Robert B. Daugherty's Obituary Highlights How Human Capital Substitutes for Natural Capital: The Case of Water in the Plains

Robert B. Daugherty‘s life offers a classic example of an economist’s optimism that ideas can substitute for natural capital.   “The breakthrough for Mr. Daugherty came in 1953, when he bought the rights to manufacture a new irrigation system, the brainchild of a Nebraska farmer, Frank Zybach. The new system came to be called center-pivot irrigation. It involved a long pipe on wheels that rotated around a point at the center of a field, spraying water as it went. “

“Robert B. Daugherty, a Nebraska businessman who helped transform the rural landscape into a patchwork of circular fields by popularizing a means of irrigation that used a pipe on wheels pivoting around a central point, died on Wednesday at his home in Omaha. He was 88.”

“Today, about 42 percent of irrigated farmland in the United States uses center pivot machinery or similar mechanized systems, said Terry J. McClain, chief financial officer of Valmont. In some Great Plains states, the system is used to water three-quarters or more of the farmland that uses irrigation.

Its prevalence can perhaps be best recognized from the air, where travelers on cross-country flights can see the landscape converted into a polka dot pattern of irrigated circles inside square fields.
“On those areas where you need to irrigate to raise crops, it’s just dominant,” said Derrel L. Martin, a professor of irrigation and water resources engineering at the University of Nebraska, Lincoln.
Before the center pivot, farmers would typically irrigate their fields by allowing water to run downhill in furrows.

Dr. Martin said the center-pivot system allowed for a much more efficient use of water. It also requires less labor and can be used on uneven or hilly terrain where traditional methods of irrigation may not be an option. It is now used around the world and is credited with expanding the acreage of irrigated land and increasing farm productivity.”

When I fly across country, I had wondered about all of these circles I see on the ground and now I get it.  I thought it was all about attracting UFOs to land there rather than another spot.

While Mr. Daugherty did not invent the key idea — he did foresee how it could be widely adopted and he must have made money in its adoption.  

Water is a scarce resource and climate change is likely to make it more scarce in certain geographical areas — this case study highlights how innovation and diffusion takes place to help us to make the best of the circumstance we face.  Human capital played a key role here and investment in education and basic R&D will only help us to be ready.  In this sense, capitalism helps us to adapt to climate change because it helps us to have the $ to finance basic research and great centers of research and discovery.  What poor nations have great universities?

Read more at Environmental and Urban Economics