American Agricultural Power, Debt, and Competition (1840-1922): How Market-Fueled Growth of Industry Caused the Industrialization of American Agriculture
One of the biggest changes American farmers underwent in the 19th and 20th centuries was moving from a moral economy based on subsistence and neighborliness to a market economy based on profit. The United States slowly moved away from being an agrarian nation as agriculture became more industrialized. The growth of industry was the most important factor contributing to the industrialization of American agriculture, specifically because cities became more powerful than rural areas, farmers were burdened with debt, and farmers were forced to compete in a market economy. Although some would argue that farmers' individual decisions were the most important factor, the competitive nature of the market was overwhelming, and even grassroots organizing failed to curb large-scale market participation, ultimately leading agriculture toward industrialization.
Power shifted from rural farmers to people and corporations in urban areas. According to Edwin Nourse, by 1919, the United States was no longer only agrarian, and was largely industrialized (223, 224). Because of the capitalist market, wealth accumulated in the cities. Banks and wealthy people in cities controlled loans and crop prices. This allowed for further surplus extraction from farmers. In this system, larger farms with more mechanization were better suited for success.
In order to compete in the profit-based capitalist economy, farmers had to purchase land and equipment, often causing them to go into debt. This debt, sometimes inherited, eventually led to farmers losing their land, and ultimately paved the way for larger industrialized farming operations to succeed. Farmers who were landless could be employed as wage laborers to capitalist farmers, which only exacerbated the change. The size of farms was increasing through this process, and larger, more mechanized farms took over rural America.
Because industrialized farms became the norm, farmers had to buy into the market. Industrialization caused farmers to specialize their crops and to rely on inputs from industry. According to Nourse, "The farmer cannot hope to make his labors on the land to achieve the maximum productivity possible to the modern industrial state of his art unless there are great factories turning out labor-saving implements and fertilizers and mill feeds" (224). This moved rural people further away from a life of subsistence farming.
Because crops were specialized, farmers were no longer able to rely on their farms for subsistence. This caused farmers to buy supplementary food and other products made by industry. At first, farmers enjoyed these products as a supplement, but soon they became a necessity. This reliance on the market continued the need for farmers to become industrialized as they needed to make a profit to obtain the other products that they were not producing themselves. Some would argue that this was a choice of the farmers, and ultimately that agricultural industrialization was also a choice.
It could be argued that industrialization was a choice of individual farmers, because they chose to purchase industrial equipment, they chose to specialize their crops, and they wanted products that were produced in the capitalist market. George Perkins Marsh in 1847 argued that any rational farmer would industrialize their farm and participate in the mechanical arts (73).
"The mechanic arts are eminently democratic in their tendency. They popularize knowledge, they cheapen and diffuse the comforts and elegancies as well as the necessaries of life, they demand and develop intelligence in those who pursue them, they are at once the most profitable customers of the agriculturalist, and the most munificent patrons of the investigator of nature's laws" (Marsh, 81).
From Marsh's standpoint, it would be the rational choices of individual farmers that led to the industrialization of American agriculture. This is because they wanted to buy products from the market, they wanted to improve their own operations mechanically, and ultimately be more successful and comfortable. While this certainly holds some truth, the history of three American movements that resisted the trend of market participation and thus agricultural industrialization tells a different story.
Up against the power accumulating in cities, increased amounts of debt, and a stronger reliance on the market, some farmers organized to resist the increasing market domination, in essence slowing the industrialization of agriculture. Although none of these movements reversed the trend of industrialization, it did show farmers' resistance to these trends. These movements demonstrate that it was not mainly the decisions of individual farmers that caused American agriculture to become industrialized. One good example of resistance to the market and therefore further industrialization was the Populist Party, or the Peoples' Party, of the 1890s.
The Populists gave some solutions to the hardships that small farmers were facing. They proposed a public ownership of the railroads (Donnelly 190) as well as a redistribution of land to those who were working it (Donnelly 190). By the turn of the century, the Populist movement was defunct, but Populists were not the only ones who organized against the market on behalf of farmers and working people.
