Agriculture's Sacred Seventh; F. A. Harper

The beginning of this major change seems to me to have started with the collapse of farm prices following World War I. It was then that a class consciousness began to appear· conspicuously among farmers, and they began the clamor for ascendancy into the political saddle under the slogan "Equality for agriculture." The move gained adherents but showed few outward signs of vic tory until the late twenties when the Federal Farm Board was established under a Republican administra tion. This became the forerunner of the New Deal and Fair Deal agricultural programs. And it is now clearly supported by many Republicans and Democrats alike. It seems to me that this change among farmers is reflected in a belief in the sacred seventh for agricultural incomes. In simple terms, this is the idea. By some miraculous fixity, the national income is presumed to be tied to agricultural income in the ratio of seven to one.

It is of passing interest to note how down through history the number seven has again and again come to be an object of devotion. It is encountered frequently in mythology, in religious practices, in gambling, and in other places. Various reasons have been given for the repeated appearance of· the mystic seven. One explana tion is that it symbolizes completeness, being a com pound of the numbers three and four-the number of sides bounding the triangle and the square. And now again the number seven has come to cast its spell, this time over the farmers who are to be guaran[257 ] teed, by one device or another, one-seventh of the national income. The size of the agricultural income, be it noted, is considered as the cause of the size of the national income, rather than the other way around. The agricultural tail wags the national dog, so to speak. The distinction is important in understanding how this con cept has come to dominate the politics of agricultural policy.

Faith in this doctrine, now so widely held, is reflected in the words of one of its most effective proponents who speaks of it as one of the «eternal verities," as one of the «unalterable laws of exchange" whereby it is easily pos sible to '<not only protect the income of agriculture but also protect the income of other groups in direct propor tion" by means of these «most profitable investments." He proclaims that «several billion dollars" spent during 1930-1941 would «have been a good investment to pre vent the loss of $500 billion." He speaks of this automatic ~<sevenfold turn of the initial dollar" as a «key factor in our economy and [one that] assumes fantastic impor tance." And admittedly it does assume great importance; if it is true, it should be followed, but if it is untrue, it becomes fantastically dangerous. ScatteringSeed Dollars Let us first presume it to be true. To follow it would then greatly simplify the problem of attaining a contin uing national prosperity for all of us, farmers and others "alike. By its miraculous power, we could have any na[258 ] tional income we want. All that would be needed would be to scatter amply the seeds of income (money) among farmers. These dollars would thereafter return home to all of us, each dragging six additional dollars behind it for others in the national income as a whole. It would be just that simple, by this concept, to assure national pros perity.

In carrying out this scheme, there is the political prob lem, of course, of how and where to scatter the income seed among the five million farms of the United States. Some wag has suggested that it might be scattered geo graphically by airplane. Or it might be sent to all RFD box holders, as congressmen once sent garden seeds. Or it might be sent to the various local political potentates~ each of whom would parcel it out among farmers in his locality. But these simple ways of doing it all have the difficulty of being too vividly exposed to scorn and the danger of discrediting the theory. So more profound ways of doing it have been devised and are now in effect. They are designed to befuddle the beholder sufficiently to cast the proper spell of mysticism. Parity Programs and the Like It is not necessary here to review all these forms of scattering the presumed seeds of income. They are fa miliar to all of us under the various and sundry names by which federal checks are being sent to essentially every farmer in the land, directly or·indirectly, ostensibly in return for something they have done. Merely being a [259 ] farmer enables one, according to the rule of seven, to serve his nation by being a seed bed for the national income.

The rule of seven is not always trotted out in front of every program, but it is evident in the background just the same. Take the parity price idea, for instance. It amounts to the same thing, because its leading propo nents assert that maintenance of farmers at a fixed "par ity" of prosperity is essential to assure the prosperity of others in the nation. And the same principle applies to essentially all the other farm programs. The source of the money to serve as seed for the sevenfold national income presents another political problem, but it is one which its proponents resolve easily in terms of.the concept itself. If the rest of the nation is predestined to share in the harvest, it is obviously their responsibility to share in the cost of the seed. So the cost is declared to be a proper use of funds collected under the compulsion of taxation. Were anyone to be allowed to shirk his share of the cost of·the seed, he would then become a free-riding reaper. Therein lies the rationale for the source of funds to operate the scheme.

