The following material was submitted in connection with the statement of Carl Taylor, supra, pp. 408-16.

SOME SUGGESTED LINES OF ACTION

(Source: A Special Report by an Interbureau Committee and the Bureau of Agricultural Economics of the United States Department of Agriculture, Technology On The Farm, Chapter 15, Washington, 1940)

From the preceding discussion it is clear that conditions are unfavorable for any easy or automatic adjustment to technological change. Furthermore, there is nothing in technological change itself nor in the way our present economy works that will assure everyone an equal share in its benefits. What, then, can be done

to remedy the maladjustments arising from such changes-how can we extend the benefits of technology more widely and minimize or cushion its worst effects? In this final chapter we discuss some steps which might be taken to give more aid and greater security to those groups most adversely affected in agriculture. It is recognized, however, that these measures are not in themselves adequate to meet the situation-their full effectiveness must await much-needed fundamental adjustments in the whole industrial economy.

Opinions and ideas vary widely as to what can or should be done to meet the problems resulting from technological developments.

One rather large group recognizes that technology has created unemployment in some specific situations, but believes any such unemployment is temporary and is followed sooner or later by new and increased employment, while gains are made in the general availability of materials and services otherwise limited to a favored few. They who have this viewpoint reason that permanent unemployment is impossible because of technological progress; new methods make it possible to produce more goods with the same labor or the same amount of goods with less labor; reduced labor cost means a lower price, increased demand for the product, and more employment to satisfy the additional demand; or, if the demand is inelastic, the lower consumer cost goes for other articles so that employment is stimulated in other fields. To this group, therefore, labor displacement as a result of technological progress does not represent a major problem, and agriculture is primarily a business in which all possible efficiency should be realized: If many farmers are poor, then there are too many farmers, and resources are being wasted (41). Strong advocates of this view often neglect to place agriculture within the setting of the current national economic conditions. Many social problems are ignored. Those in this group who recognize the short-run difficulties of displacement usually advocate an educational program for vocational training supplemented perhaps by pensions to take care of unemployables and old-age groups.

A MORE PESSIMISTIC VIEW

On the other side is a group that has a much more pessimistic view of the problem. They see a tremendous amount of temporary labor displacement in the introduction of new machines, processes, and techniques, and the growth of a permanently unemployed and relief group as a result of it. They believe that increased efficiency and lowered costs brought about by technology are not translated into lower prices, expanded demand, and reemployment in the easy, effortless manner suggested by the other group. Rather, they see various controls and inhibitions operating all along the line to prevent it. The trend in our modern economy, furthermore, has been in the direction of increasing rather than diminishing these controls. Consequently, there is nothing in prospect that would indicate anything other than a continuation and intensification of them, leading inevitably to a permanently unemployed class.

Many proponents of this view regard agriculture primarily as a way of living, rather than a means of obtaining a living. The problem of security is central in their thinking and technology is a potent force in creating insecurity. Some doubt that any social gain has been derived from the mechanization of agriculture or from the shift of certain functions from agriculture to industry.

Some persons (who question the uncritical acceptance of technological change) suggest that the fundamental way to relieve the adverse effects of such changes is to prevent the changes or at least to retard their adoption.

Several proposals have been made for delaying technical progress. One to regulate the introduction of new inventions by a scheme to control and regulate patents, stresses the importance of selecting and promoting inventions that will put people to work and retard or restrict those that will displace workers. Another feature of the plan is the collection of royalties (in return for patent rights, particularly on labor-saving patents) that would be used to take care of technological employment. The use of a labor-differential tax, another recent proposal, would seek to increase employment by imposing a tax favorable to firms that have a large proportion of their costs in the form of wages and salaries. A third proposal is to tax the use of specific machines which directly displace labor and tend to reduce the number of farms in some areas and whose adoption and use, therefore, should be taxed to relieve the displacement they cause. Another idea is to stabilize the production and marketing of agricultural commodities by regions and areas. If a technological development favors one region relative to other regions, restrictions on production

Such action

or marketing from the favored region could be established. would be taken whenever rapid shifts would create serious maladjustment in particular areas and presumably would continue until alternatives are developed in the disadvantaged areas. Although proposals of this type oftentimes have considerable appeal, it is not at all clear (even assuming they would be effective in preventing the maladjustments toward which they are directed) that they would promote the public interest in the long run. This is particularly true because the material welfare of a large proportion of our population is still too low, and those who advance these proposals have failed to show that more persons would be helped than would be hurt if their proposals were adopted.

