All the ire at banks and multinational companies by dangerous communists and anti-globalisation hippies is misdirected. They should reserve their venom for the rustic rich-world farmer living the life of Henry David Thoreau. They are the new robber barons.
If you really care about global warming, there are a whole bunch of things you probably think you shouldn’t be doing that you should, and vice versa. The environmental religion of the modern age, in which an angry Gaia will punish us for our sinful ways, but we can redeem ourselves by sacrifice and self-denial, has spawned a mythology of classical proportions. The problem is that many of those myths, spouted as accepted wisdom by an uncritical media and special-interest activists, appear to be just plain wrong.
Wired magazine goes to the actual science — remember science? — and makes some proposals for those who really care about climate change, and think not only that reducing carbon emissions will actually help, but delude themselves that it is possible to reduce them enough to make even a little dent in anticipated warming.
Here is its list, each of which is explored further in a separate article:
It doesn’t say all of these are good ideas, of course. There are excellent reasons to slash-and-burn overgrown, bug-infested jungles, to plant more productive crops, sure. But there are also plenty excellent reasons not to cut down old-growth forests. However, if your policy goal is to reduce carbon emissions, which seems to be the sole fetish of environmentalists and policy makers, then all of these points, including razing the rainforests, are valid.
Meanwhile, the US Congress is about to debate a cap-and-trade scheme that will vastly expand government powers and revenue, cost consumers trillions in bureaucratic red tape, tax and lost economic growth, and achieve very little indeed. In welcoming an open floor debate on these mushy measures, the Wall Street Journal writes:
The vehicle is a bill that principal sponsors Joe Lieberman and John Warner are calling “landmark legislation.” They’re too modest. Warner-Lieberman would impose the most extensive government reorganization of the American economy since the 1930s.
Ouch. Nothing like a fat bureaucracy to infringe on the liberty and prosperity of the people. Nothing like a first-country moral crusade to give developing-country leaders ideas to foist upon their long-suffering people. Nothing like an overbearing state to hold down the development of the poor.
As if $130 oil isn’t reason enough to consider more fuel-efficient cars, reduce energy usage in industry and invest in alternative energy sources.
While we wait for this legislative disaster, however, would the disciples of St Al please report to the consistory, so they can get cracking on Wired’s measures?
(Hat tip: Climate Skeptic.)
The current rise in food prices is very, very dangerous. Not because food will be more expensive, but because chances are the government will intervene to prevent this.
The unions in South Africa have already called for a food price freeze. This merely serves to show that they didn’t bother paying attention in Economics 101. Nor bothered to witness the results of price controls in our neighbouring no-crisis zone, Zimbabwe. If you cap prices, you cause shortages. Simple. Fact. Nothing can change that except complete nationalisation of the entire supply chain, and even then, the difference will be made up from tax, so lower real incomes will keep the real price of food the same.
The danger is that there are enough communists, socialists, interventionists and developmental-statists in government that they might just listen to the unions. If only to pander to the population and avoid the counter-productive impact of strikes and riots.
A recent commentary by the grandiloquently named Swaminathan S. Anklesaria Aiyar, picked up by the Wall Street Journal Asia, makes a good example of India. His conclusion is similar to mine, posted a few weeks ago:
India’s current food price problem isn’t a market failure. Rather, it’s a government failure to allow markets to work. The only sustainable solution is to pull back the subsidies and protections. But sustainability is the last thing on the minds of politicians competing to win the next election with ever-higher subsidies.
It’s a simple truism that in a free market, the solution to high prices is high prices. High prices drive prices down by stimulating production and discouraging unnecessary consumption. It is also true, however, that artificial costs and inefficiencies introduced into the supply chain by government intervention merely serve to perpetuate the supply-demand imbalance.
Our government should indeed take drastic action, by removing any and all regulations, subsidies, tariffs and other red tape from the agricultural sector. It should take drastic action to ensure that any pending land transfers are expedited (or cancelled) as quickly as possible, to prevent otherwise productive commercial farm land lying fallow. It should take drastic action to guarantee farmers — including new farmers on restitution or redistribution lands — gain full title to their property, so they can raise working capital by using their land and equipment as collateral. It should take drastic action to complete its long-overdue audit of state-owned land, and make suitable land available to emerging farmers and communities. And it would do well to take to heart the lessons Aiyar cites from India’s agricultural policy and its history of government intervention.
Everyone asks what government can do. Instead of acting innocent and blaming corporate collusion, this is what the government can do. This is positive action. This is taking the moral high ground. And it had better do these things quickly, or people might start thinking the unions actually have the right idea. I can think of no more dangerous result of food price inflation than that.
There’s a ton of hype over the crisis in food prices. Apparently, food is too expensive. One would think this constitutes a “price signal”, but no, whenever something is too expensive or too cheap, NGO activists, special-interest lobbyists and populist media argue that “government must do something”. This is untrue as often as it is true that “government must stop doing something”.
In this case, it could probably stop slashing and burning our food.
