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Thursday, July 15th, 2010

The Specter of Autarky

Autarky, not to be confused with autocracy, refers to a policy of economic self-sufficiency. Generally, this is considered a bad idea. Instead, nations and people benefit when they specialize in areas where they have comparative advantage and engage in trade with others to satisfy the rest of their needs.

While some have described the policies of China and others as autarkic mercantilism, generally autarky is out of favor in macroeconomics except for certain matters such as those related to national security, like defense technology or minimum food security.

But at the “meso-economic” level, autarky is making a comeback bigtime. This is the form of the increasing preference for “local” products. This is richly illustrated in a recent New York Times piece in which we hear about people coming to blows over, of all things, a pig from Iowa:

For Mr. Bechard, it came down to this: never should a pig from Kansas or Iowa have even been entered in the contest; it only made it worse that the Iowa pig won. After all, there are Red Wattle heritage pigs raised right here in Oregon. The chefs who competed work in Oregon, and most promote locally produced food.

“I get there and I get the flier and I’m immediately sickened because I’m seeing ‘local,’ ‘sustainable,’ ‘local farms,’ ‘local chefs,’ ‘local wine,’ ” Mr. Bechard recalled, “and then two of the pigs are from Kansas and Iowa? I’m looking at my friend and he said, ‘Eric, just let it go.’ ”

Many hours and drinks and insults later, witnesses told police Mr. Bechard was the aggressor when he encountered Brady Lowe, the event’s Atlanta-based organizer, outside a bar. Words were hurled and fists flew. The police came, firing Tasers and pepper spray.

This isn’t just Portland. For example, last year America’s first USDA certified organic bakery, the Bleeding Heart Bakery in Chicago, was kicked out of that city’s super-elite Green City Market for not being sustainable enough:

In short, if you want to set up a stand at Green City in the next few years and sell blueberry muffins, it doesn’t matter if those berries are organic or not. You’re better off worrying about the carbon-emitting trucks carting those berries in from California or Mexico should you choose to cook out of season. But with the Midwest’s limited growing season, is it realistic to expect bakers and chefs to stick solely to what they can procure within a 100-mile radius and, even beyond that, to what proves to be certified sustainable?

To some extent, this represents little more than the next iteration in the cycle of pretentiousness. It’s a very old story. As Jean Renoir so aptly summed it up:

Each of these cliques has its customs, its mores, indeed its own language. To put it simply, each has its rules, and these rules determine the game. And the smaller the clique, the harsher and more complex the rules. That’s why groups of wealthy people, tennis players, horse lovers, and, more simply, the people of a social set, live by a code that is all the more severe since these groups stand apart from a nation’s overall population.

It’s fine line between sustainability and farce.

But if you look at this more closely, there’s a real embedded notion that autarky is actually an important way to live and for cities to function. A growing number of people believe that we really should do everything we can to consume as much as possible that is produced locally to use.

As with most things we all defend and promote, this is touted both for its moral correctness (sustainability) and its utilitarianism (talent attraction, economic development, etc). Putting aside the moral questions for a moment, is trying to source as much as possible locally, whether that means buying products grown or manufactured locally, or from locally owned establishments, really a good idea practically?

Jane Jacobs might have us believe so. She talked about how cities generate new export industries by adding new work to old. (Of course, how can you have exports if you never import anything?) But more importantly, she talked about how certain businesses could only locate in major cities because of the ecosystem of suppliers that were there. This might be less important in the internet age, but having the suppliers you need in your business at hand is helpful. It’s sort of like the venture capital rule of thumb of not investing more than a 20 minute drive from the office. For example, if you are a designer, having something like a Tech Shop comes in handy. My friend in suburban Chicago is restoring an old house in a manner that’s totally date compliant. He is able to do this by tapping into the network of craftsmen that exist in Chicago.

These types of businesses are only there if there’s a local market. So buy local can be good in some regard if it creates this type of ecosystem that entrepreneurs are able to combine or leverage into new sources of value. Local artists and such can also provide a local cultural scene that enhances life in the city.

But there’s another side to the story. In her seminal work Regional Advantage, AnnaLee Saxenian described how Silicon Valley gained ascendance over Boston’s Route 128 corridor, despite starting out with many disadvantages. Principal among the reasons for this was the high degree of autarky in Boston firms. They were vertically integrated, and they believed in doing everything in house. Conversely, Silicon Valley was famous for smaller, specialized firms that were related via dense, overlapping knowledge and value networks.

