and can be symbolized on a chart by a J curve, because it starts out as a curving line and eventually becomes closer to a straight line of growth perpendicular to the base of the chart or graph. In nature, when J-curve growth occurs among fauna, such growth is rewarded with a ‘bust,’ because species growth soon outstrips the environment’s food supply. At that point, population growth halts and contracts to a point where the environment can support this new lower level of population. This pattern of boom and bust applies whether we are talking about starfish dn a reef or deer in a forest. There is another type of adaptation to rapid population growth seen in nature, and this is represented by a sigmoid, or S, curve. In both J and S growth, the population, whether birds, bushes, or bacteria, expands as much as the supply of food or nutrients allows. Since there seem to be no limits at first, growth starts as an exponential curve. But in S-curve growth, the species begins to detect limits to expansion. These limits are the capacity of the environment to provide food at the same rate as the rate of population expansion. In S-curve growth, feedback results that causes the species to limit the rate of reproduction, producing the reversal from an exponential curve to a sigmoid curve. What is often observed is not a smooth, perfect S, but the beginning of an S curve, followed by rapid oscillations of growth and contraction, amounting to no overall growth. A species long accustomed to growth cannot immediately adjust its rate of reproduct io n to the e n d -c a p a c i ty of the environment. Using growth curves seen in animal population expansion as an analogy for economic behavior, we can see in the figure that the informative economy is not different from the mass economy, but, rather, that it describes a more mature stage of economic development, a stage that at first will be volatile, turbulent, and chaotic. As I have drawn the chart representing the economy, my guess is that we are on the point marked with an X. We have experienced nine years of slow growth—a tapering off of the rate of expansion of our gross national product. yVhat becomes obvious when one uses such a chart to depict economic transition is that strategies appropriate during the rapid growth of the mass economy are inappropriate to its mature phase, the informative economy. Those strategies are worth repeating here as a group in order to contrast them with strategies appropriate to the informative economy. 4A I s the mass economy moves toward the informative economy, there will initially be disorder, because the activity of all economic components must change behavior, movement, and pattern. Products must change. Energy-intensive, marketing, consumption, and consumer habits must also change. Each component of the mass economy must either adapt or perish, but it will take time to understand what part each plays (or no longer plays) in what will be the new economy. This loosening, or untightening, of the economy is a necessary stage in the creation of another system. The new informative system will be characterized in part by the merging of the old science of economics with the new science of ecology. Economic laws, theor ie s , and o b s e rv a t io n s , such as Gresham's Law and the theory of the marginal efficiency of capital, are still valid, but they must be applied to a new context. Ecology is the study of the relationship between organisms and their environments. Since our wealth, economic health, and real growth now depend intimately on our understanding of our environment, any business or economist without an ecological sensitivity runs the risk of not adapting. For decades, ecological science could be ignored by businesses and economists because the environment was forgiving of demands placed on it. The planet was large enough and the population small enough to allow us to ignore the limits of resources and the expense of waste. Now we must pay attention to what the environment tells us. Gently but firmly, the environment is telling us that we are outstripping its capacity to fill our current demands. According to Lester Brown, author of Building a Sustainable Society, the world reached a major watershed in 1960 that but firmly, the environment is telling us that we are outstripping its capacity to fill our current demands. The world reached a major watershed in 1960 that we have yet to acknowledge. I we have yet to acknowledge. During that year, the world’s population reached 3 billion, and for the first time ‘the yields of three basic biological systems [forests, seas, and grasslands] expanded less rapidly than popujations.’ Since that time, the margin between total demand and total output has narrowed and even become negative, so that today we are eating into past reserves. Many items, such as fish, wool, and meat, have steadily dropped in both per capita and absolute production since the early 1970s. Part of this biological shortfall was met by such an intensive use of petroleumbased fertilizers and mechanization that fertilizer usage increased 600 percent between 1950 and 1980. During that time, population and production did not increase 600 percent. This means that reliance on oil increased faster than the rate of population growth and the increase in basic foodstuffs. There is no end in sight to this disproportionate growth. The mass economy has met food demand through the industrialization of agriculture. Large equipment operating on large farms has changed farming from labor-intensive to capital- and energy-intensive. The problem with increased U.S. food production has been that intensive methods of cultivation and fertilization are rapidly reducing the amount of top- soil and topsoil fertility. In other words, we have turned our farms into mines, and what we are extracting with our food is long-term fertility or, at the very least, the ability of the land to produce food without increasingly expensive applications of fertilizer and pesticides. The industrialization of agriculture was made possible by the low cost of energy. We could afford to use more energy per unit of output, reducing our labor costs during a period when labor was leaving the farm for higher-paying jobs. It is estimated that the United States expends ten calories for every calorie of food taken off the field, while the Chinese spend one. In order to achieve yields at one-tenth the energy cost of ours, China uses more labor. While the United States does not want to go back to a labor-intensive agriculture to save energy, U.S. farmers are faced with the prospect of continually higher operating costs and dwindling profits. However, the world is making more people, not more land. Our on ly hope of supp ly ing s u f f ic ie n t amounts of food for ourselves and others is to have more people on the land working ever more productively. H a v in g more people work the land flies in the face of conventional wisdom about the benefits of increasing mechanization, but conforms closely to the idea of an informative economy. For food production to increase and the land to regain its fertility, there will have to be a shift in the ratio of mass to information. Mass is represented by land and energy; information by intelligence, technique, and people. Smaller, more intensively worked farms are considered a romantic notion. It was Secretary of Agriculture Earl Butz, under President Nixon, who advised American farmers to ‘get big or get out.’ But during the past three years, many of the farmers who got big got out, bankrupted by the high cost of capital, while conservative farmers who stayed small and kept their debts low survived. More important, the cost of oil in the form of diesel fuel, pesticides, herbicides, and nitrogenous fertilizers has skyrocketed since 1973. With the ongoing decontrol of natural gas, which is the main component of anhydrous ammonia, the cost of fertilizers is expected to triple within the next five years. What made American farmers the most productive in the world is now threatening to put them out of business: abundant energy. From a labor-intensive livelihood, farming has become a capital- and energy-intensive industry that requires the investment of large amounts of capital and energy into the land and obtains high yields in return. But, like big industry, farmers have been fooled. By putting so much capital into energy-intensive machinery and technologies, they are being driven into insolvency. In 1982, farmers earned $19 billion in income—about the same amount as they did in 1932 when the earlier figure is adjusted for inflation. But this income will not even service their $200 billion in land, equipment, and farm debt. Land prices have skyrocketed since World War II, primarily because such large yields could be obtained. New farmers who try to start out by purchasing their own land are locked into trying to obtain the very highest yields in order to make their land payments. This means intensive cultivation and fertilization. Because farmers have been successful in producing fence-to- fence, there is too much food, which has resulted in depressed crop prices. These conditions in turn have forced farmers to try to produce themselves out of their financial difficulties. Thus, in 1982, we had record yields of wheat, corn, and soybeans—and the greatest number of farm bankruptcies since the Depression. The shift from a mass to an informative economy reverses the polarities of what is and isn’t economical. It was romantic to think of farming a small amount of land in the past few decades, because the economies of scale prevented a person from making a living unless he were growing specialty crops like wine grapes or tobacco. The $50,000 combine and 44 Clinton St. Quarterly
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