Quotulatiousness

July 13, 2012

A more accurate title would have been The Locavore Delusion

Filed under: Environment, Food, Health, Media — Tags: , , , — Nicholas @ 08:58

Rob Lyons reviews the new book by Pierre Desrochers and Hiroko Shimizu:

The fundamental question underpinning both those earlier papers and The Locavore’s Dilemma is this: if local food is so great, why did a globalised food system develop at all? The answer, as Desrochers and Shimizu argue, is that the creation of a worldwide trade in food reduced prices, increased variety and improved security of supply. If there is a problem with this world market in food, they argue, it is that it is not open or far-reaching enough.

The online eco-magazine Grist ran an interview with Desrochers earlier this month. In a follow-up piece, readers came up with responses to the interview. One of these responses provides such a neat summary of the arguments in favour of local food that it is worth repeating in full.

‘I am a local-food advocate for many reasons: Taste: An heirloom tomato picked that morning runs circles around a hybridised tomato picked two weeks ago in Florida and gassed so it turns red en route; Quality: the better the soil and the farmer, the better the food; Nutrition: food sheds nutrients after it is picked. The longer it takes to get to market, the less nutritional value it has, comparatively; Transparency: I like knowing how my food is grown and harvested. I visit my meat producer; try that at a CAFO [concentrated animal feeding operation]; Environmental: A minimisation of the use of chemicals that wash into waterways, creating algae blooms, choking out life, or killing beneficial insects, including honey bees; Sane stewardship: I like to support farmers who create more naturally fertile soil, which is better able to resist pests, floods, and droughts; Pleasure: I buy local food at my farmers’ market because it’s more pleasant to do so than going into an air-conditioned grocery store. I see neighbours, chat with farmers, taste before I buy. Economic: I want my food dollars to support my local economy; Humanity: Animals and humans are treated better on the small farms I know than they are on the large ones; I value green open spaces: Supporting local farms with my money encourages those farmers to maintain those green open spaces rather than selling off to developers.’

As Desrochers and Shimizu explain, these ideas are either not necessarily true, are matters of personal taste or, more often, are completely wrong. Instead, the authors argue, ‘the available evidence convincingly demonstrates that long-distance trade and modern technologies have resulted in much greater food availability, lower prices, improved health and reduced environmental damage than if they had never materialised. Indeed, more trade and ever-improving technologies remain to this day the only proven ways to lift large numbers of people out of rural poverty and malnutrition.’

Let’s take those arguments for local food, one by one, using (though not exclusively) the arguments in The Locavore’s Dilemma.

June 25, 2012

If NAFTA was real free trade “it wouldn’t contain 22 chapters of rules and regulations”

Filed under: Cancon, Economics, Liberty, USA — Tags: , , , , , — Nicholas @ 00:03

Free trade is the way to go, if you want to benefit the consumer. Producers don’t benefit as much: it increases their competition and means that bad producers are more likely to go out of business. Protectionists always rely on the visible “damage” that free trade does to these bad producers and minimize or completely ignore the (larger) benefits to consumers.

Jesse Kline explains why moving toward freer trade will benefit most Canadians, and the drawbacks will be to those who are least able or least willing to face real competition:

Prime Minister Stephen Harper announced this week that Canada will join the Trans-Pacific Partnership (TPP) talks, along with he United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Mexico and, we hope, Japan. Some say this will be a historic free trade deal that will extend the NAFTA zone into emerging Asian markets; others believe the United States is using the process to impose its own draconian copyright regime on its trading partners, while protecting key industries, such as auto manufacturers. The truth is probably somewhere in the middle.

The problem is that the agreement is being negotiated under a veil of heavy secrecy. And if rumours that the negotiated sections of the agreement already contain over 1,000 pages prove to be correct, it is certain that the TPP will not give us anything resembling real free trade. Indeed, the Canadian public has little idea about what we are getting ourselves into, or how much the government knew about what it was agreeing to. Based on a leaked chapter of the agreement, it looks as though we just signed up for an entirely new copyright regime, a mere hours after the government passed its own made-in-Canada solution.

