Are Farmers Capitalists or Socialists?

This is a question that’s been on my mind for a long time.

Typically, when you envision an American farmer or farming family, you tend to picture rugged individual, self-reliant, conservative types, who pride themselves on knowing how to survive with minimal interaction with the outside world. Partly, it’s our strong and primordial emotional reaction of respect and admiration for growing your own food, the aura of grit and independence that radiates from such an endeavor and lifestyle. Partly it’s the romantic mythology of our agrarian past, both from our actual history and from its longstanding portrayal in American culture.

But there is another side to American farming that is much less discussed, and far less romantic: government subsidies. In 2020 alone, the government paid out around $46 billion dollars in farm subsidies. Just over $35 billion of that was for “emergency aid” to help bolster farms struggling with the economic effects of Covid (without even vetting the allocations based on need, of course, like most government programs). But the rest, over $10 billion, was for “traditional farm subsidies that were already in place.”

A theme that you’ll notice from me, from the very beginning and which you’ll see more and more over time, is that I believe in principles, and in philosophical consistency. And I expect that from everyone, from you, from me, “my side,” “the other side,” without exception. I consider it a requirement for me to view an individual, a group of people, or an organization as rational actors who can be engaged logically on a topic, and who can be given the benefit of the doubt as being generally fair and reasonable. And I will hold the people and groups with whom I align to the same standard, I will expect them to be logical, principled, and consistent just like everyone else. Which is why I have to call out as unprincipled and myopically selfish any person or interest group who asks or lobbies for government handouts and corporate bailouts, no matter which party they’re in, no matter how they vote, and no matter how much people hate me for it.

A true capitalist, a true adherent of free markets, and in my opinion, a true believer in the American philosophy of self-sovereignty and self-reliance, would not believe in or advocate for subsidies or bailouts for businesses, of any kind. This is no less true for a farmer than for a banker or someone engaged in any other type of business.

I would say this to a farmer or any other businessperson who thinks that they’re entitled to corporate subsidies or government bailouts: if you think you are entitled to them, then why not the guy who runs the sandwich shop down the street, the restaurant that just closed, or the bank that needs a billion dollar bailout? If we make an allowance for you and your business, we have to make one for everyone. If you have a right to a government subsidy, then so does everyone else involved in every other type of business. And now you have justified unlimited government expansion and interference with the free market, and all of the unintended and nasty consequences, like the government picking winners and losers, like central planners directing the behavior of businesses through financial incentives, and like bureaucrats punishing businesses or industries they disapprove of by cutting off their funds. You justify and unleash the full force of Leviathan if you can justify it for yourself to subsidize your business.

So are farmers capitalists or socialists? For me, this question usually comes to mind when the topic of health, sodas, and high fructose corn syrup comes up. By now, everyone knows that the cause of our obesity epidemic is the processed carbs and sugars that are the unfortunate staples of the American diet for most people. I’m a free market person, and I by no means want the government telling us what to eat or drink or do with our lives, not by “educating” us, or by force. (Side note: do you trust government education and social engineering? If you do, I would ask why, and ask you to think about the government’s track record of societal programming and reconsider). I want no part of Bloombergian soda bans or calorie counts. Not only do they do no good and have no practical effect, they are an untoward imposition on people’s liberty. Freedom means, it has to mean, the freedom to do dumb things and make bad choices as well as to do smart things and make good choices. These sorts laws also impose yet another undue compliance burden on businesses, another unnecessary cost that diverts resources from investing in research, improvements, and employees.

But at the same time, I admit that if we could snap our fingers and make soda or high fructose corn syrup disappear, it would go a long way towards improving people’s weight and health (assuming no replacement was found, etc…this is a utopian hypothetical, so we can imagine a single factor changing without having any other factors change in response, which is useful for thought experiments, but does not happen in the real world). Right now, a main if not the main culprit that is destroying people’s health in America is high fructose corn syrup, sweetening everything from soda to bread to yogurt to granola bars. It’s used as a sweetener because it’s a cheaper substitute for sugar, and because for taste purposes we do need at least a little bit of sweetener in most of our processed foods. And while a little bit of it seems to be in almost everything, it is of course far more concentrated in snacks, candy, and soda, which Americans consume far too much of.

