By David L. Brown
I usually don’t write short posts on this blog. In fact, some may think I’m too verbose. Well, guilty I guess, although I like to examine subjects in depth and analyze the various factors involved. In this case, well, I’m merely going to post the map below, just released by the U.S. Agriculture Dept. It shows those counties reporting drought disaster. It requires no comment.
By David L. Brown
Yesterday I posted an analysis of the current forecasts for a poor corn crop due to heat and drought, and also mentioned that the obvious step to take is to suspend all ethanol production to free up the approximately one-third of the U.S. corn crop mandated to go to distilleries and into our gas tanks. If the corn crop drops by a significant degree, as seems likely, that mandated amount of corn will take an even larger bite out of the supply, perhaps even surpassing one-half of the total.
It’s deja vu all over again, as Yogi Berra said. Back in 2008 I posted this editorial cartoon that appeared on the cover of Quill, the magazine of the Society of Professional Journalists. (I am a 50-year member of SPJ and am immediate past-president of the New Mexico chapter.)
That cartoon is even more appropriate today, because the USDA is refusing to put a stop to the travesty even though a world food crisis is inevitable, putting hundreds of millions at risk of famine. And today, writing in The Financial Times, José Graziano da Silva, the director-general of the UN’s Food and Agricultural Organization, wrote (as reported by Reuters here):
“Much of the reduced crop will be claimed by biofuel production in line with U.S. federal mandates, leaving even less for food and feed markets,” he wrote in an op-ed just a day before the U.S. government issues a pivotal crop report that is expected to show U.S. corn output falling to the smallest in six years and stockpiles at near record lows.
“An immediate, temporary suspension of that mandate would give some respite to the market and allow more of the crop to be channeled towards food and feed uses,” he wrote in a high-profile yet indirect message to Washington.
Obviously, the line has been drawn in the sand by those in charge in Washington and it’s to favor the owners and operators of ethanol plants vs. hundreds of millions of endangered human beings. And not to mention the “inconvenient truth” of food shortages and higher prices right here at home. Already, as I mentioned yesterday, ranchers are liquidating their herds in the face of dried-up pastures and hay crops. How bad is it way out West? I saw a post a few days ago from a rancher in west Texas who said that he’s received just three inches of rain in the last two years. His critters have long since gone to market and he’s facing a bleak future.
By David L. Brown
As drought and heat continue to destroy a significant portion of the US crop, a large tranche of corn continues to be mandated for use in ethanol production. The purpose of this is to enrich farmers and channel money to corn producing states in order to secure votes. (It makes no kind of economic sense as a fuel source.) Now that the world faces more widespread famine (it’s already been a reality in many places for several years), it might make sense to shut down the ethanol plants for the time being, as this excerpt from an article today on WIRED (here) suggests (emphasis added):
“In the short run, USDA needs to figure out a way to remove the mandate on ethanol use from corn,” said Timmer [an agricultural economist]. “If we could free up 20 to 30 percent of the U.S. crop, reduced as it is, it would bring corn prices down very quickly.
New speculation limits are scheduled to be enacted by year’s end, but drought means that may be too late, said Bar-Yam [president of the New England Complex Systems Institute, a kind of scientific and technology think tank]. In the meantime, the USDA has rebuffed all requests to reduce corn biofuel allotments.
So it would make sense, but the USDA isn’t having any part of that. Well, duh because obviously farmers and ethanol barons are more important than 7 billion human beings and the reputation of the United States. Well, how is it going to fly when third world people are starving wholesale? They get to suffer and die horrible deaths while the U.S. in all the great wisdom of the USDA (headed by a rain-praying lawyer and professional politician) continues to turn huge amounts of corn into ethanol. Do we want to make America the Great Satan in fact as well as in name? If so, this will certainly do it. With hardly any effort at all we can make our country the most hated in the history of the world. When you open a future dictionary to the word “Evil” there will be a picture of Uncle Sam pointing at you. That’s what these idiots are doing.
Meanwhile, here’s a chart showing what happens when food prices rise. The numbers represent incidents of social unrest.
