On Apr 20, 3:30 pm, "[EMAIL PROTECTED]" <[EMAIL PROTECTED]>
wrote:
> What would be nice would be to produce several times what's actually
> needed. If enough food gets grown that 25 billion could be fed, while
> there are 7-8 billion of us, that would be kind of comforting, when
> worrying about aquifers supplying 10% of agricultural produce or the
> potential damage of droughts.
>
> What to do with tbe surplus? Maybe feed it to animals or make
> biofuels?
I've been thinking about this clever comment a lot in the intervening
weeks, as energy prices spiral rapidly upward.
The idea that we can promote desired collective behavior through taxes
is certainly to be preferred to regulation, for reasons of simplicity,
effectiveness and fairness. Yet we see that as meat and biofuel usages
for grain become prominent the price for grain gets bid up, at least
temporarily, out of reach of the least well off consumers.
There is an analogous problem in energy where the most prodigious
users are the least price sensitive. People driving gigantic vehicles
for pleasure are not likely to be enormously affected by a doubling of
gasoline prices; gasoline costs will remain under a per cent of annual
income for them. Less well off people in America have already been
forced to live far from their workplace or workplaces. I am personally
acquainted with a well remunerated blue collar worker who travels
about 150 miles per day in urban traffic across the length of Chicago,
who has strong personal reasons (his wife's work and her inability to
drive) not to move to the other end. He will pay the price and take it
out of discretionary spending. The people lower down the income scale
where this makes no sense will be the ones to substantially change
their behavior by losing their income altogether.
Putting a price on carbon seems to impact the wrong people. Large
disparities in income seem to be part of the situation, as does a hard
constraint on available resources. For the first time, substantial
numbers of wealthy people are competing with poor people for the same
goods. This seems to me to summarize the novelty of the contemporary
situation.
The immediate consequence is that the circumstances of the poor get
dramatically worse. Price incentives seem to me much less desirable
than they did a few months ago. It is one thing to shrug and say
"subsidies". It's another thing when the price goes up before
subsidies are even considered.
I start to think that some form of rationing for certain materials may
be needed. Perhaps part of the food and fuel supply can be injected
into a free market, but it seems necessary that some must first be
reserved for the population regardless of wealth. I don't relish the
consequent bureaucracy but the only alternative I can see is a much
more equitable distribution of wealth than we now have, which also
isn't easily achieved.
Otherwise it isn't just the surplus that goes to the animals,
unfortunately.
mt
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