To the government’s credit, it is simultaneously pursuing trade deals with the European Union and China. But in these times of global economic uncertainty, we need to see the benefits of trade sooner, rather than later. Free trade leads to higher standards of living, and benefits society through lower prices and increased variety of consumer goods; it forces domestic industries to be more efficient. Fortunately, there is another way to achieve these benefits: The Canadian government could open our borders to the world by unilaterally removing all our trade barriers.

June 23, 2012

Trade deals as mutual disarmament pacts

Filed under: Cancon, Economics, Food — Tags: , , , , , — Nicholas @ 00:27

It’s a very sad commentary that the only way the current “pro-business” federal government can even consider scrapping our supply management monopolies is because “our trading partners forced us to”:

If the government were of a mind to get rid of supply management — it swears it is not — that is perhaps the only basis on which it could: our trading partners made us do it. Certainly it would not dream of doing so otherwise. Such is the power of the supply management lobby, especially dairy, that a suffocating consensus has settled over the issue, of a kind rarely seen in a democracy. Consensus is not even the word. Every party strives to outdo the others in the fulsomeness of its support. And not just every party: every member of every party, in every province and at every level of government. It’s quite creepy.

Yet virtually every economist or policy analyst of note agrees that supply management is a disgrace. The primary effect of the quotas — the intended effect — is to drive up the price of these foods, staples of most Canadians’ diets, to two and three times the market price. The burden of these extraordinary price differentials, of course, fall most heavily on the poor, a fact that ought to trouble self-styled “progressives” but evidently doesn’t.

But it isn’t only consumers who pay. Since the quotas are tradeable, the premium over market prices gets capitalized into the value of the quota. The right to a cow’s worth of milk production, for example, runs to about $28,000, meaning a farmer looking to get into the industry faces an initial outlay, for the typical 60-cow farm, in excess of $1.5-million — just for the quota, never mind the cows, the barn and the rest.

June 2, 2012

Tim Harford on the basic daftness of “Buy British” policies

Filed under: Britain, Economics, Government — Tags: , , — Nicholas @ 10:35

The same is true for “Buy American”, “Buy Canadian”, or “Buy Australian” programs, too:

The government could at least encourage everyone else to “buy British”.

An intriguing concept. But I don’t understand how this would support the British economy at all. Imagine the whole country collectively agreed not to buy fancy foreign muck unless it was at least 20 per cent cheaper than a comparable British product. Imports would surely take a beating. Assuming the rest of the world simply ignored our silly British ways and did not retaliate, exports would — at first — be unaffected.

Isn’t reducing imports exactly the desired effect?

But such an imbalance of exports and imports would not last. British exporters, flush with the foreign currency they had earned, would seek to spend it, or to find somebody else who wanted it. No one holding pounds would be terribly interested — everyone has, after all, agreed not to buy foreign products unless they are particularly cheap. The only way to get pounds in exchange for dollars, euros and yen would be to offer a premium.

In other words the value of the pound would have to rise.

Of course. And after it had risen a respectable amount, those foreign products would be cheap enough to buy again. Imports would recover. And exports would suffer from the stronger pound. They would and the eventual result would be that we would still buy some foreign products. To the extent that British domestic substitutes flourished, there would be an equal and opposite effect on British export industries.

So there’s no point in a “Buy British” campaign?

You might just as well run a “screw British exporters” campaign.

May 9, 2012

Stephen Gordon explains that Dutch Disease is merely “economic hypochondria”

Filed under: Cancon, Economics — Tags: , , , — Nicholas @ 09:17

Politicians and newspaper columnists have a fetish about manufacturing. In the Globe and Mail Economy Lab, Stephen Gordon explains why it’s not the crisis we’re constantly being told it is:

The appreciating Canadian dollar has little to do with the decline in manufacturing; employment has been declining worldwide for decades. Changes in relative prices are more important. Producer prices for manufactured goods have increased by about 15 per cent since 2002, while the Bank of Canada’s commodity price index has more than doubled. Any attempt to promote manufacturing exports by depreciating the dollar is doomed to fail, since a lower Canadian dollar will also benefit resource exporters. Capital and labour will always move from sectors where prices are soft to sectors where demand is strong, regardless of what the exchange rate is doing.

But what about those 500,000 lost jobs? An underappreciated fact of the Canadian labour market is the size of the flows in and out of employment. More than 100,000 workers are laid off every month, and even more are hired. Before the recession, the fall in employment manufacturing was largely the result of attrition — workers who quit were not replaced. The loss of 500,000 manufacturing jobs since 2002 has been more than offset by the creation of 2.5 million jobs in other sectors.

[. . .]

Penalizing exports of raw resources could create processing jobs, but those gains will be more than offset by losses elsewhere. If processing in Canada were profitable under world prices, no government intervention would be necessary. The only way policy can generate significantly more processing jobs is by forcing producers of raw materials to accept lower prices or by forcing provincial governments to accept lower royalties. This would be a simple redistribution of income if production is held constant. But it is much more likely that producers would respond to these lower prices by reducing output. Total output and income would fall.

[. . .]

The shift away from manufacturing is part of a process that has increased incomes across Canada. “Dutch disease” is not a problem that needs solving.

May 6, 2012

One of the worst moves African countries can make

Filed under: Africa, Economics — Tags: , , , — Nicholas @ 09:55

Tim Worstall at the Adam Smith Institute blog:

You don’t have to go far into NGO land to find people arguing that poor countries need to protect their baby industries from the big bad wolves of international capitalism. That trade barriers are a good idea, that infant industries need to be nurtured and, as is the way of these things, the Washington Consensus is the imposition of the poverty that the poor suffer from.

That this is entire nonsense does not stop those idiots wearing ideological blinkers from repeating it. Which is something of a pity as it really is trade, openness to it, which drives economic growth:

    In recent years, sub-Saharan African countries have grown remarkably. According to data from the Penn World Table 7.0 (Heston et al. 2011), average annual real GDP per capita growth from 2005-9 has been over 2.5% (3.5% when excluding 2008 and 2009). This recent growth performance is remarkable given that, for over four decades since 1960, real GDP per capita growth in sub-Saharan Africa was dismal, averaging less than 0.5% per annum.

We are, as we know, talking about the poorest of the poor and any uptick in their fortunes has been both extremely difficult to find and extremely welcome when it is.

One thing that might be remembered is that, post-colonialism, most sub-Saharan countries did in fact follow the policies of infant industry protection behind tariff and licencing barriers. It was the falling apart of this in the 80s and then the gradual adoption of good old neoliberalism in the mid to late 90s which has turned the numbers around.

April 14, 2012

Colombia tries to butter up Obama with “quickie” SOPA rules

Filed under: Americas, Law, Liberty, Media, Technology — Tags: , , , , , , — Nicholas @ 10:26

Colombia buckles under intense US lobbying to introduce SOPA-like copyright rules in time for President Obama’s visit:

President Obama is heading to Colombia this weekend for a summit, and we’d been hearing stories that US officials had been putting tremendous pressure on Colombian officials to pass new, ridiculously draconian copyright laws ahead of that visit. So that’s exactly what the Colombian government did — using an “emergency procedure” to rush through a bad bill that is quite extreme.

Earlier this year, Colombia tried to pass basically the same bill, which was called LesLleras, after Interior Minister German Vargas Lleras (who proposed it). That bill was so extreme that it resulted in SOPA-like protests, following significant concerns raised by the public as well as copyright and free speech experts. So, this time around, the government just claimed it was an emergency and rushed the bill through, despite all of its problems. They seemed to think that the public wouldn’t notice — but they’re wrong.

