New Horizons in Institutional and Evolutionary Economics series
Edited by Lars Magnusson and Jan Ottosson
Chapter 2: Second-degree Path Dependence: Information Costs, Political Objectives, and Inappropriate Small-farm Settlement of the North American Great Plains
Gary D. Libecap Well, there isn’t much rain out west. There is not enough rain to grow crops . . . The historical process which we call the westward movement shattered against these facts. Neither hope nor illusion nor desire nor Act of Congress could change them in the least. (Stegner, 1954, p. xix) One of the most serious problems that presents itself in . . . the drought area is that too many farm families have been settled in these regions . . . One hundred prosperous farm families are far more desirable than 200 families on relief. (Frank Reinoehl, Farm Credit Administration, 1939)1 ‘You’ll have to get off the land. The plows’ll go through the dooryard . . .’ ‘But if we go, where’ll we go? How’ll we go? We got no money . . .’ ‘Why don’t you go on west to California? There’s work out there, and it never gets cold.’ (Steinbeck, 1976, pp. 43–4) INTRODUCTION The distinguishing characteristic of the Great Plains is its relative aridity and fluctuating rainfall, compared with agricultural regions to the east. The region receives one-third to one-half the annual precipitation of the Midwest, and is subject to periodic droughts. The Great Plains were the last agricultural frontier, settled between 1880 and 1925, first in the southern and central plains of western Kansas and Nebraska and eastern Colorado, and than in the northern plains of the western Dakotas and eastern Montana. At the time of settlement there was no consensus as to the correct response to aridity. John Wesley Powell recommended a...
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