Wednesday, June 4, 2008

Food Prices Driven Up By Myopic Hysteria

The article of debate today is the one above. Food prices are rising. World leaders are panicking. People are scared. So what do we do? Do we take a sincere look at what is actually the problem? No, of course not. We're much too committed to our Christian/Jewish/Islamic/Buddhist ethic of give to the needy. Has it actually occurred to anyone out there that we have been giving billions, yes billions , of dollars to the world's desperate nations for decades now. Has it struck anyone as even slightly odd that those countries are, if anything, more deranged, pestilential, and afflicted than ever? Who exactly is to blame for the world's poverty in a time of supposedly intellectual wealth?

Well, I would like to offer a possible explanation.

Government intervention in the business of food kills. And if that's too complicated.... governments kill.


How can I say that? Easy.

Government subsidies to farmers artificially skew the market so that they grow what the government wants them to grow. Or in the case of the US, it pays them NOT to grow certain things, so they effectively get government money for NOT doing something. And it's not just America. Japan has a host of weird rules concerning the production of rice. A lot of it has to do with post-war paranoia about being self-sufficient. Of course, many countries just abscond with the goods and they don't ever get to their starving masses, because frankly the reason their masses are starving in the first place is the governments which are begging for help are really begging for their figurehead dictator's new Porsche but don't give a damn about the people starving to support their collectivist ideal. Hell, most of those countries don't even have an ideal, they've just got a dictator and a big gang of gun-toting fanatics to keep them in power. At least until the next big gang with guns comes along to "reform" the country.

The truth is that the rapidly shifting needs of world consumers depends on the ability of business to meet their needs. Normally, we would think that where there is a massive demand, business would rush to meet that need out of the basic necessity of meeting their demand and thus maximizing profits. Unfortunately, government subsidies in countries around the world, foreign trade embargoes, and various forms of legislation relating to agricultural lobbies skew the market in favor of predetermined variables. The unfortunate part is that those variables are all set by governments too far removed from the processes of supply and demand and they absolutely cannot respond fast enough to the shifting demands of the real world. Business can, does and must do so just to survive. But, government constrains business so that it can only limp after the lead of nationalist masters.

After decades of shelling out support to "needy" countries and scrambling after socialist ideal after socialist ideal, isn't it time we learned our lesson? The USSR collapsed out of the economic impossibility of its proclaimed goals. They were INCOMPATIBLE with survival. So what do we do when we follow those ideals and things continue to get worse and worse? Do we stop and rethink our position? Do we strive to find alternatives? No. What we do is try to keep doing more of what we've been doing all along, just on a bigger and more self-destructive scale.

When will we wake up? When will we realize that we've all been playing the fool? When will we realize that playing the fool is as good as asking for our own death? Were Rosencrantz and Guilderstern any the nobler for being unaware of their fate?

No comments: