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Economies of Scale?
--by Wendell Berry
(from "Conserving Forest Communities" 1995)

"If economists ever pay attention to such matters, they may find that as the scale of an enterprise increases, its standards become more and more simple, and it answers fewer and fewer needs in the local community. For example, in the summer of 1982, according to an article in California Forestry Notes, three men, using five horses, removed 400,780 board feet from a 35.5-acre tract in Latour State Forest. This was a "thinning operation." Two of the men worked full time as teamsters, using two horses each; one man felled the trees and did some skidding with a single horse. The job required sixty-four days. It was profitable both for the state forest and for the operator. During the sixty-four days the skidders barked a total of eight trees, only one of which was damaged badly enough to require removal. Soil disturbance in the course of the operation was rated as "slight."

"At the end of this article the author estimates that a tractor could have removed the logs two and a half times as fast as the horses. And thus he implies a question that he does not attempt to answer: Is it better for two men and four horses to work sixty-four days, or for one man and one machine to do the same work in twenty-five and a half days? Assuming that the workers would all be from the local community, it is clear that the community, a timber company, and a manufacturer of mechanical skidders would answer that question in different ways. The timber company and the manufacturer would answer on the basis of a purely economic efficiency the need to produce the greatest volume, hence the greatest profit, in the shortest time. The community, on the contrary-and just as much as a matter of self-interest-might reasonably prefer the way of working that employed the most people for the longest time and did the least damage to the forest and the soil. The community might conclude that the machine, in addition to the ecological costs of its manufacture and use, not only replaced the work of one man but more than halved the working time of another. From the point of view of the community, it is not an improvement when the number of employed workers is reduced by the introduction of labor-saving machinery.

"This question of which technology is better is one that our society has almost never thought to ask on behalf of the local community. It is clear nevertheless that the corporate standard of judgment, in this instance as in others, is radically oversimplified, and that the community standard is sufficiently complex. By using more people to do better work, the economic need is met, but so are other needs that are social and ecological, cultural and religious.

"We can safely predict that for a long time there are going to be people in places of power who will want to solve our local problems by inviting in some great multinational corporation. They will want to put millions of dollars of public money into an "incentive package" to make it worthwhile for the corporation to pay low wages for our labor and to pay low prices for, let us say, our timber.

It is well understood that nothing so excites the glands
of a free-market capitalist as the offer of a government subsidy."

A Good Forest Economy?

"But before we agree again to so radical a measure, producing maximum profits to people who live elsewhere and minimal, expensive benefits to ourselves and our neighbors, we ought to ask if we cannot contrive local solutions for our local problems, and if the local solutions might not be the best ones.

It is not enough merely to argue against a renewal of the old colonial economy.
We must have something else competently in mind.

If we don't want to subject our forests to the rule of absentee exploiters, then we must ask what kind of forest economy we would like to have. By "we" I mean all the people of our state, of course, but I mean also, and especially, the people of our states rural counties and towns and neighborhoods.

Obviously, I cannot speak for anybody but myself. But as a citizen of this state and a member of one of its rural communities, I would like to offer a description of what I believe would be a good forest economy. The following are not my own ideas, as you will see, but come from the work of many people who have put first in their thoughts the survival and the good health of their communities.

A good forest economy, like any other good land-based economy, would aim to join the local human community and the local natural community or ecosystem together as conservingly and as healthfully as possible.

A good forest economy would therefore be a local economy, and the forest economy of a state or region would therefore be a decentralized economy. The only reason to centralize such an economy is to concentrate its profits into the fewest hands.

A good forest economy would be owned locally. It would afford a decent livelihood to local people. And it would propose to serve local needs and fill local demands first, before seeking markets elsewhere.

A good forest economy would preserve the local forest in its native diversity, quality, health, abundance, and beauty. It would recognize no distinction between its own prosperity and the prosperity of the forest ecosystem. A good forest economy would function in part as a sort of lobby for the good use of the forest.

A good forest economy would be properly scaled. Individual enterprises would be no bigger than necessary to ensure the best work and the best livelihood for workers. The ruling purpose would be to do the work with the least possible disturbance to the local ecosystem and the local human community. Keeping the scale reasonably small is good for the forest. Only a local, small-scale forest economy would permit, for example, the timely and selective logging of small woodlots.

Another benefit of smallness of scale is that it preserves economic democracy and the right of private property. Property boundaries, as we should always remember, are human conventions, useful for defining not only privileges but also responsibilities, so that use may always be accompanied by knowledge, affection, care, and skill. Such boundaries exist only because the society as a whole agrees to their existence. If the right of landownership is used only to protect an owner's wish to abuse or destroy the land, upon which the community's welfare ultimately depends, then society's interest in maintaining the convention understandably declines. And so in the interest of democracy and property rights, there is much to be gained by keeping especially the land-based industries small.

