(CNN) -- Riots from Haiti to Bangladesh to Egypt over the soaring costs of basic foods have brought the issue to a boiling point and catapulted it to the forefront of the world's attention, the head of an agency focused on global development said Monday.
"This is the world's big story," said Jeffrey Sachs, director of Columbia University's Earth Institute.
"The finance ministers were in shock, almost in panic this weekend," he said on CNN's "American Morning," in a reference to top economic officials who gathered in Washington. "There are riots all over the world in the poor countries ... and, of course, our own poor are feeling it in the United States."
World Bank President Robert Zoellick has said the surging costs could mean "seven lost years" in the fight against worldwide poverty.
"While many are worrying about filling their gas tanks, many others around the world are struggling to fill their stomachs, and it is getting more and more difficult every day," Zoellick said late last week in a speech opening meetings with finance ministers…
"In just two months," Zoellick said in his speech, "rice prices have skyrocketed to near historical levels, rising by around 75 percent globally and more in some markets, with more likely to come. In Bangladesh, a 2-kilogram bag of rice ... now consumes about half of the daily income of a poor family."
The price of wheat has jumped 120 percent in the past year, he said -- meaning that the price of a loaf of bread has more than doubled in places where the poor spend as much as 75 percent of their income on food.
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We really must pay attention, and learn, and repent and turn around.
That, or continue down the road we’re on and eventually, get where we might not want to be.
I was not aware that your call to change the entire structure of modern living came with the promise of lower food prices for literally billions of people. I wonder how that will work, how moving away from petroleum and other inexpensive energy sources will keep food prices low for the entire world's population.
ReplyDeleteOr is it that, while higher food prices is a sign that we need to change our ways, your prescription doesn't actually address this particular symptom of our malady?
We have a problem in that we have created an economy based on credit and cheap oil. It was not sustainable and had to lead to these sorts of problems.
ReplyDeleteI am calling for us to live more responsibly and within our means. I am suggesting that it is wrong for 10% of the world to consume 90% of its resources. When that happens, there will be less availability of basic resources, as we see here.
We can continue down the road we're going, asserting our "right" to overconsume and pretending that if third world nations just mimic our hyperconsumption, then somehow things will be all right - that against the laws of physics and logic, more will be created out of less. We can continue down that road and it will lead to unrest, starvation, rioting, death.
Or we can change directions and begin to try to live responsibly and within our means. Having set up a unworkable system, there is no magic bullet to make things automatically right and easily and magically food will appear for everyone at prices they can afford.
But continuing down the road that has led us to this disaster is clearly not an answer.
This is what I'm saying.
I'm not asking whether moving to a system in which we will live "more responsibly" (as you define it) will automatically and easily and magically make food prices at least as low as they are now, for a population our size.
ReplyDeleteThe question is, will it eventually do so? Will it ever do so?
Can your call to live more responsibly lead to a system in which 6.6 billion people have access to affordable food?
If it can't -- and I doubt it can; there's a reason there were less than a billion of us around in 1800 -- then your call for reform because of food prices is at least somewhat dishonest, because the reform you propose will do nothing about this particular symptom of societal collapse.
One problem is that we have been able to sustain 6+ billion of us because we had access to cheap oil and petrol. It was uncertain at the time of the "green revolution" whether the earth could sustain 5 billion of us. We did have struggles, but managed to feed most of our 6 billion because of cheap oil.
ReplyDeleteThat is increasingly not a reality. And, as a result, food prices are going up. But a collapse is likely regardless of whether we change our ways or not. I'm suggesting the sooner we change our ways to something more sustainable, the less damage there will be.
Dan, the way I see it is that if we don't change our ways, the earth itself will change them for us. We might as well get ready for change, because change is coming one way or another.
ReplyDeleteDr Mike! Hey, long time no "see," how's it going? I agree with you wholeheartedly, we can begin to change ourselves with some measure of control or have it forced on us, but either way, change is acoming.
ReplyDeleteSuppose you doomsayers are wrong, and that modern life will continue because the free market will have encouraged precisely the technological innovations that allow us to transition to alternative sources of energy without having to sacrifice our quality of life.
ReplyDeleteThe death by starvation of literally a billion people or more will have been averted, and I can't help to suspect that, like the Malthusians of the past, some people will be disappointed, not only because their prediction will have proven wrong, but because the society of their dreams will not have been ushered in by that convenient catastrophe.
This may not be true for you personally, but I'm not naive enough to think there aren't people who salivate over the thought of disasters because of the political revolution they hope will follow in its wake. "The worse, the better."
You are correct in thinking that I do not wish for anyone's untimely death. It is, of course, why I'm advocating changing our ways based on the tide of events.