The Wired article suggests that “some think” food prices may have led to the so-called Arab Spring (it’s pretty plain that they did), and that therefore it was a “good thing.” Boy, if that’s good I’d hate to see what they consider bad. The idea that a bunch of raving lunatics taking over third world countries has something to do with “democracy” is totally nuts. It’s anarchy is what it is, followed by theocratic chaos, mayhem and murder. Somalia et al. are hardly models for Jeffersonian democracy. Incidentally, if you doubt the connection, note the number of incidents of food-related social unrest last year in the nations most affected by the Arab Spring: Tunisia 300+, Libya 10,000+, Egypt 800+, and now Syria 900+. Hmm, where there’s smoke and so forth.
One could assume that the 2008 and 2011 events (all centered on sharp rises in the UN’s FAO food index shown by the black dotted line) will be followed by similar events in spades when the presently developing food price spike gets its boots on (which is happening right now). Many of these represent small, insignificant countries (in Western eyes, at least although the indigenous peoples might beg to differ), but there are also some significant ones, including India with 1.5 billion mouths to feed. What happens if a major population subset such as India falls into out-and-out famine? India is presently suffering a reduced Monsoon so food shortages may be coming there soon, incidental to the crisis in world supplies which will severely limit or eliminate the possibility of filling production shortfalls with imports.
China doesn’t appear on the chart and I don’t understand why, because it also has been suffering something like 50,000 minor revolts and demonstrations each year, many of which must be food related. I guess it’s not on the list because the wise leaders of China say “nuh uh, it didn’t happen.” They must have legions of Winston Smiths busily rewriting history there in the Middle Kingdom. Northern China is also presently affected by drought. If India or China (or both) were to fall into widespread famine and anarchy It would be like Somalia X1000.
By David L. Brown
According to an article in the British newspaper The Guardian, a bidding war for a potash mining company reveals a looming problem: Finding the resources to feed a world on the brink of hunger
According to the article, which you can read here, the attempted takeover of Potash, Corp., the world’s largest source of potash, by mining giant BHP Billiton:
…lays bare the global struggle for resources on a planet struggling with water and food shortages, overpopulation and pollution. And it highlights a question that overshadows the 21st century: how to provide enough food for a global population that is set to rise from 6.8 billion to more than 9 billion by 2050, according to the United Nations.
The world is waking up to the coming era of food shortages, with governments and corporations scrambling to gain control of land, minerals, energy, and food markets. The flurry of activity is based on the further prediction by the UN that food production must be increased by 70 percent to meet the needs of the projected population of 2050.
Well, not to rain on anyone’s parade, but there are two comments I want to make.
First, it is troubling to witness global corporations lining up to make huge profits from this “opportunity”. It reminds me of war profiteering, “bad capitalism” run amok.
Second, I have to say that the chance of increasing the world’s food production by 70 percent is about as likely as a 400-lb. Hampshire sow sprouting wings and flying to the Moon. We are running out of resources folks, and our industrial agriculture is built on those very resources. Without increasing amounts of oil, gas, minerals such as potash, and fertile land itself, there is no way that we can increase production, and it would probably be a tremendous achievement even to keep it from peaking and beginning to drop.
Industrial agriculture depends upon increasing amounts of the resources it needs, and the outlook is for those resources to begin to decline just as world population continues to explode. Taking potash, the subject of this latest resource grab, as an example, here’s a graphic from Potash, Corp itself that plots demand, the gray bar, against the major world sources of the mineral.
If there was ever an example of demand running ahead of supply this is it. Demand is already running far ahead of the supplyNote that from 2008 on world production remained virtually level. That is the indication of a peak, and resource peaks are generally followed by a decline. Meantime, demand will continue to rise. Through extraordinary action production might be able to temporarily get back ion an upward path—but that’s not the point. The question is how much potash do we need to increase food production by 70 percent and, even more important, where is it going to come from? And if population continues to go up, how can harvests keep up?
