Bush to Drop Farm Subsidies if EU Does the Same

[Fiona]

But also keep in mind that dairy farming might not be the best sector for the Jamaicans to allocate their resources to.

Forgive me but this seems like tautology. If the outcome doesn't fit the theory it's a bad example ?

In fact Japan's protectionism is particularly directed to food, especially rice. You say governments are not very good at picking economic winners.That is an "off the shelf" argument which would need to be supported by evidence. Much depends on what the government is trying to do and that is often very different from what a business would be aiming for.

I would be interested if you would give details of any country which became rich in a free market. I know of no example where great prosperity was not based on protectionism.

Incidentally, and further to your comments on Chile, I found this.

http://www.huppi.com/kangaroo/L-chichile.htm

Any comment ?

And a counterexample: there is a country which has practised industrial policy, protectionism and subsidies for food and other basic necessities fairly consistently and on a very wide scale over the last decennia. It has moreover a huge internal market to be not too dependent on the outside world. It's called India. Now I wouldn't say that India is a radiant example of economic success.

Please see my original link, which did discuss some aspects of the situation in India. I would add that the country has only existed since 1949 and it started from a very low base. There were a lot of problems after partition and many structural difficulties because of the colonial legacy. Nevertheless a lot of British and American jobs are now being lost to India so it looks to me as if they are doing pretty well. Again I think you are approaching this from a very short time scale. Change takes longer than you seem to think.

A little philosophical remark: from the Liberal (or for US people Libertarian) POV its better to count on the self-interest of people than on their solidarity.

That's not philosophy, it's politics. It smuggles in a whole raft of assumptions about "human nature" which are carefully unexamined. I don't think it's true.

[Lestat]

[QUOTE=Fiona]Forgive me but this seems like tautology. If the outcome doesn't fit the theory it's a bad example ? [/QUOTE]
No, it's more like, if it isn't profitable, it's not economically sound. But that was in fact not what I was referring to. I said might, and I should have added, depending on the climate (and other possible factors such as presence of parasites and diseases). As far as I know, but I can be wrong, Jamaica has a humid, hot tropical climate and that's not necessarily the best climate for dairy farming. In Africa, e.g. the best areas for dairy farming are the highlands and the drier savannahs, because of climate but also because of the prevalence of certain diseases in the forest zone.


[QUOTE=Fiona]
That's not philosophy, it's politics. It smuggles in a whole raft of assumptions about "human nature" which are carefully unexamined. I don't think it's true.[/QUOTE]

Eeh, mah girl, easy-o . I meant philosophical in the figurative sense (calm, stoical, taking a bit of holidays from the main issue) and even a bit tongue in cheek. Sorry if I misled you in thinking that I was quoting philosophy. It was meant to lighten the mood (well that didn't work )

For the rest, bear with me. But as I said before, I have no easy access to sources.

[Fiona]

@ Lestat

Sorry I took that the wrong way. I may have been misled by your signature

[Cuchulain82]

a little riposte...

Much has been said, so I'll try to summarize some thoughts:

As he said, "in the long run we're all dead". So what is the new thinking and how does it incorporate that insight?

However, the demand-supply relationship is very real- remember all those graphs with X's shifting up and down and left and right? That is demand and supply.

I rather think that was my point, not yours . Lots of x's and y's and no people.

The whole point about Keynes and Econ was that some of Viscun's "cold economic theory" is actually very useful for explaining the problem with subsidies. Subsidies are a form of price floor, and what happens with price floors is that over time, the demand and supply relationship can not equalize as it should. This is what I talked about before. The end result is that there is an excess supply. You point is, at least in part, more that we misuse this excess. However, macro economics is basically a bunch of assembled models of observed behavior, so in that sense it does contain people.

@Jamaicans

As for the example of Jamaican farmers, I can say this. For many years the predominant theory in Development was that liberalization and opening of markets would lead to development in lesser developed countries (LDCs). However, the truth is that LDCs were actually ravaged by developed countries because of the huge advantages that established nations and companies had- think of United Fruit in Central America during the 1950's-70's. They absolutely owned that area, to the extent that the US became militarily involved in Central America to protect United Fruit assets.

