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Should Food Be a Commodity?
Every second Monday something miraculous happens in my kitchen. One minute the cupboards are bare: the next minute groceries are delivered right on to the kitchen counters. I use Grocery Gateway, owned by Longos, to order groceries on the internet and have them delivered as they say, “right on to your kitchen table!” Fabulous!
This week, it occurred to me to wonder at the tremendous amount of human effort that had been involved in bringing such a rich harvest to my home. Grapes from Chili, oranges from California, tomatoes from Ontario: everything had been collected from such widespread parts of the world. I thought of the owners of the farms and orchards, the workers who had picked the crops, the transport people who had brought everything together to Toronto, Canada. Then there were the people who had made up my order, and those who had brought it to my door and delivered it with a smile. I felt grateful to them all, and willingly paid the price asked for such a service.
I hope all those farmers and people involved in producing such a richness of food, take a great pride in doing so. They are feeding the world, and without them we would all still be feverishly fending for ourselves. Without the farmers down through the ages, and all the builders, spinners and weavers, and others too numerous to mention, we would still be back in the caves. Human ingenuity and self-interest has brought us a long way!
These musing brought into my mind Adam Smith, my favorite moral philosopher and the father of economics. Neither a political or religious ideologist, nor an Utopian, he was a pragmatist, and concerned with striving to understand reality. The most famous of quotes from his work came into my mind. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” When humans began to trade with each other and further exercise their self-interest, they took another giant step forward. Those familiar with Adam Smith can understand how free trade between individuals and regions advanced civilization. Wealth began to be built up, and life improved for everyone beyond imagining.
My mind moved on to the report on Reuters about the address Pope Francis gave in Rome to the United Nations Food and Agricultural Organization (FAO) on Nov. 30. The Pope said that speculation in food commodities, market priorities, and greed for profits are undermining the global fight against poverty and hunger. He called on rich nations to share their wealth and denounced waste, excessive consumption, and unequal distribution of food. This address seems to be quite clearly stating that the present system of food production and distribution is not doing the job of feeding the hungry. It would appear that Pope Francis doesn’t agree with Adam Smith about self-interest motivating people to work, fueling the markets, and bringing needed and wanted goods to the buyers, including food. If food were not a commodity, and people prepared to pay for it, what would an alternative system look like?
The Pope has said at other times that capitalism is not a good system. It allows some people to become rich, while others remain poor, implying that those who become rich are greedy, and do so at the expense of others. There doesn’t appear to be any appreciation of the hard work needed to run any business, including farms. Food doesn’t appear by magic. It is not transported by wishful thinking. It is not marketed without any effort. Is all the work involved to go without reward?
The conference wasn’t all empty platitudes, divorced from reality. The outcome was the Rome Declaration on Nutrition which states that there is a need to implement coherent public policies across relevant sectors, from production to consumption. This sounds suspiciously like central planning. The dangerous ideas of Karl Marx have been proven not to work. Perhaps someone ought to explain this to Pope Francis. More regulation seems to be the message coming through from him.
What do you think? Is Pope Francis correct in saying that food ought not to be a commodity? Ought the food producers in our societies be controlled by central planning? Is it the right of every individual to be fed by others?
Published in General
“Who will help me?” asked the Little Red Hen. A story so simple a child could understand – but a Pope and a million economists can’t.
Many societies have tried to keep food from becoming a commodity. Shortage and starvation inevitably follow. (Thomas Sowell’s Basic Economics discusses this in detail.) In societies (such as ours) where food is treated as a commodity surplus results and obesity, not starvation is the problem.
Unless the objective is to see as many people as possible attain the kingdom of heaven as soon as possible (through starvation at an early age), I would say it is better to allow food to be a commodity.
Seawriter
Should food be a commodity? It is.
It’s rather like asking, “Should humans be mammals?”
I wish people would stop calling capitalism a “system.” Capitalism is the lack of an imposed system; the ground state.
I don’t have the stomach to read such socialist garbage, so I don’t know if this is specifically what the Pope is referring to, but: Usually when people complain about the influence of speculators and “greed” in agriculture, they are objecting to financial forwards and futures. An investor agrees in advance with an agricultural producer (or another speculator) on a delivery price for a certain foodstuff at a certain future time.
It’s possible for speculators to make money on these trades, such that the farmer would have been better off if he or she hadn’t entered into the contract. But the reverse is also true. And regardless of which way things turn out, the farmer has eliminated risk by locking in his prices in advance. If you eliminate the futures markets, it will make farmers more risk-averse, they will produce less food, and more people will go hungry.
I agree; “free markets” is a better term.
In a sense, free markets might be considered a “system” in that resources are allocated according their expected return on capital. Under socialism, resources are allocated according to what its leaders think are best for society; under communism, resources are allocated in an attempt to achieve equal outcomes.