Many parts of the world are already lagging in food production for want of sufficient potash. For example, here’s an excerpt from The Guardian article about the situation faced by China and other over-populated nations:
Experts say crop yields are low in many regions, partly due to the historical under-application of fertiliser in many developing countries. China has 20% of the world’s population but just 6% of its arable land – which has dwindled as Chinese industry has ruined previously fertile tracts of ground through pollution and heavy industrialisation. The Fertiliser Institute in Washington says China and India use only half as much potash on their fields as American farmers.
Many of these “developing” countries have depended upon purchases of grain and other foodstuffs. As production begins to lag in North America and elsewhere, and with grain crops being diverted to the production of ethanol and biodiesel, those imports cannot be counted upon in the future. To vastly increase domestic production in places such as China would require immense quantities of resources—which are going to be available in declining quantities and at soaring prices. The result: a global outbreak of food wars, waged by the powerful and the desperate, in which resources will be sought at almost any cost. Those wars are already taking place, as this passage from The Guardian indicates:
In Africa, the Chinese are forging mining joint ventures and investments linked to China’s hunt for resources to fuel its fast-industrialising economy. Africa is also seeing a land grab that has been likened to Europe’s carve-up of the continent at the end of the 19th century. An Observer investigation earlier this year established that 50m hectares – more than double the size of the UK – had been acquired in the last few years by foreign governments and wealthy investors with state subsidies.
Ethiopia alone has approved 815 foreign-financed agricultural schemes since 2007. Saudi Arabia is thought to be the biggest buyer as it turns to Africa to meet domestic demand, a move that helps it to conserve water at home.
Charities have complained that foreign expansion has been at the expense of African smallholders and that overseas investment exacerbates hunger as land is increasingly turned over to growing crops for export. There have also been reports of evictions without compensation, bullying and rising crime.
Some of the African deals have been eye-wateringly large: China has signed a contract with the Democratic Republic of Congo to grow 2.8m hectares of palm oil for biofuels. Before it fell apart after riots, a proposed 1.2m-hectare deal between Madagascar and South Korea’s Daewoo would have included nearly half the country’s arable land.
The ancient Chinese curse, “May you live in interesting times,” comes to mind. Interesting, indeed, perhaps the most interesting ever. Watch this space.
By David L. Brown
A news release from Earth Policy Institute this morning features a peek at the subject of global stability as reported in Lester Brown’s new book Plan B 4.0. This is a critical issue because nations that are failing create difficulty for any response to climate change and resource depletion.
I was intrigued by the list Brown presents, a ranking of the Top 20 failing states in the world as of 2008 (the 2009 list is out now, and is essentially unchanged). The table is from Foreign Policy magazine, based on statistics developed by the Fund for Peace in cooperation with the magazine. Together they each year measure the instability index of the world’s nations, that is, the chances they are failing or have already failed. These are the worst-cases:
The rankings are based on 1-10 scores in 12 critical areas, with 10 being the worst. Thus, a completely failed state will score 120 points. (It’s hard to imagine such a place; it would probably consist of radioactive slag.) It’s no surprise to see that Somalia is No. 1 with 114.7 points. Zimbabwe is less than a point behind, followed by Sudan, Chad and the Democratic Republic of the Congo.
It’s interesting to examine some of the other failed or failing states on this list. Extremely notable, to me at least, is that coming in Nos. 6 and 7 are nations familiar to most Americans … Iraq (108.6) and Afghanistan (108.2). These scores represent 90% of “perfect,” and yet we must scratch our head in puzzlement at the fact that our nation and many of its allies have spent the better part of a decade in the mission of creating successful democratic societies in those very places.
Now I am all in favor of peaceful democratic societies, but it’s generally been proven that nearly-failed states are not usually places where they are found. Does it make sense to attempt to plant the seeds of Western civilization in such infertile soil?
Iraq was formerly ruled by a ruthless dictator, “peace” being maintained under the iron-shod boot of tyranny. As Western troops depart, will that unhappy nation continue to move in the direction of “peaceful, Western-style democracy,” or will it break down into bloody rivalry between Shia, Sunni and Kurdish factions? As a very nearly failed state, the latter scenario seems a more likely outcome than the emergence of a Jeffersonian Golden Age.