As is typical of idiotic trade agreements pushed via the USTR — who only seems to listen to Hollywood on these issues — the copyright bill includes all sorts of draconian enforcement techniques and expansions of existing copyright law, and removal of free speech rights. But what it does not include are any exceptions to copyright law — the very important tools that even the US Supreme Court admits are the “safety valves” that stop copyright law from being abusive, oppressive and contrary to freedom of speech

February 23, 2012

Reason.tv: Months later, still no charges in the Gibson Guitar raid

Filed under: Bureaucracy, Government, Law, USA, Woodworking — Tags: , , , , — Nicholas @ 13:36

Earlier posts on the Gibson raid here, here, here, and here.

January 4, 2012

Santorum is the “Spock with a beard” universe version of Ron Paul

Filed under: Economics, Government, Liberty, Politics, USA — Tags: , , , , , — Nicholas @ 09:55

Michael Tanner enumerates the Santorum attributes his evangelical conservative fans seem to find most attractive:

There is no doubt that Santorum is deeply conservative on social issues. He is ardently anti-abortion, even in cases of rape and incest, and no one takes a stronger stand against gay rights. In fact, with his comparison of gay sex to “man on dog” relationships, Santorum seldom even makes a pretense of tolerance. While that sort of rhetoric may play well in Iowa pulpits, it will be far less well received elsewhere in the nation.

[. . .]

Santorum’s voting record shows that he embraced George Bush–style “big-government conservatism.” For example, he supported the Medicare prescription-drug benefit and No Child Left Behind.

He never met an earmark that he didn’t like. In fact, it wasn’t just earmarks for his own state that he favored, which might be forgiven as pure electoral pragmatism, but earmarks for everyone, including the notorious “Bridge to Nowhere.” The quintessential Washington insider, he worked closely with Tom DeLay to set up the “K Street Project,” linking lobbyists with the GOP leadership.

He voted against NAFTA and has long opposed free trade. He backed higher tariffs on everything from steel to honey. He still supports an industrial policy with the government tilting the playing field toward manufacturing industries and picking winners and losers.

In fact, Santorum might be viewed as the mirror image of Ron Paul. If Ron Paul’s campaign has been based on the concept of simply having government leave us alone, Santorum rejects that entire concept. True liberty, he writes, is not “the freedom to be left alone,” but “the freedom to attend to one’s duties to God, to family, and to neighbors.” And he seems fully prepared to use the power of government to support his interpretation of those duties.

January 1, 2012

Gordon Chang still bearish on China

Filed under: China, Economics, Politics — Tags: , , , — Nicholas @ 10:54

He predicted the fall of the Communist China within a decade — back in 2001 — but he isn’t worried that his prediction hasn’t come true yet:

Why has China as we know it survived? First and foremost, the Chinese central government has managed to avoid adhering to many of its obligations made when it joined the WTO in 2001 to open its economy and play by the rules, and the international community maintained a generally tolerant attitude toward this noncompliant behavior. As a result, Beijing has been able to protect much of its home market from foreign competitors while ramping up exports.

[. . .]

Don’t believe any of this. China outperformed other countries because it was in a three-decade upward supercycle, principally for three reasons. First, there were Deng Xiaoping’s transformational “reform and opening up” policies, first implemented in the late 1970s. Second, Deng’s era of change coincided with the end of the Cold War, which brought about the elimination of political barriers to international commerce. Third, all of this took place while China was benefiting from its “demographic dividend,” an extraordinary bulge in the workforce.

Yet China’s “sweet spot” is over because, in recent years, the conditions that created it either disappeared or will soon. First, the Communist Party has turned its back on Deng’s progressive policies. Hu Jintao, the current leader, is presiding over an era marked by, on balance, the reversal of reform. There has been, especially since 2008, a partial renationalization of the economy and a marked narrowing of opportunities for foreign business. For example, Beijing blocked acquisitions by foreigners, erected new barriers like the “indigenous innovation” rules, and harassed market-leading companies like Google. Strengthening “national champion” state enterprises at the expense of others, Hu has abandoned the economic paradigm that made his country successful.

