Healthy soil and sustainable growing

[Doug Willhite <drwillhite@earthlink.net>]

The wealth of nature
by John Michael Greer
http://thearchdruidreport.blogspot.com/2009/07/wealth-of-nature.html

Last week’s Archdruid Report pointed out that modern economic  
thought, through its lasting difficulties in coming to terms with the  
dependence of human economic activity on the world of nature, has  
played a very large role in backing industrial civilization into its  
present difficulties. It probably would have been wise, though, to  
point out that the word “modern” here is being used in a historical  
sense, for these difficulties date straight back to the beginning of  
economics as a distinct field of study.

Adam Smith, who set the whole ball rolling with his The Wealth of  
Nations, started that book with the following sentence: “The annual  
labor of every nation is the fund which originally supplies it with  
all the necessities and conveniences of life.” It does not seem to  
have occurred to Smith that the annual labor of a nation would be  
utterly useless without the natural raw materials, goods, and  
services – in the language suggested in last week’s post, the primary  
goods – that enable labor to be done at all, by making human life  
possible in the first place and by providing all that labor with  
something to labor on. Certainly it has occurred to very few of his  
successors.

The classic example is David Ricardo, who remains an influential  
figure in economics, not least because his theories – he was a vocal  
proponent of free trade, and provided what are still the standard  
arguments in its favor – proved to be highly useful to the British  
Empire in its time, and of course to the American empire in ours.  
Ricardo is famous for, among other things, building a significant  
part of his economic theories on the claim that land retains its  
“original and indestructible” economic value no matter what economic  
use is made of it.

This is an odd claim. Even in the early 19th century, when Ricardo  
originally made it, plenty of people could have set him straight. Bad  
farming practices that led to soil sterility were known in Ricardo’s  
time, and so was the impact of industrial pollution – though of  
course we have gotten much better at both since then. It may be  
relevant that Ricardo was born and raised in London, as far from the  
realities of agricultural life as you could get in his time; it is at  
least as relevant that his theories show the habit of dodging  
inconvenient facts for what look uncomfortably like ideological  
reasons – his arguments in favor of free trade, for example, only  
work if you grant the unstated assumption that international trade  
and its supporting infrastructure cost nothing in terms of labor,  
materials, or money, and also dodge the extent to which control of  
the transport routes and exchange processes determine who profits  
from the trade.

What is far more interesting, though, is that his definition of land  
prefigured the way that natural resources have been treated by most  
economists ever since. This is as true of radical economists as of  
their capitalist rivals; recent proponents of “green socialism,” for  
example, might want to reread Marx, who explicitly rejected the idea  
that the “free gifts of nature” could have any value at all. (The  
disastrous mistreatment of the environment common under Marxist  
regimes in the 20th century was not accidental, but a natural  
outgrowth of Marxist theory.) Nearly the only concession made to the  
ecological dimensions of economics in the mainstream, and it’s a  
fairly recent one, is the concept of “externalities” – the  
recognition that if somebody does something that fouls the  
environment, other people may suffer a loss of economic value as a  
result, and might deserve compensation for that.

Now of course this is true, and Garrett Hardin’s famous essay “The  
Tragedy of the Commons” built on that insight to remind us that a  
society that permits the advantages of ecological abuse to go to  
individuals, while the costs are shared by the whole society, is  
effectively subsidizing the destruction of its environment. Still,  
both the “externalities” argument and the structure Hardin built on  
it miss the central issues raised by the interface between  
environment and economics. Both tacitly accept Ricardo’s fantasy of  
invulnerable land as the normal state of affairs, apply it to the  
entire environment, and then focus attention on the exceptional  
situation when somebody does manage to make land (or some other  
environmental resource) less valuable.

Let’s take a closer look at the land whose value Ricardo considered  
“indestructible.” He was talking primarily about land as an economic  
factor in agriculture, and so shall we. What he apparently did not  
realize, but ecologists have shown in exact detail since his time, is  
that fertile land suitable for growing crops does not simply happen.  
Like anything else of value, it must be made, and once made, it must  
be maintained; the only difference is that the laborers that make and  
maintain it do not happen to be human beings.

Soil suitable for crops, after all, is not simply rock dust A large  
part of it – sometimes more than half – is organic matter, some  
living, some dead but not yet wholly decayed, some dissolved into  
organic colloids complex enough to give analytical chemists sleepless  
nights, and all of it is put there by the activity of living things  
over long periods of time. Energy and raw materials flow through  
soil, uniting bacteria, fungi, algae, worms, insects, and many other  
living things into one of the most intricate ecosystems on Earth.  
Plants participate in and depend on this bewilderingly complex world;  
they draw water and mineral nutrients from it, and cycle leaves and a  
wide range of chemical compounds back into it.

