The Free Market 20, no. 3 (March 2002)
My first “real job,” the summer before my senior year in high school, was selling shoes in a small retail store in my hometown. The job paid only what was then the federal minimum wage, $3.35 an hour, but, then, my labor was probably barely worth that. At least the work was honest and productive.
The following summer, a friend who worked for the US Department of Agriculture’s Soil Conservation Service helped me get a job in the agency’s regional engineering office. As my personal views on government were becoming increasingly libertarian, I had serious doubts about the legitimacy of the Soil Conservation Service (now called the Natural Resources Conservation Service), but the relatively high wages and the opportunity to work with a friend were enticing.
Nothing we did in the engineering office was beyond the capability of the private sector. In fact, we were essentially competing with private engineering firms, on an unequal footing. The chimera of a “level playing field” is often used to justify government intervention, but because our office operated on tax dollars, didn’t pay taxes like private engineering firms do, and enjoyed other advantages, we were tilting the field against private businesses.
The lack of a profit incentive meant that inefficiencies persisted that would not usually be tolerated in a firm working in a free-market environment.
Most inefficiencies, however, were difficult to see even from inside the agency. There was no way to tell whether the drainage ditch project I worked on was the highest and best use of the resources devoted to it. Behind every one of our projects stood taxpayers with their own goals that would go unrealized because their resources were confiscated by the government. While our design services certainly provided someone with a useful product, there was no way to be sure that the benefits exceeded the costs. Using tax dollars for our projects meant that we lacked any price information that would help compare the two.
Once the projects were decided upon, however, there remained the problem of deciding on the proper production process. For every goal there were several possible paths to that goal. Which one was the most efficient? Was it better to do the job more quickly, but perhaps more expensively, with the capital-intensive process, or take a few extra days and use the more labor-intensive process? Because there was no free-market pricing mechanism to indicate the value “customers” placed on having a job done more quickly, all the Soil Conservation Service engineering office could do was guess.
What saved us from disastrous errors in the choice of production processes was actually the private-sector competition. We could easily observe the capital equipment choices of engineering firms, and understood that those were probably close to what we needed. The Soviet Union pulled this off for the better part of a century, for an entire economy. By observing prices and production processes in the more free-market economies, they could find approximate solutions for their own economy. Even so, Soviet economic growth was stunted, and the information-mooching eventually caught up with them.
Even so, some might say, maybe there is a legitimate role for an agency like the Natural Resources Conservation Service. Maybe the “public goods” the NRCS provides in spreading agricultural information and technology allows the agency to offset those efficiency losses.
However, “information and technology” are not unqualified “goods.” Sometimes government agencies make mistakes and foist a project on us that does more harm than good. In the South, one doesn’t have to go far to see evidence of one of the more pervasive and persistent errors of the Soil Conservation Service—kudzu. Kudzu was initially imported from Japan in 1876 for a Philadelphia gardening exposition, but received a less-than-enthusiastic response. It didn’t become the hypertrophic denizen of the Southern countryside until the mid-1930s, when the Soil Conservation Service began paying farmers $8 an acre to plant it in erosion-prone areas.
It rooted in eroding soil, then fanned out from gullies and fields to cover anything in its path—trees, fences, utility poles, buildings, and (some say) slow-moving livestock. Kudzu grew to cover an estimated seven million acres in the Southeast, an area about one-third the size of South Carolina. Eventually, the Department of Agriculture recognized that it had perhaps chosen a cure that was worse than the disease, and took kudzu off the acceptable groundcover list. By 1970, the government realized that it had nurtured a monster, and called it a bad weed. In 1997, Congress put kudzu on the federal Noxious Weed List.
Depression-era soil conservation programs, such as the one that gave us kudzu, were at least partially aimed at reducing the amount of productive cropland. Though wrapped in conservation lingo, the early Soil Erosion Service and its successor, the Soil Conservation Service, dovetailed with the Roosevelt administration’s misguided plan to bail out farmers by raising the prices of agricultural commodities. Roosevelt’s legacy continues. Certain NRCS programs, such as the Wetlands Reserve and Conservation Reserve programs, are still effective at keeping acreage out of production.
Soil conservation has never been the exclusive domain of government, and the private sector’s conservation efforts have historically put the government’s clumsy interventions to shame.
With the statist turn that conservation activism took under the two Roosevelts, the generous and effective contributions of entrepreneurs have been nearly forgotten. Our ill-founded trust in government to save us from erosion and wetlands destruction has resulted in incalculable damage to the nation and its economy.
Some of those harms are all too visible. Other costs, like the unrealized projects of countless taxpayers, remain unseen. Yet this is typical of government bureaucracies like the National Resource Conservation Service—they start out with an apparently benign purpose, expand vigorously and indiscriminately, take over all resources within their reach, and choke out their competition. It seems fitting, somehow, that they should be associated with kudzu.
Timothy D. Terrell is assistant professor of economics at Wofford College and an adjunct scholar of the Ludwig von Mises Institute (terrelltd@wofford.edu).
