When Becky Mansfield attacks private property explanations and solutions for overfishing in “Modern” Industrial Fisheries and the Crisis of Overfishing, she argues that mainstream policy-makers incorrectly assume profit maximization is a trait of human nature. Instead, she suggests that politics of capitalist development have imposed this trait, which economists call “individual rationality,” on fishermen and other producers in the name of economic development. Although throughout her article Mansfield brings to light critical risks posed by the industrialization of fisheries, I strongly disagree with her assertion that economic incentives are externally imposed on individuals.
Defining the nature of an economic incentive is a complex task, and Mansfield oversimplifies economic theory in assuming that there is no room inside the profit-maximization concept for preferences such as custom, equity and altruism. On the contrary, many behavioral economists (for example, see Bowles, 2004) have begun to incorporate such “alternative” incentives into models of common resources, suggesting innovative solutions to local collective action challenges. It is true that standard economic theory has traditionally ignored these alternative preference structures, but rather than discrediting solutions based on individual incentives, I believe this suggests we must better understand the idiosyncrasies of these incentives in order to align profit and environmental benefit.
I would argue that individual economic incentives, especially when understood to include aspects of human nature such as adherence to social norms and preference for fairness, can be harnessed to achieve elusive “sustainable economic development” outcomes in both fishing and agriculture. Many of the articles we read this week reveal how political-economic forces rob individual farmers and fishermen of their autonomy, and therefore distort their incentive structures. This calls for a reformulation of our food system in which the complex incentive mechanisms of individual producers are allowed to function freely.
In her article Excess Consumption or Overproduction? Julie Guthman tells a history of U.S. farm policy, hinting at many distortions to farmer incentives that have led to environmental, public health and economic development problems. The U.S. government has pursued policies that subsidize the production of a few food commodities, as these export crops help solve balance of payments problems, and an inexpensive food supply “ensures a productive and complacent labor force” (Guthman, 54). The nature of these subsidies, in combination with decreased antitrust enforcement, have led to a consolidated food industry in which farmers have lost autonomy over what types of crops to grow or livestock to raise, where they can purchase seed, and where they can send products for processing.
As contract-holders with large agri-business companies like Tyson, Purdue, Cargill and Smithfield Farms, farmers are “beholden to the quality controls and price setting” of external actors. The result has been a farming sector defined by increasing greenhouse gas emissions, water quality degradation, heavy dependence on fossil fuel inputs, and little economic gain for the average farmer. As Guthman argues, “it is the companies who purchase crops that most support the subsidy system today,” (Guthman, 61), rather than the producers themselves, as 2/3 of farmers in 2006 didn’t receive any direst subsidy out of a total of over $8 billion in direct payments (USDA 2006 Fiscal Year Budget). If we created a system in which farmers had control over their means of production and could sell in a market free of monopoly and oligopoly, the environmentally and socially beneficial incentives that Mansfield highlights as defining many small-scale fisheries may be allowed to flourish in a parallel manner on land.
Jody Emel and Harvey Neo elucidate many of Guthman’s assertions with the example of the pig industry in their article titled Killing for profit: global livestock industries and their socio-ecological implications. Consolidation and farmer subordination define the production of pork, as 64% of the industry is controlled by 4 companies, and “in many cases, the animals are owned by the ‘processors’ or slaughterhouse owners from birth to death – contract farmers are essentially hired hands” (Emel & Neo, 70). For years, farmers have done what makes economic and environmental sense – recycle manure from pigs as fertilizer for crops. Since the industrialization of the industry, however, this mutual benefit for agriculture and livestock is eliminated, as the quantity of manure generated in a Confined Animal Feeding Operation (CAFO) is outrageous, and must be disposed of in man-made lagoons that tend to pollute local water supplies. The CAFO itself is imposed on most farmers as the only means of competing in a market where grain-based feed is subsidized and a few meat processors dictate the rules of production. Again, farmer autonomy is lost and any incentive individual producers may have to limit environmental, social and animal suffering is undermined.
In sum, I believe solutions to many challenges in farming and fisheries lie in returning sovereignty to those who actually catch the fish, grow the corn, and raise the pigs. Mansfield, despite a determination to detest economic incentives and profit maximization, in fact highlights the potential for small-scale fisheries to achieve sustainable development outcomes, as long as they are allowed to operate autonomously (see p. 91). When we broaden our understanding of what exactly profit maximization means, allowing for the incorporation of alternative preferences such as social norms, customs and fairness, individual economic incentives can be a driver of positive change. It is often the intervention of the state, through subsidization, or the intervention of monopolist actors, through market distortion and control, that limit the power of individual profit maximization to achieve collective action outcomes that benefit both society and the environment.
Works Cited:
Bowles, Samuel. Microeconomics: Behavior, Institutions and Evolution, Princeton University Press, N.J.
Emel J and Neo H. 2011. Chapter 3 in Peet et al. Killing for Profit: Global Livestock Industries and their Socio-Ecological Implications
Guthman J. 2011. Chapter 2 in Peet et al. Excess Consumption or Over-production: US Farm Policy, Global Warming, and the Bizarre Attribution of Obesity
Mansfield B. 2011. Chapter 4 in Peet et al.. "Modern" Industrial Fisheries and the Crisis of Overfishing
Excellent and thoughtful response to the readings.
ReplyDelete