So when I’m discussing health and obesity with my friends, the first obvious policy step when working on this issue is: stop subsidizing high fructose corn syrup. And while we’re at it, why not stop subsidizing, well, everything? In fact, the inspiration to write this article came from a snippet a friend sent me this week:

I’m not saying it’s a magic bullet, or that it would solve all our problems. But it’s an easy and obvious first step to try. And why wouldn’t we?

The answer to that is: the farmer’s lobby.

When you look into the matter, you get varying estimates on how much the U.S. spends on farm subsidies every year, ranging from $10 billion in the article I linked to above, to $14 billion, to $20 billion. In a longer view, we see that in a 15 year span $170 billion was spent in aggregate on these subsidies, and in a 25 year span, $116 billion on corn subsidies alone. Now I’m not getting into the weeds on farm subsidies, and for the purposes of this analysis, there’s no need to. As someone else said so eloquently, “The inner workings of subsidy programs is a subject best left to PhD economists.” We don’t need to know the details of these subsidies to know that they distort the marketplace and the choices that individuals and businesses would make if left to decide their preferences and best interests themselves.

The point that I’m making is that the very existence of these subsidies is anti-free-market, anti-self-sovereignty, and if you want to be dramatic about it (and why not?), anti-American. It is also apparent that the cost of these subsidies is not insignificant, year over year, and cumulatively over time. As the saying goes, “A billion here, a billion there, and pretty soon you’re talking real money.” There is real money on the table here for farm subsidies, and the ethical and economic questions surrounding this practice affect our pocketbooks, distort the market, and incentivize public consumption and business production of patently unhealthy goods.

As an average taxpaying citizen, not involved in farming or distribution of agricultural goods, I am opposed to government subsidies of farms just as much as banks or any other business (and I hope you are too). As a free market, economics-minded conservative, I am opposed to these subsidies on principle as much as I am on pragmatism (i.e. I would still oppose them if the cost were trivial).

My question is: if you are a farmer, or involved in the distribution of agricultural goods, are you willing to reject the idea of corporatism and government subsidies for your industry, just as much as for any other, and if you’re not, are you honest and transparent enough to admit that you prefer socialism for thee, and capitalism for me?

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9 thoughts on “Are Farmers Capitalists or Socialists?

  1. Not to mention the special payments made to farmers to ameliorate the effects of President Trump’s trade policies. Our government has been subsidizing farmers my entire life, sometimes paying them not to grow certain crops to maintain price stability. I’m not sure we have ever had true free enterprise in this country and am certain that we never will. What bothers me is people who call these subsidies economic policy but call entitlements “ welfare”. What’s the difference ?

    Liked by 1 person

    1. Hi Trey, thanks for reading my article, glad you liked it!

      I’ll just address that last part: there is no difference. And it’s a major point of hypocrisy on the right, which I think needs to be called out, frequently and continuously, in order to make us more fair, logical, and consistent.

      Any sort of government subsidy is welfare, whether it’s corporate or individual. But I think there’s actually a very important difference: while I believe there is a very easy and strong case for a safety net in the form of individual welfare (“orphans and widows,” as they used to say when the welfare state first began), there is almost or literally never a fair and logical case to be made for corporate welfare, of any kind, to any industry, to any class of business.

      While you can easily conjure up nightmare hypotheticals where a government bailout of certain businesses is required (a genuine financial collapse or some kind of mass starvation), outside of a textbook or dorm room, I’m not sure that any scenario like this could or would actually exist in a modern society and economy.

