Thursday, March 12, 2009

Economist's Notebook: Urban and Rural

Two things occurred the other day that got me thinking about the urban and rural divide. First, an old friend of mine (and fellow L&C economics major) called today and mentioned that he took issue with my assertion that we should necessarily give rural residents a break on gas taxes. He thinks we subsidize rural living too much and that urban living is more efficient - and not just in terms of energy usage and environmental harm, but efficiencies in our ability to (in his example) offer more choice to school children. The second thing was my coming across this article by Ed Glaeser that uses The Lorax as a jumping off point to discuss his research on the 'green-ness' of urban living.

First, a digression. I, like Glaeser, think The Lorax is a very good lesson on externalities and public goods and the importance of protecting the environment in the face of market incentives that will not. However, the Once-ler is not an archetypical capitalist as I assume Seuss intended, in fact he is a miserable failure of a capitalist. He fails to replant trees to ensure the future success of the business even though the incentives to do so are clear. However, in his willingness to go after the short-term gain and sacrifice the long-term health of the business, he is perhaps a good model for the bank executives that managed to screw that industry up royally.

Anyway, I believe in density and I believe the future of humanity is largely urban, not rural. I understand urban living has drawbacks: lots of concrete, heat islands, etc. But on balance (and in general) the ability to live efficeintly is greatly enhanced in urban areas and Glaesers research seems to confirm this. So I look very favorably on residential high rise developments in the city center because it is important to have downtown residents that live and work locally.

Personally, I chose to live in my neighborhood in Portland because from my house I can walk a few blocks to the park, the library, a New Seasons and a QFC (this was especially handy during the big snow storm), the bakery, coffee shops, restaurants, the bank, the hardware store and even the river. I am close to a multi-use path that takes my wife and her bike downtown to work most days, I can walk with my children to their schools and there are bus lines a couple of blocks away. I rarely have to get in my car to do anything. When I lived in Corvallis, I was in and out of my car all the time, because though it is a nice bucolic college town it is spread out. I feel my current lifestyle is healthier for me and my environment.

This is not to say that I pass judgement on those that choose to live in rural areas, but as a general trend I hope to see more density in America's urban cores and less sprawl to the exurbs. If you want to see what that is like, visit Denver - though the downtown has come a long way in the last 10 years it is still largely deserted after business hours.

But this vision of an urban ideal does create some conundrums. My wife and I disagree, for example, on agriculture. I tend to think some aspects of large scale agriculture is good. Production happens where it is most viable, economies of scale are large and a relatively small number can support all of the urban residents. My wife is very supportive of local agriculture, the farm-to-table movement and has, as an ideal, small local farms that sell directly to urbanites and do not rely on chemical fertilizers and pesticides. There are valuable aspects to both systems and it is hard to know where the right balance is, but I worry that this local ideal is highly correlated with wealth and it does not provide answers for the poor depend on highly productive agricultural sectors.

Clearly the two sectors, urban and rural, are complementary and we would not be able to live densely without the support of rural agricultural areas. But finding the balance between living efficiency and sustainably on one hand, and being less reliant on industrial agriculture and living 'closer to the earth' is not an easy task - nor is the appropriate balance obvious.


Jeff said...

"some aspects of large scale agriculture is good"

Yes. Although I'm sympatheic to "local grown", fact is that economies of scale and capital-intensive production have kept food prices low.

Crop farming still tends to be run by 2.5 people (the .5 being part time help at harvest) -- just like it was decades ago. It's just that instead of 300 acres, 2.5 people can now grow 3000 acres of wheat, corn, and soybeans.

There is probably too much nitrogen used in crop agriculture (for corn production in particular), but I don't see the environmental harm otherwise.

Becky Davies said...

It is true that there is a degree of efficiency in industrial agriculture, if you neglect massive environmental harms such as reducing biodiversity, eroding topsoil, hypoxic oceans from fertilizer run-off, farmworker health problems from field chemicals, and a list that goes on and on. It is also true that local, organic agriculture is cost-prohibitive for low-income consumers, as is housing and healthcare, but this is a complex issue that involves employment and wages. Current industrial farm practices provide menial-wage, dangerous jobs and contribute to the continued bleeding of small farms into the industrial agriculture system, sacrificing small farm land and jobs. Is there not a compromise to be found that could increase business opportunities to help revitalize small towns as well? Rural small farms and food processing centers could feed into a regional (as opposed to national and international) transportation system to ensure a local food supply to large urban centers. Though this sounds idealistic relative to our current industrial food system, food production is necessarily an important part of making both urban and rural lifestyles more sustainable. Perhaps the answer lies in striving for a regional ideal. Oregon is at an incredible advantage being part of and neighboring such geographic--and hence agricultural--diversity.

