Re: Economics


Don Geddis wrote:
"Duncan Rose" <duncan.rose@xxxxxxxxxxxxxxxx> wrote on 27 Jul 2006 11:1:
In the EU, we have these things called food mountains (or wine lakes); this
is where producers of these goods have been paid to produce, but have
overproduced so the surplus is stored in warehouses. Very large warehouses.
The citizenry of the EU pay taxes to fund this production, and pay inflated
prices for food (since there's an overproduction, surely the price should
drop, no?). [...] I think the EU at least is already in a position where
the cost (to the consumer) of food could be reduced. [...] Strange it is,
then, that the costs to the consumer are NOT falling.

Government interference like this in free capitalist markets, while often
well-intentioned, almost always results in a worse long-term outcome for
the society.


I can happily agree with this. There are historical reasons for the EU
policies here, but it seemed an apt example for discussion (a cynic
might say "government interference like this in free capitalist
markets, whilst often disguised as well-intentioned almost always
results in high short-term returns for companies associated with
members of the government." Of course, I would never dream of being so
cynical ;-)

Another way to look at it: EU consumers are paying a huge amount (in taxes,
and in higher food prices) in order to support a small number of small
farmers and winemakers, to allow that tiny group to continue to live in the
manner they have historically.


<cheeky pendant>
What, you mean so they can live an impoverished life, and die young?
That is, I think, how we established earlier that everybody lived
'historically' ;-)
</cheeky pendant>

Seriously though, I'm not utterly convinced that the alternative is any
better; I think perhaps many small producers is a better situation to
be in than few (or in the worst case, a single) large producers. It's
not clear to me whether if left alone the market would tend towards the
latter or not.

Japan also does this kind of thing with their rice farmers. (You have to
prohibit imports of the goods as well.) Rice farming is culturally important
to the Japanese, and wine making to the EU. But the consumers are paying a
whole lot extra to maintain that outdated system.


I think all governments do this to a greater or lesser extent. I don't
know whether this is a good thing or a bad thing (on the one hand I
seem to be in favour of intervention by some 'higher order' body; on
the other, I'm not convinced that any such bodies that currently
influence these things have anything more than passing interest in
engineering things for maximal benefit. Perhaps their definition of
what's a benefit is different to mine though...)

I put it to you that many of the 'scarce resources' we find in our
societies are 'artificially scarce'

This is by far the exception, not the rule.

Almost any valuable good you can imagine, there is more human desire for it
(if it were free) than can be provided. Scarcity is a fact of nature, not an
artificial problem invented by the corrupt rich.


Scarcity is a measure of (/ availability-of-thing size-of-population)
which is why I'm in favour of seeing smaller populations. I also think
that many things that are scarce currently are things we either think
we need or want, such as diamonds (perhaps artifically scarce) or gold
(actually scarce)) rather than things we actually need (food and
shelter (I see no natural reason for these to be scarce, except
possibly due to overpopulation)). Oil might be an interesting resource
to think about, but I'm pretty sure there are very very few uses of oil
that could not be served by synthetic alternatives (preferably
synthesised from renewables) equally well. The only resources I can
think of that might be both necessary and scarce are minerals and ores;
I think both of these are quite recyclable though which will help a
little (if we could be bothered to recycle).

I wonder why it is we seem to be depleting our oil reserves as quickly
as possible? I'm pretty sure there is a conspiracy there somewhere ;-)

Generally though, point accepted (hopefully we'll be mining asteroids
soon so that minerals and ore might become less scarce; well, we'll
see).

-Duncan

-- Don
_______________________________________________________________________________
Don Geddis http://don.geddis.org/ don@xxxxxxxxxx
Love can sweep you off your feet and carry you along in a way you've never
known before. But the ride always ends, and you end up feeling lonely and
bitter. Wait. It's not love I'm describing. I'm thinking of a monorail.
-- Deep Thoughts by Jack Handey [SNL]

.

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