike E, you may be right about subsidies and such, but the callousness displayed by “free market” cheerleaders to the destruction by big-business of small, family owned businesses (and farms)is un-Christian.
I am on the whole supportive of capitalism and free-markets, but in bear much sympathy for good ol’ Rerum Novarum-inspired “Distributism.” Not so much its practical policies — Distributism doesn’t seem to have any — but rather its focus on the dignity of the family and the worker as more important than simple profit.
Capitalism works. But that doesn’t mean we should just shrug our shoulders when market forces sink traditional, wholesome, family-oriented businesses because they can’t compete in a greed-driven Sam Walton world.
First of all, thanks for posting this, Jimmy. I am a big fan of Jonah’s work, and have been reading him since the late 90’s. I live in John Deere country, and I can tell you that farm subsidies are not the death or the life of the small farm. Most small farmers are already working outside the farm…because of equipment prices (believe me those are not geared to the small farmer) and all the other price of inputs.
Subsidies are basically screwing up the farm market, and many farmers will tell you that. I don’t know how Christian it is to pay someone to do nothing, as the government was doing in the past.
Corporate farms usually are going to run more efficiently, because they can afford the equipment and spread of labor to make the cost of doing business reasonable. Just because you may not like Wal Mart, it does sell stuff a lot cheaper.
I basically run by the principle that if government is doing anything more than regulation of standards and environmental protection (such as setting or subsidizing prices) you can pretty much bet it is screwing things up. The dirty little secret is that no matter how much you think that government is carefully pushing “forces” one way or the other, or taking a serious look at the market, the farm bill/subsidies are all produced by a political calculation. They are interested in winning the Iowa caucus next pres. election time. The market is a billion tiny decisions made by billions of individuals each day, and no government program is going to make it “fair.”
I thought I knew that name.
Jonah Goldberg’s editorials are regularly printed in one of the daily newspapers here. For some reason, most New Yorkers do not seem to like him. 😉
<>
And it also sells a lot cheaper stuff.
Don’t get me wrong. I’m not an economist, and don’t really have an alternative. I just hate to see people untroubled by the fact that unchecked free-market capitalism often leads to mass-produced crap and drives Mom & Pop out of business and onto the assembly line.
As Catholics, we should be concerned about more than efficiency and profit.
Personally, I think the answer to this problem is the same as the answer to most other problems… it’s the culture we need to change. Encourage people to choose quality products from local establishments rather than mass production, whenever reasonable. Communities should rally around their own rather than look to save a few cents. You’re right, Dan, getting gov’t involved should be a reluctant last resort. But that means we’ve got to watch ourselves.
Oops. My bad. The above post was buy me, and the brackets were supposed to contain:
Just because you may not like Wal Mart, it does sell stuff a lot cheaper.
I also think that this is a problem that has to be addressed by the culture (us) rather than through bureaucracy.
I mean, get the gub’ment involved in officially protecting Mom-and-Pop businesses and what do you get? France.
The fact that a business is small (or old) does not make it inherently good. Of course, the McCulture we have now ought to be enough to make most people think twice. Do we want nothing we can leave to our kids?
We really need to insist on beauty and utility, and not just rock-bottom prices.
Jimmy,
Are you leading up to Rod Dreher’s “Crunchy Cons”? 🙂
If so, I look forward to the discussion. I have the book. I don’t agree with everything in it, but it is worth pondering.
Bear,
I see your point. But I have to disagree that Wal Mart sells crappy stuff. I don’t work at Wal Mart, but I shop there every once and while and I get basically the same stuff I would get at Target for 15% less. Same brand, same movies, same fattening chips, etc. They just have a way of keeping the cost down that doesn’t involve a lot of frills. They control costs up and down the supply line, and have made distribution a lot more cost effective. I just don’t see why controlling inefficiency is such a bad thing. I think the American public is pretty keen on consumer products and they know when they are buying inexpensive vs. cheap. I personally hate Wal Mart’s produce, as I think it is cheap, not inexpensive.
I have never seen the point in buying something from a Mom and Pop store, just because they are Mom and Pop. Sure, I buy from a local Catholic bookstore in town instead of amazon because I can flip through it, or see what they have in the store without clicking 500 times. But I am buying from a local merchant because they are giving me something I want/need. I just don’t see how it is heroic to overpay for a commodity. I can used the money I saved somewhere else.
