As food prices skyrocket, there is growing unrest in the developing world:
Food riots have already occurred around the world, and the World Bank predicts political and social unrest over food in 30 to 40 countries. The United Nations World Food Program spends $3 billion, but needs $500 million more just to keep up. With food prices increasing as demand goes up, we look at the “new face” of hunger worldwide and what the drive for bio-fuels has to do with it
As biofuel consumption rises in the developed world, we can only expect this problem to get worse. The Wall Street Journal raises the specter of a new Malthusianism, as does the BBC.
One class of public intellectuals has always been quick to dismiss these claims as alarmist. Harking back to Paul Ehrlich’s famously false prediction of famine due to overpopulation, techno-optimists assume that human ingenuity will always come to the rescue. Worries about resource constraints have also gotten tied up in complicated politics of birth control. Debates between the Club of Rome and its critics quickly degenerated into rival futurologies, with one side predicting scarcity and the other plenty. Since prognostication is a mug’s game, the academic debate on the issue became stale for a while. Advances in science made it easy to believe that that nanotech and a new “weightless economy” could rescue us from worrying about mundane things like food and water.
Now the rise in commodity prices and general scarcity of food and fuel are generating new interest in Malthusian arguments. Before public intellectuals again get bogged down in the fruitless tech-prediction game, I hope they consider another angle on the crisis. Perhaps it’s time to reconsider economics’ extraordinarily prominent role in public policy, and to complement it with other social sciences.
Given that economics is often defined as the study of scarcity, food and fuel shortages may seem like a particularly bizarre rationale for discounting it. However, there is a narrative component of economic analysis, and an explanatory style, that makes it particularly inapt here. Consider two broad schools of sociological thought: functionalist and conflict-oriented theories. Functionalists are apt to explain how all parts of a given social order fit together, like the organs within a body (think of Durkheim’s work on “organic solidarity”). Conflict theories emphasize times of crisis and change, underscoring the ways in which different classes, professional groups, ethnic groups or states challenge one another for scarce material or symbolic resources.
Economic thought is often unapologetically functionalist. As Hirschman described its origins in the doux commerce school, one of its basic ideas is the prevalence of mutual gains from trade given comparative advantage. As individuals and groups specialize, they become more expert at what they do and more efficiently produce goods and services used by others. Gains from trade become the foundation of an economic order that promises increasing GDP, health status, and comfort.
This story has broadly described much of North America, Western Europe, and Japan. Wealthier parts of China and India have also experienced a lot of growth. But what happens when critical resources–such as oil, timber, or wheat–are in short supply? Who gets to continue growing, and who has to stop–or, worse, fall further behind? Given how quickly general technological superiority can be converted into military superiority, the stakes here are very high.
Though economists have sometimes scoffed at a lack of rigor in sociology, I wouldn’t be surprised to see sociologists turn the table and claim that economics itself reflects only one half of sociology’s classic dual viewpoints of “conflict and functionalism.” Fortunately both evolutionary economists and theorists of positional goods (like Robert H. Frank) understand how zero-sum games can make classic characterizations of market efficiency obsolete. The question now is how far to apply their insights.
I’ve argued that Frank’s views on positional goods need to become a part of the economics of health care, in part because a relatively fixed supply of doctors can mean that any group that uses its buying power to purchase exceptionally intense and time-consuming levels of care threatens to divert medical care from those with less purchasing power. (In Robert Kuttner’s words, care is being allocated to profit opportunities rather than medical need.) To the extent that commodities like oil appear to have a relatively fixed supply, the same analysis may apply.