ReplyDeleteLikewise, I'm sure you wouldn't continue to insist that we "stay the course," no matter how much people suffer; that you wouldn't let your political/religous views outweigh any obvious realities of human suffering.
Having said that, at what point would you begin questioning a belief that "technology will ultimately find a way!" or that peak oil MIGHT be a reality that we have to deal with, or that having built an economy so thoroughly dependent on cheap oil was not a good idea?
ReplyDeleteDan:
ReplyDeleteHaving said that, at what point would you begin questioning a belief that "technology will ultimately find a way!" or that peak oil MIGHT be a reality that we have to deal with, or that having built an economy so thoroughly dependent on cheap oil was not a good idea?
There's a weird top-down approach to that last phrase, as if our economy is the result of central planning based on ideas that are good, bad, or somewhere in-between. They're not.
But, that phrasing aside, your question is largely academic, since -- even if I thought our current economy was a "bad idea" and even if I thought calamity is unavoidable -- I STILL believe the free market is the best, most robust system for dealing with change.
Do you?
Hell, no. At least not an unfettered free market economy.
ReplyDeleteI think an intelligently regulated capitalism is probably the best we can do this side of glory.
Thank you for your honesty.
ReplyDelete"Hell, no. At least not an unfettered free market economy."
ReplyDeleteI'm not sure what bubba's point is. We dont have anything that resembles unfettered. In fact, nobody wants this. Really.. Not even bubba.
The question is, what sort of fetters? I believe that the rule of law is essential to a free market: fraud, theft, and coercion must be criminalized and that criminalization must be effectively enforced.
ReplyDeleteI also believe that an approximately moral culture is also necessary for a free market to run efficiently. Fraud must not only be illegal in the courts of law, it must be stigmatized in the court of public opinion so that such unethical behavior is rare.
I have a feeling that tighter bonds are what are being contemplated here -- price controls and so forth, perhaps letting individuals own the means of production while the state dictates how those means are being used. This has been tried before, and these fetters I reject as both immoral and ineffective.
I think an intelligently regulated capitalism is probably the best we can do this side of glory.
I'm reminded of a few things Thomas Sowell wrote in Vision of the Annointed, about those who believe that the decisions of the masses need to be regulated.
"They seem to assume (1) that they have more knowledge than the average member of the benighted and (2) that this is the relevant comparison. The real comparison, however, is not between the knowledge possessed by the average member of the educated elite versus the average member of the general public, but rather the total direct knowledge brought to bear though social processes (the competition of the marketplace, social sorting, etc.), involving millions of people, versus the secondhand knowledge of generalities possessed by a smaller elite group."
"The presumed irrationality of the public is a pattern running through many, if not most or all, of the great crusades of the anointed in the twentieth century--regardless of the subject matter of the crusade or the field in which it arises. Whether the issue has been 'overpopulation,' Keynesian economics, criminal justice, or natural resource exhaustion, a key assumption has been that the public is so irrational that the superior wisdom of the anointed must be imposed, in order to avert disaster. The anointed do not simply happen to have a disdain for the public. Such disdain is an integral part of their vision, for the central feature of that vision is preemption of the decisions of others."
The fact of the matter is, no group of central planners can possibly acquire all the information that is automatically reflected in the price system of the free market.
An "intelligently regulated capitalism" is a pipe dream, because no group can regulate the market as effectively as the market can regulate itself. Dan has earlier expressed some skepticism that human ingenuity can find a technological solution to an impending energy crisis, but then he turns around and suggests that an "intelligently regulated" market is even remotely possible.
It's not.
Now, I well understand that what we have now is hardly a truly free market. That's not an argument for further regulation; instead, it begs the question, have all our previous efforts to regulate the economy accomplished even a fraction of what the central planners promised? If they haven't maybe we should start cutting the fetters we have rather than bind ourselves even further.
Market economics ain't rocket science, and the failures of socialism and all its halfbreed variants are there -- in the economic theory and in the annals of history -- for all to see.
It might be a happy notion for some, to remove all the "fetters" (ie. gov't interference) on our economy, but it will never ever happen. Nor do those who propose it actually want it to happen, I'll bet.
ReplyDeleteCan you imagine for a moment that people would give up the tax credits they receive for having kids? For owning a home? For college tuition? (I'm not giving that one up, that's for sure.) etc., etc., etc. No way it'll ever happen.
Can you imagine for a moment that industrial and agricultural interests would give up their government subsidies anytime soon? Give up the tariffs that protect their products and produce?
It also seems unlikely that non-profit groups are going to give up their tax-exempt status any time soon.