No Basisin Fact What, if anything, is wrong with the idea of turning the national income into this gigantic "numbers" game? In the first place, the nxed ratio of seven to one has no basis in fact. Over the period from 1929 to date, with its ups and downs, the ratio between gross farm income [260 ] and gross national income has varied rather widely and has averaged eight and one-half to one instead of seven to one. The person who assumes it be seven to one will have erred, on the average, by more than one-fifth of the figure he was estimating. And yet something with this degree of error is proffered as justification for a con trolled economy for an entire nation. One can easily see why this ratio can't be so. In the early days of the nation, essentially everyone was a pio neer farmer, close to self-sufficiency. Even in 1790 farm ers still made up 96 per cent of the population. The ratio then had to be near one to one-farmer incomes, that is, were nearly all of the national income, rather than merely one-seventh of it. And over the years the nonfarm part of our economy expanded more than did the farm part. The nonfarm end of the ratio had to increase; it couldn't have remained fixed. And there is no reason whatever to assume that it will remain where it is at any given moment. At some time in the future it is conceiv able that farmers may be prosperous at only one per cent of the national income.

The Fly on the Chariot Wheel Another thing wrong with the seven-to-one idea is that it assumes a causal sequence which the facts do not bear out. Causation is a pulling force like that of a tug boat hitched to an ocean liner-the one in front pulls the other one along behind it. If changes in farm incomes were the cause of changes in national income, as claimed, one [261 ] would expect over the years to find changes in farm incomes preceding changes in national income.N 0 such sequence is evident in a study of the changes in incomes over the years. The claim of causation reminds one of the fly on the chariot wheel which imagined itself to be powering the vehicle in its dash down the raceway. Farm and nonfarm incomes tend to change direction together, indicating that their changes are induced by a common cause rather than for either of them to be the cause of the other. An Eternal Verity?

If this seven-to-one ratio represents one of the "eternal verities" for the United States, why should not similar reasoning apply for Britain, for New York State, for New York City-everywhere? Yet, in reality, it is not true for any of these. Let's consider John Smith for a moment. On careful study, I suspect one would find that his income over the years has been as near some fixed proportion of the national income as the one-seventh has been for agricul ture. Why not, then, accept John's income as the key to national prosperity? Why not shower largess upon him in order to make the rest of the nation more prosperous, proportionately? Every dollar we give him, by this the ory, would make us that much more prosperous. If the one-seventh works for agriculture, some other proportion ·would work for John. And it would be so much more simple to administer the scheme with a seed bed of [262 ] national prosperity based on only one key person instead of five million farmers.

Both Sides Cause a Trade The total trade of a nation,. out of which alone a "national income" is derived, is composed of innumerable individual trades between persons or their duly delegated agents. If we look at integral parts, any miracle of pros perity by such as the theory of the sacred seventh becomes clearly an illusion. Neither side of a trade is its sole cause. It requires the approval of both sides. One is as necessary to trade as the other, whether the traders be farmers or bootblacks. To endow anyone occupation with such presumed economic generative powers is to fail to understand the nature of trade itself. It is undoubtedly true that if you .give a person a dollar, he is inclined to spend more dollars than before. But this is not a trait peculiar to farmers. Everyone is so inclined. If money were to be made freely and scattered by airplane, there would be a scramble to spend it. But prices would be correspondingly higher, and persons would be no better off than before in terms of their real economic welfare. And likewise, if money obtained by taxation were to be scattered, some persons might have more dollars than before and others less. But these would cancel each other out so that the average person would have no more than before.

For the nation as a whole, production is the key to [263 ] national prosperity, the only source of economic better ... ment. That alone is the substance of which prosperity is composed. No amount of added purchasing power can empower anybody to buy something that has not been produced. Whatever is produced is available to consume, no more and no less by whatever magic formula. As with a cake of any given size, there is no way to cut it so that the sum of the parts will exceed the size of the whole. Nor can an artificial increase in the size (in dollars) of the sacred seventh of agriculture perform any like mira cle on the welfare of the nation as a whole. Patternfor Disaster In the history of farm programs both here and abroad is written clearly the portent of national disaster. The government nrst supports an industry above its merit as judged by consumers in a free market. The less efficient producers are kept in business and continue competing with the best. The market refuses to take the output at this supported price; there is "overproduction." The government buys the surplus. The attempt to dispose of the government's stocks makes enemies, and so it is de cided to impose birth control on production. The license to produce then becomes a black market commodity, and perpemates official power and graft. Producers-in this instance, of one crop-turn to producing other crops which are, in tum, put through the same cycle, one after another. The government soon will have to decide whose sons are to become farmers, as has been done in many [264 ] ~ountries under socialist regimes. Other industries followlJ one by one. The dead end of this new brand of "justice'~ is complete communism, the complete abandonment of competitive private enterprise.

