Our piece, Reality Check For Locally Grown Advocates: Economics Don’t Measure Up, brought many responses. Some were short and sweet:
Well done!
— Robert Stovicek
President
PrimusLabs
Santa Maria, California
Others came from those out in the trenches of the trade:
Another great, well thought-out piece. It’s funny how a movement like “local” can stir up so many misguided passions and beliefs. Thanks for injecting some truth, clarity and reasoning into the discussion.
— Chris Puentes
President
Interfresh, Inc.
Orange, California
Another was from one of the academics we referenced in this piece:
Thanks for mention of our article on local foods today.
Your last paragraph nailed it. One of the main reasons we wrote the article is exactly the sentiment expressed by your anonymous agricultural economist tipster: we know the arguments in favor of government support for local foods to be wrong, but our profession has been unwilling to fess up because there are so many grant dollars surrounding the issue and because it simply isn’t politically correct.
— Jayson L. Lusk
Professor and Willard Sparks Endowed Chair
Department of Agricultural Economics
Oklahoma State University
Stillwater, Oklahoma
Then, there are those overflowing with passion:
I’m a produce manager for a moderately-sized ($14m/year) natural foods co-op. I enjoy reading the Perishable Pundit, although articles like Reality Check For Locally Grown Advocates: Economics Don’t Measure Up ….usually make me feel both amused and frustrated.
I take great enjoyment in reading your attempts — and the attempts of other mainstream industry publications — to discredit widespread trends like eating locally or organically.
I am particularly amused by the attempts to discredit or downplay these movements. A good parallel example would be a string of articles in the trade press, including some in the Perishable Pundit such as, New Scientific Report Shoots Down EWG’s Dirty Dozen’ List As Misleading And An Impediment To Public Health, and Analysis Of CDC Database On Foodbourne Illness: Most Outbreaks Not Associated With Produce; Foodservice/At-Home Mishandling Is Chief Cause Of Produce-Related Outbreaks, which attempted to refute the Environmental Working Group’s Dirty Dozen and Clean Fifteen lists, with a combination of arguments that stated basically that (1) pesticides aren’t bad for you, and (2) the publishing of these lists actually dissuades people from buying any produce at all. Hilarious.
We are already seeing the effects of free market capitalism: the outsourcing of jobs, manufacturing, and even agriculture. If something can be done cheaply somewhere else, you argue, it should be done. Efficiency! The result is that our entire country is becoming a service industry and in the near future, the only jobs that will remain here are ones that cannot be outsourced: retail and service jobs.
Local economies become practically nonexistent: nothing in small town America can be produced cheaper than in China’s factories or in Mexico’s monoculture mega farms. Can you really imagine an economy that no longer produces anything of substance as something positive? How many farmers do you know? I’m talking about people who do the farming. People who are on their hands and knees every day, working in the fields.
I agree with you on some points: transporting produce isn’t where the cost of carbon is held (it is in the federally subsidized system of petrochemical agricultural production) and locally grown produce isn’t any more nutritious or tasty (in fact, because most local producers don’t have hydro-cooling or vacuum-cooling systems, local produce is more perishable). But your economics really are just a pipe dream.
Right now, our country is in a free-fall. Less regulation isn’t the answer. Ceding more power to big business isn’t going to save us. History will prove you wrong.
You can trot out plenty of experts that say eating conventional produce is perfectly safe, or that we should buy bell peppers from Mexico instead of the farmer down the street because somehow that will make us all richer, but the fact of the matter is that people know on an instinctive level that this simply is not true.
No number of press conferences or advertising is going to change that.
You could argue that I am an uninformed idealist, and I can live with that. From years working collaboratively with local farmers, I’ve seen the positive effects that my work has done. Sure, locally grown foods cost more, but they are worth more also. I suppose I could tell people that they should quit farming until they can afford 500,000 acres and the infrastructure it takes to run it.
I’m sure people would feel so much richer to abandon their businesses and take a job in the service industry.
All hail efficiency! All hail the invisible hand of the free market! I feel richer already.
