Southern Agriculture's Stake in Occupational Freedom

Abstract

The current widespread controversy over postwar government agricultural policy reveals a great diversity of opinions. On the one hand there is talk about abandoning the parity concept and letting farm prices seek their level in a free market, and on the other hand there are demands for higher guaranteed prices and more severe production and marketing controls. There are even those who advocate high government-guaranteed prices without production controls or marketing quotas. Southern agricultural leaders are to be found in nearly all of the major opinion groups and each is sure that he supports the best interests of Southern farm people. It is highly desirable to find a fairly simple basis for deciding whether a particular policy or program will have good, bad, or indifferent effects upon agriculture in general and upon Southern agriculture in particular. It is the opinion of the writer that if such a criterion exists, it is to be found in certain basic facts and relationships that exist in agriculture and will probably continue to exist for a fairly long time regardless of governmental programs and policies. This paper sets forth one such criterion and uses it as an analytical tool in evaluating certain possible postwar economic policies and programs. It is an exercise in futility to try to study the economic problems of agriculture without devoting considerable thought to agriculture's relative position in the total economy. Practically all of the economic activities in the United States and in the western world are closely interrelated. Through the market networks of our exchange economy, both prosperity and depression tend to spread from industry to industry and from nation to nation. In a competitive economy free from artificial restrictions upon the movement of people and resources from one place to another and from one industry to another, there will be a tendency for prices paid for the use of similar factors of production to be equal in all industries. In a dynamic economy, however, the prices paid for the use of identical productive factors would not be exactly equal in all industries even if conditions of pure competition (in the theoretical sense) prevailed throughout the entire economy. Except in the case of the most liquid form of capital, there are considerable costs involved in shifting resources from one industry to another and from one place to another. To attract resources and people from one industry to another is therefore no easy matter and can be achieved only by offering remuneration which is more than sufficient to offset all transfer costs.