Publications / Essay

Economics of Ecocide and Genocide

The air war in Indochina is an expression of our western infatuation with the toys of technology. Fred Branfman, at loss to find any other reason for this policy of peasant extermination, calls it “the technological imperative”. Sophisticated and murderous weaponry rain over the countryside forcing the peasants to abandon their land and flee to the cities. There is no air war tearing apart the American countryside but our policies towards our own farmers are achieving the same affect. Millions of farmers, driven from their land, have become refugees in overcrowded ghettos or have been left to starve in isolated shacks and rural slums. The policy of driving farmers and peasants off the land began many years ago; in Vietnam we see it carried to its logical conclusion.

This is not a phenomenon limited to the United States. Virtually every country in the western world ha6, in one form or another, adopted the policy of peasant extermination. The Russians, for instance, used it to bring about the “revolution” in the rural areas of the Ukraine. In South America virtually every country has its hordes of refugees coming in from the countryside to squat in the barrios surrounding the cities. The President of Zambia, Kenneth Kaunda, said recently that the same phenomenon could be seen in almost every African city. India, too, suffers from the “disease”.

Of all the countries in the world with which I am familiar only a few stand out in contrast, because of policies which have been consciously adopted to prevent this uprooting. Of these, Israel and Tanzania stand out among the non-communist countries, and China and Cuba among the communist countries. I want briefly to examine those policies at a later point.

In addition to genocide we have been practicing ecocide in the countryside of the United States in an increasing degree over the last 50 years— and in Vietnam we have again brought all our skills in this new technology to their ultimate perfection. It is as if we were testing all the techniques for worldwide ecocide (and genocide) in that one forlorn little country. It isn’t necessary to recite the dismal liturgy of herbicides, insecticides, bulldozing, earth craters from bombing, etc. that have been dumped on Vietnam over the last: few years. Nor to repeat that we have been using much of the same technology in our own land. The ecologists, the organic farm people, the environmentalists have all been reciting the list of potential catastrophes which may be waiting at the end of the road we are traveling.

Through all of this we search for villains. Somewhere there must be villains. I would like to suggest my favorite villains for consideration. They are the economists— Keynesian, Marxist, and virtually all the popular economists. It is my conviction that the so-called economists have led us down this primrose path (at the same time I must confess I have sometimes been called an economist).

In fact, what we call economics is mostly a hodge-podge of myth, and theory adapted from actual practice. Economics, as expounded by the established schools, is actually more of a description of what is happening than an effort to construct a logical base or theory of normative human behavior and the institutions that would reflect the theory. The notion that economics is a “science” can be seen as the very hoax it is when one asks the question, “What do we mean by a national economy?” Is there such a thing as national physics? Chemistry? Biology? Yet economics, as taught and practiced, is national economics. In fact, economists (capitalist and socialist) would find it hard to understand that economies (the family, for instance, is an economy) could exist outside of a national framework in the modern world. Yet, all wealth, the primary concern of economics, begins with land and natural resources—a fact which has nothing whatsoever to do with the artificial lines called national boundaries.

Being zealous to protect their illusion about themselves as scientists, economists have insisted that morality must not be introduced into their hallowed field. Therefore, since it is impossible to discuss land and natural resources without introducing a problem of morality, the entire subject is virtually left out of the discussion. The most vital, and elementary question which must be asked is not even permitted a hearing: What should be the relationship between man and natural resources? An ecologist recently wrote: “To an ecologist the notion that land could be exchanged for paper currencies as if it were the same as any other commodity, is one of the most ridiculous, and also catastrophic notions of western man”.

When the concept of ownership of land was introduced by a greedy European “discoverer” to an American Indian, he threw up his hands in astonishment. “Sell the land? Why not sell the rivers, the oceans, the air, the clouds!” Yet we, all of us, including the economists, have accepted the notion of ownership of these resources as if it were a truth laid down by divine decree—actually it was introduced through Roman law.

The only question which the economists ask is: Who should own these resources? If a capitalist economist asks the question—he generally assumes private ownership, with some government ownership of forests, parks, etc. If a socialist asks the question he assumes “national”, or cooperative ownership. But both assume ownership.

