You Can't Eat GNP: Economics as Though Ecology Mattered
by Eric A. Davidson, Ph.D.
Senior Scientist
The Woods Hole Research Center
Chapter 2
Richland for Dirt Cheap
Two Views of the Value of Soil
Richland Creek drains a forested area near Raleigh, North
Carolina, where I first started learning about soils. "Richland" is
a common name for creeks in this part of the world because the English
settlers recognized that the low-lying lands near the creeks were often
naturally fertile due to the sediments deposited during spring flooding.
By the time that I walked that land some two hundred years after its
naming, this once rich farmland was growing only spindly pine trees.
This tract of 500 acres was first purchased from the newly created state
of North Carolina in 1779. By 1860, only 70 acres of this forested land
had been cleared for agriculture, and most of that was used for growing
what was called "Indian corn."
Mr. William H. Burroughs bought the land in 1869 for $3,500. He cleared
another 130 acres and planted cotton, which was the beginning of the
end of agriculture on this land. Mr. Burroughs was not alone as a cotton
farmer. By 1880, 59,000 acres of cotton had been planted in the surrounding
county. Only forty years later, however, this parcel of land along Richland
Creek, like much of the other cotton farmland throughout the southeastern
United States, had become so severely degraded that it was virtually
useless for agriculture, and it was given back to the state of North
Carolina.
What happened in the interim of only fifty years to convert rich land
to land that was so degraded it was given away? In those days, cotton
was planted in rows spaced far apart, so that a donkey and cart could
be driven between the rows. With so much bare soil exposed between rows,
the rich topsoil was quickly eroded away in this hilly landscape, leaving
exposed a barren, unproductive subsoil that the farmers abandoned. Some
farmers were known to have boasted about "wearing out" three
farms in their lifetime. Although the soil started out naturally fertile
and rich, the purchase price of land was cheap enough that a farmer could
afford to wear out one farm and then use a small fraction of the cash
from his cotton crops to buy another parcel for the next farm.
Forty-three years later, when I was a graduate student in forestry,
my class visited this planted forest of spindly pine trees. Less than
one inch of new black topsoil could be seen on top of the abandoned eroded
farm soil. In another forty years, perhaps there will be slightly more
than an inch of topsoil. Long after I am retired, forestry students may
be able to return to this same forest and learn the lesson of how slowly
soil develops and how poorly even pine trees grow on degraded soil.
The cotton farmers of the late nineteenth and early twentieth centuries
were reacting to the economic situation of their time. Land was plentiful
and cheap, and cotton yielded good profits. Economists would argue that
these farmers were acting rationally in terms of doing what provided
them the greatest profit for their investments of capital and labor.
Ecologists, on the other hand, see a sad, irrational legacy of abuse
of the land by previous generations, which limits the potential use of
the land today and for several generations to come. Clearly, ecologists
and economists think differently about the value of soils and other natural
resources. Both ecologists and economists have visions of the way the
world works, but their visions seem worlds apart. Ultimately, however,
these worldviews can be and must be reconciled.
The Ecologist's View
The ecologist views the flow of energy and matter through the natural
environment as a pyramid. At the wide base of the pyramid is the soil
(or the ocean for aquatic ecologists) from which plants get nutrients,
water, and a foothold. Green plants depend on the soil, as well as sunlight
and air. The herbivores (cows, deer, certain insects) that eat the green
plants are less abundant than the plants, so the pyramid narrows as we
move up the food chain. The carnivores (wolves, lions, spiders, humans)
that eat the herbivores are less numerous still. Humans eat both meat
and vegetables, and because humans are seldom eaten by other carnivores,
we usually place ourselves at the top of the pyramid.
The ecologist's pyramid shows how dependent we are on a stable resource
as our base. If the soils erode away or become contaminated, it is obvious
that part of the pyramid will collapse, affecting us as well as all of
the other plants and animals in between. The width of each band in the
pyramid is not determined by a judgment of which group of organisms is
more "valuable" than another, but rather it is calculated from
the amount of energy (calories of food) or mass (weight of organisms
and their chemical makeup) produced and consumed at each level.
The Economist's View
Neoclassical economics is the mainstream modern form of economics that
applies sophisticated mathematics to the ideas of classical economists
such as Thomas Malthus, Adam Smith, David Ricardo, and John Stuart Mill.
Neoclassical economics emphasizes how supply and demand affect markets.
The neoclassical economist's pyramid is inverted. No wonder economists
and ecologists have been slow to find a common vision!
Each level of the neoclassical economist's pyramid is measured by the
monetary value of the products produced and consumed at that level. These
values are determined by monetary value judgments made in the marketplace,
where people trade their money for products. Not many people will pay
much for soil (which is the source of the expression, "dirt cheap"),
so soil is a very narrow band at the bottom tip of the inverted pyramid.
If a farmer improves the land by clearing the forest, tilling the soil,
and growing a crop on it, it gains economic value. Ironically, the soil
will lose some of its native fertility after a few years of tillage,
making it less able to support a crop with the same input by the farmer,
but the neoclassical economist still considers the soil improved because
it is now a farm that has more commercial value than the unimproved woods
or prairie. The farmer's work has added value, so the crop is a wider
band in the pyramid than is the soil. Using wheat as an example, the
value continues to increase as the crop is milled and processed, bread
is baked and transported to market, and until it is ultimately served
for consumption.
Similar examples would trace the fish in the sea as having little or
no value in the economist's pyramid until they are caught, processed,
packaged, transported to stores, bought, and served for eating. Similarly,
minerals must be extracted from the ground and forests must be cut before
economists assign them significant value.