But the flaw in rechristening free markets as “capitalism” is that under free markets, power to allocate resources is decentralized. Or, if you object that capital can be concentrated in a few hands, under free markets the power to allocate resources is voluntary rather than political/legal.
Here is Wikipedia on the subject of this wonderful story. Thanks for reminding us of it, EJH. As you say, it says it all!
Why doesn’t someone explain the basics of economics to Pope Francis?
So why is the Pope suggesting it should be not a commodity? As you say, it is so obvious why it is!
I like this, Mike! Capitalism is the natural result of human behavior based on self-interest. We both exchange our “stuff”. You are happy and so am I. Free market!
Socialism is a system whereby the state “nationalizes” the tools of production and gives the stolen loot to “the people”.
I still remember my father talking about the effects of the New Britain that came into being after the Second World War. One of his friends had his transport business “nationalized”. His friend was heart-broken. As were the people who used his buses. Where before the looting the buses were always many and on time, in the hands of the “masses”, things changed and not for the better.
Is the Pope living in such an insulated world that he knows nothing about the real world? Is no one prepared to tell him he is “away with the fairies”?
And Pope Francis doesn’t like that lack of political and legal control. That is what he is railing against. It would appear he doesn’t believe in the ability of human beings to control their own destiny, and that the outcome of that can be good.
Maybe we can take up a collection to send Pope Francis a copy of Thomas Sowell’s Basic Economics.
Seriously, Francis’s experience with capitalism has not been with capitalism. Rather he lived for many years in an environment where crony capitalism ruled – socialistic fascism where governments and corporations partnered to squeeze out the average person. That is his conception of capitalism. At his age, I doubt you will change his mind. Not even if Thomas Sowell spoke Spanish and we shipped Sowell over to Rome for a year to teach Pope Francis what free markets really are.
(As Sowell points out Adam Smith disliked capitalists because they created cartels, which destroys true capitalism. So Pope Francis is only half wrong.)
Seawriter
It would appear that Pope Francis has a different definition of “capitalism” than has Thomas Sowell. Should the Pope perhaps make this clear when he makes pronouncements? We all know where he has come from, and can make allowances for his ignorance. Should he perhaps try to learn something about free markets before he speaks against them?
As long as the developed countries give direct or indirect subsidies to their farmers, they’re distorting the market and keeping low income and low cost global producers out. If we trusted the free market and stopped subsidies it would, I’m sure, raise global incomes and food security globally – but at the cost of (at least for a while) rural incomes in the developed world.
Perhaps when you all write to the Pope (politely, I hope) you could mention that as part of the solution?
The ground state is more like Somalia or Afghanistan: tribalism, clans, subsistence farming, piracy, raids against neighboring tribes to steal their property and their women, slavery, etc.
We live in a society with a very, very complex system built up from the building blocks including English common law, complex property rights, courts and police to enforce them, copyrights, patents, capital markets that are highly regulated by entities like the SEC, and complex international treaties like NAFTA and the WTO.
That is most definately a “system.” I happen to think it’s a pretty good system overall, but it’s very, very far removed from the ground state.
Hence the $25 Whopper in Norway. Swimming in petroleum, with some of the least fertile land in Europe, they have some of the highest food tariffs in the world to protect local farmers. Why? Its a Norwegian thing. Ye gads the expense reports I turn in after travelling there.
Agreed, sort of. Developed world farmers could move into niche areas where they could command higher prices. Cater to locovores or folks who buy into the organic fad. So, if they adapt, even farmers in the developed world would win. (If you cannot add value to justify a higher price do you deserve the price?)
I will also point out food aid tends to destroy agriculture in underdeveloped countries. It is hard to compete with “free.”
Seawriter
I seem to recall from a thread some time ago, must have been on R 1.0, that you were proud of Canada’s welfare programs and said something to the effect that in an advanced civilized nation no one should be left to starve in the streets.
Am I remembering correctly, and if so do you still believe that?
I feel saying “based on self-interest” is actually both redundant and not quite accurate. Humans act based on their own theory of the world, which includes their morality, which often can go against their rational self-interest. You can define “anything a person does” as “self-interest,” but I think this misses a lot of nuance based on common understanding.
I take your point, but I feel a lot of what we have now is the more highly ordered version of where we started. I can see how calling it the ground state obscures that.
Some time ago, one of my sisters bought a nice DSLR camera. She thought it would prove worth the expense, but she ended up sticking to her phone camera most of the time simply because she could have it with her at all times and capture those fleeting moments like her daughter spontaneously dancing. When she heard me complain recently that my point-and-shoot was having issues and that I was thinking about investing in a new camera, she gave me her DSLR.
She didn’t sell me her camera. She gave it to me, because she likes my photography and because she loves me.
Similarly, my dad donated his old college geology books years ago to an aspiring library in Nigeria, because he wanted to help some distant teenagers educate themselves and become professionals.
