Iowa, iowa, iowa....
"Iowa, iowa, iowa...." DEBOVE SOPHIE/gettyimages.com

Look at all of this corn blown down by a storm that showed the farmers of Iowa no mercy on Monday, August 10.

If we use the Shona word for "no," we can imagine a farmer looking at a field after the "thunderstorm complex known as derecho" had passed, see his old baseball cap, his worn-out jeans, his dusty boots, his untucked shirt flapping in the wind, and hear him saying to himself, with his lips barely moving and cracked by the long and hot summer, "Iowa, iowa, iowa, iowa."

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Washington Post:

The destructive storms laid siege to more than 10 million acres of Iowa’s corn and soybean crop, devastating farmers and capping off what has already been a difficult few years of farming for many.

Up to 43 percent of the state’s corn and soybean crop has suffered damage from the storms, a severe blow to a $10 billion industry that’s central to the Hawkeye State’s economy. The magnitude of the battered vegetation was even visible on the same weather satellites used to track Monday’s violent thunderstorms.

What is interesting here is the value of the destroyed crops. What was the flattened corn worth? What kind of money did the Iowan farmers have in mind before the derecho, a Spanish word that shares a root (directus) and its meaning with the English word "direct"? Direct blow, direct destruction, direct losses. The value question is important to think about because it reminds one of the only school of economic thought that kept it real, the Physiocrates.


The Physiocratic movement had its leader and founder in a French doctor named François Quesnay. The program he initiated near the middle of the 18th century placed agriculture at the center of the economic world. According to this view, which the Physiocates described in a simple but influential model called the Tableau économique, only farmers were productive. The rest—kings, courtiers, soldiers, merchants, manufacturers—were sterile.

If you recognize a similarity between this conception of the economy with the long-established scheme of ecology (it identifies plants as the primary producers in an ecosystem), you are certainly on to something. The Physiocrats not only believed the farmers created value, but, more importantly, also surplus value, which is why they stressed the importance of the capitalist farmer. The wealth of a nation would rapidly expand if it broke with peasant production and shifted to that of the farmer.

Ronald L. Meek makes this point in his masterpiece of 1963, The Economics of Physiocracy. He writes that
"fermiers, i.e. farmers... exercised entrepreneurial functions. These fermiers often possessed considerable capital, and their methods of cultivation were frequently superior to those of the metayers and poor peasants."

Later in the book, Meek writes:

[The Physiocrats] pinned their hopes quite largely on the new class of fermiers, the men of substance whose entrepreneurial activities were already beginning to make certain of the northern provinces relatively prosperous. Agricultural entrepreneurs were the main agents of agricultural reform, and government policy should be aimed in particular at stimulating and encouraging them.
The Physiocrats wanted the government to leave the farmer alone. Let them grow the food. And let society grow with their wealth. They called this demand for farmer autonomy laissez-faire.

If we jump to 2017, we find the economist Mariana Mazzucato introducing her readers to the concept of a production boundary in the third section, "Meet the Production Boundary," of the introduction to her book, The Value of Everything. Her idea here is that the financial sector, to justify its prominent place in the economy, expanded the "production boundary" to include financial services. Those on Wall Street or in conventional banks and shadow banks were as productive as factory workers, people who made things that had a concrete use value. But back in 1776, it was none other than Adam Smith who challenged the Physiocratic conception of the economy by expanding the boundary of production to include factory work. For Adam Smith, it was the aristocratic class and their servants and soldiers who were sterile.

Even the Marxist thinker Rosa Luxemburg insisted, in her magnum opus, The Accumulation of Capital (1913), on the backwardness of the view that "agricultural labour is the only kind of labour which is productive," and praised Adam Smith, classified as a bourgeois economist, for making a "decisive advance... in proclaiming every kind of labour as productive, thus revealing the creation of surplus value in manufacture as well as in agriculture."

And now we arrive at the point I want to make, and how the woes of the Iowa farms play a role in this point. If we look at the Physiocratic concept of not just the production boundary but also the surplus value generated by the agricultural entrepreneur, we find that it is a real thing. It is the stuff of photosynthesis. Plants use the air around them and the light falling on them to produce nutritious bio-products. They are, in the language of ecology, autotrophs. You can't make a chair or car if you have nothing to eat. You can't be human or dog without autotrophs. Our value and surplus value begins with with the exploitation of vegetables. If we have this image in mind, we can see how value and surplus value leapt from the real of the fields to the fictions of culture. Surplus value in the condition of culture is realized as profits. (Forgive me using that word, culture. I know very well it is related to cultivation, to farming. I know. I know. But let's move on.)

By the time finance is included in the boundary of production, all meaning of surplus value as thing in the world is lost. It's now a hyper-culture of value inflation that's as unreal as the nation of Uqbar and the planet of Tlön in Jorge Luis Borges's short story, "Tlön, Uqbar, Orbis Tertius."

Most the Iowan farmers owe debts. Much of the surplus value of their crops is not in the actual crops but is securitized and transcoded as radio waves that bounce back and fourth from the ground to satellites that connect the markets of the world. The largest irrigated crop in the US is not something humans can even eat. It is grass. And this grass is often tied to the one financial asset a member of the middle class can own, a house. The real is certainly somewhere in the capitalist economy, but it's so tiny.

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My feeling, however, is that an economics of the future will have to reanimate the concepts of the Physiocrates. This renewed economics will bring the inputs of nature into the production scheme. Energy and its sources will become the key function of production (for the neoclassical school and Marxists, it is capital and labor.) The first economist of note to head in this direction is certainly the post-Keynesian, Steve Keen.

Before anything else, I consider my myself a neo-Physiocrat. That said, I will leave this post with a passage from Riccardo Bellofiore's close examination of the ideas Piero Sraffa expounded in his economics classes at Cambridge University in the 1920s, Sraffa after Marx: An Open Issue:

It is however in these months that we see the beginning of Sraffa’s reconstructive theoretical effort based on physical real costs. In a note on the ‘degenerazione del concetto di costo e valore’ (degeneration of the notion of cost and value) he writes: It was only Petty + the Physiocrats who had the right notion of cost as ‘loaf of bread’. Then somebody started measuring it in labour, as every day’s labour requires the same amount of food. Then they proceeded to regard cost as actually an amount of labour. Then A. Smith interpreted labour as the ‘the toil and trouble’ which is the ‘real cost’ and the ‘hardship’. Then this was by Ricardo brought back to labour, but not far back enough, and Marx went only as back as Ricardo. Then Senior invented Abstinence. And Cairnes unified all the costs (work, abstinence + risk) as sacrifice.

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