Would a city want to consciously choose to proceed down the Boston path? Now Boston is still the #2 tech hub in America, so it didn’t die off or anything. But given the ever more complex, globalized, and networked global economy, I’m not sure that a city seeking to disconnect itself from various trade networks is actually a good idea.

If you look at the cities that have traditions of retaining unique local cultures, products, and traditions over the long term, places like New Orleans, Pittsburgh, and Cincinnati come to mind. But these places have not been economic dynamos. In fact, for a long time they were very sleepy, and still to some extent are known for insularity. For a newcomer, no matter how long you are there, you are never really going to fit into certain parts of the social sphere. In effect, the price of this strong tradition of localism was calcified local networks and ways of doing business. That’s not to say it’s not worth it. These are among the best cities in America to visit, and for many, to live, precisely because they have not succumbed to the lure of generica. But it deadens civic dynamism.

Think about it. There’s a reason why “provincialism” is generally considered a negative word.

Perhaps for cities like Portland, with so many newcomers and so many connections to the broader world, this is less of a risk – at least for now. It is something worth watching though. As the article above goes to show, people are already enforcing new orthodoxies, and I think it would even be fair to characterize Portland as somewhat of a self-selected monoculture that might one day calcify.

But for other cities there’s more danger. The real problem in a lot of Heartland cities isn’t too few local products, it’s too few global connections and too little global perspective. For these places, the real imperative is to establish more networks, for more new ideas, new ways of doing things, and new people to make their way in. These cities need more imports, not less. They’d be better served to demand excellence no matter where it comes from than to insist on buying local regardless of whether or it is any good.

That’s not to say cities should ignore the local trend. I think there’s a lot to be said for having an ecosystem as noted. It’s about balance. A simplistic “buy local” notion comes with downsides all its own. Autarky is not the answer.

17 Comments
Topics: Public Policy, Sustainability, Urban Culture
Cities: Portland

17 Responses to “The Specter of Autarky”

  1. Matt says:

    Well put. Autarky is indeed not the answer, but I think you are conflating two or three different things, here.

    I don’t know the history of Boston’s tech firms, but is there that much of a philosophical difference between the local silicon valley ecosystem of firms and “sustainable localism”? Vertical integration is not localism; I’d argue that most local advocates are more or less explicitly attempting to replicate the local horizontal integration of the valley, not the vertical integration of General Motors or Boston’s tech corridor.

    Secondly, sustainability is not in large part about skilled information-age workers; it is about the sourcing of the physical product consumed by and the myriad inputs to (food, electricity, water) the city’s economy. Promoting local sourcing of these inputs, especially where high quality can be achieved, supports a baseline healthy economy.

    Thirdly, I’m not certain where we shifted from economic attitudes to social attitudes, but I’d like to know more about the interplay between the two before I buy that acquiring one’s food from a local agricultural co-op or farmer’s market is a slippery slope to provincialism and an inability to socially or economically integrate with the wider world.

    More networks, more specialized and advanced manufacturing, and a free flow of technology and information-age talent are indeed vital for a healthy modern economy; the core inputs that those industries all depend on are probably not. I see no fundamental tension between the twin impulses of a dynamic urban culture and sustainable, local-catchment focused food and energy production. If anything, the technological means and intellectual know-how to get serious about supplying our cities sustainably is probably a net benefit to everyone. For Detroit and Cleveland to rise again, they’re going to have to give up on the notion of being just like Portland and New York, and instead focus on what they can provide as distinct from those places.

    In the end, you are certainly right that “[a] simplistic ‘buy local’ notion comes with downsides all its own” and that “autarky is not the answer”, and we do need to guard against calcification (particularly where I’m from in Ann Arbor), but I’m not sure that sustainability and food localism are either simplistic or obstacles to the balance we’re seeking.

  2. Jim Russell says:

    The Portland story gets at the myth of tolerance that Richard Florida touts. For the last 12-years, I’ve lived in or near Boulder, CO. It’s not a tolerant community (aka People’s Republic of Boulder) and quite insular. It’s an archipelago that happens to be located in Colorado. That said, it is also an entrepreneurial hot spot.

    I see Portland in a similar light. The Portland attitude is obnoxious, but still a regional strength. I think the city offers a novel form of globalization urban geography, the supply chain radically swinging in the other direction. Like Matt, I don’t think the result has to be autarky.

    The CBDs of most world cities look the same. As Sassen has explained, there is an identifiable pattern. Portland is a different model, more distinctive and expressive of a sense of place. It’s a return to the advantages of local geographic assets.

  3. John Morris says:

    I certainly know one refuge from Portland’s legendary P.C. climate. She was from Pittsburgh originally, and gave up a better job situation in Portland cause she couldn’t take it. I’ve heard of many others.

    I’m have mixed opinions of the buy local trend. I do think it can build new local innovations and local networks. As the Times article points out, a lot more people in Portland live off exports than they like to admit.

  4. John Morris says:

    I guess the best policy is some version of the “Rooney Rule”, they have in the NFL with regard to interviewing minority candidates. You don’t have to hire, but you should look at all your options.

    I think that’s a decent rule in local economics.

  5. cdc guy says:

    Ignoring the tendency of “experts” and early adopters to have “how many angels can dance on the head of a pin” arguments (as illustrated in your word-sketch above), the notion of buying local foodstuffs does proceed from a basic economic premise: the further your food travels from field to plate and the longer it requires cold storage, the more carbon-based energy inputs it requires.

    Today that might not matter in price of food. But in a world with carbon taxes (or $150 oil), it will matter.

    Further, food grown in the deserts of California requires a lot of water that the Colorado and Owens River basins don’t have to spare. When the day comes that Western water is much more expensive (i.e. allocated at market prices), it will matter whether food can be grown elsewhere.

    This is the sort of thing my generation meant when we said “think globally–act locally.” Some of us actually do take this energy, environment, and water stuff pretty seriously.

    “Sustainability” really just goes to how many externalities one wants to internalize in one’s own “price” for a thing.

  6. cdc guy says:

    I hasten to add that I am rational (and generally sober) enough to avoid a bar fight with a foodie over the origin of a pig.

  7. Josh says:

    For an interesting argument for specialization and against autarky, I would recommend the relative new book “The Rational Optimist: How Prosperity Evolves” by Matt Ridley. You’ll have to slog through some relatively slow-going history sections, but the arguments he puts forth on everything from climate change to trade are very interesting and quite contrarian (though not contrarian just for the sake of being contrarian).

  8. Matt says:

    Alas, my usual quota of one incomplete sentence remains intact. Please read “the core inputs that those industries all depend on are probably not” as “the exclusive local derivation of core inputs that those industries all depend on are probably not”

  9. Alon Levy says:

    CDC Guy: what you say about food is a serious pet peeve of mine. The issue here is twofold. First, the carbon emissions associated with growing food are several times as big as those associated with transporting it. The difference in eco-footprint between a locally grown pig and a pig transported half a continent away is much smaller than the difference between a pig and a chicken.

    Second, the amount of oil required to transport food is small compared to the cost of the food, even assuming a brutal peak oil scenario. Class I rail’s fuel economy is such that shipping a metric ton of food 2,000 miles would consume about five gallons of fuel. At $20/gallon gas, that’s $100. But the retail price of a ton of rice, the cheapest food, is closer to $2,000, which means the extra shipping would add 5% to the cost.

  10. Alon Levy says:

    Aaron: I think your post is talking about three different attitudes, which I don’t think are clearly related. One is autarky, which means self-sufficiency and has nothing to do with the export-oriented mercantilism of China. Another is the buy-local movement, which sometimes talks about autarky in food but has different rationales. And the third is vertical integration, which is a management belief held by people who mostly support free trade and would oppose a national autarky scheme.

    While the first two attitudes may seem related, they have little to say in favor of each other. Autarky-seeking regimes usually concentrate on autarky in manufactured goods, as it is what matters most for military and security concerns. Natural resources they invade and seize if necessary, and food nearly all countries are capable of being self-sufficient in on short notice. Bioregionalists think the opposite way. While they disapprove of the idea of using free trade as a barrier to war, they disapprove of the idea of using autarky to promote war. They mostly seek autarky in food; they have little to say about manufactured goods, beyond that polluting industries should not exist and resources should be sustainable.

  11. Wad says:

    Neo-autarkism is worse than pretentious. It’s self-righteous and solipsistic.

    The whole “eat only products that were grown or made within your commute shed” philosophy will likely be its own victim of fashion and swallow itself.

    For one thing, it’s obtuse about history. A primary reason why we can indulge in commodities that travel thousands of miles from farm to mouth is that we’ve solved the barriers of storage, transportation and preservation.

    Neo-autarky’s response to the thousands of years of ingenuity and economy is hand-waving.

    Autarky is not only self-sufficiency, but also is a repudiation of trade. People, and communities, can be self-sufficient in some specialties, but might de deficient in others and need to trade for them. Autarky is driven by a need to avoid trade or co-opt it to the point in which trade can be walled off entirely.

