So for the past few weeks the McCain campaign has been making a big deal out of Barack Obama’s proposed tax increases on businesses and the wealthy. (Notably, he waRecently, after he said he wanted to “spread the wealth around,” conservative commentators gleefully accused him of being in favor of “the redistribution of wealth,” held to be a tenet of “classic socialism.”
For the record, any tax is, de facto, a redistribution of wealth. There’s never been a government that didn’t redistribute wealth, that didn’t, in the creaky old formulation, “tax and spend.” Currently, billions of dollars a month are being hoovered out of your pockets and spewed back out into the pockets of soldiers and contractors in Iraq and Afghanistan, having along the way been slightly skimmed so as to pay the bureaucrats and pols who do the taxing and the spending. It’s what government does. The question is whether a thing that’s being paid for is a necessary and appropriate public expenditure. There’s a compelling case to be made for the things Senator Obama wants, like universal health care and investment in green tech. But that’s not what I’m here to talk about.
Instead, I’d like to talk about Al Gore, who for the past two years has been flogging an interesting plan — eliminate payroll taxes and replace them with a carbon tax. In other words, you would no longer pay for Social Security and Medicare, but would instead be taxed at the pump and on the products you buy.
There are several appealing aspects to this idea. First, we could once and for all eliminate the fiction of a “Social Security Trust Fund” — since politicians keep raiding it anyway, what’s the point? We may as well just realistically face the fact the Social Security and Medicare are government expenditures, not a retirement fund in any real sense.
Second, as Gore indirectly points out, it’s best to tax things you want less of (greenhouse gas emissions) and not tax things you want more of (employment). Also, since the self-employed are currently charged 15.3% of their profits in payroll taxes (because they have to pay both the employer’s and the employee’s share), eliminating those taxes could make the world a friendlier place for owner-operated businesses.
There are a couple of things I think might need to be tweaked in this idea. First, the Social Security and medicare taxes are established quantities that have been around for decades. They’re hard to fiddle with. You can’t go increasing them just because the government needs more revenue. The carbon tax might prove tempting to politicians as a go-to budget booster when times get tough — after all, it’s hard to defend pollution, so why not tax it to infinity? The problem, of course, is that the carbon tax will be levied on essential items like gasoline and food. A reasonable tax to encourage greener behavior is not a bad idea, but what’s to prevent that carbon tax from becoming, over time, a cash cow and an undue burden on working Americans?
Second, what if it works? What if we all start riding bicycles, using compact fluorescent bulbs, and signing up for Uncle John’s backyard nuclear plant? Will we have to keep increasing the carbon tax to keep revenues steady? That seems self-defeating, a case of punishing innovation. But if we don’t do that, where will the money come from?
Third, why stop at payroll taxes? Put it this way: Barack Obama is taking heat for wanting to effectively increasing corporate tax rates (by closing certain loopholes), and McCain is meanwhile clamoring for a corporate tax decrease. Why not create incentives for corporations as well as individuals? Rather than imposing a “windfall profits tax” on oil companies — a concept that makes no sense and seems to be punishing businesses for being too profitable — why not more reasonably tax them on the harm they do? If their product contributes directly to pollution, it only makes sense that they should pay a bit to help clean it up and fund research into alternatives. (And there’s nothing to keep oil companies, who are increasingly re-branding themselves as “energy” companies anyway, from accepting those research funds to develop alternative, cleaner sources of energy.) And the same should be true of car companies, airlines, and so on. Punish them for their fossil fuel abuses, not for their business success.
But perhaps the best idea for reducing global warming is actually a rather conservative one: promote farming. A couple of weeks ago, Michael Pollan wrote an open letter in the New York Times to the next President, whoever he may be. In it, he describes the way the farm policies of the past forty years have destroyed family farming, ruined the American diet, polluted our land, vastly increased our dependence on fossil fuels, and — yep — contributed substantially to climate change.
[W]hile the experts disagree about the exact amount, the way we feed ourselves contributes more greenhouse gases to the atmosphere than anything else we do — as much as 37 percent, according to one study. Whenever farmers clear land for crops and till the soil, large quantities of carbon are released into the air. But the 20th-century industrialization of agriculture has increased the amount of greenhouse gases emitted by the food system by an order of magnitude; chemical fertilizers (made from natural gas), pesticides (made from petroleum), farm machinery, modern food processing and packaging and transportation have together transformed a system that in 1940 produced 2.3 calories of food energy for every calorie of fossil-fuel energy it used into one that now takes 10 calories of fossil-fuel energy to produce a single calorie of modern supermarket food.
It should be noted — libertarians, take heart! — that none of this is the result of normal market forces. It is, instead, the result of central planning gone amok. First, after World War II, the federal government, stuck with an oversupply of ammonium nitrate from the munitions industry, began aggressively pushing artificial fertilizer to American farmers, who up to then had mostly been making do with, uh, doo. Then during the Nixon administration’s tenure, food prices began to climb, causing a great deal of public discontentment, and Nixon created a simple mandate for farm policy: Increase production, especially of staple grains. His agriculture secretary crafted a system which was very effective at doing exactly that. Basically, he subverted the market, writing checks to farmers whenever the price of certain crops (corn, soy, wheat) fell below a certain level.
