I’ve been arguing that with Jim Bacon. You just can’t pick out one target and plink away at it without considering the whole system. We have to change on thing at a time because the whole system is screwed up, and yet if we do, we might make things even worse. The “public good” turns out to be the sum ao all the little individual “goods” and the more we restrict those (absent real health and safety issues) the less well of we all are.

I estimate that the difference between Loudon growth policy and Fauquier growth policy has cost the equivalent of a million dollars in wealth for every single person in Fauquier.

Carnival of Investing Recommended It’s Just Money

The Washington Post is carrying a series on the farm welfare system. Fellow blogger Doug Mataconis wrote yesterday and again today about it. Just in case you somehow thought welfare was limited to the proverbial single mother with five kids, here&#8217…

Believe me, I know its more than just the farm subsidy system that is screwed up.

Environment laws, Zoning laws, and who knows what else. They all restrict what you, or any other property owner can do with their property. And, if we’re going to fix it, we need to fix ALL of it.

Believe me, he cannot cut expenses. If he changes to another crop, then it is the same problem with another crop. There is simply too much surplus land to make a decent living at it. He may, and probably should decide that it makes no ecoomic sense for him to farm, and he should put it to a better use. But he is prohibited from doing that because he is zoned for agriculture. Who could he sell to, except another farmer who would face the same conditions, and probbly at a higher land cost? Because of his zoning he is prohibited from operating in an efficient manner and getting out.

In my case, I am virtually required to farm, and farm at a loss. If I do not, I will be taxed as if I was suitable for a housing development, except that development is denied to me. So, it is farm and lose money, or don’t farm and lose still more money.

I actually believe it is worse than that. My county Supervisor told me in so many words, that his goal for my property would be to have somebody rich buy it. Rich enough to place it in conservation easement and take a giant tax subsidy.

Since another farmer is not going to buy it and it cannot be used for anything else due to zoning, the available market has been dramatically reduced. This means that some rich person will eventually get a fine estate, not only at a discount to the true market value, but with a subsidy as well.

But there are othe ways in which the market is not acting in an efficient manner. I am prohibited from any activity near the stream beds that cross my land. This is for the benefit of people living downstream from me, yet they pay me no land rent. People want to preserve “their” viewshed, but don’t pay me for providing it. When I look at the farm, yes, it is lovely, but all I see is all the work that is lurking in the bushes, that they don’t see.

New Zealand and some other places now pay land owners for environmental services (over and above whatever subsidies they have).

So, I agree with you about markets and operating efficiently, but you need to look at the total system and not focus on one narrow incentive. It is a badly run incentive, I agree. But it does buy us things other than badly run farms. Lets look at the situation and figure out what it does buy, and how we can buy those things more efficiently.

Actually, I think that your math makes my point for me. Without the subsidy, Kuhfuss would be losing money. In a normal market not distorted by the LDP, he would have to find a way to deal with that. The options are many — he could cut expenses, change to different crops, or maybe even decide that it no longer makes economic sense for him to farm the land and that it should be put to a more productive use.

By subsidizing his business and masking the true economic condition of that business, the LDP makes him think everything is okay and he continues to operate in an inefficient manner.

Richardson grossed $500,000, but his net was probably more like $25,000. How many times would you want to risk that kind of money and work that many acres for $25,000?

I agree the system is screwed up, but I don’t think the characterization you are making is correct.