This certainty of authoritarian control following in the wake of subsidies is already backed by our own Supreme Court which has logically proclaimed that the govern ment may properly regulate that which it subsidizes. Rights of Free Men If we acknowledge the rights of free men, to the de fense of which I hope farmers in large numbers will one day return, it requires above all else in economic affairs that each person have what he produces. He then has the right to use it himself, or to give it away, or to trade it for something he prefers instead. And when free men trade, the same rights must prevail equally on both sides. There is no justice in robbing either side of a trade in order to give the other side more purchasing power. Each starts with what is properly and wholly his personal property, and retains equally full rights over the terms of its trade. To justify theft by either side-in any form and by any name-under any mystical manipulation of some presumed message from On High is, I believe, a major violation of justice and a defilement of the ethics of a good society. As the moral code of private property breaks down in favor of legalized theft, farmers-a dis tinct numerical minority group-are sure to lose out to the power of greater forces elsewhere. Their interest lies [265 ] in strict dominance of the moral code, as is true for·every other minority group and for every person ..

Democratic Socialism .And finally, I would point out a fundamental error of procedure being practiced in our society. By this process, collective injustice is imposed upon persons whose per sonal ethical codes are doubtless not otherwise subject to serious question. Take, for instance, the recent vote for political control of wheat production. This process goes under the euphemism of "letting the farmers work out their own salvation by democratic methods." The right to vote on this question, however, is completely out of gear with the property rights of free men. Wheat farmers were first given a subsidy on their wheat, and then acre age control was demanded by the government under· threat of discontinuing the subsidy. So when the farmers voted on production control, they were really voting, as they saw it, on whether or not they wanted to continue to receive the subsidy. Now let us set up what seems to me to be a fairly close analogy to this process. Suppose the government were contemplating granting a hundred thieves the right to steal ten bushels of wheat from each of a hundred farmers every night. Having decided to settle the ques tion democratically, it is put to vote among the hundred thieves who are "allowed to work out their own salvation by democratic methods." Would it be surprising if they were to turn in· a vote of "yes" by at least 87 per cent?

[266 ] One might ask, however: ·Why were the hundred pro spective victims-the owners of the wheat-not allowed to vote? Why were they disfranchised when it was their property that was to be taken? Why, in fact, were the prospective victims not given the full and exclusive right of vote? Or why put it to vote at all? Coming back to the wheat vote: Why were just the wheat farmers allowed to vote on this question? Why not also allow other farmers and consumers, who buy wheat, to vote on it? Why not include all taxpayers, all of whom are prospective victims? Why not, in fact, give the pro spective victims the full and exclusive right of vote on this question? Or why put it to vote at all? A Positive Suggestion Perhaps, if these private matters are to be put to vote at all, housewives should have the exclusive right to vote on whether wheat production will be controlled; farmers should have the exclusive right to vote on the closed shop and wage demands in factories producing farm machin ery; foreign producers plus prospective domestic con sumers should have the exclusive right to vote on our tariff question; and so on. I submit that such a procedure would make more sense than the present pattern where everyone votes on whether some gang of which he is a part shall not only fleece others but also force them to finance the task of shearing. Better still, I would condone neither plan, upholding instead the personal rights of property and its management.

[267 ] \Vhy not go back to the basic tenet of free men-the rigorous protection of the rights of individual persons to 'what each has produced, either in the form of wages or as some other form of private property? Why, not re nounce this new divine right of majorities and deny that majority vote makes a thing either morally right or eco nomically sound? Such, as I see it, is the only sound and permanent solution to ~~the farm problem.~' And the same solution applies to all the other class problems which have grown up to plague us as we have advanced further and further into socialism in America. [268 ] SUBSIDIES FOR GHOSTS IN THE Far West are many "ghosf' towns. Originally they sprang up around mines and for a time were populous and booming. Some of their residents became million aires. Then the ore was exhausted, or Congress decreed a lower price for silver, and the people gradually moved away. Now the false fronts are tumbling down and coyotes bark in the streets.