Brad DeLong's Semi-Daily Journal (2004)

I had to show my Chinese teacher a photograph to make her believe that women do agricultural labor in China.

OK, she's an upper class twit? Well maybe. But she is one of the best teachers around -- and her parents are both quite senior in the Communist apparat, e.g. father a colonel in the police.

Sorta reminds me of what Mister Sam said about the incoming Kennedyites: "I'd feel a whole lot better if these guys had ever even run for dog catcher."

As if anybody here doesn't know this...

The Economist's Big Mac index is out again, but with more than the usual ration of commentary on what the index represents. Plus, there's an opinion piece about the merits of market exchange rates versus purchasing power parity in assessing economic activity.

List of Chinese catastrophes. They really have been uniquely unlucky.

http://chasemeladies.blogspot.com/2004/05/killer-facts-chinese-disaster-edition.html

Yes, but look at it this way. Unemployment is probably very very low as a result of all that manual labor.

Bring in a few harvesting machines and all of a sudden you got a lot of people sitting on their hands doing nothing and feeling useless, fomenting rebellion and learning how to not work.

Defib--China's already at that point.

Brad--Whatever you do, do not walk around the Xi'an train station after dark by yourself. You'll find out what the daughters of the women scything wheat have got up to.

But Professor Delong, let's make a different comparison. My great-great grandfather sold tractors to the 2% of Russian farmers who, in 1916, could afford them. In 1936, his grandson was in Saskatchewan, farming a square mile and a half using horses. By the same year, Russian agriculture was collectivised and almost completely mechanised. Which had the greater labour productivity, the mechanised farms in Russia or the horse-driven ones in Saskatchewan? The climates were comparable, as were the choices of crop. It's possible that it was Russia - particularly since '36 was a bad crop year in Canada - but I'll bet it was Saskatchewan. Don't underestimate low tech agriculture. Storage and transportation have probably been just as big factors in raising agricultural productivity as mechanisation.

Now, as for Xi'an - All Xi'an cab drivers are scum. Death is, in fact, too good for them. They will all cheat you and there are no exceptions. Stay clear of them.

The best people in Xi'an are in the Muslim quarter. The Chinese word for Muslim is "hui" and the character looks like a little box inside a big box. That's the sign to look for. A few words of Chinese, a smile, and a willingness to spend a couple kuai will have them treating you like a beloved family friend.

I just got back from China, too. The thing that struck me was that the new economy is just not delivering for so many, like those you see camped out at the railroad stations. There are rising and unfulfilled expectations, a widening gulf between the well-to-do and average Chinese, a growing urban ugliness as older neighborhoods are obliterated for high-rises. I think the whole enterprise is going to collapse.

I think I'd like to see agro productivity go up in China as quickly as it can, in an environment-friendly fashion, and bringing about self-sufficiency for China. I think that would be good for common folks around the world.

Actually, 3000 years ago the Chinese peasantry were probably using stone sickles. Stone tools were occasionally seen even in the XIX-c.

Responding to Scott -- I have an ex-farmer friend in Minnesota who says that the unmechanized Amish are the only people who can compete as independent farmers in today's market. They do it by working very hard, being very frugal, using the minimum of modern equipment and supplies, and never borrowing from banks. (They have some kind of archaic community credit system.) Their per-acre productivity is as good as anyone's I think.

My friend sometimes works for them doing the tasks forbidden by their unique Amish kosher and Sabbath laws. It really reminds me of the Orthodox Jews. They can use stationary powered machiner, for example, but not moving machinery such as tractors.

"Amish" is a vague term in Minnesota, including Hutterites, etc. These people are similiar to but not the same as Scott's people. I rode the bus with a couple of them once. They spoke in German but one of them was reading the Reader's Digest.

Yeah, I know about the Amish. Man, the banks love them. They put money into their accounts and never, ever take out loans. They have their own internal credit system. But the money they make does get deposited into interest-earning bank accounts. If "English" are foolish enough to loan each other money for interest, there's no special reason for the Amish to avoid earning the interest. But they are totally free of outside debts.

I'm not sure their total labour productivity is higher than mechanised farms - in fact I'd bet its lower - but it wouldn't surprise me if they got better yields per acre. But they work incredibly hard. It is just borderline possible that in terms of net compensation, after taxes, wages and debt service, the Amish make more per hour spent in farm work than some mechanised farms.

There are some surprising diseconomies in agriculture. I remember reading a study done in China that showed that by combining different grades of rice in one rice paddy, the farm actually increased its profits over just raising the most desireable kind of rice. Using different grades of rice lowered disease and eliminiated pesticide use. Those cost savings combined with higher total yields meant that came out ahead.

