SPEAKER_03: Amazing, fascinating stories of inventions, ideas and innovations. Yes, this is the podcast about the things that have helped to shape our lives. Podcasts from the BBC World Service are supported by advertising.
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SPEAKER_00: Welcome to season two of 50 things that made the modern economy from the BBC World Service. I'm Tim Harford, economist, writer, general nerd. It's great to be back. One of the things I love to do is to take the abstract concepts and visible forces of the economy and show how they affect us every day in everything we do. So it's been a joy to write these episodes, to pick something we usually overlook and to show its unintended consequences, the hidden connections and the stories of the people who were behind or sometimes trapped in front of the idea. Our money, our jobs, every aspect of our lives are affected by inventions as varied as the gyroscope, the spreadsheet, the bicycle. If you listen to the first season, then welcome back. If you're new to our podcast, feel free to binge listen to the first 52 episodes in any order you choose. And whether you've been with us before or not, please give us a rating and leave comments if your podcast app allows. And please tell your friends. It really helps us if you spread the word. Thank you. So let's get started. Episode one, the Langstroth hive.
SPEAKER_01: 50 things that made the modern economy with Tim Harford.
SPEAKER_00: It's a little known fact that economists love bees, or at least the idea of bees. The Royal Economic Society's logo is a honeybee, a famous work of protoeconomics. The Fable of the Bees, published in 1732 by Dutch born Londoner, Bird and Mandeville uses honeybees as a metaphor for the economy. And when a future winner of the Nobel Memorial Prize in economics, James Meade, was looking for an example of a tricky idea in economic theory, it was to the honeybee that he turned for inspiration. The tricky idea was what economists call a positive externality. It's like a kind of topsy turvy pollution, something good that a free market won't produce enough of, meaning that the government might want to subsidise it. For James Meade, the perfect example of a positive externality was the relationship between bees and apples. Imagine, wrote Meade in 1952, a region containing some orchards and some beekeeping. If the apple farmers planted more apple trees, then the beekeepers would benefit, because that would mean more honey. But the apple farmers wouldn't enjoy that benefit, that positive externality, and so they wouldn't plant as many apple trees as would be best for everyone. This was, according to Meade, due simply and solely to the fact that the apple farmer cannot charge the beekeeper for the bees' food. Close your eyes, and you can see Meade's example coming to life. The haze of early summer, the cool shade of the apple trees, the buzz of the busy bees. No wonder the example has been handed down the years. It's vivid, evocative, and entirely mistaken. Apple blossom produces almost no honey, and that's only the first thing James Meade didn't know about bees. To understand Meade's more fundamental error, we need a brief history of humans and honey bees. The Greeks, the Egyptians, and the Romans were all partial to domesticated honey. By the Middle Ages, beekeepers were using skep hives. They're the classic woven beehives that look like a tapering stack of straw tires. The trouble with skep hives is that if you want to get the honey, you need to get rid of the bees, and beekeepers would generally poison them, and worry about getting another bee colony in due course. People started to worry about this waste and disdain for a creature that not only gives us honey, but pollinates our plants. It was in everyone's interests, especially that of the bees, to build a better beehive. And in 1852, the US Patent Office awarded patent number 9300A to an American clergyman named Lorenzo L. Langstroth for a moveable frame beehive, often known today simply as the Langstroth Hive. The Langstroth Hive is a wooden box with an opening at the top and frames that hang down, carefully separated from each other by the magic gap of 5 sixteenths of an inch, or 8 millimetres. Any smaller or larger, and the bees start adding their own inconvenient structures. The honeycombs are easily pulled out and harvested by a spinning centrifuge that flings out, filters and collects the honey. The Langstroth Hive, a marvel of design and efficiency, allowed the industrialisation of the bee. It's this industrialisation that James Meade hadn't quite grasped. The honeybee is a thoroughly domesticated animal. With Langstroth Hives, bees are portable. Nothing stops farmers coming to some financial arrangement with beekeepers to locate hives amid their crops. A couple of decades after James Meade's famous example, another economist, Stephen Chung, became curious about it and he did something we economists perhaps don't do often enough. He called up some real people and asked them what actually happens. It turned out that apple farmers pay beekeepers for the service of pollinating their crops. For some other crops, the beekeepers indeed pay farmers for the right to harvest their nectar. The market, Meade said, should exist, but couldn't. So apples and bees aren't a good example of a positive externality because the interaction does take place in a marketplace, and that marketplace is huge. These days, its centre of gravity is the California almond industry. Almonds need honeybees, five colonies per hectare, rented for around $185 a colony. Langstroth Hives are duly strapped together, loaded onto the back of articulated lorries, 400 hives per truck, and driven to the Californian almond groves each spring, travelling by night while the bees are asleep. The numbers are astonishing. 85% of the 2 million commercial hives in the US are moved, containing tens of billions of bees. The big beekeepers manage 10,000 hives each, and from California they may travel up to Washington State's cherry orchards, then east to the sunflowers of North and South Dakota, and then on to the pumpkin fields of Pennsylvania or the blueberries of Maine. Meade was quite wrong to imagine beekeeping as some kind of rural idyll. Bees have been almost fully industrialised, and pollination thoroughly commercialised. And that presents a conundrum. Ecologists are worried about wild bee populations, which are in sharp decline in many parts of the world. Domesticated bees face the same pressures, so you might expect to see some simple economics at work, a reduction in the supply of bees increasing the price of pollination services. But that's not what economists see at all. Farmers are paying much the same for pollination. The price of new queens, which are bred specially, has hardly budged. It appears that industrial beekeepers have managed to develop strategies for maintaining the populations on which they rely, breeding and trading queens, splitting colonies and buying booster packs of bees. That's why there's no shortage of honey. Or almonds. Or apples. Or blueberries. Not yet, anyway. Should we celebrate economic incentives for preserving at least some populations of bees? Well, maybe. Another perspective is that it's precisely the modern economy's long-standing drive to control and monetise the natural world that caused the problem in the first place. Before monocrop agriculture changed ecosystems, there was no need to lug Langstroth hives around the countryside to pollinate crops. Local populations of wild insects did the job free of charge. So if we want an example of a positive externality, something the free market won't provide as much of as society would like, perhaps we should look to land uses that help wild bees and other insects. Wildflower meadows, perhaps. And some governments are indeed subsidising them, just as James Mead would have advised.
SPEAKER_01: The long history of the relationship between humans and bees is well told in B. Wilson's The Hive, the story of the honeybee and us. For a full list of our sources, please see bbcworldservice.com slash 50things.
SPEAKER_00: One more thing. Have you ever looked at a train and thought how much it looks like a bird? Or been in a building and wished it was more like a termite mound? Or thought about how a mosquito might actually help reduce pain? Well, neither have I, but those are the sorts of thoughts that some amazingly talented engineers, scientists and innovators have had. And they're being explored in a brand new podcast from the BBC World Service, 30 Animals That Made Us Smarter. As you've probably noticed, we're giving you some bonus episodes to enjoy and to find and download the podcast every week. Search for 30 animals wherever you found this podcast.
