Thorstein Veblen
Review author to: 'L' Agriculture aux Etats-Unis'. By EMILE LEVASSEUR. Paris: 
1894.
The Journal of Political Economy, Vol. 2, No. 4. (Sep., 1894), pp. 592-596.
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[592] One result of M. Levasseur's visit to this country last year is this 
attractive volume on American agriculture. The purpose of the book is to give a 
conspectus of the industry as it exists today, with so much of historical matter 
as may be necessary to a clear apprehension of the factors that make up the 
present situation. The scope of the book is quite comprehensive. It introduces 
the subject with a chapter on statistical and other sources of information, and 
on the publications and methods of official bodies, state and federal, 
especially of the Department of Agriculture. In his survey of the methods by 
which statistical information is obtained M. Levasseur shows an appreciation of 
the difficulties of the task as well as of the shortcomings of the results 
achieved. By an easily intelligible mistake, a short supplementary bibliography, 
of very limited scope, appended to this chapter (pp. 13-14) on the sources of 
information, has been unintentionally given a claim of exhaustiveness which it 
belies in a very unfortunate manner.
From a comparison of the present condition of American farming [593] with its 
past and with the farming situation in other countries, the inference is drawn 
(p. 44) that the complaints of the farmers of the country are not altogether 
well grounded. Cheap and fertile soil goes far to offset any advantage which 
their competitors in older countries may possess in the way of proximity to the 
market, cheap labor, or low standard of living. The American farmer has the 
advantage of low rent, or of a low price of land (which is the capitalized 
expression of a low rent), and this suggests that the remedy ready at hand for 
the depression in agriculture in France and other European countries is a 
lowering of rents to the true value of the land as a means of production.

The farmer properly pays for the use of the instrument of production in 
proportion to what it will produce. If it is true that it has now become 
impossible for him to go on producing at current prices, he has a right to 
demand a reduction of rents to a point where an equilibrium will be established, 
that is to say, a point at which he can produce without loss. .... Interest on 
capital has sensibly declined during the past thirty years, in France and 
elsewhere; capitalists have yielded to the force of necessity. Why should not 
the rate of interest paid on landed capital, that is the interest as counted in 
term of money, submit to the same law when a revolution in the production and 
distribution of agricultural products has virtually changed the terms of the 
contract by diminishing the power which landed capital possessed of yielding a 
money product?

When this rule is applied to the farming industry of this country, as the facts 
of the situation today are applying it with constantly increasing rigor, it 
affects not so much the relation between tenant and landlord as that between 
debtor and creditor, and, what is of equal significance and is submitted to with 
equal reluctance, it reduces the nominal value, the value in terms of money, at 
which the "independent" farmer's property is capitalized.
Following the two introductory chapters, on Statistics and Sources of 
Information, and on the Rural Economy, the main body of the volume is taken up 
with a detailed description occupying some 300 pages, beginning with the 
Cultivation of Cereals and other Vegetable Products, and comprising, among other 
things, chapters on Forestry and Timber Lands, Land Sales and Mortgage 
Indebtedness, and Markets and Prices. While this survey is admirably lucid and 
concise, and while the information it contains surprises one rather by the 
accuracy and insight which it displays than by any absence of these qualities, 
the limits of space preclude any exhaustive treatment of the subject on a scope 
so broad as that of M. Levasseur's book. It is, as it is intended to be, a work 
of general information for European readers [594] first and foremost; but M. 
Levasseur's impartial attitude and breadth of view, as well as his very compact 
and entertaining presentation of his subject, gives it a high value also for 
Americans.
Speaking of the cost of production of grain, with a view to the relative 
advantages enjoyed by American farmers and their European competitors, M. 
Levasseur finds that writers interested in upholding a thesis have been too 
prone to make much of some special factor in the situation, such as changes in 
tariff and the like, while they have neglected the dominant human factor. "In 
agriculture as in industry at large, success depends in great part on the man." 
It is not safe to predict, for example, as has so frequently been done, that if 
the market price of the product falls permanently below a given figure 
production cannot go on. A change of this kind, unless it goes to an extreme, 
need not produce such radical effects.

