International Economic Disintegration

CHAPTER XI THE DRIVING FORCES OF AGRICULTURAL NATIONALISM

AFTER the general account of the post-war development in the field of agriculture and agricultural policy given in Chapter IX, and the consideration in Chapter X of changes in the international localization of agriculture as one of the principal causes of post-war agricultural nationalism, we now have to determine what were the general driving forces which made post-war agricultural nationalism try to preserve or reshape the national structures of agriculture in conflict with counteracting forces. The difficulty of this task lies not so much in any lack of provisional answers, for they are many, as in the need for finding a satisfactory order for them. Here, as on so many other occasions during this enquiry, an overwhelming amount of facts, opinions and literary documents has to be condensed, so as to get a clear outline of the strategic factors. To this end, it seems advisable to proceed along the following order of points:

(1) Every attempt to interpret post-war agricultural nationalism must begin with the peculiar position of agriculture within our highly developed capitalist economy, which, as we saw at the beginning of this part, gives rise to special problems that easily serve as motives or pretexts for measures of protection or compensation. The whole course of agricultural protectionism during the last generations cannot be understood without reference to this underlying factor. Agriculture, however, has not only its special problems, but it is also a branch of economic life which is considered too important to be left to an uncertain fate. For this reason, there is some prima facie argument for agricultural protection, but there is the dilemma that, if agriculture is protected by state intervention, it invariably means the simultaneous price protection of the very commodities which are of the most vital importance for the consumers. To make food more expensive—absolutely or relatively—is at least as undesirable as to expose the farmers to distress.

This is the fundamental dilemma characterizing the whole history of agricultural protectionism and which leads either to some sort of compromise or, unfortunately only in rarer cases like that of Denmark, to the more intelligent and honest solution of finding a third alternative, which is neither ruinous laissez-faire nor protectionism. Moreover, it goes without saying that agricultural protectionism very easily degenerates into the protection of vested interests, sluggishness and ineptitude. Quite often agriculture becomes, instead of the “underdog” who arouses our indulgence and commiseration, a lobbying pressure group, which has the utmost interest in presenting the case for agricultural protection as a mere matter of choosing between ruinous laissez-faire and salvation by protection and in ridiculing any constructive alternative policies as the impracticable ideas of arm-chair economists. The situation is rendered still more complex by the fact that the economic interests of agriculture in all its different branches and forms are very far from being uniform in any one country, so that the protection of one kind of product may gravely violate the interests of others. Finally, more often than not, agricultural protection will mean that the socially and economically undesirable forms of agriculture are conserved to the disadvantage of more desirable forms; the “plight of the farmer” must not be mistaken for the distress of agriculture in general were it conducted as it could and should be.

In view of all these complications, it is very difficult for the impartial observer to find his way and to make it understood that, in regard to agriculture, he is neither actuated by an urban-minded callousness nor indulgently biased. After this, there should be no further fear of being misunderstood, if one stresses that the problematical situation of agriculture in our modern world has certainly lost nothing of its weight during the last few decades. On the contrary, there is a strong presumption that the great changes in the structure of our economic system—especially the increase of interventionism and monopolism in every field of economic life—put agriculture generally at a still greater comparative disadvantage. Consequently, the increase of agricultural protectionism can largely be understood as a struggle by the farmer for a “place in the sun,” in the face of developments which (like the growth of industrial monopolies, &c.), have done much to make him feel that he is getting the worst of the bargain. He is faced with a world in which planning, industrial tariffs and subsidies, financial manœuvres and price rigidities are flourishing, while he feels himself delivered over to the ruthless forces of world-wide competition. Statistics tell him that the gap between the prices for agricultural products and those for industrial ones—the famous “scissors”—tends to become wider, just as the costs of agricultural production tend to eat into his selling prices, while industrial prices show a growing rigidity in comparison with agricultural ones.1 The ensuing feeling that agriculture is merely “the tail of the industrial kite” (H. Wallace), gives rise to agriculture’s demand to be treated on an equal footing with industry, either by restoring free competition and low tariffs for industry, or by giving agriculture the same degree of monopoly and protection. In spite of strong advocacy of the former course (by people like Secretary Wallace in the United States), it is more often than not the latter one which is finally adopted. Whether this is the wisest thing for agriculture is another story. What interests us here is merely the point that the recent increase of agricultural nationalism must be understood, if not excused, as the agricultural counterpart of the general development of our economic system towards more intervention, planning, monopoly, and rigidity. That is why it is hardly possible to consider the growth of agricultural nationalism in our time as an isolated phenomenon and to judge it, favourably or adversely, from this narrower point of view. For the same reason, a revision of this tendency is hardly imaginable without a total revision of our economic system, which would remove excessive interventionism and monopolism.

