Ancient Wisdom as Antidote to the Local Food Activists’ Hatred of Intermediaries
French economist Frédéric Bastiat famously observed two centuries ago that Parisians slept peacefully each night confident that others all over France worked “in concert and without agreement” to supply the capital with food in a quantity that was “what is wanted, nothing more, nothing less.”
Bastiat knew that this tour de force owed much to the middlemen whose value was such that their services were “willingly accepted and paid for.” They were certainly not parasites, as the socialists of his days believed. Among other tasks, intermediaries in the food sector had to do research, strategize, and take risks. “Guided by the comparison of prices,” Bastiat wrote, “private enterprise distributes food all over the world, always beginning at the point of greatest scarcity, that is, where the need is felt the most.” True, the “consumer must pay the businessman for his expenses” but “so far as the share of the middleman is concerned, it is reduced to a minimum by competition.”
The dislike of food processors, brokers, wholesalers, and retailers, however, still permeates the ethos of the twenty-first century local food movement whose informal motto might as well be “Pay your farmers, not your middlemen.” The preferred solutions to bypass intermediaries have been farmers’ markets and community supported agriculture (CSA), an arrangement by which consumers pay up front for a share of a growing season’s harvest by a local farmer or a cooperative.
While farmers’ markets can provide enjoyable if expensive shopping experiences, they are often limited in terms of convenience, be it in terms of out-of-the-way locations, poor parking conditions, restricted business hours, or a lack of protection from the elements. They also offer slim pickings at the beginning and end of growing seasons. Health and safety violations and resellers peddling nonlocal products can mar the experience.
CSA participants waive any guarantees in terms of the amount, quality, and predictability of food delivered to them on a regular basis. “Sharing the risk” of food production with farmers also means coming up with several months’ grocery budget up front (or at least in a few significant instalments) and costly trips to the supermarket when farmers inevitably experience production problems. CSA arrangements typically create greater food waste than if produce had been bought on an as-needed basis, a problem often made worse by the shorter shelf-life of heirloom varieties and lack of time or culinary skills among consumers. As policy analyst Marcia Ostrom put it, CSA participants often suffer from supermarket withdrawal syndrome triggered by “receiving the wrong vegetables in the wrong quantities at the wrong times.”
Alternative farmers involved in CSA arrangements also run into the problems marketing their products. Time spent looking for customers, building their loyalty, delivering the produce, and dealing with bad customers is time they don’t have to pursue their true passion of producing food using time-consuming organic, polyculture, permaculture, and regenerative methods. Not surprisingly, these difficulties have ushered in new niche intermediaries who connect an increasingly diverse range of alternative local producers to nearby upscale restaurants and consumers.
The growing pains of wasted time, food, and opportunities could have been avoided had local food activists been more familiar with the wisdom of previous generations of free-market writers. For instance, Irish-French economist Richard Cantillon wrote about intermediaries who acted as “carriers” between farmers and urban consumers three hundred years ago. Because most consumers were “not in a position to stock commodities coming from the country,” “several urban dwellers emerge[d] as merchants or entrepreneurs to buy the country’s produce from those who bring it, or have it brought on their account.” They paid a “certain price for it depending on the place where it is bought, in order to resell it, either wholesale or retail, at an uncertain price… accordingly as the inhabitants require them for their consumption.”
Nearly a century later, the Swiss-French writer Benjamin Constant praised the useful role played by the “middleman class” that operated between the “grain producer and the consumer” by observing that these intermediaries had
more funds than the producer and more resources for setting up warehouses. Dealing solely with this trade, they can study better the needs they undertake to meet. They free the farmer from having to get involved in speculations which absorb his time, divert his resources, and drive him into the middle of towns.
True, Constant observed, these “middlemen have to be paid for their trouble. But the farmer himself has to be paid for this same trouble, which he takes less effectively and skillfully, since it is not his main activity.” Far from being parasitical, Constant argued, the unique knowledge base and skill set possessed by middlemen resulted in lower prices for consumers and greater convenience for all.
The insights of Cantillon, Constant, Bastiat, and many other past writers appreciative of the value created by intermediaries are as relevant today as they ever were. Over time, many alternative farmers and local food consumers have started to better understand the beneficial role played by intermediaries. Continuing to demonize them will simply recreate problems that were solved long ago through voluntary market transactions.
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