To get back on track, Agricultural markets are particularly vulnerable in LDCs. One common method of assessing the status of development in a particular nation is to look at the percentage of the population involved in agriculture. Standard "first world" percentage is anywhere from 3%-7% (and 7% is pretty high). If there is more than 10% or 12% of the pop. in agriculture, chances are the nation needs some help. Because of various economic realities (that I honestly don’t feel like typing out), agriculture markets are particularly vulnerable. Sometimes nations are forced into producing cash crops, sometimes they can’t compete in any real sense, but the truth is this: protectionism, when done right, helps the development of a LDC. Protecting your assets and allowing them to grow can be the right tool to get things going.

(On the flip side, there are many examples where excessive protectionism has killed a market long term. This is a really tough prediction to make, and even development experts are reinventing the field every day.)

No, it does not.! the article you refer to is heavily biased, and concerns itself more with chiraques over-exess budjett than real life..

I disagree. Chirac’s excesses are the backdrop. The real point of the article is that the CAP is ridiculous.

(FYI- the Economist is, imho, probably the single most reliable and transparent news sources in the English-speaking world. Of all the major publications I’ve ever read, I would rate the Economist as the best- far ahead of the New York Times/ Herald-Tribune, Wall Street Journal, and BBC news, for example)

@Japan

Japan is not usually a good example for anything agricultural, and regarding rice it is a bonafide awful example. The Japanese are a funny people in some respects, and in particular they have a tremendous amount of national pride. They often believe very sincerely that Japanese products are of a higher quality than products produced other places, and rice is the quintessential example of this. There is a huge push in Japan to ‘be a good citizen and buy Japanese rice’. Rice from other place is, as far as I know, comparable on every level. The Japanese population, however, seems very willing to pay noticeably higher prices for Japanese rice. Not that this is good or bad- I think people should be able to spend their money however they like. It just means that economic data from Japan regarding rice is usually not a good data source.

(I only know this because a professor I studied under was a Japan expert, and this came up in a class about International Political-Economy)

@Chile, Fiona

Fiona, no one else has said this yet, but I can’t agree with your article about Chile. Central and South America have been a disaster, as far as development is concerned, since the 1950’s when the process started. Dependency theory helped during the late 1960’s, but actually did more damage long term than it did good. The Chicago economists have a real mixed record in that region, and I tend to agree. In any case, there are better regions for comparison about development, with a few of the most successful cases being: Ireland, Poland, China (still ongoing), and a few other far eastern nations that I’m not personally familiar with.

Whew! That is a lot of typing… I swore I had something else new to say, but I can’t remember what it was now…

[Fiona]

Much has been said, so I'll try to summarize some thoughts:


The whole point about Keynes and Econ was that some of Viscun's "cold economic theory" is actually very useful for explaining the problem with subsidies. Subsidies are a form of price floor, and what happens with price floors is that over time, the demand and supply relationship can not equalize as it should. This is what I talked about before. The end result is that there is an excess supply. You point is, at least in part, more that we misuse this excess. However, macro economics is basically a bunch of assembled models of observed behavior, so in that sense it does contain people.

Cuchulain,

If subsidies are a form of price floor then excluding the people who are starving from the model is a form of demand floor. The end result is that there is a deficiency of demand. Why isn't this equally fatal to demand and supply not equalising as they should ?

As is implicit in my earlier posts it is not assembled models of observed behaviour, it is assembled models of bits of observed behaviour which are allowed to count, at best. Or so I think.

Demand is an ordinary english word, but the way it is used in economics is not ordinary. Same goes for supply. Each seems to be defined in relation to the other so that supply is that which, with demand, results in price stability; and vice versa. As gamers we should have no problem with an explanation based on the worm ouroborous, I suppose; but I do.

I think we are agreeing in your next 3 paragraphs.

I leave it to Mulligan to answer your response to his post

@Japan

Japan is not usually a good example for anything agricultural, and regarding rice it is a bonafide awful example. The Japanese are a funny people in some respects, and in particular they have a tremendous amount of national pride. They often believe very sincerely that Japanese products are of a higher quality than products produced other places, and rice is the quintessential example of this. There is a huge push in Japan to ‘be a good citizen and buy Japanese rice’. Rice from other place is, as far as I know, comparable on every level. The Japanese population, however, seems very willing to pay noticeably higher prices for Japanese rice. Not that this is good or bad- I think people should be able to spend their money however they like. It just means that economic data from Japan regarding rice is usually not a good data source.

