The Royal Economic Society’s logo is a honeybee. The Fable Of The Bees, published in 1732, uses honeybees as a metaphor for the economy – and anticipates modern economic concepts such as the division of labour and the “invisible hand” that means “greed is good”.
And when a future winner of the Nobel Prize in economics, James Meade, was looking for an example of a tricky idea in economic theory, he turned to the honeybee for inspiration.
The tricky idea was what economists call a “positive externality” – 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 apples and bees.
Imagine, wrote Meade in 1952, a region containing some orchards and some bee-keeping. If the apple farmers planted more apple trees, the bee-keepers 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 bee-keeper for the bees’ food”.
But there’s a problem with his thesis. Apple blossom produces almost no honey. And that’s only the first thing James Meade didn’t know about bees.
It appears that industrial bee-keepers 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 is why there is 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 longstanding 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 these, just as James Meade would have advised.