June 01, 2004
Walking the Goat
In rural Shaanxi, the goatherds herd their goats in the scrub by the side of the road. They watch the goats attentively. The goats amble along, grazing. Typically, there are only three or so goats: the greatest number we counted was six.
Goats are herd animals: that is why they were domesticated in the first place. Goats are easy to manage in groups. Yet there they are: one farmer, and three goats. Why have each farmer manage his goats individually? Why not also watch your neighbors' goats, trading off in some simple rotation? Why has there not developed a market for goat-herding services in rural Shaanxi, so that farmers with less or easier land can earn some extra money by herding the goats of those who have more or harder land to work? Ronald Coase must be spinning in his grave fast enough to generate 100 megawatts.
Three goats is not goat-herding, it is goat-walking.
Why don't the farmers band together in a local cooperative to obtain some of the economies of scale in goat-herding that were the reason we tamed the goat in the first place?
Oh. You say they've been there, done that? And you say they're not going to do that again?
Posted by DeLong at June 1, 2004 02:53 PM
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Is this a parable about Democrats and how they should be managed?
If I'm visualizing shrubs at the side of the road correctly, maybe more than a few goats could not graze at one time within easy herding range for one person.
If we're talking about vast fields to the side of the road and/or vast fields are available for goat grazing, forget what I just wrote.
it's because they don't have anything better to do.
I know, you're thinking, "leisure!" assuming they're rational, we must conclude they like walking goats. simple!
Transaction costs? Maybe the value of the labor of a Shaanxi goatherder is so low, that the opportunity cost of herding one's own goats is less than the cost of the trouble it would take to find and hire a reliable professional goatherd.
I have herded goats AND sheep. Even with the dogs, it is a challenge keeping them out of mischief.
The large herds all go in places where there are NO FARMERS. If you are near FARMS the animals will rush into the gardens and the fields and eat everything and then the farmer will unload a shotgun at you for letting them do this.
Thus the few sheep.
I have not founbd goats easy to manage either. I think Elaine got it.
Since underunemployment in the countryside is an enormous problem in China, I think we have the second answer.
By and large, I think that it is best to assume that Chinese peasants are murderously rational, though risk-averse and often short-sighted.
Underemployment is caused by problems like this, John, it is not an explanation for this phenomenon.
More likely, I think, is a lack of trust: Goats are easy to steal, and hard to distinguish; they represent a large (to the peasant) capital cost; and the value of the labor of a Shaanxi peasant is fairly low, thus making it economic for him to goat-herd, while his initial endowment of wealth is also low, making it hard to take advantage of other peasants' labor.
My experience of goats matches Elaine's. They are smart enough to not misbehave when being watched, so their minders may have seemed less useful than they in fact were.
Capital investment in good fences is another solution, but the farmers and gardeners might prefer the system in which they buy no fencing and get to keep the occasional goat that invades their fields. The goat-keepers would lose a lot of the advantage of free or cheap forage if they had to provide fencing.
The Heifer Project would probably recommend a small shaded pen for the goats and that the humans bring them the browse, but, with Zizka, I really doubt that the Shaanxi peasants haven't considered that.
"Ronald Coase must be spinning in his grave fast enough to generate 100 megawatts."
When did Coase pass away? He's still listed on the Chicago law faculty.
Either you know the answer and you're testing your students, or, could it really be, that you think Mao's collectivization still has a future?
The answer's easy: in modern China -- like elsewhere -- the peasant trusts himself with his capital and doesn't trust others. He's his own boss. If he has something else to do rather than guide his three goats to find what few sprouts of grass are left from the previous guy's (note: there is no commons there for the goats), then he will do that something else only if it pays a lot more than the risk of letting some other guy let his goats starve. But he would probably only trust a member of his family.
And, quite frankly, in Shaanxi there's not much else to do. Or nothing else to do, in some areas. It's China, 1.3 billion people.
Sal Mehra -- Coase is a vampire. He generally sleeps in his grave, and arises at night to suck the blood of the living, though he does grant the living the right to buy a permit not to have their blood sucked for a fair price, which results in the optimal use of everyone's circulatory system.
You imply, Brad, that this behavior is in response to recent history. The above answers imply it's intrinsic to the nature of goats+densely populated rural life.
Surely that's easy enough to test. Is what you are proposing, larger pooled goat herds, something that was done before say 1930, or not?
Paul, "underemployment" is a label for the problem, and so not a cause, but inefficient goat-herding isn't a cause of the problem either. I am confident that he was not wastefully herding his goats while a more profitable task was being neglected. He was wastefully herding his goats because there wasn't anything else for him to do.
Shaanxi is one of the poorer and less likely to develop parts of China. I don't know if it's happened yet, but eventually there will be a steep US/Mexico threshold between areas of China. The cities can only absorb so much labor and migration to the cities is already discouraged.
Why are we talking about this? But since you started it, should we consider that with a population in Shaanxi of over 36 million and a "densely populated rural life," x million farmers walking 3 goats each will require y kilometers of road to support his herd? Shaking head in disbelief.
Goats are cute. But sheep taste better.
It is possible that they were taking a few goats somewhere where you only need a few goats, like a big goat roast party or something.
Collective production and specialization is a function of property rights laws. Without a system to fairly register and document goat ownership, or at least a time-honored custom to distribute partnership and profit shares, then collective production cannot commence.
In addition, we can not under-estimate custom and culture. The other day I asked for the N'th time someone from a farming background why didn't small-farmers in the US band together in cooperative production groups to obtain economies of scale and preferential large customer treatment from credit lenders? He agreed with me that the problem is fundamentally the same as a bad western movie.
In the bad western movie a rancher comes along and tries to buy up everything and through means fair or foul forces off / picks off the more numerous farmers one by one. Or smaller operators. Or sheep herders. Or whatever.
The eternal question is why don't all the small fry gang up to face down the big fish? Well that's human nature. People need leaders and organization in order to work together, and trust and documentation in order to establish their fair share of labor, efforts, and profits.
It's the eternal question of distribution theory. Whence did the production and specialized task structure come from and how does it distribute duties, property rights, and income from the collective endeavor.
Isn't "underemployment" just a relative value of the overemployed? (Or the underworked economist?)
Do you think the herder
a) wants to take care of 100 goats for the same benefit? All that stress.
b) Move to Guangdong and work 14 hours a day in a factory until he finds out that the owner isn't going to pay him? Much more stress.
Seems to me a bucolic life herding three goats might just be right. As long as you have DSL and WiFi for your off-time.
Couldn't he leash his goats? I've seen professional dog walkers manage more than 10 dogs at a time.
I third Elaine and Zizka. And it seems to be the simplest solution. Goats are kind of herdlike, but they are not that herdlike. If you have a herd of goats, there are always a few goats away from the herd because they have found something interesting and have wandered off the mess with it. So goats are herdlike unless they have something more interesting on their minds. And they are smart enough to mess with things pretty good, you ask me. And you gots lots a farmers with little farms, then that is a lot of some one else's stuff to mess with.
Sheep are not like this. Sheep are the closest mammal to plants.
And where did Prof De Long get his goat experience, may I ask, with all due deference?
Elson wrong about Coase -he is free to buy it at any price at all, as long it is a price on the effeicient frontier of the co-operative solution.
... and the judge says it's OK...
Some places in California are using goats to control invasive roadside weeds and brush; two goats, tethered, still need to be checked every 90 minutes.
Ha! See? What does a mere tether mean to a goat? Some old guy trying to keep track of 20 goats would just go mad and lose them all in the end.
Why didn't you just ask them???!!