Jeff said...

"there is a degree of efficiency in industrial agriculture"

Actually, there is extremely high efficiency in industrial agriculture -- that's why no one is ever likely going to kill it.

"reducing biodiversity"
Don't get this one ... just because a certain variety of corn, for example, is optimized to a certain region, doesn't mean that that's the only one that can ever be planted.

"eroding topsoil"
Farming tends to be done by people who own the land. They have a strong incentive to use soil-preserving practices. Back in the 1960s the farmers may have plowed everything under -- but no-till is all the rage today.

"hypoxic oceans from fertilizer run-off"
Of the potential problems you mention, I think this is the most severe.

"farmworker health problems from field chemicals"
If folks are following the regulations - this should not be a problem.

"Current industrial farm practices provide menial-wage, dangerous jobs"
Examples? As I said, most crop agriculture in this country is done by 2.5 people (usually part of a single family) running 400 horsepower John Deere tractors ... certainly not menial or dangerous...

Becky Davies said...

My main argument refers to the need for a regional agriculture system, not the 100-mile diet with lots of farms driving their individual trucks of produce into the city, but not the 10,000 mile diet either. But to respond in brief...

--I suppose theoretically you could grow a mixture of crop varieties, but one look at a standard grocery store makes it clear that this does not happen (single-variety monocultures are the norm).
--You've hit the soil problem on the head: industrial farms don't have incentives to care for the soil because they will simply apply more fertilizer in excess quantities.
--If recent food contamination issues are any indication, the USDA cannot be relied upon for sufficient regulation and enforcement of abuses in large-scale food production operations.
--Machines don't harvest all the strawberries and raspberries that come out of California. People do (= low wage jobs). People also manage the cattle that are funneled through industrial slaughterhouses at 500 head/hour.

But to reiterate--regional food systems.

Doug said...

What do people think of the principle that the stimulus money is being targeted toward the most economically depressed areas, such as the Forest Service's recent announcement that forest restoration money would go more to Coos and Curry County instead of Lane and Marion County? (Just an example, and maybe not the best one).

Assuming for the sake of argument that forest restoration is of equal ecological value in each of these counties, one could argue that these economically hard hit are least likely to "lead" Oregon's economic recovery. We need to stimulate positive economic feedback in places where those positive feedbacks are likely to become self-reinforcing. Maybe the most economically depressed rural places are sink holes for stimulus money.

Jeff said...

"they will simply apply more fertilizer in excess quantities"
It's true that farmers tend to overfertilizer. The price of fertilizer is probably to low to account for negative externalities. Like gasoline, it needs a big Pigovian tax.

"Machines don't harvest all the strawberries and raspberries"
True. Now that unemployment is going up so fast, I wonder if a bit more of this work will be done by native-born Americans?

"People also manage the cattle that are funneled through industrial slaughterhouses"
To me, the only place to use the term "industrial agriculture" is for animal production, where it truly is handled by gigantic corporate farms -- generally not family farms. [See today's opinion piece by Nicholas Kristoff in the NY Times.]

"My main argument refers to the need for a regional agriculture system"

I'm sympathetic to your points, but a contrarian would say: What's wrong with importing certain products from New Zealand, for example, if their carbon footprint is far less than it is to produce it in Ohio, for instance? The few studies that I've seen of this suggest that ocenanic and land transport contributes only a very small portion of the overall carbon footprint of food products. Much more critical is the energy/fertizer, etc, that goes into making them. Greenhouse tomatoes are so inefficient in this sense, that you're better off to import them from distant tropical regions (if you can't wait for summer to eat them, that is).

Jeff said...

"one could argue that these economically hard hit are least likely to "lead" Oregon's economic recovery"

Yes. But I've heard it said that the point of fiscal policy is not necessarily to look for the biggest bang for the buck, but to simply get money flowing -- since consumers and businesses sure as hell aren't spending.

It's unlikely that rural parts of Oregon are the "best" place to invest, but the people there will sure appreciate (and need it).