— Adam King
Produce Manager
Wheatsville Co-Op
Austin, Texas
We are always grateful for the contributions of Robert Stovicek, Ph.D, whose contributions include these pieces:
Pundit’s Mailbag – Food Safety And The Role Of Buyers
Pundit’s Mailbag — Robert Stovicek: Trusting CDFA
Pundit’s Mailbag — Beef Industry Not The Best Guide For Produce Food Safety
Pundit’s Mailbag — False Positives Not Surprising
Pundit’s Mailbag — Improving Buyer Oversight And Responsibility
Pundit’s Mailbag — Food Safety For Private Label Versus Branded Product/One Nation Versus Another
Pundit’s Mailbag — Does A 1,200-item Audit Necessarily Result In More Safety Than A 40-item Audit?
Pundit’s Mailbag — Fighting Spirit And The Challenge To Live
Also for the willingness of Chris Puentes to weigh in on industry issues as he has with these pieces:
Tesco’s Fresh & Easy Promoting Its Pricing In A Big Way
Another Video Parody… This Time On Growers And Marketing Agents
We were also pleased to showcase the work of Professor Lusk and his co-author, F. Bailey Norwood.
We also appreciate the willingness of Adam King to lay his views on the line for the industry at large.
We are pleased that we provide him amusement and apologize if we frustrate Mr. King, but we would hardly say that we attempt to “discredit” eating locally or eating organic.
If you read pieces such as this one that we wrote supporting a Raw Foods club, it is very clear that our inclinations are in favor of freedom. So we stand on the side of those consumers who wish to eat raw foods, organic foods or locally grown foods.
For the most part, these are matters of taste and consumer preference, much as if one prefers vanilla over chocolate. It would be as foolish to say a consumer who wants to eat local should not do so as to say that a consumer who prefers Butter Pecan ice cream ought to instead eat Rocky Road.
The issue that comes up mainly pertains to advocates making substantive claims for a particular course of action, and we appreciate Mr. King’s willingness to acknowledge that at least some of the claims often made for local — that it is more flavorful and reduces carbon output — are not necessarily so.
In other cases, such as when we argued against the Center for Science in the Public Interest’s list of Top Ten Dangerous Foods, as we did here, here and here, or when we have discussed the work of the EWG that Mr. King references, we think that Mr. King avoids the nuance in our arguments.
There is always a difference between the choice of an individual and a public policy choice. In many areas, we don’t have great science. For example, there is no lifetime-length, double-blind, randomized trial in which one group is given organic produce and one given conventional so that we can evaluate the impact of organic vs conventional on disease and life expectancy.
In light of this imperfect information, if an individual wants to eat organic and has access to organic produce at a price he can afford, that is a rational choice.
A public policy decision to, say, require exclusively organic production is a whole other ball game. If yields drop or prices increase, quite possibly it would be a bad decision, causing many people to become malnourished or die — even if those people who eat organic actually are healthier.
We confess to chuckling a bit over the critique of free market capitalism. Leaving aside the issue of whether the US system has much to do with free market capitalism, we are reminded of Winston Churchill’s comments on governance: Democracy, he said, is the worst form of government except all the others that have been tried.
Critique capitalism as one will, what is the alternative? Communism has collapsed of its own weight, surviving only in small outposts of despotism such as North Korea and Cuba, or in countries such as China, where it is honored more in the breach than the observance.
We have many problems in the US, but there is no continental scale nation that is more free or more affluent.
Mr. King’s assessment of the value of trade points to a big problem with economics and with public discussion of policy issues — much of economics is not at all “instinctive.” We are not big fans of Paul Krugman’s political columns in The New York Times, but when he was a serious economist his work was often inspired. He once wrote a brilliant paper, titled Ricardo’s Difficult Idea. It is worth reading the whole piece, but here is the introduction:
SYNOPSIS: The trendy idea of rejecting Comparative Advantage is rejecting a tried and true idea that has lifted millions out of poverty.
The title of this paper is a play on that of an admirable recent book by the philosopher Daniel Dennett, Darwin’s Dangerous Idea: Evolution and the Meanings of Life (1995). Dennett’s book is an examination of the reasons why so many intellectuals remain hostile to the idea of evolution through natural selection — an idea that seems simple and compelling to those who understand it, but about which intelligent people somehow manage to get confused time and time again.
The idea of comparative advantage — with its implication that trade between two nations normally raises the real incomes of both — is, like evolution via natural selection, a concept that seems simple and compelling to those who understand it. Yet anyone who becomes involved in discussions of international trade beyond the narrow circle of academic economists quickly realizes that it must be, in some sense, a very difficult concept indeed. I am not talking here about the problem of communicating the case for free trade to crudely anti-intellectual opponents, people who simply dislike the idea of ideas. The persistence of that sort of opposition, like the persistence of creationism, is a different sort of question, and requires a different sort of discussion. What I am concerned with here are the views of intellectuals, people who do value ideas, but somehow find this particular idea impossible to grasp.
