The reoccurring pattern of one invention creating new needs and opportunities that led to yet another invention offers important lessons for understanding the lack of development in other times and places. The key to explaining the progression of innovations in California was the close link between manufacturers and farmers that facilitated constant feedback between the two groups and the keen competition among producers that spurred inventive activity. Entrepreneurs seeking their fortunes were in close tune with their potential customers’ needs and vied with one another to perfect equipment that would satisfy those needs. Where these forces were not at work, the burdens of history severed the potential backward linkages that are so critical for economic development.Just as there were major investments in mechanical technologies to increase the productivity of labor, there were also substantial investments to increase the productivity of California’s land. These included agro-chemical research, biological learning concerning appropriate crops and cultural practices, and land clearing and preparation, but the most notable were investments in water control and provision. These took two related forms.In this realm, Californians literally re-shaped their landscape as individual farms leveled the fields and constructed thousands of miles of ditches. In addition, individual farms, reclamation districts,plastic pot manufacturers and the Army Corps of Engineers built several thousand miles of major levees to tame the state’s inland waterways. The second form consisted of a variety of measures to supply the state’s farms with irrigation water. Table 1 details the growth in the state’s irrigated acreage between 1890 and 1997.

Expansion occurred in two main waves: the first lasting from 1900 through the 1920s and the second, linked to the Central Valley Project, during the decade after World War II. Much of the historical growth of irrigation was the result of small-scale private initiatives rather than large-scale public projects that have attracted so much scholarly attention. Up until the 1960s, individuals and partnerships were the leading forms of organization supplying irrigation water. These forms accounted for roughly one-third of irrigated acres between 1910 and 1930, and over one-half by 1950. These small-scale irrigation efforts were closely associated with the rising use of groundwater in California over the first half of the twentieth century. Between 1902 and 1950, the acreage irrigated by groundwater sources increased more than thirty fold, whereas that watered by surface sources only tripled. Groundwater, which had supplied less than 10 percent of irrigated acreage in 1902, accounted for over 50 percent of the acreage by 1950. This great expansion was reflected in the growing stock of pumping equipment in the state. Underlying this growth were significant technological changes in pumping technology and declining power costs. During the 1910s and 1920s, the number of pumps, pumping plants, and pumped wells doubled each decade, rising from roughly 10,000 units in 1910 to just below 50,000 units in 1930. Pumping capacity increased two-and-one-half to three times per decade over this period. Expansion stalled during the Great Depression, but resumed in the 1940s with the number of pumps, plants, and wells rising to roughly 75,000 units by 1950. Individuals and partnerships dominated pumping, accounting for about 95 percent of total units and approximately 80 percent of capacity over the 1920-50 period.43 Since the 1950s, there has been a shift away from individuals and partnerships, as well as groundwater sources. By the 1970s, irrigation districts—public corporations run by local landowners and empowered to tax and issue bonds to purchase or construct, maintain, and operate irrigation works—had become the leading suppliers. The district organization rapidly rose in importance over two periods. In the first, lasting from 1910 to 1930, acreage supplied by irrigation districts increased from one in-fifteen to approximately one-in-three.

Much of this growth came at the expense of cooperative and commercial irrigation enterprises. Between 1930 and 1960, the district share changed little. During the 1960s, the district form experienced a second surge in growth, which was due in part to the rising importance of large-scale federal and state projects, which distributed water through these organizations. By 1969, irrigation districts supplied more than 55 percent of all irrigated acreage.Few issues have invoked more controversy in California than recurrent problems associated with agricultural labor. Steinbeck’s portrayal of the clash of cultures in The Grapes of Wrath represents the tip of a very large iceberg. The Chinese Exclusion Act, the Gentlemen’s Agreement aimed at Japanese immigrants, the repatriation of Mexicans during the Great Depression, the Great Cotton Strikes of 1933, 1938, and 1939, the Bracero Program of the 1940s, ‘50s, and ‘60s, the UFW and Teamsters organizing campaigns and national boycotts, the state’s Agricultural Relations Act, the legal controversy over the mechanization of the tomato harvest, and the current battles over illegal immigration are all part of a reoccurring pattern of turmoil deeply rooted in California’s agricultural labor market. There are few if any parallels in other northern states; clearly, the history of agricultural labor in California is very different. For all the controversy, however, the state’s farms have remained a beacon attracting large voluntary movements of workers seeking opportunity. Chinese, Japanese, Sikhs, Filipinos, Southern Europeans, Mexicans, Okies, and then Mexicans again have all taken a turn in California’s fields. Each group has its own story, but in the space allotted here we attempt to provide an aggregate perspective on some of the distinguishing characteristics of California’s volatile agricultural labor market. The essential characteristics of today’s labor market date back to the beginning of the American period. Table 2 offers a view of the role of hired labor in California compared to the nation as a whole. Expenditures on hired labor relative to farm production and sales have generally been two-to-three times higher in California than for the United States. Within California the trend shows some decline. Another important perspective is to assess the importance of agricultural employment in the economy’s total labor force. Here the evidence is somewhat surprising.Both agriculture and agricultural labor play a relatively prominent role in most renderings of the state’s history.

