Agriculture and the Social State Subsidies or Commons?

AuthorFriedmann, Harriet
PositionResponse to article by Anne Orford in this issue, p. 1
  1. THE RISE OF A MERCANTILE FOOD REGIME II. HOW US DOMESTIC FARM PROGRAMS SHAPED A MERCANTILE INTERNATIONAL REGIME III. THE MERCANTILE CRISIS AND TWO PROJECTS TO RESOLVE IT IV. BRINGING THE SOCIAL

    Anne Orford challenges us to reinterpret histories of international trade law within the wider historical context of power and property. Her analysis illuminates the origins of present day discourses of free trade and protection in 18th and 19th century political economy. The pivotal abolition of grain import controls in 1846, often taken to mark the end of mercantile trade policies, expressed imperial relations linking English social classes with colonial subjects; both were linked with land laws, namely enclosure of common lands in England and eviction of indigenous peoples to make way for European colonial settlement. She tracks the lineages of practices and ideas that created a new world of interlinked rights--to enclose property, to engage in labour contracts, to trade. She shows the shadow side of those lineages: to violently extract a distinct sphere we now call economy from the web of responsibility and control linking mercantile states to customary ways of life. Only the experience of many generations living within this fraught double history of institutions and ideas could permit the false but widely shared belief that state and market are naturally opposed, and worse, that there is an intrinsic tension between economic wellbeing and the many protective roles of what Orford calls the social state.

    It is this third term social that underpins my critique of Orford's analysis, which sustains the dichotomy between state and market. This bipolar tension, which she shares with those she criticizes, makes it difficult to envision a way out of the destructive neoliberal course except by returning to something before it. Yet she fails to give a fraction of her attention to the actual dynamics of the food regime of the 1950s-70s. I will take up her bewilderment at the apparent mental colonization of agricultural trade critics, who seem to her inconsistent in their criticism of farm and export subsidies inherited from a golden age when food was cheap for consumers and farmers were supported by government regulations. But analysis of the real relations of that period shows it to be full of contradictions, leading to a crisis from which at least two exits were possible. Of course, neither option was a return to pre-1980 regulatory structures. Indeed, subsidies which initially supported small farmers had become part of a new field of power.

    To move past the state-market dichotomy in which Orford remains caught, I will first address this imbalance in her historical account. International laws and institutions marginalized food and agriculture in specific agreements made or rejected in 1947-48. The mechanisms implicitly governing that food regime are accurately called neo-mercantile. It was the very attempt to bring them into an Agreement on Agriculture at the World Trade Organization (WTO) that constituted the neoliberal project of freeing markets. Resistance, as critics eventually acknowledged, amounted to efforts to save a disintegrating regime. A decade after the Seattle meetings to found and oppose the WTO, Oxfam International issued a report called Rigged. Rules and Double Standards: Trade, globalisation and the fight against poverty, insisting that Northern states agree to abide by the same open trade rules imposed on the South. (1) The shift in historical context between 1950 and 1980 makes sense of the eventual convergence of views regarding specific regulations, such as farm and export subsidies, between advocates and critics of free trade. I will end by suggesting new places to look for an emergent third way of organizing state-market relations in agriculture and food, centered on issues that were barely related to them in the past--ecosystem integrity, health, and intellectual property--and rules and institutions centered on renewing ideas and practices of commons.

  2. the rise of a mercantile food regime

    Policy regimes cannot step in the same river twice. Neo-liberalism since the 1980s is both like and unlike the first liberalism in the 18th century. Each sought to undo the institutions of a mercantile system that preceded it. (2) Similarly neo-mercantilism, I argue below, characterized the international food regime targeted by neoliberal policies. Of course it too is both like and unlike the mercantilism criticized by 18th century political economists.

    Because Orford gives scant attention to the rules of the period prior to structural adjustment and fiscal austerity in the 1980s and international trade agreements in the 1990s, she keeps to a linear history of free trade over the centuries. I hope to show that there is also an important cyclical dimension to that history. I must go into some detail to explain the implicitly mercantile policies underpinning the food regime after World War II under US leadership. I beg the reader's patience.

    The US-centered food regime was created in 1947, the same year as the General Agreement on Tariffs and Trade (GATT), and the two were connected in more complex ways than Orford suggests. That regime was neo-mercantilist, for good and ill. (3) The regime went into crisis in 1973--leading to the first UN World Food Summit in 1974, which coined the term food security. (4) Just as neoliberalism introduced new words such as "conditionally" and new uses of old words such as "austerity," which hide the basic similarity of those policies to original liberalism, so the new language of mercantilism in the 1940s and 50s--including "non-recourse loans" (one name for US domestic farm subsidies) and U.S. "food aid" in the form of "concessional sales"--conceals a basic similarity to the first mercantile policies. (5)

    As Orford argues, after half a century of international depression and war, on the victorious powers' agenda were social policies designed to make the sacrifices of war worthwhile. These included national regulation of agriculture and of food to stabilize farm sectors and to guarantee "freedom from want." (6) However, an explicitly internationally regulated food system, which was part of that agenda, was refused at the last moment in favour of an implicit regime in which inter-state power would play out invisibly until crisis erupted a quarter century later. The original plan would have made agriculture (and an international World Food Board) a centrepiece of postwar intergovernmental economic institutions. Instead the issue, including trade, was relegated to national states. As a result, US domestic farm policies drove international patterns of production and trade for at least two and a half decades.

    During World War II, the US and UK took command of their national industries and coordinated them for the war effort. On this basis, their plans for a postwar order included a World Food Board (WFB), which might be described as an international institutional support for coordinated domestic regulation by social states. (7) This could be the sort of system that Orford would like. The proposed WFB would have instituted a system prefigured by prewar international commodity agreements, which set upper and lower quantitative limits for exporters and importers of specific commodities such as wheat and tin based on historical quantities traded, in order to stabilize international markets; (8) all national states were to manage their domestic agricultural sectors in line with international agreements. The Food and Agriculture Organization (FAO), founded in 1945 in anticipation of the WFB, would have been well known instead of marginalized and (like other specialized UN agencies) directed exclusively towards what were then called the underdeveloped countries of Africa, Asia, and Latin America.

    However, it was not to be. At a meeting in Washington in 1947 called to establish the World Food Board, both the U.S. and UK changed course and opposed their own wartime plan. (9) It was of course rejected and mostly lost to memory. Whatever the UK's reason (the UK delegation included future Labour Party Prime Minister Harold Wilson), the reason the US refused was that the WFB was inconsistent with its domestic farm programmes and the import controls required to support them.

  3. HOW US DOMESTIC FARM PROGRAMS SHAPED A MERCANTILE INTERNATIONAL REGIME

    The Roosevelt administration, which included farmers in its political base for building a social state, had invented a new type of farm support called non-recourse commodity loans. While this program did help family farmers survive by stabilizing prices, it did so in an unsustainable way. One of those ways was to encourage scale--the bigger the crop, the bigger the payment. As farms concentrated at the expense of their neighbours, their numbers declined over time, as did the importance of their votes. Moreover, commodity specific supports fostered specialization and industrial methods based on chemical and mechanical industries, which converted from wartime explosives, poisons and tanks to fertilizers, pesticides and combine harvester-threshers. (10) The upstream and later downstream industries--agricultural input and food manufacturers--came to "squeeze" farm incomes, and perversely also to capture farm lobbies and many of the subsidies originally designed to preserve family farms.

    From the international perspective, it is important to understand how the specifics of US farm supports shaped the international food regime that emerged from US efforts to solve...

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