East of Eden: Between Land and Labor

"After He drove the man out, He placed on the east side of the Garden of Eden cherubim and a flaming sword flash back and forth to guard the way to the tree of life." (Gen 3:24)

"So Cain went out from the Lord's presence and lived in the land of Nod, east of Eden." (Gen 4:16)

As the global economy struggles to regain a footing and the stock market is on a stark decline, traders and investors may be looking for safe havens in which to invest capital in order to avoid financial ruin. One possible avenue of investment that appears to be booming right now may be arable farmland. As the world population increases and global economic tension is on the rise, people will always need food. In this way, investing in arable farmland may be a wise investment.

A Reuters article written by PJ Huffstutter recently reported that while rural land prices are surging, some investors are viewing US farmland as the "latest hot commodity". Agricultural land prices are rising at a rate not seen since the 1970s, and in some cases arable land prices are reaching record highs. In Iowa, owing to increasing demand for food, agricultural land prices have risen by nearly 33%. Why? According to Huffstutter, "China's expanding wealth, the increased use of biofuels and a growing global population that has just passed seven billion will put a premium on fertile soil for decades to come."

Where many farmers and wealthy investors may be leery over the precarious state of Wall Street currently, some perceive farmland to be a relatively stable investment. Huffstutter: "Large parcels of good land can be difficult to find in the US, and what is out there doesn't tend to come up for sale very often."

Even so, there are risks associated with running a farm. Huffstutter notes that as technology has increased, there is less need for back-breaking labor as in the farming of the past. Nevertheless, the financial burden of farming appears to be increasing. Huffstutter: "Input costs have doubled or more in recent years, and commodity prices have remained volatile." That being the case, even with volatility in commodity prices, at the end of the day individuals need their wheat, corn, and potatoes.

Reuters' article on increasing demand for farmland calls to mind my Benzinga colleague George Maniere's discussion last August on why George Soros is selling his gold and buying farmland. The value of farmland has appreciated 1,200% since the year 2000, and food prices appear to be rapidly increasing. According to Maniere, investors are "flocking to farmland" as a new booming industry. As such, a fund controlled by Soros owns 23.4% of a South American food production and renewable energy company in South American known as Adecoagro. Such thoughts on investment seem to give the phrase "green investing" a whole new meaning.

Maniere noted that food supplies are going to continue to be "under pressure" -- and not just food, but also water. Even amidst a dire global financial crisis, people still need food and water. While many in the US take water for granted, water could soon replace oil as the world's most hotly-contested commodity. While booming farmland and rising food prices may be reason for wealthy investors to salivate in terms of investment potential, the specters of overpopulation, rising food & water demand, and global catastrophes should give all individuals reasons to be concerned.

For me personally, the issues of rising arable land prices, food shortages, overpopulation, and a possible water crisis call to mind the strength and power behind the saying, "By the sweat of your brow you shall eat bread". In this time period, it would seem that many have forgotten that verse. If only in the Biblical context, when Adam and Eve were banished from the Garden of Eden, that was when human scarcity was created. Man was to come face-to-face with economic and social scarcity. Scarcity not only in terms of sustenance, space, and time, but also piety, love, and romance. Even so, as Friedrich Engels once wrote on the topics of overpopulation and relative scarcity, "In short, if we want to be consistent, we must admit that the earth was already overpopulated when only one man existed."

In this way, though individuals may lament or become forlorn at the prospects of humanity's future in terms of food, land, and water scarcity, I think world problems help to put things into perspective. Arguably, humanity has done well in creating and using technology to make life easier, and yet humanity seems to have found itself in a precarious and ominous situation -- on a global scale.

We would do well in finding ways of resolving scarcity on our own terms while respecting individuals' rights and free will. As Vladimir Lenin advocated communism to Russians while preaching on the street like a religious cleric promising "peace, land, and bread", we can see that some economic paths work better than others. While the Bolsheviks ambitiously cried out the slogan "Peace, land, and bread" in furtherance of the communist ideology, we can see how that worked out in the history books.

MarketWatch's Ruth Mantell recently wrote an interesting article on how many Americans are beginning to double-up households and share living space. According to the article, this year 30% of adults are living in doubled-up households, compared with 27.7% in 2007. Thus, while inhabitants of this planet are feeling an economic squeeze in terms of food prices and energy prices, serious land and water issues seem to be on the horizon as well. And let's face it, with a rising world population, it would appear that "living space" east of Eden is shrinking.