I argued some of the reasons for food inflation in a previous post, and noted in particular that biofuel subsidies are perverse incentives, and eliminating them is the first answer to the misguided, knee-jerk question about what government can do. (The second is to drop all other tariffs, levies and subsidies, first on agriculture, and then on fuel, which constitutes a major input cost for producers.)
South Africa has a national biofuels strategy that is barely out of its diapers, complete with taxpayer-funded subsidies, imminent fuel-composition mandates and government-owned shares in private companies. (The company I have in mind, in which the government took a 25% stake in 2005, has been too busy spending taxpayer money to bother constructing a website.) So that first answer will probably be the last to be considered by the motley crew of interventionists, statists, socialists and marxists that populate our government. Reflection, review and self-criticism aren’t among their strong points.
Let’s see how the rich US is faring with biofuel. Two Washington Post writers today write of what they call ethanol’s failed promise (via Blue Crab Boulevard, which also has news of, wait for it, food shortages and panic hoarding, right there in the rich ol’ US of A). Neither of the writers lack in green credentials, and in fact, they cite environmental concerns and energy use before noting the impact on food supply:
These “food-to-fuel” mandates [i.e. ethanol subsidies and fuel composition laws] were meant to move America toward energy independence and mitigate global climate change. But the evidence irrefutably demonstrates that this policy is not delivering on either goal. In fact, it is causing environmental harm and contributing to a growing global food crisis…..
[…] It is now abundantly clear that food-to-fuel mandates are leading to increased environmental damage. First, producing ethanol requires huge amounts of energy — most of which comes from coal. Second, the production process creates a number of hazardous byproducts, and some production facilities are reportedly dumping these in local water sources. Third, food-to-fuel mandates are helping drive up the price of agricultural staples, leading to significant changes in land use with major environmental harm.
If the United States can’t afford ethanol subsidies, why on earth is South Africa hell-bent on burning its food stocks for fuel? When the biofuels strategy was first adopted, maize prices were low, and a surplus was being produced. Biofuel, said the government, would “soak up” that surplus. I’m no expert on the state of our agricultural markets or on prices of specific farm produce, but elementary economics suggests that if a surplus causes low prices, but farmers are not induced by the price mechanism to switch to different, more profitable crops, because they can sell their surplus to the government’s pet biofuels makers instead, this might explain why the supply of food is now under pressure.
Not to mention this business of “requiring huge amounts of energy”. My electricity will probably be cut two hours from now, for four hours. This can happen two or three times a week. What for? To produce ethanol? So we can run our cars on biofuel while the poor go hungry? So we can bash SUV owners for driving environmentally-friendly food-guzzlers?
Meanwhile, the UN too is dithering, waffling about how the Green Revolution that has halved world hunger since the 1960s was actually a failure, and we should all switch to organic farming. Yeah, that’ll help. Let the poor eat boutique honey. Douglas Southgate, of the Free Market Foundation, has a more elaborate take on its latest sustainable agriculture report (the link might only work for a week). And South Africa’s policy makers simply swallow what the green lobby and the UN wonks feed us.
Sometimes, the depth of insanity among government bureaucrats, whether American, South African, or global, is truly amazing. Slash and burn, guys. Go ahead. Good intentions never fed anyone, but then, hunger victims don’t vote.
“What developing countries need is to develop, not to have their present conditions of life and work preserved like a museum exhibit,” writes Janet Daley in a column prompted by a report that finds “fair trade” to be fundamentally unfair. Thanks to Alex Matthews, over at the excellent classical liberal blog AfroDissident, for alerting me to his own post on the subject. (Granted, he did so two weeks ago, but I have been very patchily connected, thanks to the electronic-frying power of blackouts.)
As you glide along the supermarket aisle past the smartly packaged Fairtrade coffee and guiltily slip the cheaper arabica into your trolley instead, you may ask yourself how much good your overpriced purchase of the Fairtrade stuff would have done anyway.
Well, now you know. Today’s report from the Adam Smith Institute [summary here, or full report in PDF here] will probably confirm your suspicion: Fairtrade labelling is largely a marketing ploy, which makes clever use of the almost infinite capacity for guilt harboured by the residents of wealthy countries over the condition of those in poorer ones, even though that condition is, in no rational sense, their fault.
But rational thinking does not come into this: you and your heaped shopping trolley represent wealth and security, which you have a vague but pretty firm notion that the people who harvest the coffee beans do not have. So maybe you are persuaded to make a gesture: a small strike against “exploitation” and global greed and (if you are old enough to remember this epithet) “corporate capitalism”. And you feel better about yourself.
It transpires that a very small number of farmers are getting a subsidised fixed price for their produce under Fairtrade franchises and that this is at the expense of most other farmers in their regions, who are actually worse off as a result.
But even more serious, the Fairtrade operation helps to keep poor countries and undeveloped economies exactly that — poor and undeveloped.
By sustaining agricultural activity that would not otherwise be sustainable in the global marketplace, it keeps backward populations from developing other forms of modern economic activity that might help them climb out of their backwardness. In order to permit wealthy people to indulge in a bit of sentimental largesse, it effectively preserves an anachronism that locks some of the poorest people in the world in backwaters of primitive economic existence.