And in Afghanistan, things are even worse. That benighted place has never really been a nation at all, but a ragtag collection of fiefdoms ruled over by warlords and funded by the opium trade. Even today, after years of military operations against them, the Taliban control wide areas of the region. Now that the U.S. has set its departure date for 2011, what hope is there for this failed state to suddenly thrive and grow into a peaceful member of the world’s democratic nations? To demonstrate my guess about the odds of that happening, try this experiment: Place one large snowball in a microwave oven; set the controls to “high” and the timer for ten minutes; and hit “cook”. Later as you mop up the floor, you’ll have a good analogy of what will likely be the future in Afghanistan, a place that has been impossible to rule since the days of Alexander the Great. Namely, a huge mess.
The place is absolutely unready to take responsibility for its own governance and security. The U.S. Marines have been assigned the task of training native Afghan soldiers, and according to a recent report from The Guardian, it’s a near fruitless exercise, dealing with illiterate, lazy, hash-smoking peasants who are completely ill-suited to function as modern-day soldiers.
So the outlook is dim for Afghanistan, No. 7 on the list of Top 20 Failed States. But what can we learn from some of the others?
Well, there’s Pakistan right there at No. 10. The world’s sixth most populous nation, Pakistan is a nuclear power. How do you feel knowing that a nation that ranks 104.1 on an instability scale of 120 has nuclear bombs and missiles? Imagine how India feels, having to live right next door.
Pakistan isn’t the only unstable nation with a large population to make the list. Bangladesh, with a score of 98.1 is the seventh most populous nation, and right behind it is Nigeria, the eighth largest by population and a score of 99.8.
But that’s not all, for the Top 20 also includes North Korea, another nuclear power. Talk about instability!
Now, from the Fund for Peace website, here is a graphic to give you the “big picture” about world instability. You might be surprised and even dismayed, may even feel chills go up and down your spine. The nations colored in red are the most seriously failed or failing. There are presently 38 of them including Iran, another dangerous and potential nuclear power with a score of 90.0.
Yes, the red is where the most trouble is, but notice how much of the world is covered in orange, indicating a “warning” stage. And as far as those nations shown in green and judged “sustainable,” meaning safe, there are only 13 of them, not including the U.S., Britain, France, Germany, Japan and many other advanced nations. As you can see, Canada, Australia and New Zealand, along with Ireland and five Scandinavian countries including Iceland are the main “safe” places, along with Switzerland, Holland, Austria and Luxembourg.
In case you’re wondering, here are the scores for some of the “yellow” countries: Germany 36.2; France 35.3; United States 34.0; United Kingdom 30.5; Japan 31.2. And the “safest” place of all: Norway 18.3.
It is interesting to note that the further you get from the “center” as indicated by this map, the safer. Central Africa, the Middle East and a few nations along the fringe of Asia are worst off, surrounded by a sea of orange. It is only when you get far away from these areas that the colors fade to yellow, and finally to green.
And all of these nations, with perhaps only a rare exception or two, are presently meeting in Copenhagen to discuss a global plan to cooperate in mitigating CO2 emissions, no doubt the greatest challenge humanity has ever faced. What could go wrong?
By David L. Brown
It continues to amaze me that as the world economy continues to spin down and around in the toilet bowl of history, absolutely nobody seems to be paying any attention to the very clear and simple reasons why this is happening.
There are many “usual suspects” being foisted upon us, including evil bankers, predatory investment advisors, incompetent political “leaders,” Ponzi-scheme promoters, greedy individuals and more. Lift almost any rock and you’re likely to find someone else to blame. Oh, look, it’s that guy over there, behind the tree. Let’s get him!
And all the while the answer has been right there for anyone who has eyes to see, like the proverbial elephant in the living room. For decades the world has been running full-speed ahead on a flawed model of eternal growth, growth based upon the utilization of natural resources, most notably petroleum. And it is an unfortunate fact that the Earth, which does not have an infinite supply of these resources, has been savaged until the amounts of those resources are no longer rising, but are in decline.