    Small-scale self-sufficiency isn’t bad. Urban farming, for instance, is still at an individual level and scalability is not yet an issue. It’s Jacobsean in the sense of people adding new work to old. If urban farming is meant to disconnect city regions from agricultural supply regions, then there’s the scalability problem. (Urban farming has too many constraints to nourish a city; supply regions still have the comparative advantage).

    Autarky, though, is a reactionary decision. It’s a choice against choices. Autarky ends up swallowing itself because it labors under its own impracticality as well as the judgmental thoughts and actions of its adherents.

  12. cdc guy says:

    Wad, in general there is only one big hole in your argument: we haven’t really “solved” the problems of storage, transportation, and preservation. We’ve simply compromised on the lowest common denominator because we have to.

    Large-scale farming and transport requires plant hybrids that favor large-scale farming methods (including longer storage and transport). Over time, those “specialized” producer regions have become monocultures; this is a risk akin to those in the financial markets: one false move and the whole system crashes from lack of diversification.

    Fresh food (I mean freshly-picked fruits and vegetables) tastes better. I have never eaten a squash, a bean, a berry, a melon or a tomato that tastes as good as the ones from my parents’ garden. And “today’s sweet corn” from the farm market is always better than anything in any grocery store.

    Autarky may be a “choice against choices”, but stressing local sellers isn’t necessarily autarky. Why do people fight Wal-Mart? In part, to preserve choices that they know will disappear; a local economy is equal parts monetary and social. Not all people value price rollbacks over everything else; they do not believe life is a relentless march to the bottom or the eternal pursuit of the lowest price for everything.

    In food markets, some people are willing to pay more for better taste and for knowing the producer: choices. I, too, see the pretentiousness of some uber-localist foodies. (Every realm has its pretentious sorts whose attitudes grate: food, wine, clothing, cities, architecture, art, cars, whatever.) But their attitude doesn’t negate the value of a wide range of choices for the rest of us.

  13. Alon Levy says:

    It’s not true that large-scale farming methods require monocultures. US farming is monocultural, but European farming isn’t, even independently of Europe’s refusal to adopt GMOs. This comes from different government incentives: the US farm aid structure encourages corporate farming of corn, which is what Iowa does, whereas EU farm aid encourages smaller-scale farming of many different crops, which is what France does.

  14. I would agree with the other posters here–the “buy local” movement here in town is more about one of two things:

    * anti-corporatism; a not-uncommon attitude in parts of Portland–especially where certain large-scale retail and agribusiness corporations are concerned
    * concerns (some legit, some not) about the quality of large-scale agriculture. Some fresh foodstuffs don’t suffer much from being trucked around; some do.

    I didn’t recall hearing about this incident when it occurred. Google did uncover it being reported in the local press; the coverage tended towards the “news of the weird” type, indicating contempt for the folks in question. That said, barfights are commonplace, and occur for all sorts of stupid reasons; this particular one isn’t all that remarkable.

  15. John says:

    Two thoughts while reading:

    1. Autarky sounds a lot like Cleveland Mayor Jackson’s proposed “self-help economy.”

    2. I buy local food because it’s fresher and tastes better. The Michigan strawberries and peaches at my local Evanston farmer’s market are about 4.238 times better-tasting than those at the grocery store.

  16. Wad says:

    CDC guy, my rebuttal to your assertion that I have a big hole in my argument comes in the form of a three-word question.

    Are you starving?

    No? Then we’ve we’ve solved the barriers of storage, transportation and preservation. QED.

    I used the word barriers, not problems. A problem is a question with a range of solutions. A problem is abstract. A barrier is a physical limitation.

    Food had and has three physical barriers: storage, transportation, and preservation.

    The first, fundamental barrier overcome was transportation. Namely the rule that Trade Helps Feed People. We as a species exist due to this endowment our biological ancestors gave us.

    If foodstuffs and seeds hadn’t been traded, we would have remained hunter-gatherers and civilizations would last only until foodstuffs were exhausted.

    Globally, Earth is very biodiverse foodwise, even with the presence of monoculture farming. What would humans do if wheat could only be grown in a region of Europe? Or seafood could only be harvested in the North Atlantic Ocean? Any disruption in supplies would mean a chain reaction of mass species extinction.

    Trade not only enabled food to be cultivated in diverse locations, it also provided what we now know as import replacement. Trading of seeds and animals allowed for food not only to be grown in multiple regions, but also adapted to local climates and soils through improved farming techniques and cross-breeding.

    Over time, food was bountiful, and foodstuffs were both a store of value (calories and nurtients) and a medium of exchange. Food cultivation always had trade in mind.

