Agricultural subsidies have long been a bugbear of mine. Why are the governments of advanced economies content to see coal mines or shipbuilders or textile plants wither in the face of foreign competition, while farmers are carefully cossetted? There once was an argument that food security necessitated large domestic production of food, but that’s clearly nonsense given the scale of world trade in agricultural commodities (I recognise the environmental argument in favour of local production, but that’s not the justification made by either the farmers or the policymakers).
What’s criminal about the policy is not that it violates free market principles, although it clearly does that. My principal objection is that it cripples the ability of the world’s poor nations to develop healthy agricultural export industries. Zambia, for example, has tremendous agricultural potential. But the biggest markets in the world the US, Europe and Japan have built high barriers to this production.
Europe has long been the worst culprit. But now, the US looks like it’s challenging for the title. Congress is on the verge of approving massive new agricultural subsidies, just as the administration is pushing for a new global trade agreement that would slash such handouts. And the response of the European officials? “It has certainly taken the heat off us,” is the quote from one in the Financial Times.
Whatever the US policy, it certainly hasn’t been working in a healthy way for the vast agricultural expanses of the Great Plains. As The Economist points out, the plains were desert when white settlers arrived, and it may be natural for them to return to that state. The depopulation of rural areas is sad, but agricultural subsidies (at least as they are designed now) seem to be accelerating rather than stemming the trend. And they are certainly doing nothing to encourage the development of economic alternatives in these regions.
Like many others, I read the glowing reviews of Bjorn Lomborg’s The Skeptical Environmentalist when it was published earlier this year. Here was a green-minded scientist debunking most of the accepted wisdom of the environmental movement.
But it seems Lomborg’s science is shaky at best. And the protests of the laudatory book reviewers ring fairly hollow in the face of so much scientific opinion. Needless to say, the criticisms of Lomborg have received a tiny percentage of the coverage of his original claims.
Paul Krugman on Enron and what he calls death by guru: “There is a chicken-or- Enron question: Was Enron so admired because it embodied faddish management ideas so perfectly, or did those ideas become so faddish because of Enron’s apparent success?”