*3.2. A View from Economics*

Economics has been on the agenda as a science since the 18th century, sometimes associated with sociology, and sometimes dissociated from it. Initially, classical economics was treated as a pure and liberal science by figures such as Adam Smith [65]. Later, it was treated differently, via more critical views on its function by Marx [66] and Keynes [67], which brought new thoughts on employment matters in macroeconomics.

Stein [68] and Allaire [5] argue that the tools provided by mainstream economics are limited, and cannot provide sufficient elements to support development. Despite the charge of these elements being more related to institutions and structures of concepts, it brings an essential element of reflection on the role and consistency in using these tools.

Since Adam Smith's *The Wealth of Nations*, in 1776 [65], economics has been considered an independent subject. The aforementioned book is a landmark text on economics, and by discussing the issues of the division of labor, productivity, and free markets, is still vital reading on the subject. Moreover, the book was written during the Scottish agricultural revolution (therefore embedded in this context), seeking to form an economic theory opposing the theories of mercantilist foundations that could no longer respond to problems arising from new realities, such as protectionist tariffs on precious metal reserves.

As approached by Say [69], Ricardo [70], and Mill [71,72], classical economics is based on liberal perspectives of the market. Significant matters that ground such thoughts rely on self-regulating systems, in which external and state interference is not only unnecessary, but unwanted. Classical economists comprehend that such entities and measures limit and disrupt the market's perfect function, and that the market is governed by its own independent production laws and trade, needing no other external factors, and reaching its natural optimum by itself. Such understanding is best summarized by Smith's most famous analogy developing the invisible hand concept, central to the *laissez-fare* philosophy—the premise of neoclassical economics.

**Figure 1.** Opposing chains of agri-food market construction.

Regarding agrarian issues, Smith [65] understands that this activity is less prone to a division of labor than manufacturing, concluding that it does not result in significant differences in development between countries. However, he understands that such activity is more desirable than industrial work in the context of North America, due to land availability and owner control over the process.

Smith's view reveals a singular comprehension of the agrarian system, despite giving due importance to agriculture. He understood this system as complete land control and ownership along with total separation of labor between the urban and rural environments. This view shares the worldview that characterized the time; it endorses a utilitarian conceptualization of land use maximization. Moreover, by pointing to complete control as a positive asset, along with the large availability of land, it converges with the capitalistbased global system in formation at that time, based on profit maximization. As such, Smith understands that subsistence is of primary importance to long-term industrial-based economic growth; however, he also understands that a utilitarian view of the land function manifests that land should be comprehended as an asset for profitable use only by owners discharged from food sovereignty. Furthermore, by endorsing the use of large portions of land towards maximization, the author expresses the thought of land owners and elites of the time.

On the other hand, neoclassical economics was first quoted by Veblen [61] to set new perspectives based on new ideas of granting value based on the relationship between the material desire to acquire a specific good and the costs of production. These new ideas were based on the thought of maximization of utility and profit, based on rational choice theory, best defined by Arnsperger and Varoufakis [73] under three axioms (despite their observations on the development of this school of economic thought): methodological individualism, methodological instrumentalism, and methodological equilibration. In sum, based on the lack of pluralism, neoclassical economics reduces the analysis of reality into previously squared theory, and does not fully consider the concreteness of all social facts. However, it prevails both in academia and in public and private institutions.

The liberal view proposed by classical and neoclassical economics supposes that the market works more adequately when there is no or minimal regulation, since it develops naturally towards an optimal equilibrium, provided by the free competition of economic agents. Therefore, it is centered on a utilitarian view towards maximizing gains and specialization of functions through division of labor. The premise of self-determination of individuals towards their own gains, although legitimate, does not aim at social or collective gains as primary intentions.