This, of course, had the effect of rendering market price meaningless to the farmers. In a normal agricultural market, price would act as a natural damper — discouraging people from growing more corn when corn prices fell too low, for example. Price fluctuations also encourage diversification of crops — a loss on one crop can be covered by a gain on another. But if production of staple grains and soybeans was being subsidized, it was now actually in a farmer’s interest to grow as much of those few basic crops as possible — flooding the market, driving the price down, and setting the check-writing machine in motion.
It also had the perverse, possibly unintended effect of moving animals off the farm. The fact that feed-quality grain could now be bought for less than it cost the farmer to produce it meant that it became more economical to create large feedlots separate from the farms and to fatten livestock on cheap, market-price grain.
At the same time, farming (at least in the heartland) moved away from being a labor-intensive activity that provided food to the local and regional markets, as well as feeding the farmer and his family, to a machine- and chemical-intensive process meant to provide a cheap commodity to a global market. Again, there were unintended consequences: the decreased need for labor shrunk both the market for farm workers and the size of the average farm family, and gradually the Midwest de-populated. Fewer and fewer farmers meant the gradual consolidation of farms into fewer and fewer hands. But since farming is a business of incredibly narrow margins, this meant, of course, that it mattered more and more if an individual farmer failed, which only made it less and less politically palatable or possible to talk about ending farm subsidies. And so the cycle continued….
Farming in America is gone. The old image we all still carry around of the family farm from, say, Charlotte’s Web, with the ducks and the cows and the horses wandering around grazing happily, is now, sadly, mere nostalgia. If this were merely a product of natural progress, perhaps we would sigh and move on. But it’s clear that not only is it not a natural business development, but this development is actually harming both nature and business. No wonder the American Conservative called food reform “a conservative cause if ever there was one.”
As Pollan points out, there are solutions to these problems. He’s optimistic that we can wean our agricultural system off fossil fuels and “resolarize” food production. Food, he points out, is the one product that largely produces itself, using energy from the sun. The fossil fuels used in agriculture arise largely from three problems, all created by bad policy. First, by promoting monoculture, we’ve invited in pests and weeds that crop diversification and rotation tend to minimize. (Different critters eat different plants, different weeds thrive in different soil conditions — if you create the same conditions year after year, the same pests will keep coming back.) So farmers are forced to use a lot more pesticides and insecticides. And large-scale monoculture requires continual application of artificial fertilizer to keep the soil from being depleted of nutrients. All these chemicals are petroleum-derived.
Second, the kind of industrialized farming that makes large-scale monoculture possible requires a substantial amount of motorized equipment. To make matters worse, purchasing this equipment often locks farmers into using it — after buying expensive combines and tractors, they no longer have the capital to experiment with other methods of food production. This means that even farmers who recognize that monoculture is no longer working for them can’t afford to change what they’re doing.
Third, of course, now that food has been turned into a global commodity, we tend not to eat locally, moving our food, in some cases, from the United States where it’s grown to China for processing and packaging and back again to the U.S. market. Even leaving aside those extreme situations, current farm policy, which prevents farmers who receive federal aid from growing “specialty crops” — i.e., vegetables — means that it’s impossible for Iowa, one of the richest agricultural areas in the world, to feed itself. Iowa has to import fruits, veggies, and other non-grain foods from California or other countries. Again, all of this uses cast quantities of fossil fuels.
These practices may have seemed like smart business efficiencies when oil was cheap a decade ago. Now, of course, they’re causing food prices to rise again. During the year that I was in Iraq (April 2007-June 2008), supermarket prices for some foods doubled or more. Countries that abandoned the idea of being agriculturally self-sufficient because food became an easily-purchased global commodity are now, predictably, suffering shortages. And of course the needless production of greenhouse gases is something we can no longer sanction.
Pollan’s prescription is simple — go back to actual farming. Create “polyculture” farms that plant a diversity of crops, rotate those crops, plant all year (most farms in the Midwest now lie unused for about half the year), and bring animals back to fill their natural function — eating pasture and making fertilizer. And rebuild local and regional food economies so that food doesn’t need to travel so far. Pollan points out that the president can take a lot of steps to make this happen. Some are symbolic — he suggests devoting a portion of the White House grounds to a “victory garden,” as Eleanor Roosevelt did during the war — while others are basic but eminently practical — direct military bases and schools to purchase locally-produced food, and give them assistance and an infrastructure through which to do it.
Of course, reform of farm subsidy is critical, but Pollan points out that this need not be bad news for farmers. Instead of simply throwing over the subsidies and letting farmers fend for themselves, Pollan proposes that we retrench our land-grant universities and begin teaching a whole new method of farming — highly scientific in approach, yet based on working with the natural order rather than trying to dominate it. He argues that agriculture can become one of the “green industries” everyone wants to promote. Careful, scientific polyculture is labor-intensive, requiring constant monitoring and oversight, not to mention a certain amount of sheer hard work. In other words, it creates jobs at all levels, from basic manual work for high school students and new immigrants to highly advanced technical work for college graduates.
Can a return to a farming America solve all our problems? Probably not. But it can certainly create a healthier, less oil-dependent nation — and as thoughtful young leftists from Berkeley and Chicago move out into the heartland to work at rebuilding American agricultural greatness, and as ranchers and farmers travel to the great research universities to receive serious technical training, maybe we can begin to heal the rupture between rural and urban that seems to have ruined our political dialogue.