A return to subsistence farming won’t aid economic recovery

Being a child in the world’s poorest nations is not idyllic.  Widespread poverty means that many have to work to support their families.  This limits their access to education and damages their health.  The Food and Agriculture Organisation estimates that over 150 million children under the age of 18 work in agriculture.  For that, read subsistence farming.

Poverty is a result of inefficiency; of repetitive tasks performed in such a way that it imposes the maximum burden on a person’s time and effort while returning the bare minimum for their survival.  The specialisation that results from division of labour leads to a greater return on that effort.  It also leaves time for innovation.  That innovation triggers further division of labour and creates more opportunities and wealth.

None of this can happen, though, if each specialist cannot trust others to produce the goods and services they no longer produce for themselves.  Poverty is the result of profound distrust.

In 1870, the life-expectancy of the average American was 45 years, and the median household income (in 2008 US dollars) was around $10,000 annually.  More than 70% of the population worked in or on farms.  In 2008, only 2% of the population were in agriculture.  The life-expectancy of the average American is 76 years, and the median household income is $ 50,000 annually.

Those who would wish to promote subsistence farming as a means to creating maximal employment should ponder this deeply.

Which is why it is deeply troubling to see Michelle Obama, the wife of the US president, in the back garden of the White House promoting self-sufficiency by growing your own veggies.  Even more troubling is that other world leaders have joined in the call for such action.  UK Prime Minister Gordon Brown and his wife have invited journalists to their home to quaff home-grown tomatoes and other sprouts.

Schools have been encouraged to get children to grow vegetables.  Indeed. What is the world coming to when wealthy nations promote enforced child agricultural labour?

This is an obvious and clear backlash against the credit crisis and perceived failure of the trust mechanism so necessary for the operation of markets.  If such a response were to be taken seriously, it would result in mass poverty.

The population of the US in 1870 was 38 million, it is now well over 300 million.  Between 1870 and 2008, the number of farm workers collapsed from 28 million (including child-labourers) to 834,000, but farming increased productivity to feed 260 million more people with plenty left over to export. 

There is no way that everyone could return to farming unless productivity dropped dramatically.  If that happened then don’t expect modern lifestyles and life-expectancies to survive.  If countries hide behind economic barriers that support self-sufficiency, global trade and investment will collapse.

It is unlikely that – beyond some grand media posturing by their leaders – Western nations are going to turn their backs on specialisation and economic diversity.  Too many people enjoy their iPods, mobile phones and computer games to want a (short) life of bone-breaking toil ploughing the earth.

In South Africa, though, small-scale farming is still seen as a genuine response to economic hardship.  Under the guise of "food security", thousands of households are being settled on tiny plots that are supposed to support them.   They aren’t and, as people are dispersed in this way, they find it ever harder to get goods to market, earn a living, educate their children or seek healthcare.

Setting the 17 million unemployed to rural agriculture isn’t going to improve their lives.  Increasing the complexity of the economy might.  This is no easy task, requiring belief from investors and entrepreneurs that business relationships can be trusted.

Time then for politicians to demonstrate their trust in specialisation, and commitment to honest and incorruptible leadership.  It won’t be rapid, but it is more certain than farming.