The mom and pop stores will never go away because people will always want to impulse buy, or see, touch or feel something. Remember how Amazon was going to put Borders and Barnes and Noble out of business? Well, I have both in my hometown, and they seem to be doing quite well. They might have a coffee shop now, and they might sell a lot of music, too, but industries adapt.
Personally, I think Wal Mart will tap itself out here sometime soon, and people will get sick of the mega-store feel, and the parking lots littered with garbage and empty shopping carts and head back to Mom and Pop. You are already seeing that with Whole Foods, etc.
Sorry for the length of the post…
These discussions always disgust me because I grew up on a family farm – something that was (and is) only possible because of the managed-market setup of the Ontario Milk Marketing Board. Ontario produced milk rarely has hcg in it because the quota system elimiinates the incentive to over-produce. There is no need to pay subsidies because there are only as many farms as the market can support. The milk can be sold for a decent price – yet, in the end, only costs dimes more than the milk in other provinces or across the border. Dimes. To enable people to live in a human fashion. To produce better quality milk using more environmentally friendly and sustainable methods. (Environmentally friendly and sustainable naturally, without over-regulation, because smaller farms have healthier cattle and can be managed better.)
You know something? I would rather North Americans be poorer and the economy suffer than continue to inflate and live seperated, inhuman, appetite-driven lives. The free market is not an evil thing. But its not the be-all and end-all either.
Jimmy, I enjoy this site because of the Catholic take on things. I am sure that you and I share some political leanings and probably disagree on some things. But it would be best from my perspective if this blog were to avoid perty much anythin’ havin’ to do with NRO. I’m sure these folks are nice in their own way, but they are simply unworthy of the conservative label. Catholics can do a lot better even on the web than to look to Goldberg.
Bear,
Like I said, why are ‘family’ farms so much more important that ‘farms’ – so much more that not to find family farms indispensible is to be “un-christian”?
I admit that I like the idea that those who WANT to have a small family farm should be able to do it. That probably means growing specialized crops, etc.
When someone says “oh, too bad – it’s better to be poorer than give up ‘x'” then you’re making decisions for others that aren’t yours to make. People CHOOSE to live according to their appetites, agri-business and Wal-Mart don’t force them to do it. Appealing to fallen nature doesn’t mean causing the fall. Blame people for wanting milk for dimes less, not the producers making it for dimes less.
Tim (not TimJ),
HOw about Thomas Sowell? Is Jimmy allowed to link to him? Or is that perty much best avoided, too?
Mebbe you ought to just get along out of town if’n you cain’t handle a different opinion than what yew yerself got.
I think NRO = tasty goodness; so what is Jimmy to do…avoid or provide tasty goodness…
Blame people for wanting milk for dimes less, not the producers making it for dimes less.
Hence my suggestion that the best way about this is watching our own choices and promoting a cultural change. Probably not very realistic. But you gotta do what’s right anyways.
People CHOOSE to live according to their appetites, agri-business and Wal-Mart don’t force them to do it.
No, but they do take full advantage of fallen appetites. I think there is a certain amount of responsibility in that.
What’s at stake is not necessarily family vs. company farms. It’s the fact that, frequently, businesses which operate in accordance with Catholic principles (knowingly or not) make less of a profit than businesses which don’t, due to higher production costs. This gives them a higher priced product and a free market disadvantage.
Now, some consumers may do their research and decide to buy the product from the morally superior company. But most won’t. And, potentially, the more “efficient”, lower-cost, morally inferior company will drive the morally superior company out of business.
Essentially, I’m troubled by the fact that a producer who is willing to take advantage of fallen human nature has an edge in the free market over a producer who has concerns higher than profit.
Now, I don’t know squat about farm subsidies, and I’d too like to keep the gov’t at arms length. I’m not arguing against free markets, etc. I’m just saying realities like the situation above should give us pause. They should cause us to make more responsible choices as consumers. But, realistically, most people are just going to go for the cheapest price — and not worry about the occasionally troubling process behind making the prices that low.