Likewise, people donate food, clothes, toys, and whatnot all across America every day. Often, they buy things for the sole purpose of giving them to strangers.
Yes, our Vicar in Rome is mistaken about capitalism and the need for centralized bureaucracies to redistribute wealth or to regulate (in the old-fashioned sense of “make regular”) various industries. But he and our other bishops are correct to insist that capitalism, like any system or free market, must be shaped and tempered by love.
A network of self-interest may provide the means of joy and fulfillment, but those means may be wasted, abused, or hoarded. It is love which gives meaning to our labors, to the fruits of those labors, and to our trades. Freedom, in the marketplace or in any other domain of life, is merely opportunity. Shared and happy abundance is not its only possible end.
As Joseph touches on, capitalism alone has not provided this extraordinary standard of living we now enjoy. Capitalism in cooperation with other values, including a devotion to charity and justice for all people, is how we became so rich.
During the recent spate of stories about the shortage of basics in Venezuela, I saw a tweet that went something like: Socialism: people standing in line waiting for bread. Capitalism: bread standing in line waiting for people.
Pope Francis should remember the old adage that a lot more tears have been shed over prayers that have been granted than over prayers denied.
So what would the alternative to a commodity/trading food system be?
1. Require that consumers of food must deal directly with producers.
a. For my personal interests, this strikes me as rather inefficient. For some of my food during part of the year I do deal directly with the farmers who grow the food. But, that’s for only a part of my food needs, and if I had to rely on it year-round, my food choices would be quite limited between November and May. I could deal directly with farmers from all over and arrange for individual delivery from each farmer to my door, but I prefer to spend my time doing other things (like earning a living). Therefore, I pay Danny Wegman’s family (in the form of the Wegman’s supermarket chain) to go find the food I want and bring it to my town.
b. For the world at large, I don’t see how a direct dealing requirement would get large quantities of food to large numbers of people who currently lack food, particularly since it seems today that the efficient producers and the needy are quite geographically remote from one another.
2. Install regulators who would direct the production and distribution of food. These regulators would need to know exactly who needs food, and who is capable of producing food, and have the power to require those who are capable of producing to produce.
a. To be workable, the number of regulators must be relatively small. How does a relatively small group of people know enough: i. to accurately predict what food needs are going to be, including where those needs are going to arise? My food needs (desk job in an office) are different from the food needs of the guys building the apartment building across the street from my office. ii. to accurately know enough details about each person capable of producing food to tell that person how much of what to produce?
b. How would the regulators then ensure that the producers produced the “right” stuff (as determined by the regulators)?
c. How would the regulators subsequently ensure that the produced stuff got to the right consumers (as determined by the regulators)?
In his address, Pope Francis goes on to say
It is the duty of every State that cares for the wellbeing of its citizens to subscribe to them unreservedly, and to take the necessary steps to ensure their implementation.
So he obviously comes from the premise that it is right for some humans to rule over other humans (through the “State”). Therefore, I suspect he would favor the second alternative.
Scripture (backed by human experience) tells us that all people are prone to yielding to temptations that lead to corruption, I don’t see how anyone can say that a regulatory system (necessarily involving humans) is any more sure to deliver the right food to all the right people than does a market “system.”
The men’s Bible study I attend is full of men with leftist views who think it’s proper to force others to conform to their notions of charity by having government do “charity.” But, in recent months, more of them have begun to realize that by using government to do our charity, we lose the ability to teach ourselves and our children about charity, and along with it, to learn what love is and what love does.
I’ve exhausted myself ranting at those who complain about “speculators” that 1) they only complain when the speculator gains, and 2) they apparently don’t want price signals to be effective.
Well, yeah. Because the moment you outsource it to the organization with a monopoly on the “legitimate” application of violence, it ceases to be charity.
I hear what you are saying, Zafar. But those subsidies for the farmers of the free world are given by their governments out of the self-interest of the citizens of those countries. After self-defense, the thing needed most in any society is food. The farmers in the free world are the most efficient at producing food, and have to be encouraged to keep doing so. The subsidies could be seen as the taxpayers paying the farmers indirectly the true price necessary to have them continuing to feed us.
If I were writing to the Pope, I would be pointing out to him that poverty is often the result of people having too many children whom they can’t feed or educate properly.
“Perhaps someone ought to explain this to Pope Francis.”
Kevin Williamson did a masterful job of this this past summer.
The first part of this post, where you list all the people who make such bounty possible, started sounding like I, Pencil.
Your version could be I, Tomato.
Seawriter: I will also point out food aid tends to destroy agriculture in underdeveloped countries. It is hard to compete with “free.”
This is something to write about to the Pope. Food Aid food is free, and it does lots of harm to the country accepting it. In other words, there is already lots of “charity” being given, which the Pope says he doesn’t like.
I find it hard to understand what he really means by what he is actually saying.