The Political Economy Effects Agricultural Innovation

During my undergraduate economic history course, I teach a lecture on innovation. I start the class with a look at American life in the 19th century. If you’re into giving thanks, being thankful for innovation and not being born 200 years ago might not be a bad place to start.

Rudyard Kipling said of Chicago “Having seen it, I desire urgently to never see it again.” City streets were full of pigs (there to eat the garbage) and horses. The streets were also, naturally, full of manure. The problem was so bad that at the turn of the 20th century, American urbanists were plotting out exactly when streets and sidewalks would be completely covered by horse manure. The internal combustion engine (innovation!) was right around the corner, solving the horse and manure problem but creating other problems. Rural life wasn’t much better, marked by isolation, loneliness, and drudgery. Most goods were homemade and handmade, most laundry was done by muscle power. Travel, intra- or inter-city, was dangerous and slow. Life expectancies were short, working hours were long, and especially as the Gilded Age dawned, inequality was high. In 1890, one railroad employee was killed for every 300 employed.

Clearly, we don’t live in that world anymore. Why? Ufuk Akcigit, John Grigsby, and Tom Nicholas credit the golden age of invention from the late 19th and early 20th centuries. Robert Gordon made somewhat similar claims (though he’s a bit more pessimistic about future innovation than I think we ought to be), highlighting five important clusters of innovation for transforming the world. This includes dramatic decreases in the cost of electricity (light when it was dark and motors where before we only had muscle), growing availability of running water, the expansion of entertainment and communication, and more.

But where scholars of innovation might focus on the supply and demand of inventors (I lecture on Bell et al’s missing Einsteins and Cook’s work on African American inventors) or the supply and demand of invention (my undergraduates get several slides on Petra Moser’s world fairs work) or the economic effects of inventions, those interested in political economy might come to innovation with different questions. Beyond economics, how did the changes in the technological world change everything else? 

As dedicated readers know, I speculated about the political and social effects of a particular innovation that put thousands of telephone operators out of work in the early 20th century based on work with Dan Gross. But when I posed this question I posed to my undergraduates recently, we focused mostly on agricultural innovations. Given the enormous changes in how we feed ourselves—90% of Americans with jobs worked on farms in 1800, a number that fell steadily for the next 150 years—much of it driven by innovation and increasing productivity, agriculture seems like a logical place to start. Plus, on the what we’re thankful for, Economics of Research and Innovation in Agriculture, edited by Petra Moser, just showed up in the mail (thanks NBER). Here are a few of the highlights (mixed with some ramblings of my own and one new paper) to the political-economic effects of innovation.

(I only have a few more lectures in my EC365 class this semester, so I suppose that I’ll have to stop mining them for posts eventually.)

Barbed Wire

Hornbeck (2010) estimates the effect of the invention (and mass-production) of barbed wire on agricultural development in the American West. For farmers to gain legal protection from encroaching cattle herds, American state law required “lawful fences.” In areas where wood was plentiful, wood fences were not so expensive and mostly worked. But in many of the richest farmlands in the US, forests were rare and fences were extraordinarily expensive. As Hornbeck notes, in 1872, the capital stock of fences was about equal to the value of all livestock or the national debt or the railroads, pick your comparison of choice. But after barbed wire (invented 1874, mass-produced circa 1876), fencing was suddenly plentiful and cheap everywhere. Hornbeck documents that large increases in agricultural investment in the least wooded counties, seeing them catch up with their wooded neighbors who had always enjoyed cheap fences.

But as any connoisseur of westerns (spaghetti or otherwise) can tell you, the conflicts between ranchers and farmers are not just economic. Range wars were bloody and destructive. Did the availability of cheap (and effective) barbed-wire fences reduce violence on the open range? Kevin Costner’s Open Range features plenty of rancher vs land owner killing, despite being set in 1882, after barbed wire’s introduction. The dating on Shane is more ambiguous but also sees farmers and ranchers shooting out about grazing and property rights.

I don’t know what the data says (or what data on range war violence even exists) but I like the question a lot.

Wheat

Olmstead and Rhode (2002) focus on innovation in wheat seeds. A naive story about wheat productivity would plot a hockey stick. Wheat yields (bushels per harvested acre) look pretty flat from 1860 to 1940 before starting a sharp increase. 

But Olmstead and Rhode argue that this apparent lack of productivity growth is misleading. Throughout the “flat” period, wheat was moved farther and farther west, often to more marginal land and beset by new agricultural pests and with very different climatic challenges (less rain, colder lows, warmer highs, less or more frost, etc). That yields did not fall, they argue, is a remarkable fact.

For me, this paper prompts some interesting PE questions. For one, we often think of the large (and very long-run) effects of certain regions (or peoples) specializing in a certain crop. But if crop innovation is widespread and continuous, are these changes ever big enough to “shock” the crop culture?

Ogallala Aquifer

In a paper that I served as an RA on (a very long time ago), Hornbeck and Keskin (2014) study the effects of irrigation. Specifically, access to the Ogallala aquifer, made possible by innovations in groundwater pumps and center-pivot irrigation after WWII. Comparing counties over the aquifer before and after the inventions, the authors find large increases in irrigation and sizable increases in corn harvests and farmland values.

In a recent working paper, Aditya Dasgupta asks about the political effects of this innovation. Or rather, he uses this innovation to get at an even bigger question about geography and economics and politics. He starts with a puzzle: rural areas are conservative in the US today but that was not true 100 years ago. Where did the plains state populists of William Jennings Bryan go? What changed? At least in the states around Ogallala, access to irrigation seems to play a big role. Water access created groups of “upwardly mobile farmers” as well as rich “agribusiness interests”, both of whom might have pushed local politics more conservative.

We live in a world defined by technology and we always have. But understanding that world requires us to think both about the “direct” effects of technology and the “indirect” effects on politics, culture, society, and everything else historical PE scholars are interested in.

Author(s)

  • I am an Assistant Professor in the Boston University Department of Economics. I am also a Faculty Research Fellow at the NBER in the Development of the American Economy program. My primary research interests are in labor economics and economic history.

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