Second, the global boom of the last two decades ended in 2008 when markets around the world crashed. The tumultuous events of that year brought to a close an unusually benign period during which countries attempted to integrate China into the international system and therefore tolerated its mercantilist policies. Now, however, every nation wants to export more and, in an era of protectionism or of managed trade, China will not be able to export its way to prosperity like it did during the Asian financial crisis in the late 1990s. China is more dependent on international commerce than almost any other nation, so trade friction — or even declining global demand — will hurt it more than others. The country, for instance, could be the biggest victim of the eurozone crisis.

Third, China, which during its reform era had one of the best demographic profiles of any nation, will soon have one of the worst. The Chinese workforce will level off in about 2013, perhaps 2014, according to both Chinese and foreign demographers, but the effect is already being felt as wages rise, a trend that will eventually make the country’s factories uncompetitive. China, strangely enough, is running out of people to move to cities, work in factories, and power its economy. Demography may not be destiny, but it will now create high barriers for growth.

H/T to Chris Myrick for the link.

December 19, 2011

Kelly McParland: “Norwegians are the most revoltingly perfect people in the world”

Filed under: Bureaucracy, Economics, Europe, Food — Tags: , , , , — Nicholas @ 14:24

Don’t worry, my Norwegian friends, it’s just small-minded Canadian jealousy that you tend to beat us in all the “Smug Country” polls and your national monopoly is even more constricting and incompetent than our equivalent national monopoly:

Everyone knows the Norwegians are the most revoltingly perfect people in the world.

They consistently top all lists of Things Good Countries Do.

They give more to foreign aid than just about any other country in the world. Countries are supposed to give 70¢ for every $100 of national production, but hardly any do. Norway gives about 40% more than the benchmark. They’re sitting on hundreds of billions of dollars in oil profits, and instead of blowing it on short-term expediencies (like a certain western province we could mention) they squirrel a lot of it away in an investment fund to help maintain their high standard of living when the oil runs out. And believe me, their standard of living is high: a cradle-to-grave nannyism that revolts conservatives but seems to work for Norwegians. (In Norway, life is so soft that even cows are required to have rubber mats in their stalls so they can rest comfortably between shifts).

They’re so perfect they’re annoying. Even Swedes get tired of hearing about them. So it’s kind of fun to read about how they’ve completely buggered up their supply management system, so that the entire country has been stripped of its butter supply just as Christmas arrives and everyone gears up to make lots of stuff for which butter is required. And if it reminds you of Canada’s own supply management system (think: dairy products and Quebec), all the better.

December 12, 2011

Defining crony capitalism

Filed under: Economics, Government, Liberty, Politics — Tags: , , , , , — Nicholas @ 14:51

Bill Frezza explains what crony capitalism is and how it differs from free market capitalism:

If defenders of capitalism hope to win over fair-minded fellow citizens who are honestly upset and confused, we need to define these terms and answer some basic questions. In what ways are Crony Capitalists and Market Capitalists the same and in what ways are they different? What makes the former immoral and the latter virtuous? Why are Crony Capitalists a threat to democracy and prosperity while Market Capitalists are essential to both? How is it that ever larger numbers of Market Capitalists are being corrupted, turning into Crony Capitalists? And what can we do to reverse that trend?

All capitalism is driven by greed — the desire to not only achieve economic security, but to amass pools of capital beyond one’s basic needs. This capital can fuel the kind of conspicuous consumption that offends egalitarians. But it also finances investments in new products and businesses, without which the economy cannot grow. [. . .]

What makes Crony Capitalists different is their willingness to use the coercive powers of government to gain an advantage they could not earn in the market. This can come in the form of regulations that favor them while hindering competitors, laws that restrict entry into their markets, and government-sponsored cartels that fix prices, grant monopolies, or both.

Crony Capitalists are also more than happy to help themselves to money from the public treasury. This can come from wasteful or unnecessary spending programs that turn government into a captive customer, subsidies that flow directly into their coffers, or mandates that force consumers to buy their products.

[. . .]