Even so, the world is abundant. As I have written previously, "The problem of scarcity rests not in the inherent nature of the Earth, but in the inherent nature of mankind." In light of the current global financial crisis, our banishment from paradise and fall from grace seem to have gotten the better of us.

While pondering on economics on one of my reveries, I wondered why there is no viable foodstuff commodity that humanity can consume on an inexpensive and efficient basis where such a foodstuff commodity would provide a human sufficient nourishment. Were there such a foodstuff commodity that could provide humans sufficient nourishment, I am sure some investors and/or governments would seek to control (or even destroy) the commodity in order to increase demand and profits. It is said that "man cannot live on bread alone", but if humanity had a commodity that could be produced uniformly and cheaply whereby we could provide sustenance to the world's population, I think the world would be a better place. If we could just grow and distribute a massive amount of "manna" for the globe, maybe there would be no hunger. On this topic, I think it would be interesting were there a currency based on the value of a pound of rice or a gallon of water, so as to fundamentally unite the necessity of production with economic transactions.

Take, for instance, the essential commodity of air; air is not really a marketable commodity. There is demand for air, but for the most part, it is not a commercialized commodity. Why couldn't food or water maintain a similar status? Why couldn't there be a mass-produced foodstuff called "manna" that would be akin to rice or corn or wheat where we could cure the world of starvation and malnutrition? The answer rests in the phenomenon of labor, i.e. human toil on this sphere. Unlike air, we need to work in order to gain rice or corn or wheat; we need to work and expend energy in order to get water. Even in light of the "tragedy of the commons", even were there an abundance of "manna" in common territory, it would most likely be diminished or secured for profit by market actors. Whether we like it or not, east of Eden, we eat by the sweat of our brows. Or for those of us who are not engaged in manual labor, at the expense of time and mental energy.

But let us talk about labor for a moment. The Independent in the UK reported recently that Virgin tycoon Richard Branson is warning that an entire generation may grow up to not know work if the economy does not improve. Branson wants the British government to take more steps to stop rampant youth unemployment. Such possible steps include reducing the amount of time necessary for a college education, making it easier for companies to hire part-time workers, and "the creation of a new government body for people who want to start their own businesses". Branson: "We've got to stop this high youth unemployment - there's a great danger of creating a lost generation who've never know work."

What complicates matters is that youth unemployment is now a global problem. As such, an entire generation seems to be facing a jobless predicament amidst a planet with increasing demand and decreasing resources. One cannot help but see a sort of humor with the idea of an entire "lost generation" of individuals across the planet facing a shortage of jobs. When you think about it, the idea that an entire generation of young people around the world should be without jobs is quite comical. Something so fundamental, essential, and everyday for humans is being denied to an entire generation of young people.

Such thoughts may lead one to wonder if this "lost generation" is actually a "last generation"? While we're on the topic of Eden and humanity's fall from grace, I do recall reading that the era of the "last generation" is supposed to be, well, an interesting period of time, to say the least. Interesting, ominous, and precarious. How ironic it is then to consider the idea that mankind began with the charge of "By the sweat of your brow you shall eat bread" and evolved to a point where the ability to work is in short supply...and in some locations, non-existent or impractical.

Indeed, living space "east of Eden" appears to have gotten smaller and more cramped over time. Even then though, arable land values, water crises, and food crises must have their limits. At the end of the day, people have to eat and drink one way or another, and where economic transactions fail to secure various individuals' survival, that is where conflict and violence come into play -- the great struggle for survival. After all, scarcity was not the only thing mankind discovered after getting booted out of the Garden. Aye, on the topic of farmland, one must think back to those early agrarians Cain and Abel: Cain with his crops and Abel with his flocks of sheep. In the Biblical context, it was through a sense of socio-economic jealousy that Cain became the first murderer on the planet.

Even millennia after the incident between Cain and Abel, some in economic markets may ask, "Am I my brother's or sister's keeper?" In a comical way, with a human population of three or four individuals to an overcrowded planet with seven billion individuals, it appears that humanity has much yet to learn. Even with our great advances in technology, humanity appears to still be wandering while trying to find its way back to the Garden. One cannot help but see the humor in that. And though manufactured scarcity may produce profits for some, one cannot lose sight of its costs as well. Just something to keep in mind as we make our way trying to get by in that realm east of Eden.