(2) Greatly increased weight is given to the factor just named wherever pro-rural ideas and theories dominate, where the commonly accepted aim of preserving and fortifying the position of agriculture is made out to be not only due to it, if it is to have equal justice with industry, but even more as being necessary for deep sociological reasons. Such a policy is made one of the corner-stones of a reform of the whole society. If a whole nation is persuaded that an agriculture run by prosperous peasant farmers is the backbone of society, not only for economic, but also for sociological, sanitary, cultural, and demographic reasons, it will be easier to make it accept agricultural nationalism than would be the case in an urban-minded country, where people are more insensitive to such an outlook. Whereas the former case may be illustrated by the examples of Germany, France and Switzerland, England seems to come closer to the second. In general, there is a fundamental difference between countries where agriculture is looked upon as an industry like any other, and those where it is regarded as a means to higher ends than that of material production. Experience shows that it is just as difficult for these two groups to understand each other as it is to get the colour-blind and the normal to agree on the meaning of red.

It is a remarkable fact that we find the rural mentality in those countries where the peasant type of farming prevails, i.e. a type of farming whose subtle structure can rarely be made clear to countries and people who have not been made familiar with it by practical experience. The fact that the countries characterized by a rural-minded philosophy are practically identical with peasant countries is easily explained, for it is hard to see how one could be sentimentally attached to any other type of farming or construct sociological philosophies around “wheat factories.” It is equally difficult to understand how agriculture can be presented as the backbone of a nation, if it is not agriculture in the sense of peasant farming, for it is only here, and not on highly rationalized and industrialized large estates, that rural life provides the milieu which breeds a different type of man to that of the industrial centre. Nor is it comprehensible how people, who look upon agriculture as an industry like any other, should deplore the “drift from the country” any more than, let us say, the “drift from the shoe factories.” Whoever thinks of agriculture in terms of mere productive efficiency, artificial fertilizers and tractors should be consistent enough to drop the mask of pro-rural sentimentalities. It cannot be stressed too forcefully that wherever the argument of agriculture being the foundation of a nation is used, it can only be agriculture in the sense of peasant farming that is meant. This is all the more necessary as the argument in question is so often misused by large-scale agriculturalists for furthering their own interests, quite often precisely at the expense of the real peasant farmers.2

It is evident that the recent growth of agricultural nationalism must be largely attributed to the influence exerted by those pro-rural ideas and theories, in view of the increasing difficulties under which European agriculture has been labouring since the ’twenties. Moreover, it has to be observed that, for a number of reasons, this pro-rural attitude has gained enormously in strength in most countries since the war, so that the drive for “re-agrarianization” has everywhere become a potent force in economic policy. This explains why, even in democratic countries where the agrarian electorate is in the minority, agricultural nationalism could be carried through, on an unprecedented scale. It is extremely important to bear this in mind, not in order to excuse the policy, but so that we understand that it would hardly be realistic or acceptable to the pro-rural school to present an alternative policy which left this philosophy unsatisfied. However, the important point (which will be developed later) is that the alternative to agricultural nationalism is exactly such as promises to give even fuller satisfaction to the pro-rural philosophy than does agricultural nationalism.

(3) Coloured by the pro-rural philosophy, but chiefly owing its position to considerations of military security and economic independence, the ideal of a maximum of national self-sufficiency in foodstuffs (“food autarky”) achieved a dominating influence after the war. This ideal represents a rather complex combination of heterogeneous ideas and theories, a combination which can be largely traced to economic philosophies that had been developed in some countries long before the war, e.g. in Germany during the well-known “Agrarstaat-Industriestaat” controversy (around 1900) or in France by writers like Jules Méline in his book Le retour à la terre (1905). It is partly the outcome of rational considerations of a military character, partly the result of economic reasonings based on distrust of the stable development of world economy, and partly the reflex of that more instinctive desire which drives the individual to grow his vegetables in his own garden. All this becomes a very forceful motive for “re-agrarianization” and one which nobody can afford to dismiss as altogether incomprehensible. The important point to be noted is that, whereas in the pro-rural argument the emphasis is on the human and social side of rural life, it is here above all the physical volume of agricultural production which is stressed. In the first case, the goal aimed at is a maximum of men earning their living and leading a satisfactory life in agriculture, while in the second it is maximum productivity. It is easy to see that these two kinds of considerations are very likely to come into serious conflict with each other, a fact which makes the whole policy of agricultural nationalism self-contradictory, when it sails under the flag of “re-agrarianization.” The recent development of agricultural policy in Germany may be cited as a striking example of this.

In view of the possible conflict between the human and the productivity argument for “re-agrarianization,” it becomes important critically to examine the latter by enquiring whether a maximum of national self-provisionment in foodstuffs can really serve the desired ends or whether it may not create fresh difficulties, which are even less welcome than a higher degree of dependence on imports, to say nothing of the sheer impossibility of the most highly developed industrial countries attaining even a small degree of food autarky or of the grave danger attendant on the wasteful exploitation of the soil accompanying frantic efforts in this direction. As far as the military argument for food autarky is concerned the reader is referred to Part III of this book.