Beyond these obvious Crony Capitalists lies a slippery slope designed to attract and entrap Market Capitalists: the tax code. By setting nominal corporate tax rates high while marketing tax breaks to specific companies and industries, Congress assures itself a steady stream of campaign contributions from companies looking to lighten their tax load. While there is no shame in reducing one’s tax burden from 35% to a more globally competitive 20%, is it any wonder that people get sore when some extremely profitable corporations manage to get their tax burden down to nearly 0%?

November 29, 2011

Stephen Gordon: Governments should favour consumers over producers

Filed under: Cancon, Economics, Government — Tags: , — Nicholas @ 09:40

In his latest post at the Globe & Mail‘s Economy Lab, Stephen Gordon points out that governments get the entire prosperity thing wrong:

The next time a political party vows to defend the interests of the producers in a certain industry, you should ask why it isn’t choosing to defend the interests of consumers instead. Because the contribution of an industry to the public good is not its ability to provide large incomes to those who work there; it is its ability to produce things that people want to buy.

Business groups may give lip-service to the benefits of competitive markets, but their heart isn’t in it; they know that their real interests are best served by providing reduced output at high prices. And that’s exactly what we get whenever governments set policy in order to benefit producers: see, for example, our dairy industry.

The motives of producers who call for special treatment in the name of consumer protection are equally suspect. Producers are not in business for their health, and they definitely are not in it for your health. So when producers call for regulations in the name of protecting consumers, you can generally assume that the real and intended effect is to exclude potential competitors: see, for example, our dairy industry.

November 15, 2011

Stephen Gordon: One does not simply end supply management

Filed under: Cancon, Economics, Food, Liberty — Tags: , , , — Nicholas @ 09:29

Stephen Gordon in the Globe and Mail‘s Economy Lab on the economically indefensible Canadian anomaly known as “supply management”:

The best way to get a rise out of Canadian economists is to ask us about our dairy supply management system. It’s simply indefensible: a government-enforced cartel whose only purpose is to generate high prices for what most would view as essential goods. This sort of arrangement wouldn’t be — and isn’t — tolerated in another sector of the economy. Nor is it tolerated anywhere else in the world. So the news that the federal government is considering putting supply management on the table in order to join the Trans-Pacific Partnership trade deal is guaranteed to generate a certain amount of excitement among my colleagues.

It’s hard to believe that the interests of 13,000 Canadian dairy farmers could consistently trump the interests of 34 million Canadian dairy consumers, but yet the system is still with us. Why can’t we simply end supply management and let consumers benefit from lower dairy prices?

The problem is that current dairy farmers are — for the most part — not earning monopoly rents from what they produce. In order to sell their output, dairy farmers must first obtain a permit to do so, and dairy quotas are not cheap: more than $25,000 per cow. To a very great extent, the higher prices that they receive simply cover this initial investment.

November 12, 2011

Still no charges in the Gibson Guitar case

Filed under: Bureaucracy, India, Law, Media, USA, Woodworking — Tags: , , , , — Nicholas @ 11:00

An update in the Wall Street Journal just recaps the background to the case, and has an interview with Henry Juszkiewicz, the CEO.

On Aug. 24, federal agents descended on three factories and the Nashville corporate headquarters of the Gibson Guitar Corp. Accompanied by armored SWAT teams with automatic weapons, agents from the Fish and Wildlife Service swarmed the factories, threatening bewildered luthiers, or guitar craftsman, and other frightened employees. A smaller horde invaded the office of CEO Henry Juszkiewicz, pawing through it all day while an armed man stood in the door to block his way.

“I was pretty upset,” Mr. Juszkiewicz says now, sitting outside that same office. “But you can only do so much when there’s a gun in your face and it’s the federal government.” When the chaos subsided, the feds (with a warrant issued under a conservation law called the Lacey Act) had stripped Gibson of almost all of its imported Indian rosewood and some other materials crucial to guitar making.

The incident attracted national attention and outrage. Like Boeing — whose plans to locate new production in South Carolina are opposed by the National Labor Relations Board — here was an iconic American brand under seemingly senseless federal fire.

« Newer Posts — Older Posts »

Powered by WordPress