On Thu, Feb 22, 2001 at 10:20:43AM -0500, Michael Lorrey wrote:
> Very good points, Greg. Also note that in any economic system, demand
> tends to expand to meet supply, and also that excessive supply over
> demand tends to cause waste and a preference for the cheapest supplier,
> which invariably tends to be one that externalizes costs to a greater
> extent than its competition. Maintaining supply/demand balance works to
> minimize pollution and waste of resources, something that all greens
> (and extropes) should be for, regardless of their economic dogma.
Generally true, but ...
We're seeing at least one example, today, of an entire industry being
driven to the brink by improvements in its own efficiency and competition
on price. Agriculture!
Here in the EU, price supports have begun to collapse over the past couple
of years. (Those supports, at least in the UK, were originally intended
to provide for self-sufficiency in time of war -- talk about learning the
lessons of WW2!) Agricultural produce prices are falling, and it turns
out that we can't easily support an agricultural sector at all. Only about
2% of the population in the UK is directly involved in food production
(but produce roughly 50% of the food required by the entire population).
Go back 200 years and it took 80% of the population to produce 100% of
the food required. That's a huge improvement in efficiency ... but the
farmers are having horrendous difficulties making ends meet, because of
the continuous downward pressure on food prices.
(Note that price supports in France serve a radically different purpose
from the UK -- France has this tradition of rural living, the ideal of
the peasant farmer as a way of life to aspire to, and the cottage in
the country with its own kitchen garden -- which puts different social
pressures on the system.)
A fundamental problem is that people *can't* physically consume much more
food; obesity levels are rising, but the main source of new money going
into foodstuffs is spending on luxury goods, prepared items, imported
exotica, and so on. Everyone can afford to eat, and most people can afford
to eat what by 1950 standards would be considered a luxury diet. We've got
the most intensive, industrialised agricultural system in the EU, but it's
competing with third world banana economies -- it can't bring in enough
money to operate effectively.
If we posit a world in which regional economic imbalances have flattened
out, we'll eventually hit a point where downward pressure on food prices
can't go any further because if it does there'll be insufficient money to
pay for food production -- but consumption os flat. If food is produced
at cost, in sufficient quantity and quality for everyone, there is *no*
further room for growth (other than through artificially-induced fashions
and fads, which offer transient relief through manufactured scarcity).
What happens then?
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