OK now I'm divided. Upon arrival in Canada for a family reunion my uncle almost had me convinced that socialism isn't a complete failure. Let's be honest, my conservative friends, you are quite right that the economic freedom in a free-enterprise system guarantees the most prosperity, and that alternatives which abridge such freedoms are misguided and are eventually self-defeating. But the dire analyses you make about how terrible things are in socialist countries are often biased and self-serving. Canada's health care system, for example, has plenty of problems, but it's not the complete failure that some would have it. Of course without the government regulation of the market the care could be better and arrive more promptly, but by and large Canadians are satisfied with their health care, and only a minority of extreme cases are there real life and death problems.
So on the case in point: my farming uncle and I are catching up when a news story comes on the TV that we stop and pay attention to. Apparently part of the new conservative Prime Minister's electoral platform was to do away with the Canadian Wheat Board--a government run non-profit monopoly which forces all producers of certain grains to accept market averaged prices in exchange for the service of pooling their resources, thereby removing competition between producers and placing the onus on the consumer to compete for a grain price. The Harper administration attempted the rather underhanded tactic of doing away with one of the CWB's powers via a regulatory agency, and in this news story, a federal judge had just struck down the regulation on the (correct, in my opinion) grounds that such a drastic change should not be done by fiat, but rather after debate in the legislative body (story here, commentary and more details here). My uncle was quite satisfied. For him, far from being an appallingly burdensome restriction on his freedom, the CWB is more like a valuable partner which handles the marketing of his grain for him--thereby leaving him more free to improve his actual farming as he sees fit. By comparison, he reported discussing farming with North Dakotan church members he met at a large regional conference one time who apparently related spending between 60 and 90 % of their time marketing their wheat. Armed with this understanding, his most powerful argument for the CWB was: what freedom do farmers who want to do away with it think they are going to gain?
I'm skeptical about the CWB as an effective partner for marketing grain. Since it is a government bureaucracy, with a non-profit mandate or not, it will of course tend to inefficiency and sclerotic sluggishness on the markets. Also, as a governmental program it does not share the responsibility with the farmer in the event of failure to do its job, and is therefore never properly motivated to do its best. Furthermore, the security of the many provided by such an agency which guarantees a certain price to the producers, tends to encourage laziness among the farmers who may well have more free time to concentrate on improving yields, but who nevertheless have less incentive to do so. And more insidiously, such an imposed security actually punishes successful risk-taking and therefore extra effort.
Now, I'm sure there are plenty of just-getting-by lazy farmers in Canada but the problem I have with all of this is that while I understand these principles, I have to submit to the evidence that my uncle and all the Canadian farmers I know well are extremely hard-working people. I don't mean to suggest that the principles are flawed, but rather that there's something missing from the analysis because those correct principles are not predicting the real behavior. Maybe my anecdotal evidence is simply biased toward an exceptional group of people with extraordinary senses of self-motivation. But I suspect more simply that the CWB, despite it's being a government bureaucracy and a monopoly at that, doesn't do so bad. Despite all the potential problems with it, it still does its job well enough to support the prosperity of one of the wealthiest nations on earth. Part of its relative if not perfect success may have to do with its non-profit mandate. As much as I disagree with the idea that profits are somehow bad, the profit motive DOES sometimes provide an incentive for cheating--best we admit this frankly and openly, my conservative brethren. And apparently the American agricultural giant Cargill, for one, has not always resisted this temptation. At least the CWB has no interest in shorting farmers, cheating on weights and measures, or in participating in any other underhanded practice designed to dishonestly make easy money off the honest labor of another.
My uncle's other major argument for the CWB is something I may need a little help on from you readers out there who may understand economic principles better than I do: he said that the free-enterprise system tends toward monopoly anyway, and that monopolies really aren't so bad or to be feared after all. I'm not sure about this. Free-enterprise tends toward consolidation, but I see very few real examples of total monopoly like the CWB represents here in the US. Also, since monopolies can control supply, they can therefore control price and even demand, by manipulation of supply and price--this is generally untenable for consumers who should have a choice of supplies so as to have the cheapest prices for their demands. Of course the CWB does the producers a service--by forcing everyone to pool their resources at the same price, the competition is removed between producers, and now it's the consumers who have to compete to pay higher prices. However, is that REALLY how things should work for the greatest benefit of everyone in the system? Isn't it better for the consumers to have the freedom of choice? Shouldn't the burden of competition really BE on the side of the producer in order for improvement to occur? Of course the result of producers competing would be that some would fail. I don't think we should be afraid to allow failure (but I do need to do a later post on exactly what failure means, and how far we should "let" people fall before helping as a society), because it motivates people to find the things they really are best at, and I'm convinced there's room for everyone, maybe just not at the first thing they try. In the short run, there would be a fairly large group of farmers going on welfare, but eventually they would be motivated to find something else they could do to support themselves and their families. In the short-run there would also be some wild successes, and the farmers with the most land would tend to swallow up smaller farms and consolidate into larger and larger operations, thereby forcing many small farmers into other businesses. But in the long run, the system would find an equilibrium where no one would be left resource-less, and where success would be rewarded naturally.
My solution? Maybe a MaBell-style breakup and privatization would maintain many of the benefits of pooling for the producers, while introducing at least some element of competition into the system. As many farmers as would like to would still be able to organize as they see fit for mutual benefit, but it would be done privately, not by the government and not by force. Less talented/hard working farmers would have a softer landing because splitting the CWB into 3 or 4 smaller private companies would still mean they were big enough to command high prices, but it would still allow those who just couldn't cut it to fail and thereby have a chance to learn what they really are good at/willing to work hard for.
Can we conservatives hold fast to and stand up for our principles and at the same time avoid succumbing to our own dire rhetoric of the failure of other systems by realizing that although our way is best, other systems of belief and organization may be based upon some true principles and are therefore able to produce at least some good results?
Comments