A NEED FOR NEW SOCIAL DIRECTION

Instead of preventing or slowing up technical progress we need, rather, to speed up and give new direction to social and institutional changes in order to keep pace with technological change. We need to spread the benefits of technology more widely-to extend the benefits to all of the people and to areas where such developments, up to now, have been negligible. We need to encourage the development of new opportunities and greater security for all farm people, particularly the disadvantaged groups.

In this report, we accept neither the optimism of the group that believes that the problem is minor and that reemployment occurs practically automatically nor the pessimistic view that technological advance must be discouraged or held rigidly in check. An underlying assumption in this report is that inventions and technological progress have been a major factor in raising the standard of living of all the people that by cheapening the means of production, technology has greatly increased efficiency and has brought to the mass of consumers conveniences and luxuries that otherwise would have been available only to a few. But it also has been recognized that these benefits have not always been distributed equally among all groups-that along with them have come certain maladjustments.

As long as our economy was expanding and domestic and foreign markets were growing steadily, these maladjustments were temporary. Labor displaced by new machines and techniques was soon reabsorbed because of the expanded demand for products of particular industries and the new lines of activity opened up by inventions and new techniques. As the era of free land passed, however, as we have shifted from a debtor to a creditor Nation, and as our ability to find or to hold foreign outlets for our excess products has progressively declined, maladjustments due to scientific progress have become accentuated.

Some labor supplanted by technological progress continues to be absorbed by reemployment as in the past, to be sure, but by no means does it take place in the rapid, semiautomatic manner of former years. In fact, there has been a distinct slowing up, with a progressively lengthening interval of idleness between the time of displacement and that of reemployment. It is for this reason that consideration needs to be given to measures of a remedial natureto seek thereby to reduce the impact and to cushion the effect of these changes upon the disadvantaged groups.

The measures proposed relate primarily to steps that might be taken within agriculture itself. It is not assumed, however, that these are the only steps that need to be taken nor that they will in themselves relieve the existing maladjustments. In fact, even more urgent adjustments are needed in the nonagricultural segment of our economy. If such adjustments were made in the direction of greater freedom of enterprise, expanded output, lower and more flexible prices, there would be much less disparity of exchange between agricultural and industrial production and prices and there would be increased opportunity for the excess workers in agriculture to find gainful employment in industry. Such a fundamental development would lessen the need for specific measures in agriculture itself. Over a period of time it not only is desirable but it should be possible to move in this direction. Such a change should make possible a higher level of living for the entire population. But until such adjustments are made it is imperative in the interest of justice and fair play that steps be taken within agriculture itself to cushion the adverse effects of these technological developments.

Suggested ways to attack the major problems created by technological developments are in three groups:

Measures to provide employment and security to displaced and underprivileged people;

Measures to stabilize agricultural economic conditions;

And measures to create a wider appreciation for the values and benefits of rural life.

Some of the suggestions are neither new nor exhaustive. Some are now being tried but need increased emphasis. Perhaps no one suggestion or combination of suggestions will meet the problem fully. But if they are developed on a reasonably adequate scale they should be helpful in minimizing the most adverse effects of technology.

MEASURES TO PROVIDE EMPLOYMENT AND SECURITY FOR DISPLACED AND
UNDERPRIVILEGED PEOPLE

First, we need to develop a program which will provide for the immediate relief and rehabilitation of those now unemployed and in distress and which will absorb and cushion the shock for the additional numbers expected to be displaced. This calls for a conservative works program.

Second, looking beyond the immediate situation, we need to develop measures for the permanent rehabilitation of these people. Such measures include: An extension of the present Farm Security Administration program to reach a greater number of the low-income group, the development of a more adequate program for farm labor, maintenance and further development of owneroperated family-sized farms, and assistance to farmers in the development of new sources of employment and self-help.

A Rural Conservation Works Program for Immediate Relief and Rehabilitation.1

To meet the first or immediate problem mentioned, a rural conservation works program is proposed. In it, the present unemployed and underemployed in agriculture would be put to the productive task of building up our greatly depleted soil, forest, and water resources.

The essential elements of the problem are these: We need to find secure incomes for more than 3 million men now living on farms, probably half of whom are wholly or partly unemployed while the other half and their dependents barely exist on gross cash incomes averaging not more than $200 to $300 annually. With each passing year many more men and boys of working age are likely to be looking for opportunities on the land. Accruing to this group also may be an additional 350,000 to 500,000 workers displaced during the next ten years as a result of mechanization. Over and above the work these people now get one way or another, it has been conservatively estimated that they represent an unused annual labor supply of 450 million man-days.

The very areas where most of these needy farm people live are the same areas where our natural resources have been punished the most severely, where forests have been most ruthlessly cut over, and where land, water, and forest resources are unprotected from further abuse by man and nature.