What developing countries need is to develop, not to have their present conditions of life and work preserved like a museum exhibit. And the greatest aid to real development — and the proven route out of mass poverty — is through free trade, not Fairtrade.
All of which should cause us to reflect on the various misuses of the word “fair”, and its even more pernicious noun form “fairness”, as it is bandied about in political discourse. As received opinion has it, “fair” means “equal” - in the strict literal sense of the word. Distribution of wealth in a society is “fair” if nobody has much more than anybody else - however much harder they may have worked, or however singular and disciplined their talents may be.
The corollary of this is that taxation helps to ensure “fairness” by seeing to it that those who earn more than others have more of their income confiscated. On this formulation, disparities of wealth are inherently wicked. This is a moral philosophy that you may or may not find attractive. But if you do, you will have to accept that it is fundamentally totalitarian. Disparities of wealth are a sign of a dynamic free-market economy in which some sectors are invariably expanding while others contract: at any given moment, some people’s lot will be improving ahead of others’.
[…]
It is ironic that the very same people who are committed to the idea that “fair” must mean “the same” talk endlessly about “opportunity”. Nothing is a greater killer of opportunities than uniformity.
[…]
How have we come to accept such vindictive uses of the word “fair”?
Of course it was initially the fault of the Left and its special pleading lobbies, which — like some Fairtrade promoters — had a lot to gain. But the Right has been complicit: it has surrendered words like “fairness” and “opportunity” — and accepted caricatures of other words such as “selfish” and “greedy” — with scarcely a murmur of dissent.
Romantic notions of the noble savage, of the beauty of the supposedly traditional pursuits of poor people, are very common. Many developing countries actively play into this misguided view Westerners have of them. I cannot count how often I’ve seen beadcraft workshops in South Africa, as if this is the route out of poverty, or wire sculptures in museums, as if simple crafts are thereby ennobled. The only effect of indulging this romantic, condescending image of Africa is to create an industry that produces singularly uniform curios that delight clueless rich people. Absurdly tall wooden giraffes may be a wonderful way to part a fat prat from his dollars, but it is hardly the best route out of poverty.
Do read the full report (PDF), it’s worth it.
In fairness, here’s the rebuttal by the Fairtrade Foundation. It may not surprise you that it finds the report to be utter rubbish, motivated by evil agendas.
It says, “Releasing this report when thousands of people are trying to make a difference to global poverty by promoting Fairtrade products, is an insult to the effort and commitment of Fairtrade producers and their supporters in the UK.” Ag shame. Good intentions are so, well, good.
“Moreover, the opinions in this report will be rebutted by the producers themselves during Fairtrade Fortnight…” Well sure, but those producers are of “the very small number” cited in the Adam Smith Institute report. Besides, they comment on only a very limited fact: that they get paid more for their coffee. Of course they’re going to say that’s a good thing. They’re hardly likely to consider their personal windfall in the context of the macro-economic impact on development.
“Those of us who have had the privilege of seeing and hearing at first hand the difference that Fairtrade makes to poor communities are not going to be persuaded otherwise by the rehashing of simplistic economic theories.” Indeed. Economic theory has seldom stood in the way of socialist, statist, collectivist or protectionist preachers. Especially not when there’s money to be made from gullible saps.
Update:A fellow calling himself Angry African posted this link to his own post about Fairtrade as a comment to this piece over at the Mail & Guardian Online’s blog site.
It’s well worth a read, especially since it claims Fairtrade not only charges consumers more for the label, but charges participating farmers for the priviledge of being Fairtrade certified. If true, Fairtrade starts to sound more like a protectionist cartel — no, worse: a protection racket — in the Proudly South Africa vein.
“Pay us and we’ll put our label on your products, mark it up sky-high, and give you a small kickback,” then comes to mean, “Pay us, or we’ll guilt-trip people into not buying your products, so you can be sure you won’t get your products to market in our rich countries.”
Temba Nolutshungu, a director of the Free Market Foundation, has written an interesting piece that examines the role and influence of non-governmental organisations in African policy formulation around major development issues. The link will not work forever, so the full text follows.
Statist NGOs wreak havoc in Africa
Temba NolutshunguEver since the 19th century territorial scramble for Africa, Africans have become used to Western intervention in their affairs. Decolonisation and independence was supposed to mark the end of this, and to a large extent, Africans govern their countries in a sovereign way. But long after the pith helmets and starched uniforms of the colonisers have left Africa, a new breed of colonialist is emerging. These are the statist NGO campaigners who hope to save Africa from everything from GM food to globalisation.
These NGOs consist of ‘consumer’ and humanitarian groups and ‘development’ charities. They are united in the belief that modern industrial civilisation, profit and competition are unethical. In their view, people, particularly those in developing countries, would be better served by the existence of strong, comprehensive regulations and state intervention that put ‘equity’ and the redistribution of wealth ahead of the economic dynamism that has made the West and eastern countries like Japan, Taiwan, Singapore and South Korea wealthy.
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