Abstract
This paper examines the impact on agricultural development of the introduction of barbed wire fencing to the American Plains in the late nineteenth century. Without a fence, farmers risked uncompensated damage by others' livestock. From 1880 to 1900, the introduction and near-universal adoption of barbed wire greatly reduced the cost of fences, relative to the predominant wooden fences, especially in counties with the least woodland. Over that period, counties with the least woodland experienced substantial relative increases in settlement, land improvement, land values, and the productivity and production share of crops most in need of protection. This increase in agricultural development appears partly to reflect farmers' increased ability to protect their land from encroachment. States' inability to protect this full bundle of property rights on the frontier, beyond providing formal land titles, might have otherwise restricted agricultural development.
Highlights
In The Problem of Social Cost, Coase (1960) begins with the example of a farmer and a cattleraiser: without a fence, cattle will damage the farmer’s crops
Private enclosure of common lands in England may have contributed to the onset of the Industrial Revolution, by increasing both agricultural output and labor supplied to other sectors (Ashton 1962)
Returning to Coase’s setting, this paper examines the impact on agricultural development from a decrease in the cost of protecting farmland: the introduction of barbed wire fencing to the American Plains in the late 19th century
Summary
In The Problem of Social Cost, Coase (1960) begins with the example of a farmer and a cattleraiser: without a fence, cattle will damage the farmer’s crops. Aside from any external protection effects, cheaper fencing benefits an isolated farm by providing greater control over a farmers’ own cattle This allows the production of cattle and crops in close proximity, and increases cattle productivity through improvements in feeding and breeding. Barbed wire’s effects are a combination of direct technological improvements and increased protection from others’ cattle. There is little evidence of an increase in cattle production This suggests that barbed wire did affect agricultural production through the purely technological benefits of cheaper fencing; rather, barbed wire’s effects partly reflect an increase in security from external encroachment. Overall, barbed wire appears to have had a substantial impact on agricultural development in the US and, in particular, this may reflect an important role for protecting land and securing farmers’ full bundle of property rights.
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