All of these are just a tiny sample of the ways in which the government controls our economy through tax policy, tariffs, subsidies, etc.
The "unfettered" market economy is about as real as unicorns.
An "intelligently regulated capitalism" is a pipe dream, because no group can regulate the market as effectively as the market can regulate itself. Dan has earlier expressed some skepticism that human ingenuity can find a technological solution to an impending energy crisis, but then he turns around and suggests that an "intelligently regulated" market is even remotely possible.
ReplyDelete1. I base doubt on finding a magic solution to our cheap oil problems on the reality that there's not an existing source of energy available at last decade's (or even this decade's) prices.
Such a cheap, abundant energy source does not exist out there. We can't create cheap abundant energy out of nothing. Technology has some uses, but it's not a miracle cure.
2. Without a doubt, human planning has its limitations. We can't adequately plan what might happen if we tweak stuff.
The thing is, we are tweaking stuff as it is. Just because gov't can't perfectly tweak rules to maximize economic wisdom, it would also be foolish to assume that a hands off approach (one in which those who stand to benefit by doing things the cheapest way possible) will somehow magically result in good policy and/or economics.
I hold no illusions that gov't is a cure-all. Do you similarly recognize that corporations are not at all a cure-all? That those folk who operate (by law) from a maximize profits and minimize costs model will somehow operate in We, the People's best interests?
As Adam Smith noted: "The interest of the dealers in any particular branch and trade or manufactures, is always in some respects different from and even opposite to, that of the public."
Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.
ReplyDelete~John Maynard Keynes
"Do you want to know the cause of war? It is capitalism, greed, the dirty hunger for dollars. Take away the capitalist and you will sweep war from the earth."
~Henry Ford
"Economists have provided capitalists with a comforting concept called the "free market." It does not describe any part of reality, at any place or time. It's a mantra conveniently invoked when it is proposed that government do something the faithful don't like, and just as conveniently ignored whenever they want government to do something for them."
~Edward Herman
"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country....corporations have been enthroned and an era of corruption in high places will follow, and the money of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war."
~Abraham Lincoln
You forgot one, Dan.
ReplyDelete"From each according to his means, to each according to his needs."
Your contempt for the freedom of other men, combined with an apparent ignorance of basic economics, is dangerous.
The fact is, I understand that people run their businesses to achieve a profit rather than a loss (oh, the horror), and they do so in part by minimizing costs. The latter is admirable insofar as it encourages efficiency -- inefficiency is not responsible living -- and, in the presence of competitive forces, businesses pass along those lower costs by selling their goods and services at lower prices, thereby increasing the quality of life of their customers.
I understand that even a free market isn't a perfect market, but it is far more responsive than any alternative, both to real systemic changes and to the needs and wants of real people.
And I understand that no market is truly, perfectly free, but it is an ideal to which we can strive. Regulations should be a very rare, very unobtrusive exception, not the rule.
It is amazing what sets you off, Dan. I don't know what pisses you off worse, the idea that some people actually think the whole Bible's authoritative, or the idea that people should be free to govern their lives, their property, and their businesses as they see fit.
Dan, I do wonder if you've ever bothered to look up the context of that Adam Smith quote.
ReplyDeleteThis entire thing is worth quoting, but I'll highlight what you quote and the sentences that immediately follow.
"As during their whole lives they are engaged in plans and projects, they have frequently more acuteness of understanding than the greater part of country gentlemen. As their thoughts, however, are commonly exercised rather about the interest of their own particular branch of business, than about that of the society, their judgment, even when given with the greatest candour (which it has not been upon every occasion) is much more to be depended upon with regard to the former of those two objects, than with regard to the latter. Their superiority over the country gentleman is, not so much in their knowledge of the public interest, as in their having a better knowledge of their own interest than he has of his. It is by this superior knowledge of their own interest that they have frequently imposed upon his generosity, and persuaded him to give up both his own interest and that of the public, from a very simple but honest conviction, that their interest, and not his, was the interest of the public. The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."
Again:
"The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention."
Why, look. What were these dealers doing that was contrary to the public interest? Were they acting within the free market?
No, they were not. They were seeking to limit the free market through regulation, through tarriffs and other barriers that would artificially limit competition.
It shouldn't come as a suprise that businesses aren't necessarily supportive of the free market. It's this capacity of betraying the free market by supporting regulation that Mr. Smith was criticizing, not their behavior within the market itself.
You failed to highlight this line:
ReplyDelete...It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."
It is in the corporation's best interest to do what it can to make a profit, and if that is to limit the free market, they will, if that is to deceive, they will, if that is to oppress, they will - or at least that's the tendency.
