individual farmers to control land and other assets (Anderson and Lueck 1992). Raup (1973) shows that history
is littered with examples of factory farming outdone by small family farms.
21. Production agriculture has many complementary tasks across stages that also reduce the effective number of
tasks. For example, many tasks, like on-the-spot decision making, are performed jointly, so the skills for one task
transfer easily to other tasks. Successful farming depends on making many small decisions, often immediate, and
often regarding the timing of actions. Timing and-on-the spot decisions are highly complementary and common
across many tasks within a stage. Being a good judge of weather for planting is complementary to judging the
weather for harvest. Also, if a family farm controls planting, it is likely to control other stages that require the same
inputs. For example, cultivation and harvest require the use of tractors and general farming knowledge, and are
thus likely to be controlled by family farms. On the other hand, because processing crops usually calls for large
and different forms of capital, the farm that grows the crop is unlikely to process it. Farming is characterized by a
host of complementary tasks, both at a given stage, and across stages.
22. See U.S. Department of Commerce, Bureau of the Census (1999), United States Data, Table 47, Summary by
Type of Organization.
23. Fogel and Engermann (1974), however, attribute this organization to economies of scale, but this claim ignores
the source of such economies in the slave owner's ability to monitor repetitive tasks relatively cheaply over long
stages of production.
24. The general issue that farming is not subject to great gains from specialization, and therefore small farms are
at no great disadvantage, was noted very early by J. S. Mill (1965 ):
the operations of agriculture are little susceptible of benefit from the division of labour....There is no
particular advantage in setting a great number of people to work together in ploughing or digging or sowing
the same field, or even in mowing or reaping it unless time presses. A single family can generally supply all
the combination of labour necessary for these purposes. (P. 144)
25. For historical data, we rely on Bidwell and Falconer (1925), Danhoff (1969), Gray (1941), and Schlebecker
26. Our most important source is Drache (1964). See also Briggs (1932) and Bigelow (1880). Drache and others
use “bonanza” for farms over 3,000 acres, although the most prominent of these tended to be between 20,000 and
50,000 acres. Drache finds 91 farms of this size in the region in 1880. He also finds 15 farms that had at least 20,000
acres. This compares to an average farm size of little more than 200 acres during this time. The 1997 Census of
Agriculture (U.S. Department of Commerce, Bureau of the Census 1999) reports that the average farm size in the
relevant North Dakota counties was roughly 1,000 acres.
27. The bonanza farms should not, however, be considered a systematic business failure. The stockholders of the
Northern Pacific and entrepreneurs like Oliver Dalrymple profited from introducing wheat and its technology to
an uncultivated territory. The bonanza farmers capitalized on increasing land values that depended on their own
efforts. For instance, land bought in 1875 for $1.00 per acre was sold in 1885 for as much as $25.00 per acre,
yielding an annualized nominal return of 38 percent during a period in which price levels fell nearly 20 percent.
Drache (1964) shows that bonanza farmers learned quickly that they could do better by abandoning the factory
system and leasing or selling their land to local homesteaders. Because they could break soil all summer without
having to establish homes for families, it is also likely that the bonanzas were able to exploit specialization gains
in sod busting.
28. Coulter is cited in Drache (1964, 213).
29. According to Isern (1990): “In pure custom threshing the thresherman provided not only the machinery, the
engineer, and the separator man but also the full crew of men required to do the threshing....thefarmer was
responsible only for hauling away the grain as it fell from the spout of the separator. The pure custom thresherman
provided board for his crew, usually by maintaining a mobile cook shack and hiring a cook” (75).
30. One-man “pull-type” combines (pulled by tractors) were available by 1926, and by the 1940s self-propelled
combines were on the market. Although the combine was invented in 1838, it was used sparingly (mainly in
California) before the gasoline engine was perfected. Combines required an enormous amount of power that made
them unwieldy in the fields when powered by horses or mules (Isern 1990). Data from the USDA show the adoption