Personally, I think Wal Mart will tap itself out here sometime soon, and people will get sick of the mega-store feel, and the parking lots littered with garbage and empty shopping carts and head back to Mom and Pop.
Yeah, I hope you are right, Dan.
Mike E – What you seem to be ignorant of is all the ways that governments and corporations take punitive action against small farms – and small businesses of other types too. Over-regulation by the federal government hikes the cost of production up to a level that more often than not makes it impossible for small businesses to compete.
And I would argue that there is indeed something wrong with appealing to the worst of human fallen nature in order to make a buck. That you don’t see a problem with that indicates a problem with your thinking, not mine. If the only job of the state is to facilitate free trade and stay out of the moral choices of their citizens, then we might as well strike down all laws that seek to legislate morality. Decency laws? Get rid of those – if some guy wants to make a buck by advertising using naked models on the street corner, he ought to be allowed to. After all, theres nothing wrong with appealing to fallen man, right? Don’t forget legalizing prostitution and drug use.
Lets not pretend this isn’t a valid moral question about making it possible for people to live genuinely authentic and ethical lives, just as much as forbidding prostitution or the drug trade. You simply value some things more than others. But free-trade fanatics want to make it impossible and/or illegal for a place to adopt the sort of system that made my childhood possible. The WTO meeting in Beijing wanted to impose sanctions against countries that maintained what you call ‘protectionist’ policies, like co-operative managed markets. What right does anybody not living in my community have to make that sort of decision for us?
The question here is this – what do you honor and promote? Values of family, integration, health, quality, morality, sustainability? Or just money. And hope that enough money will make up for the fragmentation of local communities.
There was some quote, wasn’t there? ABout the love of money? Hmmm….maybe you can remember it for me…
I used to own a screen printing shop, and our profit margin was so small that buying imported raw goods was just a fact of life. If we had insisted on buying only American t-shirts we would have gone belly-up quick (even most American tees are made from imported textiles).
Our corporate customers (heck, ALL of our customers)were looking for the least they could pay for an adequate product. They could not afford to squander their profit margin, either. They routinely took competitive bids and we were keenly aware of that.
The truth is, most people want to favor local goods over foreign, but won’t pay much to do so. They have their kids to look after, too.
I do think we should give preference to the local economy, but not through ham-fisted federal interference that may do more harm than good.
The success of Wal-Mart is just a reflection of the culture. We can’t blame them for just being there. If tomorrow they began selling only American-made goods, they would shrivel up and blow away within a few years, and we would all be complaining about some other retailer, while spending a quarter of our paycheck at that same retailer every week.
Look in a mirror, and repeat… “I am Wal-Mart… I am Wal-Mart…”
I think a lot of people are stealing some bases here. We go from buying the same product a few cents cheaper at a mega-store to having a greedy and fallen nature of uninhibited love of mammon. We are basically taking about t-shirts and milk. I am sorry, but I just don’t see how this is the fall of Western civilization. The economy is roaring, jobs are plentiful, and household incomes are rising. Why can’t we make Mexico, China, India, etc. a better place to live by trading and buying from them? I am all for America, but it makes everyone better when we trade. We are a human race after all.
Despite NAFTA, CAFTA, etc we are still going strong, and we are improving Mexico, etc.
Basically, when you ask for a subsidy, you are just asking for everyone to pitch-in for your benefit. Now, sometimes that needs to be done (ie natural disaster), but to do this for the general course of business is dangerous. Is there any responsibility on the person taking the subsidy?
The other issue is why is it that people believe that keeping someone inefficently employed in this country is inherently better than keeping someone in a corporation or overseas employed? I understand wanting to buy things from local stores that you like, but what if I don’t like them or think that they’re charging to much of a premium over someone else?
If I’d like to support a local Catholic business I can look at the one’s advertising in the church bulletin. Are they the cheapest, probably not, but I like their values and would be willing to pay a bit more because of it. If their price was to much higher to justify I would go elsewhere. Is this, in any way, a moral decision? No, this is a market. Most of the moralizing of “local” vs. “Wal Mart” goes away as soon as the numbers get large enough. Would I shop locally for a little bit more, sure. Would I buy a product that was thousands and thousands more locally for no reason other than that it is local, probably not. This is price discrimination, my fallen nature has nothing to do with this
There’s still plenty of room in the American economy for Mom ‘n Pop shops, but they need to be specialized.