The death knell of the runaway, unsustainable “growth” economy was when Peak Oil was reached. Nobody knows exactly when that actually occurred, but the date on which the problem became clearly apparent was Friday, June 6, 2008.
On that date I wrote an essay titled “Black Friday, a Day To Remember.” My comments were based on the fact that petroleum prices had that day spiked by nearly $11, causing the stock market to begin a downward decline that has not ended to this day. Here is a link to that essay, so that I won’t have to repeat it all here. But the core of my message was that the old economy was dead and that the world was in for a long and perhaps endless depression. In fact, I illustrated that essay with the image below, comparing the doomed ships with commerce and industry about to fall off the edge of the world. The image is even more apropos today because that process of economic collapse is now taking place before our very eyes, and doing so at an accelerating rate.
Now one of the worst things to do when you learn that something no longer works is to keep on trying to make it work. (One definition of insanity is when someone continues to do the same thing over and over expecting the result to be different.) When the mule is dead, there is no use hitting it with a two by four any longer, and yet that is what our economic and political “leaders” seem intent upon doing. They are focused almost entirely on trying to restore the old economy, the one that broke, the one that used up its fiscal fuel and can no longer function. Meanwhile, virtually no efforts seem to be aimed at exploring and developing new models. Yes, there is some lip service being paid to increasing development of alternative fuels, but that’s like a gnat on the elephant in the living room.
By David L. Brown
There is news of a serious drought that is threatening to destroy nearly half of China’s winter wheat crop. Widespread wheat growing regions had gone without rain for 100 days.
But not to worry. The Chinese government reports that the problem is well in hand.
First, they are going to divert two major rivers from the southern part of the country to the wheatlands for irrigation. This would be equivalent, perhaps, to diverting the Missouri River to southern California and Arizona. That shouldn’t be hard, and could no doubt be done well before the wheat crop has been destroyed in about the next month or so. Or not.
Second, and one might conclude this has already solved the problem based on the triumphant news reports out of China, they have begun firing thousands of artillery shells into the air containing rainmaking chemicals. The result, the government proudly reported, is that some areas have now received 2 to 5 millimeters of rain.
Wow! Two millimeters is about a twelfth of an inch and five millimeters is about a fifth of an inch. From my experience, dry, drought-stricken soil would absorb such small amounts only into the top of the dust layer and it would quickly evaporate. It would do nothing whatsoever to feed stricken roots deep in the ground.
Oh well, at least they’re trying … trying to put a good face on what might be a looming disaster. We must sympathize with the Communist leaders in the Forbidden City who face protests, food riots, possibly even revolution if the peasantry sees that things are going all pear-shaped PDQ.
The potential problem is immense. We are seeing the Australian summer wheat crop almost completely destroyed this year, in the twelfth year of drought. Also in the Southern Hemisphere Argentine crops are being wiped out by heat and drought. If a similar pattern begins to develop in China, they will be well and truly impaled on the sharp end of a No. 18 wood screw (see illustration below. Note nifty self-tapping feature.)
Northern China depends on wheat for noodles, won tons, dumplings and other mainstays of their cuisine. If they should lose a third or more of the crop, they would have to go on the world market to buy wheat. BUT, as I reported here recently (“Food Supplies Losing Race to Famine,” Jan. 27), should China increase its purchases of wheat by only five percent of its total usage, it would entirely wipe out the entire export supply of wheat worldwide.
That statement is a measure both of how big China is, and how small the remaining available grain stocks are. Taking the losses resulting from the Australian and Argentine droughts and heat waves into account, there might not even be any net wheat for export in the world later this year. That might leave several hundred million Chinese with empty bowls on their tables later this year. Try to imagine that.
Forget Peak Oil, that’s nothing. We’ve reached Peak Food and it’s all downhill from here on, especially in relatively poor and over-populated places like China, Indonesia, the Philippines, India and Pakistan.
By David L. Brown
The worldwide recession (economists are still too frightened to use the “D” word) is hitting hard in Asia and it seems there may be no bottom. Even Japan, the only First World economy in Asia, is being hit hard. Japanese exports have plummeted and they are teetering on the brink of economic chaos.