A good forest economy would be locally complex. People in the local community would be employed in forest management, logging, and sawmilling, in a variety of value-adding small factories and shops, and in satellite or supporting industries. The local community, that is, would be enabled by its economy to realize the maximum income from its local resource. This is the opposite of a colonial economy. It would answer unequivocally the question, To whom is the value added?

Furthermore, a local forest economy, living by the measure of local economic health, might be led to some surprising alterations of logging technology. For example, it would almost certainly have to look again at the use of draft animals in logging. This would not only be kinder to the forest but would also be another way of elaborating the economy locally, requiring lower investment and less spending outside the community.

A good forest economy would make good forestry attractive to landowners, providing income from recreational uses of their woodlands, markets for forest products other than timber, and so on.

A good forest economy would obviously need to be much interested in local education . It would, of course, need to pass on to its children the large culture's inheritance of book learning. But also, both at home and in school, it would want its children to acquire a competent knowledge of local geography, ecology, history, natural history, and of local songs and stories. And it would want a system of apprenticeships, constantly preparing young people to carry on the local work in the best way.

All along, I have been implying that a good forest economy would be a limited economy. It would be limited in scale and limited by the several things it would not do. But it would be limited also by the necessity to leave some wilderness tracts of significant acreage unused. Because of its inclination to be proud and greedy, human character needs this practical deference toward things greater than itself; this is, I think, a religious deference. Also, for reasons of self-interest and our own survival, we need wilderness as a standard. Wilderness gives us the indispensable pattern and measure of sustainability."

To assure myself that what I have described as a good forest economy is a real possibility, I went to visit the tribal forest of the Menominee Indians in northern Wisconsin. In closing, I want to say what I learned about that forest-from reading; from talking with Marshall Pecore, the forest manager, and others; and from seeing for myself.

The Menominee originally inhabited a territory of perhaps ten million acres in Wisconsin and northern Michigan. By the middle of the nineteenth century, as the country was taken up by white settlers, the tribal holding had been reduced to 235,000 acres, 220,000 acres of which were forested.
The leaders understood that if the Menominee were to live, they would have to give up their old life of hunting and gathering and make timber from their forest a major staple of their livelihood: they understood also that if the Menominee were to survive as a people, they would have to preserve the forest while they lived from it. And so in 1854 they started logging, having first instituted measures to ensure that neither the original nature nor the productive capacity of the forest would be destroyed by their work. Now, 140 years later, Menominee forest management has become technically sophisticated, but it is still rooted in cultural tradition, and its goal has remained exactly the same: to preserve the identification of the human community with the forest, and to give an absolute priority to the forest's ecological integrity. The result, in comparison m the all-too-common results of land use in the United States, is astonishing. In 1854, when logging was begun, the forest contained an estimated billion and a half board feet of standing timber. No records exist for the first thirteen years, but from 1865 to 1988 the forest yielded two billion board feet. And today, after 140 years of continuous logging, the forest still is believed to contain a billion and a half board feet of standing timber Over those 140 years, the average diameter of the trees has been reduced by only one half of one inch-and that by design, for the foresters want fewer large hemlocks.

About 20 percent of the forest is managed in even-aged stands of aspen and jack pine, which are harvested by clearcutting and which regenerate naturally The rest of the forest is divided into 109 compartments, to each of which the foresters return every fifteen years to select trees for cutting. Their rule is to cut the worst and leave the best. That is, the loggers remove only those trees that are unlikely to survive for another fifteen years, those that are stunted or otherwise defective, and those that need to be removed in order to improve the stand. Old trees that are healthy and still growing are left uncut. As a result, this is an old forest, containing, for example, 350-year-old hemlocks, as well as cedars that are probably older The average age of harvested maples is 140 to 180 years.

In support of this highly selective cutting, the forest is kept under constant study and evaluation. And loggers in the forest are strictly regulated and supervised. Even though the topography of the forest is comparatively level, skidders must be small and rubber-tired. Loggers must use permanent skid trails. And all logging contractors must attend training sessions.

The Menominee forest economy currently employs-in forest management, logging, milling, and other work-215 tribe members, or nearly 16 percent of the adult population of the reservation. As the
Menominee themselves know, this is not enough; the economy of the forest needs to be more diverse. Its products at present are sawed lumber, logs, veneer logs, pulpwood, and "specialty woods" such as paneling and moldings. More value-adding industries are needed, and the Menominee are working on the problem. One knowledgeable observer has estimated that "they could probably turn twice the profit with half the land under management if they used more secondary processing."

--Wendell Berry
(from "Conserving Forest Communities" 1995)

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