The economist's pyramid appears to be precariously balanced on a tiny
point that is the soil layer. If the soils were washed away, would the
economist's pyramid come tumbling down? If the soil were eroded completely
away and it could not be substituted by another technology, the neoclassical
economist would agree that the upper layers of the pyramid would suffer.
If the soil resource is only partly depleted and does not disappear entirely,
however, the economist would argue that improved agricultural technologies
(more fertilizer, more pesticides, irrigation, new crop varieties) could
produce the same crop yield and the same value at higher levels in the
pyramid while using less soil at the base. In effect, technology substitutes
for the lost soil. The degree of sophistication of the technology determines
the sharpness of the angle of the pyramid.
History provides some evidence in support of the neoclassical economist's
view that technology can, to a limited extent, replace soil. Before the
advent of chemical fertilizers, about five times as much land was needed
to feed a family than is needed today. In addition to using chemical
fertilizers, the breeding of new crop varieties, the use of pesticides,
and irrigation have increased yields further. Of course, these technologies
have deleterious side effects on rivers and groundwater, which are discussed
in Chapter 6, but the fact remains that agricultural technology has allowed
us to get more food value out of each unit of land and soil.
Had it not been for these advances in agricultural technology, the
predictions of massive famine made by Thomas Robert Malthus, a classical
economist of the late eighteenth and early nineteenth century, would
have come true. Malthus predicted that human population would grow at
an ever-increasing rate (exponentially), whereas the best that could
be expected of the agricultural technology of the day was a gradual and
constant (arithmetic) rate of growth in food production, and so a shortfall
in food production relative to the needs of the human population would
be inevitable. The population has indeed increased nearly exponentially,
but growth in agricultural productivity has more or less kept up with
the demands of an exploding population (although over 1 billion people
are now malnourished, largely because of problems of food distribution
and local economies). Maybe Malthus was both behind and ahead of his
time. He did not foresee the power of technology to yield more food,
but the jury is still out as to how far we can allow the soil base to
become depleted while still feeding a rapidly growing population. I have
great faith in technology, but it would be foolish to assume that the
soil resource can be depleted indefinitely, and it is simply wrong to
assume that the soil can be replaced completely for feeding humanity.
Reconciling the Ecologist's and Economist's Visions of the World
 The ecologist's and the economist's visions of the world can be reconciled,
in the case of soils, by recognizing that the soil resource is irreplaceable
in both worlds and that it plays an essential role in both pyramids.
Whether your preferred vision of the world has the pyramid right-side-up
or up-side-down, conserving the soil resource will improve the stability
and yield of both pyramids. Technological advances (in both conventional
and organic farming) are welcome and needed, but they will not replace
soil.
The human economy works within the confines of the natural economy.
The ecologist's and economist's pyramids can remain in their present
orientation as long as the economist's pyramid is placed within the ecologist's
pyramid.
The human economic system can function pretty much as modern neoclassical
economic theory describes it, except that the economic system cannot
stand by itself. It is part of a larger system, which is represented
by the ecologist's pyramid. Although largely unpriced and thus absent
in economic analyses, natural resources, such as soil, water, air, forests,
and oceans, provide essential functions and hence must be viewed as an
integral part of our economic system.
Many farmers whose families have lived on the farm for several generations
have a land ethic -- a reverence for the land that supports them. This
ethic, and the desire to hand over their farm to their children and grandchildren,
can provide the incentive to manage the land wisely and to prevent soil
degradation. Even these farmers, however, must balance their land ethic
with their families' pressing financial needs. In many places, corporate
farms are replacing the family farm, and it is less clear that the long-term
view of a land ethic is compatible with the bottom line of a corporation's
quarterly or annual profit sheet. In many regions of the world, farmland
is being expanded into previously unsettled regions by people migrating
from overcrowded areas, and these landless poor have not yet developed
a land ethic. Although the land ethic supports sound management, it is
probably not enough to protect our soils for productive agriculture in
both the near and distant future. Farmers also need economic incentives
to practice erosion control and prudent irrigation.
In the United States, there have been some successes in encouraging
farmers to take easily erodible land out of production through a government
incentive program called the Conservation Reserve Program. If the farmer
agrees to take the most vulnerable land out of agricultural production
and plant it in native grasses or trees, then he can participate in various
price support and credit programs. Despite considerable success in reducing
rates of soil erosion, these programs were nearly eliminated by Congress
in 1995 because of opposition to environmentalism in general, and specifically
to the idea of government telling farmers how to manage their land.
In following chapters, examples illustrate how new initiatives that
draw upon the ideas of ecological economics are finding ways to include
the ecological values of resources like soils in the economic marketplace
system. In the United States, the Conservation Reserve Program is expanding
again. Another approach, conservation easements, allows landholders to
take tax write-offs in exchange for easements that stipulate the type
of development and management allowed on the land in perpetuity. New
ways of planting with only minimal tillage or no tillage, which helps
to minimize erosion, have been encouraged by government-supported research
and are becoming economically attractive to farmers. Tax credits for
planting windbreaks, building terraces, installing drip irrigation, and
other investments of capital and labor are needed to further reduce the
rate of soil erosion and to avoid salinization in many regions and countries
throughout the world.
These methods of encouraging sound soil management are still evolving
and many are controversial, but we no longer live in a world where a
farmer should boast of wearing out three farms in his lifetime, even
if such actions were economically rational in the short term. There are
too many mouths to feed and too little land to cultivate to permit such
recklessness, although it is occurring nevertheless. The disciplines
of ecology, agronomy, and economics must be engaged and integrated to
find ways to give farmers of the twenty-first century the incentives
and technology needed to act in a manner that is both economically and
ecologically rational.
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