Stuff is cheap; people are expensive

March 2000

For me, few emotions can match harvesting a large crop. Big production numbers generate a deep satisfaction. I think this is because I am “stuff-biased”. My value system places physical materials at the very top. Moreover, all my life I have been taught that the most honorable way to wealth was to create tangible goods.

Most people trade labor for wealth. Whether by the hour or year, compensation depends on the quality and quantity of your effort. For such workers, America’s transition to a service-driven economy has been less disruptive. But it is confounding agriculture.

Adding to the difficulty is the surprising output boost that has occurred in most areas of production. From gold to sunflowers, predicted demand growth has not only been met, but exceeded by technology-driven productivity gains.

Stuff is pouring out of farms and factories around the world at unimaginable rates and low costs. Last Christmas I bought tree lights made in China at a cost of $1.99 for a string of 100. How is this possible? That’s what I tip a parking attendant! Computers that cost $2000 last January now can be had for $999.

Meanwhile, my tractor labor bill at the dealer features a rate of $45/hour. Tuition, movie tickets, and health insurance climb relentlessly. This is not simple deflation we are experiencing.

Employment has become the vehicle of choice for fulfilling our social contracts. From day-care to counseling; from pensions to out-placement, a job is more than trading labor for pay. It is an obligation of support by the employer that is increasing pervasive and expensive. Selling a product carries no such extra burden. One transaction type is growing in value (the job) and one is shrinking (the sale)

So we sit in agriculture, outraged that the piles of our production don’t bring us wealth. More worrisome, many of us are betting the farm on a return to a “stuff-based” wealth standard. Unfortunately, convincing the world that stuff is what is important will be a tough sell.

Maybe it is time for our accounting system to change. Human effort now adds much more than just muscle output. The technological level needed for our lives means that those who provide those benefits can command compensation – and get it. How badly do you want your TV to work, or the MRI scan to diagnose accurately, or the plane to land safely? Obviously, enough to pay well.

Consider too, the “throwaway” mentality of modern existence. Fixing appliances has become a questionable effort. The most important and costly input for cornflakes is not corn, but figuring out how to get the consumer to pick your flakes instead of your competitors’. Our indignation at these violations of our value system is sharply at odds with the rest of the world.

The astonishing wealth of the US allows lifestyles filled with what would have been deemed waste fifty years before. Those years were when my parents were forming my value system. Consequently, all the rules I was taught about what is valuable need some scrutiny. Saving broken machinery because “it’s a good piece of steel” doesn’t add much to my bottom line unless steel is relatively expensive. Spending time recovering and storing all manner of seemingly useful stuff makes sense only if your time is relatively valueless. I think unexploited time, not our inventory, could be our most valuable asset.

These facts have forced me to adopt a new principle that I use as a background for my business decisions: Stuff is cheap, people are expensive. I chant that to myself several times a week, like I used to mumble “don’t let them take the baseline” during basketball practice. My goal is to stop being surprised by the world’s new value system.

The hard part is overriding my longstanding economic prejudices. For instance, if I want to grow stuff for a living, I plan on doing it as cheaply as possible – instead of wishfully hoping for increasing prices. Secondly, any time I can decrease the amount of services I buy – fix my own computer, calculate my own taxes, do my own wiring – I can save serious bucks. Third, I am developing services I can sell or incorporate into my output.

Consequently, my life is changing. Marketing often takes precedence over production. Mastering new skills can be more important than saving inputs. In fact, several enjoyable jobs that used to yield big returns no longer do so – like tillage. At the same time, wading through information streams, grappling with confusing crop insurance programs, or tracking down dollar flows can yield “bankable” results.

This economic philosophy means education and the ability to keep learning may be our most necessary tool in the future. I look at time as well as acres as a predictor of income generation. Most difficult, I am changing my pack-rat lifestyle. Throwing away much of my hoard keeps me from seeing wealth where none actually exists.

My new goal: Become an expensive person who can prosper selling cheap “stuff”.

Am I Sustainable Yet?

January 2007
©John Phipps 2007

The best I can discover, my mother’s family began their connection with our farm in 1854. So, we’re talking 150+ years and counting. Another way of putting this is: Abraham Smith, Shepherd B. Smith, William Monroe Smith, Hallie Smith Jennings, Mary Louise Jennings Phipps, and ta-dah – John Phipps. I tend to favor this dating method.

Now add in the fact, that according to every objective measure I can afford, the soil – the physical dirt on which I stand – is in better shape than when I began my career. Phosphorus and potassium levels are higher, organic matter has almost doubled, and the few erosion problems I had (water drains toward our farm, not away) are at least partially mitigated. Yield charts are pointed in the right direction, our wells test clean, and the tilth of the soil (admittedly hard to measure) is better with the drainage we continually add.

I think I’m sustainable. Really.  I think we can keep this act going for a few more decades at a minimum. But since I have already freely confessed to being an industrial farmer, it turns out I am disqualified from claiming sustainability.

So what are the criteria?  Funny you should ask, because like “natural” and “organic” this definition is illusive. One source offers this standard: “Sustainability rests on the principle that we must meet the needs of the present without compromising the ability of future generations to meet their own needs.” Note the use of the words “rests on” rather than “is”.  One way to insure that sustainability is reserved for the right people is to embed as many subjective qualities as possible in the definition. “Sustainable agriculture integrates three main goals--environmental health, economic profitability, and social and economic equity.” Guess who will judge the “social equity” part of the competition.