The latest news from Toyota is that that they have raised their projected losses for the year just ended. In fact, they have tripled them and are describing their results as the worst in 70 years. Here are excerpts from the BBC with details:
In December, Toyota predicted it would make a full year operating loss of [$1.65 billion].
The Japanese car giant has now tripled that figure and expects to make a [$4.9 billion] operating loss, the first annual loss at the firm in 70 years.
In December, Toyota boss Katsuaki Watanabe said the current downturn was of a size that comes only: “once in a hundred years”.
That is a startling change in projections just from December. As it turned out, the world’s largest car company lost as much just in the last quarter of 2008 as they were expecting for the entire year. Their business literally fell off a cliff, and one can imagine that it is still in free fall. “First loss in 70 years” would make it that wonderful year 1938 when Toyota was busy making military vehicles for the conquest of China and Korea and America was still in the depths of the Depression.
This is more evidence that Asia is getting hit harder than we are here in the U.S., at least so far, and there doesn’t seem to be anything under them to stop the decline. Japan’s exports are down 40% and they ain’t seen nothin’ yet. Other Asian economies are in even worst shape. China is falling so fast and hard that the seismic waves will rattle dishes around the world.
The 64 Trillion Dollar Question is: What will be the effect on America of the collapse of emerging nations that have bet their wads on exports? Surprisingly, it probably will not really be as bad as might be expected.
First, we made the extremely excellent move of offshoring huge numbers of our manufacturing jobs. At the time that looked like a mistake to many. But now that the new worldwide Depression has arrived (yes, I’m bold enough to use the “D” word) the laborers and middle managers that are losing their jobs are not Americans, but Chinese, Koreans, Taiwanese and Vietnamese. Those would have been American jobs and our yellow brothers are taking the hit for us.
Those busy export generating nations that cashed in their cheap labor in return for the chance to supply foreign consumers with a flow of cheap goods expected that America would continue to be a vast black hole, willing and able to absorb an endless stream of neat consumer items. We were viewed as insatiable shopoholics, unable to resist the siren call of “new, better, cheap”. They failed to realize that all good scams must come to an end. How many big TV sets do we need here? How many new computers every 18 months? How many more cell phones, gee-gaws, kitchen accessories, rugs, items of furniture, digital cameras, stereos, VCRs and DVD players, etc. ad vomitum do we actually need?
Well, as it turns out, not too many more. The bucket is pretty full. Here is my personal example. I have a neat 53-inch high-def projection TV that I have owned for about eight years. It’s not a flashy flat-screen version, but I will nonetheless keep it for much longer because it serves me perfectly well. I have VCR and DVD players of about the same vintage and they work just fine. I don’t plan to buy a Blu-ray player. I have a pair of high-end stereo speakers that are 30 years old, and another pair that are actually a couple of years older than that. They are wired to stereo receivers that are at least 20 years old. I will keep them for the rest of my life. I have all the furniture, gee-gaws, rugs and furniture I will ever need.
I also have several Apple computers, none of which is less than about 3 years old (G5 towers, a G4 laptop, all pre-Intel) and although there are newer, faster, better computers, it turns out that I am not actually doing major cosmological or nuclear computations or intensive data processing so those computers are just fine and will be used for many more years. My first generation iPhone works great and I have no inclination to buy the newer, better, faster, shinier one.
I have a five year old car that is paid for and will be driven until the wheels fall off, which could be for as long as I need a car.
Finally, I am a photographer and I have a Canon 5D SLR camera that has recently been replaced by an improved model with about twice the number of pixels. No thanks, the 13 MP model I bought a couple of years ago is perfectly satisfactory for anything I will ever need to do, including prints up to 20 by 24 inches or larger.
Many if not most Americans are in a similar situation. We have been needlessly replacing our “stuff” in reaction to glitzy marketing and a spend-spend mentality. That mentality has died with the arrival of Peak Oil and the subsequent economic chaos. We have stopped spending—but the wonderful thing is that it doesn’t make any real difference because most of us already HAVE perfectly good “stuff” and there is a lot of good used “stuff” available for those that need it.