I have no problem with what Smith says here. I'm just saying it behooves WE, the People, not to hand over too much power to corporations. As I was suggesting with the Lincoln and Ford quotes.
I find it interesting that you associated their quotes with a Marx quote. You suspect Ford and Lincoln were commies?
It is amazing what sets you off, Dan. I don't know what pisses you off worse, the idea that some people actually think the whole Bible's authoritative, or the idea that people should be free to govern their lives...
ReplyDeleteWho says I'm set off? Pissed off? I was quoting a news story and suggesting we would be wise to pay attention to the signs of the time.
I'm not especially pissed off today, but thanks for your concern.
And, of course, the usual disclaimer: You have misrepresented my position once again by making presumptions about what I mean and why I said blah blah blah...
How about this? You go ahead and make whatever nutty statements and accusations you want and we'll all just wink and nod our acknoweldgement that you "know" (wink, wink) what we're thinking better than we do?
Dan, I don't care who said it first: if you're approvingly repeating a quote that war can be swept off the earth if only we could get rid of capitalists, you're going to invite -- and deserve -- allusions to Karl Marx and the conclusion that the thought of individual economic freedom infuriates you.
ReplyDeleteI can't read minds, but I know unhinged criticism of individual freedom when I see it.
To be sure, I agree that too much power in the hands of a few large businesses is a bad thing. The question is, what is the cure? More competition or less competition? More individual freedom or less freedom?
What Smith wrote about the members of one particular economic interest can apply, not only to all economic interests, but also to politicians.
Politicians are also "an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."
Because they have a monopoly on the legal use of violent force to coerce the citizenry, the state is -- by orders of magnitude -- much more dangerous than any business.
It makes no sense to complain that businesses have too much power and then look to an ever expanding state as the solution.
Nod, wink, wink.
ReplyDeleteOkay, I'll bite: why did you quote Ford's line, "Take away the capitalist and you will sweep war from the earth"?
ReplyDeleteDan,
ReplyDeleteI notice that you convieniently left out the effect that growing corn for ethanol is having on the food situation. Of course, it would probably be worth the food shortage/higher prices to save the environment.
Bubba, the quotes were to show that many responsible patriotic Americans have recognized some of the problems inherent in capitalism.
ReplyDeleteCraig, I was just quoting a story, I didn't "conveniently" leave out anything. The Ethanol problem is exactly one of the problems we have created by building an economy dependent on cheap oil.
Dan:
ReplyDeleteBubba, the quotes were to show that many responsible patriotic Americans have recognized some of the problems inherent in capitalism.
Problems such as what? That the free market thrives on the "most wickedest" behavior imaginable? That the free market is the sole cause of war in the world?
These aren't remotely serious criticisms, and they do not highlight any real limitations inherent in the free market.
"Problems such as what? That the free market thrives on the "most wickedest" behavior imaginable? That the free market is the sole cause of war in the world?"
ReplyDeletenod, wink, wink. LOL
Alan, I'm not sure I understand your comment, and I would appreciate an explanation.
ReplyDeleteWould you care for a different perspective on this?
ReplyDeleteLink
Dan,
ReplyDeleteYou like to say that you have faith in the people to do the right thing. The discussion that stands out regarding this had been about my statement that some people should not vote. But where is your faith in the people if you assume wicked behavior by those who run businesses? Where is your faith in the people if you insist on regulation? Is your faith in the people so weak that you assume corruption is inevitable simply by being productive and prosperous?
The interests of the business owner is of course apart from the interests of the public. The owner is only concerned with a portion of the public that has a desire for his product or service. Then, his interests blend with the interests of the consumers for whom he provides the product or service. When the consumer decides the product is too costly or is not of the quality desired, then the interests of the owner shift to accomodate the consumer. The consumers' objections have regulated the business owner. And this is a more efficient regulating procedure than the artificial type imposed by governments and busybodies.
You like to say that you have faith in the people to do the right thing.
ReplyDeleteI should clarify that in general, I have faith in our system to do the best we can. That is not the same as the people always doing the right thing. I just think our system is set up fairly well (not perfectly, of course) to include checks and balances and even when we get bad leaders, there is still some power in the people's hands to correct things and not let things get too awful.
It's not a blind trust in people.
Quite obviously, I think that one thing that Adam Smith got right was that, "It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."
And given that they have their own interests at heart which may not be for the common good, we need checks and balances in place. Just as in our voting system and our political system.
I think we have a pretty good system in the US BUT we must keep the checks and balances in place and to the degree we go wrong/have gone wrong, it is when we've ignored or removed checks and balances.
And there you have it: This leftist commie defending the American Way, how about that?