Factoring in external costs (pollution, erosion, etc.) should be the function of the market, and if adopted, would further many goals for sustainable ag proponents. An oil tax would be an example. However, my prediction is even with such constraints, industrial agriculture would find a solution, since change is what we do best.

Sustainability often is code for “self-contained”. Sustainable ag proponents are drawn to the idea of minimal non-local inputs. Using fertilizer from vast deposits in Morocco, for example violates this concept of the closed circle of production, even though employing such assets when they otherwise would yield zero return seems to be a win-win decision.

Sustainable agriculture relies upon animals to complete many of the “closed-circuits” of nutrient cycles. Strangely, this is not seen as technology, even though it is arguably unnatural: man alters animal lives to his purpose, i.e. domestication. Similarly the use of lime for pH control is countenanced likely because it is ubiquitous and hence “local”. I wonder if a farm with a potash deposit could apply it and still be sustainable.

In fact, sustainability is another maxim by which agrarian thought closes itself to the world. However, if I define my community as the globe, I am not using any “outside” inputs. Given the increased linkage of the global economy, is this an unreasonable enlargement of “community”? Perhaps, but when viewed from this perspective, industrial agriculture not only is sustainable, it is expandable.

Local sustainability also requires a stable economy and political structure to allow it to flourish. The infrastructure built in part by industrial agriculture allows pockets of sustainable agriculture to thrive undisturbed. You don’t see many Amish communities in Afghanistan, for instance. In fairness, a world of only sustainable agriculture would likely have less need for courts and roads and banks.

Sustainable agriculture also seems content, even obsessed with limiting production.  The underlying theme is of land being fragile and easily overburdened by modern technological methods, again with little data to verify this assertion. As yields climb, it is fair to ask, “Where are the signs of exhaustion?”

Sustainable agriculture also employs much more labor. Farmers who see a future of computers and machines are drawn to the job security of this alternative. Sustainability refers then to their lifestyle, not their farm.

Sustainable agriculture is not, in my view, about sustainability or agriculture. It is about trying to recover some perceived lost status for people who think lives are devalued by participating in an enormous economy. By drawing a tight circle around me and mine, and adopting pharisaical rules of correct practice, sustainable agriculture proponents try to ensure the moral spotlight shines only on them. 

March 2015

It’s time for better endings

No effort has been spared as ag media worked to educate farmers about estate planning. However, this worthwhile effort glosses over the key event in the “transition” process: somebody dies.

Like most Americans, farmers don’t talk much about dying. So while our affairs may be in calculated readiness, the actual process we face is studiously ignored until thrust upon us. One result, as noted in my book review in this issue, is we often lose control of important aspects of our lives during the final days. In short, we have too many bad endings.

The issues raised by Dr. Gawande are often intensified for farm families. Distance is the greatest difficulty. Caregivers are often far and few. Their duties and authority, if not well understood, can frustrate the best-intentioned efforts. Newer services, such as modern hospice programs will be harder to obtain and more expensive. Far from support services, the cost of dying can escalate rapidly. Time in transit consumes the waning time of the patient and taxes the caregiver.

As rural communities depopulate and age, the social network that has added so much to final times is incomplete or missing altogether – church families, fraternal organizations, recreational groups, etc. Support ministries like funeral dinners are quietly switched to professionals, unavoidably altering the traditions of passing.

Our willful ignorance of the art of dying, as it was called for centuries, leaves us with little guidance and unrealistic expectations. But we can do more to make final days the best they can be.

One pervasive fear is leaving our homes, but we do little to prepare for our decline, often to avoid acknowledging the inevitable. Downstairs bedrooms and easy-access facilities can’t be added at the last second. Accommodations for live-in caregivers should be a consideration.

Simple efforts to embrace alternative connections can minimize anger at seeming abandonment. Master simple Facebook skills, switch to a Kindle for a fingertip library, and start e-mailing friends for important social contact. Smartphones allow grandchildren to text and send photos.  Avoiding non-stop TV seems to be an important step to prevent unhappiness.

Difficult discussions about your hopes and fears are imperative. Unworkable expectations of support can add resentment and guilt to an already troubled time. Caregivers must take time to ask the right questions, such as “What do you fear most?” and “What tradeoffs are you prepared to make?” in order to manage an inherently aggressive medical system. Most of all, we must listen patiently to the dying to learn what they think is important, which is often not safety or added lifespan.

Farm families have another struggle, as amid grief and worry, oncoming generations may be anxious about the farm business. Many estate plans crumble during a lengthy final illness like Alzheimer’s. Those who have created a plan for the cost of such an outcome need to understand the underlying assumptions. For example, Medicaid currently pays nearly 2/3 of US long-term care costs. Gaming Medicaid, now common to protect farm assets, won’t help much if the program is a casualty of ideological warfare.

Avoid a managerial limbo during a protracted decline toward death. Inability to deal with unexpected business possibilities can mean lost opportunities or aggravated problems while the management is “on hold”. Tensions between financial custodians, health caregivers and distant family can add suspicion to grief – a bitter mixture. An unhelpful effort to unreasonably prolong life can transfer too much authority from loved ones to physicians, attorneys, and accountants, while neglecting the possibilities for a more positive ending.

As Baby Boomers die in larger numbers, our support system will be taxed across the nation. In rural America, as we have learned on so many issues, unless we take responsibility to build a better response to dying, most helpful programs will be diluted or unfeasible. Absent better end-of-life education and realistic planning, the default will be too often an unhappy, exhausting descent into a medical establishment that struggles to say when.