Much of economics stems from Marshall's "perfect markets" model [74]. Based on the ideas of classical economics, Marshall believed that with an abundance of buyers and sellers, the market tends towards equilibrium. Despite providing good didactic models, such as the formulation of the model created by Pareto [75], and facilitating the understanding of economic concepts, their ideas were criticized both by Hayek [76], who understood competition as a process in constant change, and Granovetter [31], who understood that markets are determined by multiple factors, making such perfection impossible. From both sides, one can conclude that markets are not perfect, and that models can illustrate ideal but unrealistic situations. However, this model advanced a positivist, economic liberal ideal that less regulated markets tend to function better. In practice, they are determined by institutions that aim to maintain the status quo, creating maintenance tools for their holders.

The determining conditions of these perfect markets have been known for a long time. Firstly, that there are many buyers and sellers, so there is no personal influence in the market (atomization). Secondly, that there is a perfect substitute for the good on the producers' side (homogeneity). Thirdly, that there is free movement of goods and productive facilities for any party (mobility). Fourthly, that there is no barrier to entry into the market (permeability). Fifthly, that there is no imposition of any part of price holding, which results from the market itself (free price flow). Sixthly, that no social actor has information different from the others (transparency).

Within agri-food markets, commodities configure the nature of goods that are closest to the ideal model. These goods, as previously stated, considering their intrinsic characteristics, contemplate simplified realities in which ceteris paribus is best applied. These sorts of goods reduce the complexity of food, fitting more adequately with analysis that does not consider elements beyond the surface, and deepens through the causes, reasons, and hidden elements of the social factors. However, commodity production systems are designed only to maintain the hegemony of agrarian elites, in detriment to the production of food imbued with culture and destined for food sovereignty.

Since the first appearance of the term "political economy" in Montchrétien's work [77], the embeddedness of the state, economy, and society have become clearer, as noted by Mayntz [78] (p. 5). The Weberian concept of the term is rooted in government participation and intervention in employment and growth. Balaam and Veseth [79], for example, argue that the conceptual difference between political economy and economics lies in international trade. However, rooted along with economics, the political economy also centers the causes of social actions on self-maximization of benefits, rooted in utilitarianism, limiting its explanatory capacity.

Nevertheless, in the 18th century, François Quesnay—one of the pioneers in the field reflected on the importance of agricultural production. He attributed value to it due to the multiplication of the farmer's effort and resources, while manufacturing, services, commerce, and trade would be "sterile" [80]. Years later, Theodore Schultz, upon receiving the Nobel Prize in economics in 1979, recognized the relevance of agriculture, placing it at the center of world economic development [81].

The relevance of agri-food matters to the field results from globalization. It is not by chance that it coincides with a new perspective on the state's role in the economy. In the agricultural sector, globalization resulted in the acceleration of the rationalization and mass production of goods, later adapted and optimized through Fordism. This process resulted in the massification and standardization of consumer goods. Gramsci [47] argues that the stability and maintenance of such a production system are integral to the performance and influence of the state.

Thus, under this interpretation of the system, the state acts towards the standardization and homogenization of agri-food products, while maintaining elites' status. Therefore, the globalization processes of massification, standardization, and transformation of the food sector sustain this logic of food and fiber for the industry. Thus, there is an evident loss of authenticity and diversification, consequently reducing the complexity of the agrarian system. This results in loss to the consumers, and simplifies the offer of agri-food products and political economy to answer the state's political and economic influence in the relations of production and consumption. As such, Benjamin [82] points to authenticity (uniqueness) and locale (physical and cultural) as attributes that embed an irreproducible character in goods and objects. Such a concept can be easily attributable to GI agri-food in order to sum value and work as a counter-movement to a mass-culture society.

In short, industrialization also plays a role in the construction of rural development that is, not only in agro-industries, but also in the construction of combat spaces aimed at the greater potential for maximizing profits. In industrialized societies, these appear as the main battleground. However, in nation states where agrarian elites prevail, industrialization does not develop. Thus, extensive rural estates become the most significant source of power, and their owners constitute institutions, structuring the domination of these agrarian elites and strengthening their hegemony. In this way, the production of commodities in monoculture systems tends to suppress industrial development and stifle the growth of other agricultural systems.