In contrast to this view I would suggest what seems to me to be both the scientific and moral approach to this problem: to recognize that land and resources can only be used by man, not owned; and that they should be held in trust, rather than exploited for the advantage of any individual, group of individuals, or nation. Morally, it is no more justifiable to own land and resources than to own slaves.

This brings me to the policies adopted in Israel and Tanzania. These nations hold land in trust, substituting user’s rights for ownership rights for both individual farmers and industrial and commercial land in the towns and cities. The result, in both countries, has been to eliminate to a large: degree the speculation, the absentee landlordism, the exploitation of the peasantry, and rural migration to the cities. In Cuba and China, where there is less industrial emphasis, a more humanitarian concept of socialism has brought a degree of security and hope to the peasant and prevented the exodus into the cities. In Russia, the repressive measures used to prevent the exodus, have not been very successful.

Unfortunately, even these countries, with the probable exception of China, have been adopting the ecocide technology of United States agriculture where short-term productive success has obscured the long-term disastrous effects on the soil, the environment, and the health of animals and humans.

The “green revolution”, as exported to India, illustrates again an infatuation with technology which originated in the West but has now permeated other parts of the world. By the “green revolution”, I mean the new miracle seeds, the high nitrogen commercial fertilizers, and the necessary pesticides which go along with it. Since the genetic change in the seed appears to respond well only to high nitrogen fertilizers, the forced feeding which results in unhealthy plants requires the pesticides to offset the insects and diseases always ready to attack unhealthy growth. This provides a “package” for export—the seeds, the fertilizer, and the pesticides. It is the “package” of United States agribusiness.

As we have come to the end of the ecological trail of agribusiness in United States agriculture we have found a way to export the package to other countries. Besides the potential ecological time bombs (which Clifford Wharton described in a pamphlet put out by the Agricultural Council entitled Green Revolution: Panacea or Pandora’s Box?) there are social effects which can be described in the present tense. Only farmers with money or credit can purchase the “green revolution”. Naturally, these tend to be the larger and already affluent farmers. As their production increases and their products go on sale, the price of rice, for example, drops. Then the smaller, poorer farmers find that their small margin of survival (after the 1/3 to 1/2 of the crop is paid for rent of the land and interest to the money lender) is wiped out. The only “solution” is to leave and risk starvation on the streets of Calcutta. To the farmer, the risk of urban starvation sometimes looks preferable to continued serfdom and starvation on the land.

I agree that we cannot blame the economists for the technology, or our infatuation with it. But we can blame them for the policies which assume that we have no control over the technology, and for the policies which assume that the only important question is the problem of production.

Economists have had little interest in the problems of distribution—neither the question of distribution of resources not the distribution of the end products of production. It is assumed that these will be taken care of through the “marketplace”, or through allocation at the National level in the case of the socialist countries.

Moreover, it has been assumed that efficiency lies with bigness, that bigger is better. (Since economists are mostly male, is this simply male machismo?) Therefore even though huge monopolies or conglomerates are not necessarily in line with the marketplace theory of capitalism, they are preferable because they must be efficient. None of these assumptions has been proven in actual practice. This is particularly true in agriculture where the assumed production efficiency of large-scale units has proven (in the case of the Russian State farm, for example) to be a miserable failure. This is not to imply that the smaller the farm unit the more efficient. However, with modern equipment optimum production efficiency has been shown to be far smaller than the size of our large-scale farms (probably between 300 to 1,000 acres depending on the type of crop, etc.). And from an ecological point of view, of course, all of the advantage is on the side of the relatively small farm.