For example, I buy things like shaving cream and chicken noodle soup at Walmart. It costs a lot less than a local store for the same product.
However, the last time I bought a new laptop bag at Walmart, it fell apart within three months. So, I went to the local specialized bag store and got a bag that cost a lot more, but it’s still going strong.
America doesn’t need tens of thousands of Mom ‘n Pop stores selling shaving cream in the most inefficient way possible. But it does need highly specialized Mom ‘n Pop stores that can focus on a niche and offer expertise and quality. That’s something that mega stores can never do well.
Oh, Kate. Calm down a bit… you’re getting all hysterical like the proferssor chick at Harvard who thought she might pass out if the boys said that girls were different…
YOU are the one who is ignorant. I just asked some questions. I even said that I think family farming is a way of life that shouldn’t be stamped out. And you can put your self-righteous BS about my “love of money” away too, you don’t know anything about me. (if you can’t find a place for it, I have a suggestion:))
I am well aware of how regulation damages business. And markets don’t create regulation, politicians do – usually with (D) after their name. Sadly, not enough republicans are conservatives and so they whore themselves to business.
My point is that we seem to thing we, here in the US, are the only people entitled to jobs. When WalMart buys from India or China, those REALLY poor people get to eat.
We have the opportunity to move on to something else. Yes, many people put money ahead of everything else, and they are getting their reward right now.
Free markets didn’t make your childhood all but impossible, people did. People who want cheaper things. SOmetimes out of greed, sometimes out of choices. If a person with no post-secondary education wants to marry at 19 and raise a family with a stay at home mom, I think Wal Mart, Target and the like are the ONLY way he’s going to be able to do it.
Materialism is what’s bad, not capitalism. Free markets have lifted MILLIONS out of poverty around the world. To quote Wm. F Buckley (sorry, Tim) quoting someone else “the problem with socialism is socialism, the problem with capitalism is capitalists.”
Bear,
Thanks for the reasonalble reply. I share your concern about appealing to base nature. I don’t shop at Wal Mart myself for that reason, but I am glad they exist to help poor people afford basic necessities. When we as consumer ARE willing to pay a little more for local products, there will be more local products. They don’t disappear overnight when the bigstores come in. They exist together for awhile and people choose which will stay in business. I shop for local stuff where I can, an don’t lose a seconds sleep over Amazon, Target, or McDonalds.
MMmmmmm…. McDonalds. Gotta go.
Mike E.
Even if you felt that you were being unfairly attacked earlier, it wasn’t really necessary to respond the way you did.
There really shouldn’t be a place for mere insult on a Catholic blog.
Actually — the Chinese goods may be made by actual slave labor.
This is why I try to avoid Chinese goods.
Other Third-World countries — well, I’m not, in fact, going to do something better for them than buy their goods. (And send money to Catholic Relief Services, but that’s another matter.)
TimJ,
Fair enough, and true enough.
My apologies to Jimmy.
Actual slave labor would be bad. How does one find out if it’s slave labor, or labor feeding some poor chinese soul?
Why should one have more concern for a person 10,000 miles away than their neighbor? It is the typical false compassion. Is your compassion so weak that for a nickel you now feel compassion for another person 10,000 miles away in a different country? Just be honest, and say you care less about your neighbor than your pocketbook.
The case for Mom & Pop’s is that they don’t whore off the government. How many family farmers are whoring of Medicaid? How many Mom and Pop’s are are whoring off public assistance? How many employees does Wal-Mart have on public assistance? It is real easy to make lots of money when the government subsidizes a good portion of your employees.
Hmmm…I ask questions and point out some things that might mean someone’s pet issue is just that, and what happens. Does anyone provide a reasonable response? Sure, Bear, Mary, others. BUt also, I get called “unchristian”,”ignorant”, and slandered twice about “love of money”/”pocketbook over neighbor”
Nice. GOtta go…there are workers to exploit, I have to go not shop at the Mom N Pop store.
P.S.
Hey M.Z. – where I live, there are lots of Mom N Pope “whoring” off teh government. We call them family farms.
Mom N Pops whoring off the government, I mean.