In all industry, whether manufacturing or agriculture, a large number of the 
persons engaged are of a vegetative habit; they get their livelihood by their 
business, and expand or contract their scale of living to correspond with their 
profits. In agriculture especially this mass of vegetative producers is 
enormous. The United States are no exception in this respect, although the 
standard of living in that country is higher than in France. The American 
farmers complain of low prices; most assuredly, there are years when many do 
business at a loss, that is, spend more money on their business and their 
livelihood than they make; but on an average, and allowance being made for the 
proper exceptions, farming has so far afforded the farmers, a living, - 
otherwise it would have been abandoned.

In the section treating of Prices and Freight Rates there occur one or two 
mistakes to which attention may be called. On page 318 (note) it is remarked 
that the freight rates given in cents per bushel in the Statistical Abstract of 
the United States do not correspond with those given in the Report of the 
Interstate Commerce Commission in cents per 100 pounds, "the bushel being 
counted at 46 pounds"! If the rates are converted from the one schedule to the 
other at 60 pounds to the bushel it will be found that they agree as nearly as 
figures of this class can be expected to agree. The following (p. 323) is also a 
little confusing: "The difference between the highest and lowest price [of 
wheat] for the year in Chicago is commonly very pronounced, having been as great 
as 125 cents in 1886, under the paper-money régime, and 92 cents in 1888 under 
the régime of specie payments." Apart from the slip by which 1886 is brought 
under the "régime of paper money," there is the correction to be made here that 
1886 was a particularly sluggish year for the wheat market, the price of cash 
wheat never [595] reaching one dollar, and the range for the year not exceeding 
some 20 or 25 cents; if the date given is a misprint for 1868, it is to be 
remarked that wider divergences occurred during the sixties; it is more probable 
that the larger figure is intended for the year 1888 when the price varied by 
something over 125 cents, going as high as $2 at the end of September (the month 
of the notorious corner associated with the name of Mr. Hutchinson), and as low 
as 72-73 cents during the early part of the year.
As to the future of American agriculture the opinion expressed is hopeful 
without being enthusiastic:

American production has two outlets: home consumption and exportation. 
Improvement in the agriculture of Europe, extension of grain and cattle culture 
in other exporting countries, and obstructive tariffs in importing countries may 
disturb the export trade of the United States, but will not drive them out of 
the foreign markets. America will continue to export. What proportion of her 
product, the future alone can tell. What is certain is that it will require 
added effort to hold the markets already occupied or to find new ones, for more 
countries are constantly entering the market with agricultural products, and the 
facilities for transportation are increasing, resulting in increased 
competition. But, on the other hand, it is beyond question that American 
industry can aid American agriculture in opening up new outlets for its products 
by diversifying the form in which the goods are put on the markets, (p. 349).

Home consumption will of course also increase; more slowly, probably, than in 
the past,(1*) but still very appreciably. "There are writers who fancy that they 
can see afar oft the day when America will contain a population dense enough to 
consume all the agricultural products of the country. That day, if it is coming 
at all, is too remote to occupy our thoughts at present. .... For the present 
generation it is idle to count on the home consumption to carry off the entire 
product and so remove the necessity of an export market." (p. 350) "Prices will 
remain low .... If this abundant supply is to become, as I am persuaded it will 
be, a permanent feature of the market in the future, it is not improbable that 
prices will fall even below their present level, to a point which it would be 
rash to attempt to fix" (p. 351). "One of the consequences of low prices will 
probably be a decline in the value of farms devoted exclusively or principally 
to the [596] production of the depreciated articles," (p. 353). The ultimate 
result being a diversification and intensification of farming, with a 
continuation in the future of the progress made in the recent past. "American 
agriculture was favored by fortune for some fifteen years; it will now have to 
put forth greater efforts, for less results perhaps; but it is capable of doing 
so" (p. 358). But there is no doubt of the final result.
As a final word on the question of the marketing of agricultural produce, M. 
Levasseur remarks on the protective tariffs, on grain especially, so much in 
vogue in Europe today. He traces the French protective legislation, without many 
words, to the cupidity of the land-
owner, and characterizes it as at best an attempt to take money out of the 
pockets of one part of the French people in order to put it into those of 
another part.
T. B. VEBLEN.

NOTES:
1) By an oversight, quite explicable, but misleading, a statement made in the 
Journal (June, 1893. p. 375), that "the bread-eating population of the countries 
which draw on the supplies of the general market to which America contributes, 
may be expected to increase by ten per cent. in ten years," is referred to (p. 
350) as an estimate applying to the future rate of increase of the population of 
the United States.
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