Distribution of goods, however, presents a problem in efficiency hardly considered by the urbanologists among the economists. Does it make sense to drive the farmers out of Mississippi, Alabama and Georgia into Chicago, Cleveland, New York City, or Washington, and then ship the produce grown in these Southern states up north to feed and clothe them in the cities? It is estimated that every family which migrates into the urban ghettos costs the city approximately $50,000 in terms of housing subsidy, job training, welfare, and added services needed (fire protection, police protection, schools, etc.). For this same family remaining in the rural areas on a small farm, the cost would be less than half for the same or better housing accommodations and services. Furthermore, this could be a long-range investment rather than an outright cost as it is to the city. This would especially be true if:

  1. The land was either very low cost or virtually free (I would argue that the land should be virtually free, as a user’s right),
  2. We had a money system which could provide these families with easily accessible low cost credit for production needs.

Credit or money is that most elusive of all problems which seems to leave everyone (not least the economists) up a tree. There is much revived talk these days about monopoly capitalism and large corporation control of the economy, but seldom is there a mention of the fact that the key monopoly of our entire system is the banking and credit system (in socialist countries this monopoly is, of course, in the hands of the government which doesn’t necessarily make it any better).

There is also a great deal of talk about decentralization or democratizing power. Unless the power to create money or credit is decentralized or democratized, whether under a nominal capitalistic or nominal socialistic system, there can hardly be any real decentralization of power. For along with control of land and resources, control of the power of credit creation is at the heart of any economic political system. Control of the means of production through whatever form of workers control is of secondary importance to the real issue of power. For the power to allocate credit through the banking system determines which production units will survive and which will not.

It is precisely because the farming community in the United States (especially the small farmer) has had so little control over the banking system that it has fared so badly. The system has been controlled almost from the beginning through the industrial sector. In fact, the checking system was invented in England by industrialists in the early 1800’s to subvert the power of the landlords who then controlled the banks and credit through their power in the douse of Lords. Once the checking system broke this power, the industrialists took over, and the industrial revolution took off like a rocket. The farmers who had previously been robbed by the landlords (and still are in many parts of the world) became the victims of the industrialists who walked off with all the credit and through misuse of the banking system helped bring about the alternating periods of inflation and depression which we have experienced ever since.

During periods of inflation the farmer finds himself caught between the rising prices of equipment and feed—prices which the industrialist controls—and the relatively low prices which he receives for his products in the farmer’s market—the only “free” market left in the economy (except when the Federal government tries to control prices by fixing them at certain levels to insure production). Then, during depression periods he must sell his products for little or almost nothing. At the same time he must continue to make payments on money which he has borrowed to purchase his farm, his house, his equipment, etc. The interest on this money, while relatively low in the United States compared with other countries, nevertheless comprises 2/3 or more of the monthly or yearly payments the small farmer must make.

It is a sad commentary but nevertheless a fact that the poorest money investment is the purchase of a farm for the purpose of farming, but the best investment is the purchase of a farm for subdivision into housing. Today, in America, it is virtually impossible to survive as a farmer, if the land has been purchased recently, unless the purchaser is a very wealthy individual or corporation which can use the land as a “tax shelter” and capitalize on the USDA “land bank” payments.

Bad as this problem is in the United States it is relatively good compared to most countries, especially the so-called underdeveloped countries. Interest rates to small farmers in South America average around 50% according to an American economist who spent several years there. In India rates may run from 30 to 40% or more; and in some parts of Asia over 100% (up to 400%) is charged. In these places such charges create a virtual state of peonage or serfdom, especially when combined with land rent charges which take 1/3 to 2/3 of the farmers crop. Is anyone still wondering why the Vietcong find such a sympathetic reception among the peasants of South Vietnam? It is simply because the peasants are ready to help anyone who promises to free them from this serfdom.

Yet the economists accept this money system, seldom making any suggestions for even minor changes let alone a total overhaul or a totally new system, and write about it in esoteric language as if it were part of a God-given system which it would be sacrilegious to change. It is in fact nothing but a mechanism and needs to be de-mystified like so many sacred cows.