The present position of forestry in our rural economy typifies in a unique way this situation. At a time when farmers are threatened by overproduction in many leading agricultural products, consumption and destruction of good forest products is taking place at a rate in excess of growth of such materials, and the quality of the remaining forest stands is deteriorating. The use of land and manpower to balance the forest budget, and to relieve rural unemployment is, therefore, a logical and appropriate step. The geographic coincidence of the location of people needing supplementary employment with the location of forest lands in need of additional conservation measures makes the proposed program especially feasible. In many areas where distress of the rural population is most acute, such as the Southern Appalachian, Ozark, New England, Lake States regions, and the southern pine territory generally, the abuse and devastation of forests has gone on for decades and is still in process. It is in these areas that restoration of the forest resources offers much promise for greater employment, more regular incomes, social rehabilitation, and a stable self-supporting economy. Here, human and forest conservation can well be effected simultaneously.

We could paint a similar picture of much of our agriculture and range land, where one-crop farming, overgrazing and other exploitative practices have

1 The discussion in this section is based on an Interbureau Coordinating Committee Report prepared under the direction of Raymond C. Smith, Chief Program Analyst, Bureau of Agricultural Economics. See also article by Mr. Smith in Land Policy Review, MayJune 1940, and a statement presented by him to the Senate Committee on Education and Labor, May 24, 1940.

stripped off the precious top soil and destroyed the most productive and palatable grass species. These exploitative practices not only have stimulated erosion, but have accelerated floods, and flood damage to our streams and reservoirs and have endangered our irrigation water supplies.

To rebuild these resources to a safe level and to protect them will require many millions of man-days of labor. As far as we can see right now, to do the things we know should be done is a task that requires at least 11⁄2 billion man-days of labor.

A rural conservation works program that would marshal the unused and wasted rural manpower now available to perform this needed task of conservation on our farms, ranges, and forests would go a long way toward giving the temporary security and supplementary income so badly needed by these people and, at the same time, would be building up a physical base underneath them and the whole population of great permanent value.

Types of Projects that Might be Undertaken Under a Conservation Works Program.

The program, as envisaged, would include both work projects and credit activities. As far as possible these projects should be fitted into existing administrative machinery so that there would be continuity in conservation efforts and duplication avoided. The work projects might include:

Partially self-liquidating forest conservation works projects administered by leasing or entering into cooperative arrangements with the owners of private forest lands. Such work as tree planting and forest restoration, fire protection, sustained yield management, and harvesting of timber could be accomplished, the owners' contribution being made by an agreed-upon portion of the returns from timber sales. This would provide a means of unlocking opportunities for employment on such lands and to bridge over the difficult transition period until the forest resource is restored to sustained yield status.

Partly or completely (depending on type of activity) self-liquidating soil and water conservation works projects administered by the Government, pursuant to cooperative agreements with the owners of private crop and grazing lands. Terms of the cooperative agreements with the private land owners could assure the Government that the land would be managed properly after completion of the work and should state the amount which would be repaid to the Government. Soil, water, and forest conservation projects, not self-liquidating and conducted on privately owned land, are of such a nature that the conservation work, while of substantial public benefit, would not add sufficiently to the value of particular private lands to warrant repayments by the land owners. Examples of this type of project would be: Work to protect highways, reservoirs, and other public facilities. Other activities might include tree plantings in connection with erosion and flood control, shelterbelt plantings in the Prairie States, stand improvement demonstration projects, protection against forest insects and diseases, and an expansion of the fire protection efforts.

If the conservation works program were extended to forest lands in public ownership, several hundred thousand additional man-years of employment could be realized. The work would include road and trail construction, tree plantings, timber stand improvement and protection against fire, insects, and diseases.

A lending program for conservation to be accomplished by private operations also could well be included. After the necessary machinery and arrangements were set up this might include:

(a) Loans to forest products enterprises, not only for direct conservation work, but also for business purposes, such as mill construction and expansion and road building, with the loan agreement conditioned upon the following of sound conservation practices and sustained yield management.

(b) Inclusion in all tenant-purchase loans of the Farm Security Administration of adequate amounts for conservation work.

(c) Short-term conservation loans to farmers for terracing and other conservation practices on their own farms. Loans also could be made to cooperative associations for limestone crushing and for the purchase of terracing equipment. Production credit associations and banks for cooperatives could well expand this type of activity.

(d) Inclusion in all long-term loans made by Federal land banks and by the Land Bank Commissioners of funds for adequate conservation work. Considerable conservation work might be accomplished on farms acquired by Federal land banks or by the Federal Farm Mortgage Corporation through foreclosure, before disposal of such lands to new owners.