A new group arose in Oklahoma, the Indiahoma Farmer's Union (IFU). By 1903, The IFU used collective marketing tactics to ensure that farmers would get a fair price on their crops (Bissett 28). This was to safeguard against exploitation by those who held power in the market. The Indiahoma Farmer's Union did not last long due to political pressure and was soon defunct. The ideals of the IFU were not destroyed and farmers continued to organize.
By 1912 the Socialist Party in Oklahoma had the support of working farmers (Bissett, 61). The organization had extensive organizing power that it drew from the Populist Party as well as the recently defunct Indiahoma Farmer's Union. The Socialist Party rejected traditional Marxism's stance on private property. Instead, it agreed with the Populist idea of redistributing land to those who were working on it (Bissett, 68). The Socialist Party was also subject to political pressure from the Democratic Party and grass-roots groups. By 1922, the once booming organization had only 72 paid members (Bissett, 173). However, the Socialist Party in Oklahoma is a good example of how some farmer's individual choices worked directly against the further industrialization of American agriculture.
These movements and their demise showcase just how much power and wealth had accumulated in the cities. Because the banks, railroads, and middlemen held the power, farmers were forced to compete in a profit-driven economy. As opposed to the previous moral economy, based on neighborliness and subsistence, farmers now had to compete for profit in order to succeed. This caused farmers to buy mechanical equipment and soil inputs.
Often supplies and machinery were bought on credit. The results of mechanization were not only positive. In fact, because much of the machinery was purchased on credit, it made farmers more economically vulnerable (Danbom 111). Another way farmers fell into debt, and ended up losing their land was the crop lien system. This system allowed farmers to purchase farming equipment and supplies on credit, in return for a share of their harvest. According to Bissett, "It provided the mechanism by which farmers moved from ownership to tenancy" (15). This caused farm sizes to grow and consolidate. The largest and most mechanized farms were often the most successful. Land ownership was never widely redistributed back to the people who worked the land. Because of the way agriculture was moving, farmers continued to buy into the profit-based market and continued to industrialize their farms.
Farmers were no longer living in a moral economy where their needs could be provided for by themselves and their neighbors (Bailey 210). This only caused farmers to rely more on the profit they made from farming to afford other necessary goods. In essence, buying into the market caused farmers to further rely on the market. This fueled industrialization as farmers wanted to increase their profits.
Ultimately, the market economy pulled farmers in, and created the need to industrialize farms. Even though farmers resisted on several occasions, the industrialization of American agriculture was caused by a market-driven growth of industry. Farmers lost their power to urban areas, fell into debt, and were compelled to compete in the market for profit. Although some would say that it was farmers' individual choices that led to industrialization, the market was in motion and there was little individuals could do to stop the process. Thoreau poked fun at the farmers' move away from subsistence farming that was already beginning in 1854 by saying, "The farmer is endeavoring to solve the problem of a livelihood by a formula more complicated than the problem itself. To get his shoestrings he speculates in herds of cattle" (143).
Bailey, Liberty. "The Holy Earth." Trans. ArrayAmerican Georgics: Writing on Farming, Culture, and the Land. New Haven and London: Yale University Press, 2011. Print.
Bissett, Jim.Agrarian Socialism in America: Marx, Jefferson, and Jesus in the Oklahoma Countryside. Norman: University of Oklahoma Press, 1999. Print.
Danbom, David.Born in the Country: A History of Rural America. 2nd e. Baltimore: The Johns Hopkins University Press, 2006. Print.
Donnelly, Ignatius. "From the Omaha Platform People's Party." Trans. ArrayAmerican Georgics: Writing on Farming, Culture, and the Land. New Haven and London: Yale University Press, 2011. Print.
Marsh, George. "Address to the Agricultural Society of Rutland County." Trans. ArrayAmerican Georgics: Writing on Farming, Culture, and the Land. New Haven and London: Yale University Press, 2011. Print.
Nourse, Edwin. "The Place of Agriculture in Modern Industrial Society." Trans. ArrayAmerican Georgics: Writing on Farming, Culture, and the Land. New Haven and London: Yale University Press, 2011. Print.
Thoreau, Henry . "Walden." Trans. ArrayAmerican Georgics: Writing on Farming, Culture, and the Land. New Haven and London: Yale University Press, 2011. Print.