Agriculture Reference
In-Depth Information
The first proponent of post-industrial decentralization was perhaps Peter Kropotkin, who
as early as 1901 noticed that the replacement of steam power by electricity was resulting
in lighter machinery more accessible to smaller communities, which ought to have been
leading to the reintegration of industry with small highly productive farms. 'The 'concen-
tration' so much spoken of is nothing but an amalgamation of capitalists for the purpose of
dominating the market , not for cheapening the technical progress'. 59
This theme was taken up in the 1920s by the American Ralph Borsodi, in this prophetic
paragraph:
The coming of cheap power in a form suitable for application to domestic ma-
chines may help to redress the present adverse balance between the home and the fact-
ory. When we shall have become sufficiently civilized to create a demand for small
generating plants driven by windmills and watermills, they will be developed and
placed on sale at even lower prices than the very ingenious plants driven by gasoline
engines which are now on the market. The domestic producer will then have power,
heat and light at no cost in money except for lubricants and maintenance.
Borsodi was ahead of his time in a number of ways, but no more so than in his identific-
ation of what we now call 'food miles' in his 1927 book The Distribution Age . The thesis
of this topic is that economies of scale are more than offset by diseconomies of distribu-
tion. He provides pie-charts showing that the distribution costs for products such as corn
flakes and rolled oats, even in the 1920s, were twice as high as manufacturing costs. And
he depicts the working of Say's Law (that 'supply creates its own demand') in the freight
industry:
We may have reduced the ton-mile cost of transporting freight, but at the same
time we have increased the average miles per ton shipped so as to completely wipe out
the saving and to actually increase the transportation cost on each ton of merchandise
we consume. 60
In particular, he lambasts the pointlessness of what he calls 'cross-hauling' (transporting
the same item in opposite directions):
If Chicago manufacturers could secure a thousand desirable outlets in New Eng-
land in addition to those they supply in their own natural territory, they could probably
lower their cost of production sufficiently so as to quote prices FOB New England in
full competition with Boston. If, however, the Boston manufacturers at the same time
secure one thousand desirable outlets in the Chicago manufacturer's territory, isn't the
net return a mere exchange of accounts?
 
 
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