written by Todd DePastino

In part one of this essay, we discussed how Vietnam’s peasants under French rule, like peasants everywhere, lived on the brink of catastrophe. That is the nature of the peasant’s existence.

As R.H. Tawney put it, a peasant is a person standing in water up to his neck so that the slightest ripple will drown him.

Tawney’s Ripple usually comes in the form of famine.

Every peasant society has vivid collective memories—passed down in oral tradition—of horrific famine, when whole villages were wiped out and never came back. Some of the more infamous episodes even reach to contemporary American awareness: Ukraine in the 1920s and 1930s, Ireland in the 1840s, Ethiopia in the 1980s.

Vietnam’s own long history of famine has one miserable lowlight: the Famine of 1945. It happened toward the end of World War II, when the Japanese and French ruled Vietnam together. Two million Vietnamese died in a matter of months. The event is still remembered in Vietnam today. Just about every family has a story of it.

So, the first priority in the peasant’s life is to grow enough food for the family to survive.

The second priority is to grow a little extra as a surplus. Sure, that surplus can be drawn upon when times are really hard, but it’s also to use in trade. Because peasants need to trade for goods they can’t make themselves.

In the peasant world, you make most everything yourself. You don’t go to retail stores for clothing or a home builder for housing. You sew and build those things yourself.

But you can’t build everything. Animals you need to buy. So, too, special medicines and tools. Sometimes, depending on where you live, salt needs to be purchased. Land always does.

To buy these things, you grow a surplus.

Because peasants plan to sell, and not consume, a portion of their crop, they are sensitive to price fluctuations. They depend on market stability.

Staple price drops often mean death, literally.

Let’s say you’re a peasant in French Indochina in 1920, and you need to replace your old water buffalo. You know that a mature water buffalo will cost you 100 piastres.

You also know that 100 kilograms of rice is worth 100 piastres. So, you know you have to grow 100 extra kilograms beyond what’s needed to keep your family alive to buy that water buffalo.

Ten years later, 1930, a mature water buffalo still costs 100 piastres. But the price of rice has fallen dramatically (which it did, in fact). That extra 100 kilograms of rice will now fetch only 50 piastres on the market.

This difference in price is the making of a catastrophe.

The peasant now needs to grow twice the surplus as in 1920. If they fail, then no water buffalo. No water buffalo, no farming. It’s just a matter of time until the family starves.

And surpluses aren’t always for buying things. Sometimes, they’re for paying taxes.

Taxes is the word we use today for a compulsory levy paid to a larger outside authority. But really, these levies have come in many forms, from bribes and shakedowns to tithes and tributes. The important thing for the peasant is that every once in a while someone—the Baron, the King, the Emperor, the Bishop, the regional bully—is going to come around to collect. You hope it won’t be soon. But you know it won’t be never.

So, you always have to have something on hand to give “the King’s Men,” as they were called in medieval Europe, when they come calling.

If you didn’t have it, the King’s Men might collect you, and you’ll become a servant to the King, taken away from your family and unable to provide for them. Again, catastrophe.

Always present and pressing, the peasant’s imperative to grow enough of their staple crop to meet their needs shapes their view of the world, which is profoundly risk averse.

Peasant exhibited an aversion to risk so extreme that modern economics has a hard time making sense of it. From a modern point of view, peasants are deeply irrational.

Economists call it the “marginal utility of wealth.” Generally, the more wealth we have, the less utility additional wealth brings.

If you have $10 million, how much more benefit will you enjoy from another $1 million?

We Americans are experts at finding new ways to boost that marginal utility, to dream up new ways to spend money we might get. And our whole economic system is based on a willingness to risk some of what we have to gain more.

We quit good jobs to get higher paying ones. We take out loans to start businesses. We hold our kids out of the labor market so they can go to school to earn more in the future. We use money to buy lottery tickets.

These are all evidence of our high risk tolerance, which rises until it hits the limits of our marginal utility of wealth.

Would you spend $100 on a billion dollar Powerball Jackpot? Maybe.

Would you spend that $100 on a $1,000 lottery? Probably not.

The marginal utility of that extra $1,000 in your life is just not enough for you to risk the $100 you could spend on other things.

For peasants, the marginal utility of wealth zeroes out at an absurdly low point. Once their families are fed enough to keep them alive and their compulsory levies are paid, they have no use for wealth. There is nothing, not one scenario, that could inspire them to risk anything for any wealth beyond what’s owed to the Taxman. To peasants, the only use wealth has is for survival.