But as Table 2 indicates, until the last two decades, agricultural employment in California has generally been less important to the state than for the country. Clearly, it is the special nature of the state’s labor institutions,hydroponic container system not their overall importance in the economy, that warrants our attention. From the beginning of the American period, California farms have relied more extensively on hired labor than their counterparts in the East. At the same time Californians never developed the institutions of slavery or widespread share-cropping as did their counterparts in the South. The parade of migrants who have toiled in California’s fields has often been described as “cheap labor.” But this appellation is something of a misnomer, because the daily wage rate in California was typically substantially higher than in other regions of the United States, one of the world’s highest wage countries.In an important sense the “cheap labor” in California agriculture was among the dearest wage labor on the globe.In addition, one of the remarkable features of California agriculture is that the so-called “development” or “sectoral-productivity” gap—the ratio of income per worker in agriculture to income per worker outside agriculture—has traditionally been relatively narrow.This finding in part reflects the relatively high productivity of the state’s agricultural sector. It also reflects demographic factors. Due to low rates of natural increase, California’s farm sector never generated a large home-born surplus population putting downward pressure on rural living standards. Instead, the sector attracted migrants from the surplus populations of other impoverished regions of the world. For these migrant groups, agricultural labor was an entry point into a generally robust and dynamic economy.To a significant extent, past cohorts or their descendants, through hard work and high savings rates, have managed to advance up the occupational ladder.Over the long run of California’s history, agricultural labor has not been a dead end pursuit creating a permanent class of peasant laborers. This is an important point, because the agricultural history literature laments the end of the “agricultural ladder,” whereby workers start off as laborers or sharecroppers and work their way up to cash tenants and then owners of their own farms. According to the traditional literature, ending this process represents one of the great failings of nineteenth century American society.The literature is particularly critical of California because of its large farms and high ratio of hired workers to farm owners. But a little serious thought suggests how misguided these concerns are. Engel’s Law tells us that as income per capita grows, a smaller percentage of income will be spent on food. This suggests that in a growing economy the agricultural sector would diminish in size relative to the non-agricultural sector. At the same time the closing of the frontier meant that the total supply of agricultural land could not continue to grow as it did for most of the nineteenth century. Thus, unless farms were Balkanized into smaller and smaller units there was no possible way for the nineteenth century ideal to have continued. In California, although many members of immigrant groups succeeded to move up the rungs of the agricultural ladder, the focus on agriculture totally misses the key point.

The descendents of the past waves of Chinese, Japanese, Portuguese, Sikh, Italian, and Armenian laborers who now work outside of the agricultural sector are generally not anxious to give up their white and blue collar jobs to return to farming. Economic historians often explain the prevalence of the family farm in the northern United States by the working of the Domar model—if there is free land and a crop production technology offering little economies of scale and requiring little capital, then anyone can earn as much working for themselves as for anyone else.There will be no free hired labor, and if bound labor is illegal, no farm will be above a family’s scale. Like many simple abstract models, the implications of the Domar hypothesis are starker than the realities. But its fundamental logic is thought to explain many central features of the development of northern agriculture. California’s so-called “exceptionalism” also follows from the Domar model.In this state, production tended to involve larger scale and greater quantities of capital . In addition, due to the environment and the “initial” distribution of property rights, land was not free in California. Hence, the assumptions of the Domar model were violated. It proved possible for farmers to pay workers more than they could earn working for themselves and still earn a profit. From the mid-nineteenth century on, California was characterized by “factories in the fields” or “industrial agriculture” or, in more modern terms, “agribusiness.” But it is important to note that agriculture based on profit-oriented commodity production employing a substantial amount of hired labor was a widespread phenomenon in the period, and by no means limited to California. This organizational form was common to the agriculture of many capitalist countries in the late-nineteenth century, and it has arguably become increasingly common throughout the United States over the twentieth century. From a global historical perspective, the stereotypical mid-western commercially oriented family farm employing little or no hired labor is probably a greater exception than what prevailed in California.Today California farmers often complain about the high cost of labor relative to what their international competitors have to pay. But when the state first moved into the production of specialty crops, California producers of fruit and nuts faced labor costs several times higher than their competitors in the Mediterranean Basin. Given these conditions how did the early Californian producers not only survive, but in many cases actually drive European producers out of markets that were in their own backyards? For many crops such as wheat and cotton, California producers competed by relying more on mechanization to save labor, but that option was less available to orchardists. More fundamentally, the Hechsher-Ohlin model predicts that countries or regions should produce commodities that intensively use their abundant factors and sparingly use their scarce factors. Given this insight, why would the Californians even choose to try to produce labor-intensive crops?There is no doubt that California was a high-wage economy in the national, not to mention global, context. For example, in 1910, California farmers paid monthly agricultural laborers 71 percent more than did their counterparts nationally; day harvest labor was paid a 36 percent premium.