    Yet there were the three barriers to overcome. One was how to deliver foodstuffs to market. Another was how to collect all these foodstuffs. A third was how to keep all the foodstuffs safe from parasites and spoilage.

    Problems of fruits and vegetables: They spoiled quickly and because they are delicate, storage proved to be a challenge.

    Problems of grain: As grain trades emerged as the dominant form of food trade because they offered superior advantages of storage and transportation, grain was also the most overgrown food crop. This also led to the widespread introduction of grain parasites.

    Problems of animals: Slaughtered meat spoils very quickly and spreads parasites in consumption and cultivation. Dairy products had the same problems but were relatively easy to store and transport. Also, animal carcasses contain heavy amounts of waste relative to their weight and girth.

    The solutions to these problems comes in the foods we eat today for personal enjoyment, but at one time represented a practical solution to a storage, transportation and preservation barrier.

    Fruits and vegetables can be pressed into a liquid form and fermented or for fatty varieties, used as oil. Later comes fruit preserves, brining, canning and drying.

    Grains could be shipped raw or milled, or their seeds could be pressed into oils. Grains could also be transformed into dough, which in turn can be used to make longer-lasting and tastier breads, pastas or pastries. Later, grains with some processing, could be eaten as cereals.

    Animals provided the most robust innovations, likely because they were the costliest of foodstuffs. Before chemical refrigerants, preservation and flavoring went hand-in-hand (salting, smoke-curing and brining). Sausage-making also solved the barriers of preservation and waste processing. The less savory parts of the animal — organs, head meat, offal — could be processed into something far more palatable. Even inedible parts of animals had their purpose. Hides and furs were used for clothing. Even bones could still be consumed by using them as stock or extracting gelatin.

    Dairy compounded the value of animals, as the beast could still nourish humans without being slaughtered. Plus, dairy products had a miraculous chemical property: Their textures could exist in three different states at the same temperatures — solids (cheeses and butters), liquids (milks and creams) and semisolids (yogurts and curds).

    Overcoming these three barriers has allowed the foodstuffs, as well as the human inputs of cultivation and processing, to be ubiquitous worldwide.

    Farming, milling, canning, sausage making, cheese making, butchering and baking are universal skills. The variation comes in preparation techniques and ingredients that are locally obtainable.

    Note the difference between obtainable and available. Americans and Europeans are notorious coffee drinkers despite having limited stocks of domestic beans. Italy, in particular, is renowned the world over for its dishes and sauces made with a New World fruit, the tomato. Due to geography and history, people of three major religions, dozens of nations and a hundred or so ethnic groups have been divided on many things — often murderously so — yet they all eat the same dishes.

    These are examples of how the barriers of storage, transportation and preservation were overcome. Plus, these advances were all done prior to the Industrial Revolution (except for canning in lightweight packaging).

    The IR brought along machine-based agriculture allowing for mass production and processing of food; high-speed air, sea and land transportation; chemical refrigerants; synthetic chemical preservatives; a better understanding of microbiology; and chemical fertilization.

    It’s the post-IR phase that has bastardized food as we know it, but let’s not throw out the baby with the bath water. High-speed transportation has improved food security worldwide. Refrigeration has been to food storage what the Internet has been to communication. Microbiological science has not only made the food we eat much safer, but it’s also helped farmers understand how to contain parasites and not get sick in cultivation.

    Continued …

  17. Wad says:

    … Continued from above.

    The “local food” movement is a lifestyle choice that’s allowed by an affluent consumer base and willing producers. It has meant food has become tastier, and we’re also seeing the return of agricultural processes within the city sphere. This is a great thing. (Jane Jacobs held the theory that agricultural innovations began in cities and spread to the countryside, rather than supply regions leveraging their wealth into a higher standard of living. This still flies in the face of the generally accepted belief that great powers emerge from an agricultural base.)

    Yet local food versus macro food is a debate that spells danger if humanity must be forced to adopt a paradigm. Look at the schism between the late Dr. Norman Borlaug and the whole food movement. Borlaug wasn’t convinced of organic farming techniques. His doomsday scenario was that widespread organic farming would starve half the world to death due to its inefficiencies. Meanwhile, the movement (organic and local food are under this umbrella) believe Borlaugian farming techniques will overstress ecology and lead to agricultural catastrophe and widespread famine.

    So you have both sides ascribing blame to the other for ecocide and impending famine. So who’s right?

    More importantly, why does it have to be either-or? The world is big enough to allow for both macro and local agricultural paradigms. Also, each could serve as a backstop to the other should there be a disruption in the food supply chain.

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