The True Cost of American Food

I eventually received an invitation to be one of many presenters at the True Cost of American Food Conference mentioned in my previous blog piece. I am scheduled to be in a breakout session that deals with issues linking scale or farm size with the economic, ecological, and social costs of food. I will have an opportunity to address some of the issues that I have raised in my two blog pieces on the subject, at least indirectly. However, I will focus my presentation on comparing the “true cost of food” produced on larger, extensively-managed farms and smaller, intensively-managed farms.  The true costs of producing food on today’s large, industrial farms are the “opportunity costs” of producing food on smaller, sustainable farms instead. Opportunity costs can be calculated for economic, social, and ecological costs — without attempting to translate non-economic social and ecological costs into economic costs.

The basic problem in trying to translate all costs into economic costs is that while everything of economic value ultimately comes from the earth, economies do not value all of the useful things the earth has to offer. The economy only values things that are scarce, meaning things that are not sufficiently abundant for everyone to have all they want. Air obviously is essential to life, but air has no economic value until it is polluted or otherwise diminished in quality or quantity to create a scarcity of clean, breathable air. Water has no economic value unless access to clean water is somehow restricted. In general, things of nature only have economic value to the extent they are used to produce things that are scarce and thus have economic value, such as food, or are purposely made scarce.

Furthermore, economic value is individual, impersonal, and instrumental – as least as we know it today. Economic relationships are impersonal. The specific persons involved in economic transactions don’t matter. If something cannot be bought, sold, or traded, it has no economic value. Relationships matter in economics only to the extent that they create economic benefits. Thus, the economy places no value on the “personal” relationships that must weave, sustain, and occasionally mend the social fabric of healthy communities. No matter how scarce love and compassion may become, loving and caring relationships have no economic value.

Economic value is individualistic in that economies are nothing more than collections of individual enterprises. Economic wholes are simply the sum of their parts. As a result, there is no economic value in doing anything for the sole benefit of anyone else or of communities or societies as wholes. Finally, an economic transaction or investment is always a means to some further end – it is instrumental. There is always an expectation of getting something of greater economic value in return for any economic investment. Acts of selflessness and altruism – doing something solely for others or society in general – are “economically irrational.”

Social values are different from economic values. First, social values are personal because they depend on the specific persons involved in the relationship. We simply cannot buy, sell, or trade the relationships we have with friends, neighbors, children, or spouses. They may be critically important to our quality of life, but they have no economic value. We expect of get something in return for what we invest in a social relationship, but we generally don’t know exactly what we will get or when we will get it. We just know that to have a friend we must be a friend.

So what does this mean with regard to relying on internalizing economic values to account for the “true cost of American food”? Since everything of economic value ultimately comes from nature by way of society, it’s true that the depletion and degradation of societal and ecosystem services ultimately impose costs and diminish the productivity of the economy. The lingering global recession may well be a reflection of the growing scarcity of “free services” from nature and society to support continuing economic growth. As societal and ecosystem services become increasingly scarce, they will become economically valuable and markets then can and should be encouraged to ration and allocate their use.

The basic problem is that things of nature and society often become ecologically and socially scarce long before they become economically scarce and thus take on economic value, as we have seen in the faltering and retreat in the environmental, social justice, and world peace movements. Fossil energy prices are not influenced by the ultimate depletion of fossil energy but instead by its current scarcity or abundance. Climate change gets little attention because its major economic impacts are thought to be in the distant future. Human health is of no economic value until people get sick – meaning their health becomes scarce. Sick people may die, in spite of our best efforts to save them. If we wait for the earth’s ecosystem and global society to get much sicker before we value then, the entire global economy may die.

So what is the new strategy for the future? We must create a new social movement that gives “ethical values” priority over economic values. We can’t wait for growing scarcity and economic value to save us. Economies must function within the limits or bounds of ethically and morally just societies. Ethical values are different from economic or social values, although they may evolve from social relationships. Ethical values define what we believe to be right or wrong and good or bad in our relationships with each and with the other things on the earth. Ethical values are impersonal, non-instrumental, and communal.

First, we need a new social movement because ethical values evolve from social values. As social relations become less personal, we begin to understand we need to treat people we don’t know as well as we treat people we do know. Our expectations regarding social reciprocity for our good deeds become less well-defined and less certain as relationships become less personal. Eventually, they grow into ethical values, which are non-instrumental. When we do things for purely ethical reasons, there is no expectation of receiving anything of tangible value in return. We do things simply because it is the right thing to do. Ethical values are also communal: We also understand that whatever is right and good for one person is good for all people, everywhere, including those of the future.

So, what makes me believe a movement that gives priority to social and ethical values will be any more effective than strategies that give priority to economic values? First, I believe there is a growing realization that the pursuit of material economic self-interest has not brought us greater satisfaction or happiness. For example, a 2003 British Cabinet study found there had been no overall improvement in well-being, happiness, or quality of life in the U.S. or any of the so-called developed nations since the 1950s[i] – in spite of continued growth in incomes and wealth. An extensive review of a number of academic quality-of-life studies found no indication of further increases in overall well-being associated with increases in incomes as economies grow beyond around $10,000 to $15,000 per person. [ii] These studies are only confirming our common sense that we humans are not just material or economic beings but also social and moral beings. Quality of life is not just a matter of economics.

Certainly, we need the economic necessities of life – food, clothing, shelter, health care, – things money can buy. But we also need relationships with other people for reasons that have nothing to do with anything of economic value we may receive in return. We need to care and be cared for, to love and be loved. And, need a sense of purpose and meaning in life, a sense of what we do matters, that our choices in life are right and good. Our stewardship of nature and society is not a sacrifice that requires some form of economic compensation. Only when we consider social and ethical values, as well as economic values, will we be able to understand the “true cost of American food” – and begin to create a new better food system and better future for humanity.

John Ikerd

[i] James Oliver, “Children before cash; better childcare will do more for our wellbeing than greater affluence,” The Guardian, May 17, 2003. http://www.guardian.co.uk/society/2003/may/17/children.healthandwellbeing .

[ii] Ed Diener and Martin Seligman, “Beyond Money,” Psychological Science in the Public Interest, 5 (1), 2004, 1–31.