(4) The recent growth of agricultural nationalism must be further understood as typical of the way in which some of the more important ideas in the general economic policy of the present day find expression in the field of agriculture. Paramount among these is undoubtedly the desire for greater economic stability. As this motive is considered so important a factor of present-day economic nationalism in general that a special part of this book will be devoted to it, it may suffice merely to mention the point at this juncture. It should be added, however, that the motive of economic stabilization may serve agricultural nationalism in two senses: in the narrower sense of aiming at agricultural stabilization proper, i.e. at stabilizing agricultural incomes, prices or production; and in the wider sense of making agricultural policy in some way or another part of a large scheme of general economic stabilization. What is meant by the latter will become clear if one considers that, once a country like present-day Germany embarks on a policy of full employment based on general autarky, exchange control and planning, agriculture is bound to become an integral part of such a collectivist system.

In connexion with the last remark, it may also be observed that the general drift of economic policy to-day can be conceived not only as the outcome of the desire for economic stability, but also as a result of the modern drive for socialism, planning, and collectivism, which is based on the most diverse considerations. In spite of its peculiarities, agriculture can hardly escape this general tendency; thus agricultural nationalism is bound to ensue as the unavoidable external counterpart of internal collectivism and planning.

(5) So far we have enumerated the major driving forces behind contemporary agricultural nationalism, which may be considered as fundamental and deeply rooted in long-run tendencies. To these must be added the numerous motives born of special conditions of a more or less passing character, which are connected with the agricultural depression since the ’twenties or the general depression since the ’thirties. For the present purpose it may be sufficient to group under this heading agricultural indebtedness, monetary disturbances, the special problems of rye production and viticulture, the reactions of dumping and other policies and the consequences of the industrial depression on agriculture.

(6) It is worth elaborating this last point, that not only do the various driving forces behind modern agricultural nationalism easily involve it in serious conflicts and inconsistencies, but also that the aims of agricultural nationalism may often undergo a conspicuous and sudden change either because the dominating motives are changing, or because a new and unforeseen situation is cropping up in the course of the agricultural policy. Thus we can observe that agricultural nationalism starts, as in Germany in 1933, by combating low prices and overproduction, until the original surplus suddenly turns into a serious shortage, thereby changing a previous “surplus economy” into a “shortage economy” presenting entirely new problems. A similar development could be observed to a certain extent in France, where an agricultural policy designed to protect the farmers against the consequences of deflation, was later made the instrument for preventing agricultural prices from rising too suddenly after the devaluation of the franc. Again, a most spectacular change of scenery can be studied in Germany, where the country’s general economic policy, which led during recent years to a most critical shortage of labour, has completely changed the outlook of agricultural policy. Not only has the original “surplus economy” turned, as we saw, into a “shortage economy,” but at the same time a policy which aimed at settling as many people as possible in agriculture has perforce had to concentrate on trying to solve the problem of how to produce a maximum of agricultural products with a minimum of labour.

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3 Cf. especially Gardiner C. Means, Industrial Prices and their Relative Inflexibility, U.S. Senate Document, No. 13, 1935, which, besides substantiating the facts, gives a very good idea of this trend of thought.

4 Cf. W. Röpke, German Commercial Policy, London, 1934.

• 1Cf. my paper “A Value Judgment on Value Judgments” in which I am explaining my attitude in this very important methodological question. It will probably be published in the “American Economic Review.”
• 2The following pages are largely based on a memorandum which the author wrote together with Professor Alexander Rüstow (University of Istanbul) in the summer of 1938.
• 3The purpose of this book is to make a new and more promising approach to the diagnostics of that long-run crisis in international economic relations which is one of the most striking symptoms of the general economic, social, and political crisis of occidental society. I believe that the urgent necessity of such an approach has been enhanced rather than diminished by the outbreak of the war. However, I would betray my own philosophy if I regarded this book as anything more than a mere beginning, an invitation to constructive criticism, and a way of opening or furthering a discussion for which the world seems to be ripe. In submitting this book to criticism, I am not afraid to expose myself as one who believes not only in the scientific legitimacy but even in the utmost scientific necessity of employing a measure of judgments, which is ultimately based on a definite conception of what is wrong with the world, and of what should be done in order to put it right again. Those who are shocked by such an attitude may be reassured that I gave more thought to this methodological problem than I am able to explain on this occasion.
• 4(b) This crisis puts social science in a new situation, which is itself highly critical and which no partial investigation in any field of this science whatever can ignore without running the risk of missing its aim. Nobody conversant with the current development of the social sciences can overlook the fact that the feeling of being on insecure ground is becoming more and more widespread, until even the most tenacious followers of the traditional lines of approach sense the need for reorientation. The growing literature on methodological questions even in countries like England, where it was formerly distinctly unpopular, is a sure token of this scientific situation, as is also the fact that it has been felt necessary to open the present report in such a roundabout way as would have appeared rather strange even five years ago.