Farm Living And Economics: Macro Perspective

Economics is the pivotal factor in the adoption of farm living or any other alternative for an improved standard of living. I’d like to argue that the prevalent economic paradigm has served its utility and it’s time we begin the process to create a better one.

Tribal societies across the world, before they merged with mainstream societies, did not conform to the modern economic postulates of GDP growth or per capita income, employment or composition of the economy into agriculture, manufacturing and services to determine whether their economy is developed or developing. Can we then say that they were economically not well off? If such societies have survived for thousands of years, surely their economic needs must have been met – at least to the extent of sustenance. Modern economics, however, does not have methods to measure their economic well-being and progress.

Hold on! I’m not advocating that tribal societies are a better model or anything like that. We are simply evaluating our economic paradigm.

So, if we’ve adopted an economic paradigm, which isn’t able to measure the economic well being for all kinds of human societies, there may be a case to critically evaluate it. I will state few obvious gaps. I guess these will provoke thought and enable one to evaluate our economic models effectively.

We limit our economic study to those resources or transactions, which can be measured in financial terms.

What is the other way out, you may ask. I don’t know as of now, but if we are not able to measure, in financial terms, the economic value of the housewife’s work, the value of children playing with each other, the value of healthy habits, or the value of home-grown vegetables or milk, I think there is reason to believe that our economic measurement misses a large portion of economic value.

We rely on market determined price.

The financial value in a transaction or a resource is almost never based on the real economic value. Of course the real economic value can be different based on person, time and utility/circumstance. Consequently, the price of food, water, education, healthcare often do not reflect the real value.

We compare the economic value of incomparable products or services.

By arriving at the monetary value of everything, we end up comparing the value of a teacher with the value of a doctor. Doesn’t that sound insane? We use market determined prices and term food as of lesser economic value than automobiles or pharmaceuticals.

Notwithstanding the above factors, if we still consider GDP as an indicator of economic well-being, let me elaborate the relationship of GDP with actual value addition, more so in modern urban life.

Wasteful expenditure, Accidents and Adverse Impact of city life – All contribute to GDP.

GDP increases even when we burn more fuel in traffic jams, when we spend on medical treatment in the event of accidents or diseases and psychological disorders caused due to a sedentary lifestyle. Increase in pollution for example has a very positive impact on GDP growth.

GDP grows even when it just makes living possible

Urban living augurs very well for economic progress. Cities necessitates vertical living at ever increasing heights – thus increasing consumption of construction material, equipment, labour and a host of other services. Cities require enormous infrastructure of trains, roads, sewage channels, civic administration, water, transportation and warehousing of food and other consumable – basically, just making life possible.

GDP grows even by consumption of non-value adding or value depleting products/services

Urban living is replete with examples of people consuming products or services, which they don’t need; why even those which cause harm to them as individuals or the society or the ecology or all. Nonetheless, all of them add to the GDP growth and goes to reinforce the notion of progress.

GDP grows even by devaluation of the currency (inflation)

How is all this related to Farm Living?

At a macro level, it is important to measure economic well-being. However, the shortcomings of the conventional measurement matrices render them meaningless if farm living has to make sense.

‘Need-Fulfilment’ as an indicator of economic well-being

At an individual level, needs (including wants & desires) can be considered limited. Every person is unique and so are his needs. Someone would look purely at the functional value while buying a phone, while another may additionally need a feel-good or qualitative factor. Is it then possible to measure need fulfilment using a single measurement metric? Of course, it isn’t. However, if one is conscious that his needs, in reality are limited, one will be able to define the extent to which his needs are fulfilled. So, it is possible to measure need fulfilment subjectively. That way, it will be possible to

  • Fulfil needs by self-effort or barter, without bothering about the impact on GDP or any other statistical metric.
  • Avoid value depleting or non-value adding consumption
  • Follow the maxim ‘Need-based Spending’ rather than ‘Resource-based Spending’

The ‘need fulfilment’ paradigm of economic well-being has many benefits – to the individual as well as for the country or civilisation as a whole. However, it also raises many questions. How will government raise resources if people don’t earn more than what they need? How will large scale public projects be viable if there aren’t enough users? It is almost impossible to envision how a country or a society will look like outside of the prevalent economic model.

However, it would be meaningless to delve in the macro-economic questions at this stage. At this stage, it would be pertinent to understand whether, at an individual level, people are able to discard the lure to earn and accumulate financial resources.

Cursory understanding of people suggests that there are individuals, who are inclined to step out of the rat race of financial growth. I guess, that is a meaningful starting point. After all, it should be possible for people with diverse economic paradigms to co-exist.