My objective in this essay is to try to explain why intellectuals who are interested in economic issues so consistently balk at the concept of comparative advantage. Why do journalists who have a reputation as deep thinkers about world affairs begin squirming in their seats if you try to explain how trade can lead to mutually beneficial specialization? Why is it virtually impossible to get a discussion of comparative advantage, not only onto newspaper op-ed pages, but even into magazines that cheerfully publish long discussions of the work of Jacques Derrida? Why do policy wonks who will happily watch hundreds of hours of talking heads droning on about the global economy refuse to sit still for the ten minutes or so it takes to explain Ricardo?
In this essay, I will try to offer answers to these questions. The first thing I need to do is to make clear how few people really do understand Ricardo’s difficult idea — since the response of many intellectuals, challenged on this point, is to insist that of course they understand the concept, but they regard it as oversimplified or invalid in the modern world. Once this point has been established, I will try to defend the following hypothesis:
(i) At the shallowest level, some intellectuals reject comparative advantage simply out of a desire to be intellectually fashionable. Free trade, they are aware, has some sort of iconic status among economists; so, in a culture that always prizes the avant-garde, attacking that icon is seen as a way to seem daring and unconventional.
(ii) At a deeper level, comparative advantage is a harder concept than it seems, because like any scientific concept it is actually part of a dense web of linked ideas. A trained economist looks at the simple Ricardian model and sees a story that can be told in a few minutes; but in fact to tell that story so quickly one must presume that one’s audience understands a number of other stories involving how competitive markets work, what determines wages, how the balance of payments adds up, and so on.
(iii) At the deepest level, opposition to comparative advantage — like opposition to the theory of evolution — reflects the aversion of many intellectuals to an essentially mathematical way of understanding the world. Both comparative advantage and natural selection are ideas grounded, at base, in mathematical models—simple models that can be stated without actually writing down any equations, but mathematical models all the same. The hostility that both evolutionary theorists and economists encounter from humanists arises from the fact that both fields lie on the front line of the war between C.P. Snow’s two cultures: territory that humanists feel is rightfully theirs, but which has been invaded by aliens armed with equations and computers.
When we read Mr. King’s lament that nothing can be produced in small town America cheaper than in China, we know he doesn’t understand comparative advantage.
Obviously, if China produced everything cheaper than the US, and, for argument’s sake there was only China and the United States in the world, then China would quickly stop exporting because the US would have no money to buy anything. This would cause changes in labor rates, in currency values, etc., that would make it possible to trade again. In general, if Country A produces apples at five time the cost of Country B, and Country A produces pears at double the cost of Country B, it will make sense for Country A to produce the pears and Country B to produce the apples.
This is not intuitive, and those who don’t study it will lead us to make poor decisions in economic policy.
We appreciate honesty in argument and so Mr. King’s assessment that locally grown foods cost more and are worth more is notable. Cost is pretty objective, and we take Mr. King at his word. When he says locally grown foods are “worth more,” we immediately ask: To whom? To an impoverished family struggling to put enough calories on the table? To a wealthy family that likes to eat peak-of-season fruit every day of the year imported from wherever it might be best?
The truth is that whether it is “worth it” or not is entirely subjective. Fortunately that is what markets are for. Mr. King’s co-op is focusing on local and, presumably, that is what the co-op’s owners/customers want. Whether Aldi’s customers want that is another issue entirely.
Our point is that if Mr. King is right — that the local produce is “worth it” — then consumers will buy it. Our critique of the UC Davis procurement system was, in large part, that they were setting up procurement policies with no reference to what their consumers actually want.
We will make one final note about Mr. King’s letter. Note how at the end, after a lengthy letter regarding local, he suddenly switches to small scale. Yet these are not synonyms. Should a supermarket in Salinas buy from a local large lettuce grower or bring in lettuce from a small, but distant, grower?
We appreciate the letters from Robert Stovicek, Chris Puentes, Professor Jason L. Lusk and from Adam King. Whatever their views, all are willing to help advance the interests of the trade and the country by engaging in public debate on an issue of great importance.