The farmer who wants to grow crops is attempting to extract wealth  
from the underground ecosystem of the soil. She can ignore that, and  
simply plant and harvest with no attention to the needs of the soil,  
but the soil will be depleted of nutrients in a few years and her  
crops will fail. Alternatively, she can replace nutrients with  
chemical fertilizers, predators with pesticides, and so on; if she  
does this she will have to use steadily larger doses of chemicals to  
get the same yields, and when the chemical feedstocks run out – as  
they eventually will – she will be left with soil too sterile and  
pest-ridden to grow much of anything. If she wants to fulfill  
Ricardo’s promise and hand the land on to her grandchildren in the  
same condition that it came from her grandparents, she will have to  
provide the things the soil needs for its long-term health. Put  
another way, she will have to barter with the soil, giving it the  
things it will accept in exchange for crops.

This is the premise of organic agriculture, of course. It’s a premise  
that has proven itself over millennia, in the Asian farming regions  
that inspired the organic pioneers of the early 20th century to  
devise a more general way of doing the same thing, and over decades,  
in the farms now using organic methods to get yields roughly  
comparable to those of chemical agriculture. The organic approach has  
many dimensions, but one may not have received the importance it  
deserves. To an organic farmer, land is not a commodity that can be  
owned but a community with which she interacts, and that community  
has its own economy on which the farmer’s own economy depends.

Imagine, to develop this concept into a metaphor, that our farmer got  
crops, not from the fields, but from a village of some indigenous  
tribe near her home. The inhabitants of the village are deeply  
conservative, and their own economy follows traditional patterns not  
subject to change. If the farmer wants crops, she must find out what  
the villagers are willing to take in exchange for them, and that will  
be determined by the internal dynamics of the village economy: what  
is already produced in surplus amounts, what is scarce, what is  
desired and what is detested by the villagers. Her relations with the  
village, in other words, would be exactly the same in outline as  
those of an organic farmer with her land.

The same thing is true of every other form of economic activity,  
though the dependence on nature may be less obvious in some cases  
than in others. Behind the human activities that produce secondary  
goods lie nonhuman activities that produce primary goods – the  
biological cycles that yield soil fertility, crop pollination, and  
countless other things; the hydrological cycles that put fresh water  
into reservoirs and taps; the tectonic processes in the crust that  
put economically useful metals and minerals into veins in the rocks;  
and, of central importance just now, the extraordinarily complex  
interplay of biological and geological processes that stored away  
countless billions of tons of carbon under the earth’s surface in the  
form of fossil fuels.

Conventional economics assumes that these things get there by some  
materialist equivalent of divine fiat. This misstates the situation  
disastrously. Primary goods are produced by an exact analogue of the  
way that secondary goods are produced: raw materials are transformed,  
through labor, using existing capital and energy, to produce goods  
and services of value. The difference is simply that all this takes  
place in the nonhuman world. Human beings do not manage the  
production of primary goods, and the disastrous results of trying to  
do so suggest that we probably never will; on the other hand, in at  
least some cases – maltreated farmland is a good example – we can  
interfere with the production of primary goods, and suffer the  
consequences.

E.F. Schumacher’s insight, that goods produced by nature are the  
primary goods in any economy, and those produced by human labor are  
secondary goods, thus needs to be extended further. There is also a  
primary and secondary economy. The cycles of nature that produce  
goods needed by human beings constitute the primary economy, while  
the process by which human beings produce goods is the secondary  
economy. The secondary economy depends utterly on the primary in at  
least two ways. First, as discussed last week, something like three- 
quarters of all economic value in today’s world is produced by nature  
– that is, by the primary economy – and only around a quarter is  
produced by human labor. Second, even that quarter is made directly  
or indirectly from primary goods, and cannot be made at all if the  
necessary primary goods aren’t there. This is why the attempt to  
replace a depleted natural resource with something else always  
involves substitution costs: human labor must be brought in to  
replace some part of the work previously done by nature, and the  
costs of that part of the work thus end up having to be paid out of  
the secondary economy.

We have become so used to thinking of economics as a matter of human  
labor that it’s probably best to point out that what are sometimes  
called “primary industries” – farming, mining, and the like – belong  
to the secondary economy, not the primary one. The primary economy  
consists wholly of those nonhuman processes that yield economic goods  
to human beings. Thus a farm and the crops grown on it are part of  
the secondary economy, while the soil, water, sun, and genetic  
potential in the seed stock that make the farm and its crops possible  
are part of the primary economy. In the same way, a mine is part of  
the secondary economy, while the slow geological processes that put  
ore in the ground where it can be mined are part of the primary  
economy. If you examine any human economic activity, you’ll find  
behind it natural processes that make that activity possible; those  
processes are the inputs from the primary economy that make the  
secondary economy possible.

Thus Adam Smith’s dictum cited earlier badly needs reformulation. The  
product of the natural environment of every nation is the fund which  
originally supplies it with all the necessities and conveniences of  
life; the annual human labor is simply the energy input required to  
turn some of that product into forms useful for human beings. The  
wealth of nations, it turns out, is ultimately the wealth of nature,  
and the sooner the value of natural cycles and primary goods is taken  
into account, the better chance our descendants will have of avoiding  
the self-defeating habits that are pushing modern industrial system  
down the long road to collapse. To do so, however, will require a  
clear sense of the difference between value and price, or to put  
matters another way, between wealth and money – the theme of next  
week’s post.


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