Regulation and the Revolution in United States Farm Productivity

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Overview

The introduction of New Deal regulation coincided with the start of a revolution in U.S. farm productivity. Compared with small gains in the three decades prior to 1930, farmers after 1935 maintained an exceptionally high rate of productivity growth. In Regulation and the Revolution in United States Farm Productivity, Sally Clarke argues that regulation worked in tandem with farmers' competitive markets to create a dynamic process for productivity growth. Competition, Clarke finds, cannot alone explain the rapid diffusion of technology. Prior to 1930, farmers in the Corn Belt delayed purchases of the tractor, the most important technology, despite the cost savings it promised. Aside from competition, farmers responded to their investment climate, which Clarke defines as the interaction of diverse elements: unstable prices, the structure of farms, and the role of different actors - implement manufacturers, creditors, agricultural researchers. In the 1920s, tractors demanded large sums of cash at a time when farmers' investment climate hampered such financial commitments. As a result, many families delayed purchases and missed potential productivity savings. The New Deal changed this climate. Regulation stabilized prices, introduced new sources of credit, and caused implement manufacturers and private creditors to revise their business strategies. Despite the Depression, farmers invested in expensive technology and acquired significant new gains in productivity. After the Depression, the rapid growth in productivity entailed drastic changes in the farm sector: a small number of competitors survived but most ultimately quit. Regulation shaped these outcomes. For as long as prices fell after World War II, credit and price regulation helped aggressive farmers invest in land and technology. Ironically, these same policies created conditions under which those who gave up their livelihood rarely experienced foreclosure. Instead, in the 1970s when prices rose, those far
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Editorial Reviews

From the Publisher
"...a fine and provocative study. We can only hope that this book will generate many other works that also seek to challenge prevailing simplistic explanations of change and that build on Clarke's elegant assessment of the emerging issues." Technology and Culture

"This is a model monograph that judiciously employs economic theory and business history to tackle an intriguing question....Clarke's methodology should be extended to other regulated industries, for she has shown that focusing on a broad array of forces (productivity, finance, technology, competition, political action) over time can yield fruitful analyses of ideologically charged subjects." American Historical Review

"Although Clarke is a historian her work provides more than standard historical perspectives, and this book should prove useful and interesting to a wide range of economists....Clarke's book is well researched and thought provoking. Those interested in the economic history of agriculture will find this book interesting and challenging..." Journal of Economic Literature

"This is a theoretically informed and empirically careful and thorough study with important implications for public policy." The Journal of American History

"Clarke brilliantly shows the circumstances and conditions under which business and government could and did work together to further the development of one of the nation's critical industries....America's farmers, politicians, and pundits would reap a huge harvest if they could consult Clarke's insightful book before the nation embarks on a new set of agricultural policies." Business History Review

"By combining economic and business history, Clarke has produced a study with much to say about the economics of twentieth-century agriculture in general and the New Deal period in particular....The book has many strengths. The argument throughout is stated forcefully and with great clarity, and is buttressed by extensive research in the published records and unpublished manuscripts of the USDA, the state experiment stations, and implement companies and farm lenders. It explains in detail the role of credit in midwestern farming, the behavior of agribusiness, and the impact of the New Deal in the Corn Belt—all subjects too often slighted by historians studying agriculture in the 1930s. It also focuses attention on the long-term implications of the farm programs. Finally, its epilogue offers a perceptive appraisal of the causes of the farm credit crisis of the 1980s." David E. Hamilton, Agricultural History

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Product Details

Table of Contents

List of tables
List of figures
Acknowledgments
Pt. I Regulation and productivity
2 Agriculture and the organization of knowledge in the early twentieth century 22
3 Accounting for the slow rate of productivity growth 50
Pt. II "Power Farming" in the Corn Belt, 1920-1940
4 The tractor factor 83
5 Depressed markets and market regulation 136
6 "If You'll Need a Tractor in 1936 You Ought to Order It Now" 162
Pt. III A legacy for New Deal regulation
7 Regulation, competition, and the revolution in farm productivity 203
8 Conclusion 246
Epilogue: The credit crisis of the 1980s 255
Appendix A: The tractor's threshold, 1929 271
Appendix B: The tractor's threshold, 1939 287
Appendix C: Sources of preharvest and harvest labor productivity, 1929-1939 297
Index 305
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