Peasants are so risk averse, they will always choose the guarantee of a bare subsistence over even an excellent chance of earning a much higher income. They choose subsistence because it’s safer.

You see this risk aversion is every aspect of a peasant’s life, including the technical arrangements of how they farm.

Modern commercial farmers plant in monoculture—single seed varieties planted in straight lines in large fields. Monoculture farmers treat their entire field the same uniform fertilizer, soil, and irrigation. Treating one great field the same way maximizes efficiency, lowers costs, and increases profit.

Peasant fields are much different. They are crazy-quilt and off-kilter. Each irregular patch harbors its own unique seed, fertilizer, soil conditioning, and irrigation regimen. The idea is to plant with as much diversity as you can knowing full well it will take much more work and that some of these fields will fail.

But failure of some fields is fine, as long as the mouths are fed and taxes are paid. Diversity ensures that while some seeds will fail, most will not, and the family will survive.

As a peasant, you don’t farm to maximize yield. You farm to minimize catastrophe. All you want is to guarantee a bare subsistence. No amount of possible extra yield is worth any risk to a subsistence guarantee.

Peasants find convoluted ways to increase that guarantee, even if it means lots of extra work. Rural economists refer to this as “agricultural involution.” Peasants double-crop, triple-crop, and intercrop the same plots of land. Some of these crops will fail, despite the backbreaking labor. That’s fine. So long as enough survive.

This graph tracks the performance of two hypothetical seed varieties, Seed A and Seed B. Their contrast illustrates the stark differences between modern economic and peasant economic decision-making.

The blue line of Seed A well out performs the red line of Seed B. Over 18 years, Seed A returns 30% more crop than Seed B. If Seed A were a stock mutual fund, we’d want it in our 401k accounts.

Peasants, however, will pick Seed B every time. The reason why is evident in the graph lines. While Seed A yields more, it’s also more volatile. In seven of 18 years, Seed A fails to yield above the Subsistence Line. That means catastrophe to a peasant. Seed B may keep peasants poor, but that doesn’t matter. What matters is it keeps them alive.

In addition to the technical arrangements of farming that protect them from the vagaries of nature, peasants also relied heavily—almost entirely—on the social arrangements that governed their everyday lives and guaranteed the best chance of survival.

The single most important protection from disaster peasants enjoyed was the village. Villages existed to keep peasants alive. They structured the world to diminish the chances of disaster. Villages functioned as a kind of hard protective shell over the lives of its members. In return, they commanded absolute loyalty. And their societies were tightly knit and heavily regulated.

There’s an old saying in every peasant society that goes something like, “The emperor’s power stops at the village gate.” Render unto Caesar whatever he may require, but everything else belongs to the village.

The bond between peasants and their villages runs so deep that villages served as an extended family. In fact, many surnames around the world, including my own, derive from village names. The line between fellow villager and, say, cousin, was thin, indeed.

Villages protected peasants in a hundred ways, but the most important was by providing access to the Commons.

Every village possessed common lands: forests, streams, and fields.

Notice how all villages are laid out. Residences are bunched tightly together with fields surrounding them. In Vietnam, about 25% of village fields were common land, there to save residents from disaster.

Let’s say your crop fails, and you need that water buffalo. Village elders gather and grant you the right to harvest from a ½ acre of common fields. Or. they permit you to catch 20 fish from the common stream, or chop down three trees from the common forest to sell at the market.

Such permissions were often overseen by the village priest or monk. These spiritual guides helped maintain equilibrium in the village.

Most villages also had lords, land lords, as well as peasants. Lords held the land and leased it to peasants. Villagers paid lords in crops and service.

And then if the village was endangered, if someone was starving, lords were expected to intervene. That was their obligation. Lords’ power and wealth were justified by their paternalism. Lords acted as the pater, the father, of the village and took care of it.

Lords often, as you might imagine, sought to maximize their wealth and minimize their obligations, but the peasants were always ready with their torches and pitchforks to remind land lords of their paternalistic role.

If lords began neglecting their duties to the village, peasants would usually start by petitioning a more powerful noble, perhaps even the king. Then, they might issue a threat: hang a likeness in effigy, burn an out building, slaughter one of the lord’s prized animals.

If the lord remained unmoved, things got ugly fast.

Peasant revolts weren’t common, but they happened everywhere on occasion. Some were big enough to make the history books: England in 1381, China in 1850, Mexico in 1994, for example.

Others were so big they came something else all together. Think Russia in 1917.

And think Vietnam in the 1940s. Ho Chi Minh’s historic achievement was to take peasant revolts and organize them into a national independence movement. How he did that will be the subject of future posts.