(b) Production efficiencies to be gained from a concentration on
standardized, repetitious tasks.
(c) Institutional advantages growing out of the educational sys-
tem, which in effect produces trained people whose outlook and
training causes them to prefer a structure of agriculture that in-
cludes a managerial echelon, which is the level for which they have
been equipped. They are risk-averse.
These are powerful incentives for a continuation of the trend
toward a separation of decisions regarding investment from decisions
regarding production activities in agriculture. They offer short-run
gains that can be captured by individual firms, but they also intro-
duce a bureaucratic managerial structure that seems likely to involve
long-run social cost.
Some Potential Consequences of International Market Linkages
for Highly Concentrated and Specialized Agricultural Areas
Agricultural states have not been as seriously affected by domestic
swings in the business cycle as have industrial states in recent years.2
This may change with increasing concentration and specialization
in agriculture. The domestic business cycle is incfeasingly enmeshed
in the international business cycle, especially as it affects our de-
veloped-country trading partners. The rapid expansion in export
markets for agricultural products cushioned the effects of the domes-
tic downswing in economic activity in 1973-74, and again in 1979-80.
This may not be repeated in the next business cycle downturn.
The much greater dependence of monocultural or duocultural
areas on foreign markets (the com-soybean Eind wheat-sorghum
states in particular) may result in a feed-back to agriculture of future
U.S. business cycle trends via the international market. The growing
interdependence of the markets if the developed countries may thus
reduce the cushioning effects that export markets have provided
agriculture in the 1970’s.
If this occurs, it will reveal the vulnerability of agricultural areas
that have experienced the most pronounced concentration in firm
size and SpeciEilization in one or two products.
The Larger Significance of Concentration in Agriculture
Are we losing flexibility in the agricultural sector? Tibor Scitovsky
attributes the survival of capitalism to its flexibility.3 The U.S. agri-
cultural sector has had one of the best “flexibility indexes” of any
sector in the U.S. economy. Why?
2Norman J. Glickman, International Trade, Capital Mobility, and Economic Growth:
Some Implications for American Cities in the 1980's, Report to the President’s Commission
on a National Agenda for the 1980’s, Symposium sponsored by the National Academy of
Sciences, et al. Washington, D.C., June 3-4,1980, p. 3.
2Can Capitalism Survive?—An Old Question in a New Setting, Am. Econ. Review,
Vol. 70, No. 2, May 1980, pp. 1-9.
157