Wednesday, June 22, 2016

The Strongest Link

Some might be surprised, of the degree to which Adam Smith held agriculture in high regard:
The capital, however, that is acquired to any country by commerce and manufactures, is always a very precarious and uncertain possession, till some part of it has been secured and realized in the cultivation and improvement of its lands. A merchant, it has been said very properly, is not necessarily the citizen of any particular country.
Few today, would consider the role of agriculture as quite so basic. What might account for the fact that Adam Smith emphasized agriculture over industry in this passage? For one, he recognized the merchant as part of what would become the international nature of tradable sectors. Even though all goods have some form of local origin, this expansive form of economic wealth belongs to all nations.

But by the same token, industry - with its relative lack of definable roots - was more subject to the vicissitudes of war. Patterns of commerce and industry could readily be broken down at any time, and - as had so often played out historically - not always reemerge with the same strength they held before exposure to the conflicts of nations. Whereas, local agriculture - while hardly impervious to the threats of war - still had higher chances of escaping such strife relatively unscathed.

Hence the above quote appears to highlight a belief on Smith's part, in agriculture as society's strongest link. Or more precisely, agriculture as rooted in the economic capacity of what was once every nation's citizen majority, via their contribution to a nation's most basic needs. When Smith lived - and indeed for a long time afterward - agriculture provided ready means for spontaneous coordination and cooperation, for people from all walks of life.

All too often, people forget how to cooperate and coordinate for their wants and needs, when they do not have adequate institutional means by which to do so. For centuries, agriculture provided economic cohesion alongside a strong incentive for family production, before giving way to the prominence of manufacture and commerce. What was perhaps less discussed, was the fact citizens were losing the most reliable production autonomy they had ever known. To some degree, governments must have understood what had actually taken place. After all, agriculture had also served as work opportunity for young and old, who would thereafter become underrepresented in the modern workplace. How much bearing might this loss have had, on the rationale of the welfare state?

Part of the problem for many citizens, was the loss of autonomy and self direction in terms of economic outcome. The knowledge based wealth which ultimately became so important to the economic foundations of nations, largely bypassed the work based patterns of citizens in many areas. As a result, a growing number of communities and regions gradually grew dependent on the places where knowledge use was allowed to flourish. Where once local citizens provided points of stability from which other forms of commerce had been able to expand and multiply, now local communities were forced to rely on resources that existed well beyond their ability to reciprocate.

Nations and governments alike, have forgotten the integral role of citizens as a foundation for economic stability. Instead of addressing the earlier losses of production rights, governments responded by establishing a welfare state. Now, as many of those government promises have become difficult to fulfill, policy makers grow anxious to scale back welfare states. There's just one problem: many have forgotten the particulars as to how these welfare states were established in the first place. Citizens will once again need clearer rights for production in the marketplace, should policy makers proceed down this path.

However, some factions are ready to double down on the earlier bets of the twentieth century, in a belief that governments will still be able to take care of their citizens on previously defined terms. Even though it makes little sense to reemphasize government power at this juncture, there are important reasons why it is happening. Too many supply side factions bear their own responsibility for a resurgence of Keynesianism, given the fact they have chosen economic stagnation over marketplace strength and full participation.

While Democrats and Republicans alike have created harsh limits on the supply of knowledge product, Republicans are paying the highest price in terms of party disarray. Even worse, is the fact all concerned gave progressives and financial interests the rationale that supply and demand is not central to economic activity. After all, special interests have seen to it that broad supply and demand for knowledge product in the marketplace, is mostly wishful thinking for dreamers and fools.

Just as agriculture was once the strongest link - because of its connection to citizens as a whole - knowledge use has the potential today, to fill that role as well. But if nations disregard this possibility, widespread knowledge use could just as easily lose its chance, to become a solid economic foundation in times of uncertainty. Indeed, the connection between time value and knowledge use was never as important, as it is in the present.

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