One of the things that is absolutely killing the auto business is the tsunami of late-model used (and unsold new) vehicles that are glutting the market. And in case you’re concerned that we are losing the overseas sources of new “stuff” as foreign suppliers sink into bankruptcy and doom, there is no hurry to rebuild domestic manufacturing because we are already awash in “stuff.” We’ll be fine with our old “stuff” for years to come.
China is now blithely pinning its future on the idea of developing domestic consumer markets. Most Chinese people do NOT have “stuff” but want it. unfortunately, since China’s export business was the major underpinning of their economy and that is dead as a dinosaur, Chinese people aren’t going to ever get the “stuff” that we already have, and which their criminal leaders have promised them. Instead, tens of millions of them are out of work with countless more soon to follow.
Meanwhile, the Chinese government is going to be spending the dollar reserves it earned from all that exporting and the savings of its poor citizens just to buy food from the only remaining nation on Earth capable of producing foodstuffs in sufficient quantities to be a major exporter. That would be us.
Bottom line: No matter how bad things become here in the USA, they’re going to be worse “over there” and we will have the last laugh (although an admittedly hollow one).
By David L. Brown
Advocates of expanded free trade through elimination of tariffs and other economic barriers claim that more open trade would benefit people in developing nations. The failure of the ongoing Doha round of trade negotiations among exporting nations is viewed as a tragedy for economically underprivileged people, particularly those engaged in subsistence agriculture.
An article in a recent issue of Science magazine questions this. Here is a key paragraph from the piece that appeared in the January 9 issue:
In July 2008, negotiations for a Doha Round trade deal collapsed again, this time over provisions to allow developing countries to protect the livelihoods of subsistence farmers. Premature trade liberalization undermines the policy space necessary for investment and technology policies for development. Further agricultural trade liberalization will undermine food security in most developing countries, many of which have been transformed from net food exporters into net food importers. Contrary to the claims of advocates of agricultural trade liberalization, eliminating agricultural and export subsidies in the Organisation for Economic Co-operation and Development would, at least temporarily, increase food prices in food-importing countries! The supposed gains from agricultural trade liberalization are likely to bring greater benefits to a few rich agriculture-exporting countries, rather than to most of the developing world, let alone the bulk of the poor.
The co-authors are Jome Kwame Sandaram, Assistant Secretary General for Economic Development, U.N. Department of Economic and Social Affairs, and Rudiger von Arnim, an assistant professor of economics at the University of Denver.
The article mentions several arguments about why more open trade would harm poor nations. I’ve pulled a few statements out of the article. They are presented below in boldface followed by my observations and comments.
“The overwhelming volume of trade occurs between nations that are similar.”
This makes sense. Americans may buy Mercedes and Toyota automobiles from Germany and Japan. They have not shown a desire to purchase cars engineered and manufactured in places such as the Philippines, India, Botswana, Malaysia or Uzbekistan, although these and many other nations manufacture automobiles.
Attempting to create a level “playing field” between trading partners that are separated by factors of technology, wealth, consumer demand and tradition is obviously a difficult proposition. Values are different, costs relative, and there is a vast gap in supply-demand factors. According to myth, Manhattan Island was purchased for a bunch of beads and buttons which were happily received by the native Americans living there. Whether or not that is true, it is a fact that Europeans systematically offered primitive peoples cheap trade goods in return for major concessions of land. Thus was the era of colonialism begun. The natives had no complaint, because they had no concept of land ownership and viewed the receipt of trade beads, cloth, iron axes and such as windfalls.
The situation today is quite different from the days of European expansion, but not entirely different. To expect that the poorest nations of the world can compete economically with the richest and most advanced raises definite questions. An African family might be able to grow two or three acres of corn using techniques not too different from those of centuries ago, while an Illinois farmer might single handedly grow a thousand acres with considerably more success.
Can a rich nation and a poor nation really be trading partners when their products and markets are so vastly different? Or, must they interact in a way reminiscent of feudalism, like master as to serf? Perhaps.
“Offshore outsourcing…can be a threat to the welfare of developed countries.”
