This Rothbard op-ed ran in The New York Times on May 17, 1985. I wasn't able to find it online by searching Google or even nytimes.com, so I thought I'd post it here.
Will the Farmer Ever Stop Wailing?
By Murray N. Rothbard
WASHINGTON—Year in and year out, in good times or bad, the American farmer rushes to the forefront of public attention, wailing about his dire lot and clamoring for all manner of Government support.
The farmer's myriad and powerful lobbies are alwais there and nearly always successful. The farmer is presented as a particularly noble species, close to the soil—Ma and Pa Joad constantly in need of our cherishing and our vast subsidies. In Marxian lexicon, he stands with the "working class" as the exploited of the earth, victims of capitalism.
That grand image, however, is simply a myth, and we should not be hoodwinked into shelling out more money for farmers' mistakes. Farmers, ultimately, are businessmen, no more noble or wicked than other entrepreneurs. And judged as entrepreneurs, farmers seem to have done a shoddy job.
Many businessmen are misled by the inflationary credit generated by the banking system, but farmers have been especially imprudent over the years in rushing heavily into debt when times are good, and then, when the inevitable recession drives prices down, wailing over their fate and blaming evil creditors who have made it so. At that point, farmers rush to the Government to demand relief, and invariably they get it.
The Reagan Administration has acted like most of the others. After making noises about moving to a free market, the Administration rushed to subsidize banks for forgiving a large portion of farmers' debt, to compel lower interest rates for future loans and to guarantee those loans.
It was the eternal quest of the farmer to have the taxpayer bail him out of the consequences of his own actions that led to our disastrous price support program.
After World War I, when demand for farm products subsided, American farmers found they had overbuilt for peacetime demand. The surplus caused prices to plummet. Rather than taking their lumps or shifting to other businesses, farmers began to cry for "parity." They expected consumers to support the style to which they had become accustomed.
In early 1929, Herbert Hoover initiated the modern price-support program by creating the Federal Farm Board, which purchased wheat and cotton in order to raise their prices above free-market levels.
Each successive administration has strengthened the agriculture cartel. In the attempt to solve one problem, the Government created others. Goverment purchases of farm products to raise prices, for instance, resulted in embarrassing stockpiles of farm goods. Government then tried acreage controls, but farmers shrewdly outfoxed the authorities by concentrating on the highest yielding acres. Using machinery, fertilizer or irrigation subsidized by other divisions of the Agriculture Department, farmers increased production despite acreage limits.
The Government also tried to subject farm commodities to marketing orders, placing quotas on production and shipments.
The Reagan Administration has only intensified the problem through its payment-in-kind program, which paid farmers in grain from the surplus in exchange for not planting on certain acres.
Market forces of world trade may finally provide retribution for past excesses. As domestic farm prices rise, the gap between the artificially high domestic price and the world market price widens. The farm lobby has demanded higher tariffs or severe import quotas to keep out cheaper foreign competition. But the Government can do little about the calamitous falling off of farm exports, as foreigners react to the high American prices and trade barriers that prevent them from selling goods here.
Farm exports are now drying up, and the farmers' squeals are louder than ever. They should be ignored.
There is faint hope in the possibility that the farm program has become such an evident mess and world farm prices will put such a squeeze on domestic producers that something might actually be done to return to a free market.
If China can actually take radical steps toward a free market, there may even be hope for the American farm program.
Murray N. Rothbard is director of academic affairs for the Ludwig von Mises Institute, an education foundation.