Secular Right | Reality & Reason

Dec/14

11

Feeding the Seven Billion

collectivizationLate last month there was a conference in Rome organized by the UN food agency (FAO) and World Health Organization (WHO).

One of the attendees was the pope.
The Daily Mail reports:

The 77-year old said the world had ‘paid too little heed to those who are hungry.’
While the number of undernourished people dropped by over half in the past two decades, 805 million people were still affected in 2014.

‘It is also painful to see the struggle against hunger and malnutrition hindered by ‘market priorities’, the ‘primacy of profit’, which reduce foodstuffs to a commodity like any other, subject to speculation and financial speculation in particular,’ Francis said.

Writing for Forbes, Tim Worstall explains (again):

[J]just to lay it out in very simple terms in one place. Regarding that first point, about profit. Profit is the incentive for people to do things. If people don’t profit from their actions then they won’t do them. Of course, we can take a wide view of what “profit” is: we could, for example, say that the warm feeling a farmer gets from watching a starving child eating the food he has grown is a profit. And it would be as well. But as we’ve found out over the past century or so (looking at those various attempts at the collectivisation of agriculture is really most instructive) that that good feeling of having produced what others need is not actually enough. Any and every society that has relied upon such public feelings has had extensive malnutrition if not out and out famine.

So, we want the producers of food to profit from their having produced it. Otherwise we just don’t get enough food.

Then on to speculation and financial speculation. These move the prices of things through time. This is also highly desirable (as Adam Smith pointed out 238 years ago) as by moving prices through time we also move supplies of food through time (see the linked pieces for this in more detail). We move food from, as Smith said, a time of plenty to a time of dearth: thus reducing malnutrition and starvation. And yes, again, the incentive for people to do this highly desirable thing is to make a profit.

So we actually want both profit and speculation in food. For the end results are desirable. We get both the production of food in the first place and the movement of it, in both geographic and temporal, terms, to where it is needed….

That’s not (of course) to deny that there are people who are malnourished, but, as Worstall explains:

[E]conomist, Amartya Sen… has pointed out that, for the past century at least, starvation and famine have not been caused by an absence of food. They’re no longer supply side phenomena and they’ll not be solved by looking at that supply side.

No, instead, famine now is an absence of purchasing power among those who simply cannot buy the food that is available. This is such a well-known matter that even George Bush, when President, tried to get the rules about US famine relief changed (Obama is trying again now, too, according to reports). Instead of shipping US grain to starving people ship US money to starving people so they can buy the food that is already there. Or if not exactly there, then nearby. And we can rely upon the existence of that effective demand to incentivise people through that profit motive, through speculation, to ship the food from where it is to where the hungry people are.

That is, modern hunger is a demand side phenomenon and will be solved by demand side measures. Like, as above, giving poor people money to buy food with.

This is what actually works, this is how most NGOs now see hunger, many governments too. The problem is not that there’s no food for the poor to buy. It’s that the poor have no money to buy food. The answer is thus not to fiddle around with the supply side, that’s working just fine. For there are supplies of food available. What’s going wrong is the demand side so that’s where the solution must lie. We must turn actual demand (empty bellies) into effective demand (people with empty bellies with money to buy the food that exists)…

What the pope is suggesting is (essentially) to mess with the supply side, something that could very easily make matters worse.

And yet that’s what he suggests.

And he still seems unwilling to acknowledge the remarkable contribution that the free market has made to reducing malnourishment on a planet where the population has now swollen to seven billion.

It’s almost as if the pope is putting ideology (in this case his distaste for the free market) before the facts, facts he must know. It’s almost as if his ideology matters more to him than truly helping the hungry.

Those would, shall we say, be very revealing priorities.

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