The reason American and European countries have moved manufacturing to the Third World is to take advantage of cheap labor. This has left us in a precarious position. For example, a large percentage of the consumer items purchased in the U.S. are made in China. American factories have been closed and their former employees laid off. This has benefited American corporations in that they have reaped greater profits by reducing labor costs. It has benefited American consumers in that they have enjoyed many luxury items at prices they may not otherwise have been able to afford. It has, of course, benefitted Chinese workers and their bosses, creating a growing middle class there. Meanwhile, it has destroyed jobs for many Americans, causing them to end up unemployed or working at much lower paying jobs.
By David L. Brown
One of the major problems facing the United States today is the fact that our First World nation is bordered by a Third World state, Mexico. The problem is magnified by the fact that Mexico is in the process of collapse, on the path to becoming a failed nation such as Zimbabwe or Somalia. The seriousness of this problem is hinted at by this excerpt from an Associated Press story today:
Feds Plan ‘Surge’ if Mexico Drug Violence Spills Into U.S.
Saturday, January 10, 2009
EL PASO, Texas — If Mexican drug violence spills across the U.S. border, Homeland Security officials say they have a contingency plan to assist border areas that includes bringing in the military.
“It’s a common sense extension of our continued work with our state, local, and tribal partners in securing the southwest border,” DHS spokeswoman Amy Kudwa said Friday.
Homeland Security Secretary Michael Chertoff, who described the contingency plan in an interview with The New York Times this week, said he ordered specific plans to be drawn up this summer as violence in Mexico continued to mount.
The plan includes federal homeland security agents helping local authorities and maybe even military assistance from the Department of Defense, possibly including aircraft, armored vehicles and special teams to go to areas overwhelmed with violence, authorities said.
Kudwa would not give specifics on the so-called “surge” plan, but said it does not create any new authorities.
In the last year, more than 5,000 people have been killed and police and military officials have become common targets for violent drug cartels who are fighting with each other and the government for control of lucrative drug and human smuggling routes across Mexico.
More than one-fifth of the deaths have occurred in Ciudad Juarez, the hardscrabble border city just across the Rio Grande from El Paso.
The ongoing drug wars just on our border are as bad as Afghanistan and Iraq, probably worse. A few weeks ago I saw a news item stating that for an entire 24 hour period there had been no murders in Tijuana. That was so unusual that it was considered to be news worthy of being reported in the U.S. press. At least, as this article indicates, our homeland security department is beginning to treat the problem with the seriousness it deserves.
There seems to be no end in sight and the problem just gets bigger. The Mexican government is corrupt to the core and completely unable to control its territory. I have news for the writer of that AP article, and that is that the Mexican war is already spilling over our borders. For example, there have been reports that growing numbers of Americans are being kidnapped here in our their own country and taken across the border to be offered for ransom. So far, the media and government have mostly downplayed cross-border crime such as this.
The more it is tolerated, the more it will be encouraged. That kind of criminal violence will continue to spread until we take strong action to secure the border and remove those Mexican criminal elements who are already here. The idea that it is politically incorrect to identify and deport illegal immigrants is national suicide.
We are witnessing a worldwide epidemic of collapsing civil law, a problem that will continue to spread, and a significant example is taking place right there on our very own southern border. Mexico is a failing state, just as surely as those in Africa. The northern tier of Mexican states from the Gulf to the Pacific is already in almost the same situation as Somalia, with drug lords and corrupt military and police engaged in civil and gang warfare, right on our own border.
The story calls this “drug violence.” That is over simplification. This is much more than that and as the world economy sinks, Mexico begins to suffer widespread famine, unemployment there becomes endemic, and the crime worsens, what will those tens of millions of starving and desperate people just to our south do then? Stay there and starve or be killed? Move to Zimbabwe? Ask their friends the Chinese to let them move there?
Um, no, as is traditional down there in Old Mexico they’ll be coming north to the Land of the Formerly Free and the Home of the No Longer Brave. To join the millions of their fellows who are already here. And we better start now if we want to prevent our nation being overrun by tens of millions of economic and environmental refugees.