Our money system is so shrouded in semi-secrecy that it is hard to learn how decisions are made. Briefly, a few men (no more than 19 and probably fewer) sit on the board of the Federal Reserve (the so-called “money managers”) and make the decisions which control the amount of money/credit (money and credit are synonymous in this sense) which is created and permitted to flow out into the banking system. This means control over the ebb and flow of some 200 billion dollars each year in the United States. This is the real source of money/credit, where inflation begins, where a decision, for example is made to finance the war in Vietnam with government debt through the “open market” operations of the Federal Reserve. In 1964, when L.B.J, and the “top men” made this decision, over 30 billion dollars of new money flowed into the system within a few months and provided the major recent boost of inflation for which we are still paying. And now Nixon with his inflated “deficit budget” is doing the same thing.) This power over the issuing of money, controlled as it is by politicians, bankers, and the corporation elite, provides them with an alternative to direct taxation. Inflation is, in effect, an indirect tax—primarily a repressive tax on the poor, on all those with low incomes. The small farmer is near the bottom of this list next to the pensioner or welfare dependent.

Yet the nature of this system, based on debt financing or debt issue, is that it must continuously expand or it will collapse of its own weight. Inevitably, this does happen, and recession/depression ensues, and the farmer loses again—very often his home and farm through foreclosure.

Is there no other way?

Certainly there is and we have some workable models, but none of them operate on a national level because that is precisely what we do not want. We have historical and contemporary models of decentralized credit and banking systems although there is hardly room to go into them here in this brief article. Yet few economists have concerned themselves with such alternative models and information about them is hard to come by.

Establishment economics hold, of course, that it now has solved the problem of the extremes of inflation/depression. It might be hard to convince those among the millions of unemployed, or even the average housewife who fights inflation daily, that this is true. In fact, we seem to be entering into a new phase where we have inflation and depression at the same time—the worst of both worlds. Furthermore, if we admit that the Keynesian economic policies, which have been followed in the United States for the last 30 years or more, have been at all successful in preventing the extremes of inflation/depression, we have to examine it in the light of the price we have paid for this “success”. The price, in fact, is militarism and a war-dependent economy. Over the last 20 years, each time the danger of recession/depression approached, a new “military threat” appeared (Korea 1951, the cold war missile race 1955, the Vietnam war 1961 and after), and the politicians were able to justify debt spending for military “needs”. This stimulated the economy and sent production and employment soaring (and also accelerated inflation). As a result we are now locked into a military-industrial economy, but we are also at the end of this road. Obviously, military spending no longer solves unemployment, only creating more inflation.

The farmer is locked into this system like everyone else and hardly dares to move away from his ecologically disastrous course, even though he may greatly desire to do so. The “economics” of organic or ecological farming are against him. There are, of course, alternatives here, too, even within the tight confines of the restrictive system. Lee Fryer has tried to outline some of them in his recent book, Earth Foods.

Yet the best hope, frightening as it may seem to some at first, is a general collapse of the present system before major war or ecological disasters overtake us which are irreversible and all life on earth is ended. As the system collapses it becomes more readily possible to initiate the creative alternatives which must replace it if life is to continue.

By collapse I do not necessarily mean anything as precipitous as the depression of the 1930’s. In fact the system is collapsing already; large segments, entire geographic areas, are more and more being left out of the “real” economy. These areas, mostly rural or center city, are beginning to search for new alternative institutions such as the Community Land Trust, which like the Tanzanian and Israeli models, holds land in trust and offers user’s rights rather than fee simple title. It is perhaps, too early in the breakdown phase to initiate alternative community based credit and banking systems, but the time is rapidly nearing when these, too, will be vitally needed.

But it is not too early to begin planning these alternative economic structures and testing them on a pilot basis.

Publication By

Robert Swann

Robert (Bob) Swann was the founder of the E. F. Schumacher Society, now the Schumacher Center for a New Economics. In 1974 E. F. Schumacher asked Robert Swann to start a sister organization to his own Intermediate Technology Development Group, but it was not until 1980, when prompted by Resurgence editor Satish Kumar, that Swann organized the E. F. … Continued

Related Lectures

A Conversation About Land and Liberation
Prophecy of the Seventh Fire: Choosing the Path That Is Green
Democratizing Monetary Issue: Vision and Implementation in the Berkshire Region of the U.S.
Ecological Redemption: Ocean Farming in the Era of Climate Change
Public Voice for Schumacher Center’s Sustainable Economic Policies