And actually, in Indiana there's an Amish group that says its only wrong to take power from the grid. As long as you generate it yourself, it's okay. There are a bunch of computer-controlled greenhouses with Amish owners out there, each operating off generator power. The anti-technology thing is not to be taken totally seriously. The Hutterites have the same lack of faith in banks and the same tendency towards frugal living, but unlike the Amish, they live on communes and they have no problem with advanced technology. There's a Hutterite software company in Canada.

"Bring in a few harvesting machines and all of a sudden you got a lot of people sitting on their hands doing nothing and feeling useless, fomenting rebellion and learning how to not work."

Isn't rural unemployment already one of the biggish problems they face? Unofficial best guesses at something like 150M unemployed peasants, IIRC? A number on par with the total number of people employed in the US...

I think that this is what a lot of new-right Republicans have forgotten: that the number one reason to favor capitalism (the accumulation of wealth for investment) is that it increases overall productivity and wealth. The number one reason to put reins on it however is that the process always increases social inequity and social inequity is immensely politically destabilizing.

Hence why the EMH will never be seen in reality. A perfectly efficient market would reflect a perfectly unstable society. The growth and speed of development therefore is bounded by two factors: the accumulation of enough wealth to increase resource productivity, the restriction or redistribution to provide a sufficient braking effect that social inequity does not grow too large and create social unrest.

Every stable capitalism is always a balancing act between leaning too far forward or too far back on the unicycle. You don't lean forward, you won't get anywhere fast. You don't learn to lean back, and you'll lose control.

My ex-farmer friend was successful up to a point. He took his father's tiny shoestring farm and expanded it enormously. "There are two things every good farmer knows", he said once. "Taxes and credit".

I don't know what exactly drove him out, but at one point he owed something like $200,000 and a piece of machinery with a resale value of $80,000. The whole farm economy went bust for whatever reason (commodity prices?) and no one could buy anything.

My understanding is that the small farmers all quit because they couldn't make any cash and ended up being broke on subsistance farms which they supported by labor off the farm. My friend tried to stay in the game by expanding but went broke because of debt.

brad, what is your point?

Is there any evidence that harvesting wheat with a steel sickle actually reduces the yield per acre compared to more modern mechanisms? Certainly, it reduces yield per woman-hour. But in a state that's at least 5 times more populous than it was 3000 years ago, that might not be the limitting factor!

"Which had the greater labour productivity, the mechanised farms in Russia or the horse-driven ones in Saskatchewan? ..."

The Soviet state guaranteed employment... so statistics were perhaps not very comparable....

Each engine Break Horse Power delivers the power of eight horses on a sustained basis, if I recall correctly. That means a hundred BHP tractor engine packs the power of 800 horses in it. And just one man controls it.

If you had an abundance of horses for some natural reasons and allowed each man to change horses every hour and have each horse work just one hour every day, you would still need a hundred men to manage a hundred *** horse-lots*** in order to do the equivalent work of a 100 BHP tractor.

It is just no match.

But then it may be a different story in fruit or vegetable growing, where mechanization could not be applied as effectively as in wheat fields. Just could be. And the same might be true for growing rice. I don't know.

In any case, when I speak of higher productivity in agriculture, I mean a smaller and smaller portion of national labor force having to toil in agriculture in order to feed the nation. This figure is I think two or three percent in US, which is about one percent of population. Why you could manage that even by some sort of national service: Work one year in a farm thus producing a hundred years' food stuff for one person and therefore be entitled to it too.

Nobody ever got hurt by working in a capital intensive, high productivity job and that kind of jobs are good for others as well if you have a sound distribution mechanism.

To Mac:

Have you ever tried it yourself? Do you know how hard and how exhausting this kind of farm labor is? Not for a day, not for a week, but day after day, year after year ... Why do you think all those young Chinese women CHOOSE to work for some foreign "slave factories" 14 hours a day and 6 and half days a week? Becuase the alternative is worse!

"Yes, but look at it this way. Unemployment is probably very very low as a result of all that manual labor. Bring in a few harvesting machines and all of a sudden you got a lot of people sitting on their hands doing nothing and feeling useless, fomenting rebellion and learning how to not work."

That reminds me of a classic story I heard about an economist in China. There were a bunch of workers digging a trench with shovels. The economist said, "We need to get a backhoe; we could be finished digging the trench a lot faster."

The supervisor was shocked. "But if we had a backhoe, all these people would be unemployed!"

The economist responded, "Oh, I didn't realize you were worried about unemployment. If that's your concern, let's take away their shovels, and give them spoons."