      Now if you go back just 100 or certainly 200 years, and any time before that in history, where starvation was real and an ever-present danger, I think you could actually make a much stronger case that something like agricultural subsidies or subsidies for certain critical businesses was necessary to prevent true devastation. But in a modern, western society of wealth and abundance, I find it very unlikely that a scenario like that could actually happen. There is just too much wealth, too much liquidity, too much innovation, and too much information for a true civilizational collapse to happen.

      Would you agree?

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      1. I don’t know about never. We were staring into the abyss of a major depression in 2008-2009 , were we not ? We don’t know how bad that could have become because we didn’t let it. But I do believe that government can and eventually will cause economic collapse if we continue to print money to solve problems. And I don’t see the political will/ courage to put on the brakes.Many politicians talk a good game but it’s so much easier to pacify the people who are hurting by sending a check, and letting our grandchildren deal with it. Having said all that, what would we have government do about the pandemic, especially considering that many are in dire straits because government imposed restrictions that shuttered businesses and destroyed jobs ? Is there no duty on the part of government to attempt to repair that harm ?

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    2. Not sure why it’s not letting me reply to your last comment, maybe threads can only go so deep…

      I want to address one or two points at a time for clarity.

      “I don’t know about never. We were staring into the abyss of a major depression in 2008-2009, were we not ? We don’t know how bad that could have become because we didn’t let it.”

      Were we? I’m not enough of an expert on finance or economics to say for sure, the best argument I heard was that we had to do *something* to make sure banks could keep going to make sure businesses could keep operating with their lines of credit. I don’t even know if I’d call that a bailout, maybe more of a “guarantee.”

      But I think that’s missing the point, and ten steps down from the big picture: the financial crisis wouldn’t have *happened* and banks wouldn’t have *needed* a bailout if it wasn’t *for* corporate subsidies and government welfare in the first place. The subprime crisis was created and incentivized by government policies, and I think that scenario actually proves my point that without government subsidies, there is no nightmare scenario in a modern free-market economy that’s plausibly going to threaten our existence.

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    3. I actually wrote a long, detailed article on that very topic.

      Bottom line: we’re screwed.

      Well…maybe our grandchildren are. But this country as a whole definitely is, eventually.

      “But I do believe that government can and eventually will cause economic collapse if we continue to print money to solve problems. And I don’t see the political will/ courage to put on the brakes.Many politicians talk a good game but it’s so much easier to pacify the people who are hurting by sending a check, and letting our grandchildren deal with it.”

      https://shanehachey.com/2019/02/17/american-bankruptcy/

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  2. They are socialists and capitalists depending on scale of industry, I don’t mind subsidies for a necessity such as something very detrimental such as food. Ranks right up there with the military which is pretty much a socialist system too. Literally everyone needs food and I dont mind a system that makes everything a lot easier to aquire even for the weakest of people. Now what I might mind is who gets what and how much and from what I see there is room for improvement, I will see if I can find the article I read on which briefly describes where the money goes I don’t agree that if you give it to one, you have to give to all,,,the subsidies appear to mostly go main components of our diets. Again though, where the subsidies go is arguable imo, So that’s my take, I don’t think being a pure capitalist benefits us nor does socialist and full socialism is horrid. A good combo of both works best it seems. https://www.thebalance.com/farm-subsidies-4173885

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    1. Thanks for your thoughts Bill. Can I ask why you think it’s fair to say one business deserves subsidies but another one doesn’t? To me, that seems unfair, and just typically serves each of our own particular biases, either based on who and what we just happen to be personally close to, like if your family is in banking or farming, or what randomly appeals to our emotions. Farming is a great general example of that, but there are countless others, environmental, you could say a particular crop or type of farming, you could say the auto industry if you live in the rust belt or are partial to blue collar work, etc. Everyone has their reason for why their particular thing should be subsidized. If we grant yours, on what basis could we deny someone else’s, or vice-versa? I just want to be fair to and consistent with everyone, and I think the only way to do that is without subsidies.

      “I don’t agree that if you give it to one, you have to give to all”

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