(I only know this because a professor I studied under was a Japan expert, and this came up in a class about International Political-Economy)

I am aware of this aspect of Japanese behaviour. Two points:

1. If the economic theory is "assembled models of observed behaviour" then this is one of them. Once again you seem to be leaving out everything that doesn't fit the model as a bad example. Where I'm coming from we would call it a counter example and that is fatal for a theory (see Karl Popper and many others)

2. Japanese people are not sentimental or stupid. They seem to be convinced that security of the food supply is essential to economic development. They seem to me to be right.

@Chile, Fiona

Fiona, no one else has said this yet, but I can’t agree with your article about Chile. Central and South America have been a disaster, as far as development is concerned, since the 1950’s when the process started. Dependency theory helped during the late 1960’s, but actually did more damage long term than it did good. The Chicago economists have a real mixed record in that region, and I tend to agree. In any case, there are better regions for comparison about development, with a few of the most successful cases being: Ireland, Poland, China (still ongoing), and a few other far eastern nations that I’m not personally familiar with.

I am sorry, I do not quite follow. I understand that you don't agree with the article I linked but you go on to say the Chicago economists have a mixed record and you tend to agree. What is it you agree with ?

I know nothing about Poland or China, but Ireland is successful precisely because it has benefited from the CAP. Their growth dates from when they joined the EU, as I understand it.

[Cuchulain82]

[QUOTE=Fiona]If subsidies are a form of price floor then excluding the people who are starving from the model is a form of demand floor. The end result is that there is a deficiency of demand. Why isn't this equally fatal to demand and supply not equalising as they should ?[/quote]
Ummm... I don't think so. The "Market" that I mean is the US domestic food market, because that is where the subsidies go to. Granted, with NAFTA and other american trade agreements food is exported throughout the hemisphere. The starving people in LDCs are never a part of the market, so it isn't a selection bias to not include them- the fact is they aren't ever a part of this economic model.

This example is, btw, a pretty sound example. It is general, and as such it isn't foolproof. However, it is litereally a textbook example.

[QUOTE=Fiona]As is implicit in my earlier posts it is not assembled models of observed behaviour, it is assembled models of bits of observed behaviour which are allowed to count, at best. Or so I think.[/quote]
Well, we're all allowed our opinions. IMO, Economics is an astounding tool, one of the few disciplines that does a good job bridging the gap between social and hard sciences. There is no lack of people who agree with your point of view. Have you read Amartya Sen's Development as Freedom? He is a Harvard professor and is fabulously intelligent. I think that some of the ideas that he writes about in the book might be very relevant.

[QUOTE=Fiona]Demand is an ordinary english word, but the way it is used in economics is not ordinary. Same goes for supply. Each seems to be defined in relation to the other so that supply is that which, with demand, results in price stability; and vice versa. As gamers we should have no problem with an explanation based on the worm ouroborous, I suppose; but I do.[/quote]
Why do you have a problem with any explanation using Demand in the Econ sense? This is, basically, an Econ discussion, so I don't really know what other vocabulary would work best. If we were discussing philosophy (another area I studied) I would use philosophical terms where necessary, with the hope of advancing the dialogue.

[QUOTE=Fiona]I am aware of this aspect of Japanese behaviour. Two points:

1. If the economic theory is "assembled models of observed behaviour" then this is one of them. Once again you seem to be leaving out everything that doesn't fit the model as a bad example. Where I'm coming from we would call it a counter example and that is fatal for a theory (see Karl Popper and many others)[/quote]
Actually, I was trying to explain a statistical anomoly and identify an outlier. What I tried to say was that the behavior of the Japanese, as a people, has been observed to be such that they place a premium on buying Japanese rice. This isn't the case with all other agricultural and consumer products, and so rice is atypical in this regard.

[QUOTE=Fiona]2. Japanese people are not sentimental or stupid. They seem to be convinced that security of the food supply is essential to economic development. They seem to me to be right.[/quote]
Don't put words in my mouth- I didn't say anything about the Japanese being sentimental or stupid. I said they were nationalistic, and that is very true. The Japanese for centuries viewed themselves as a superior race- not culture or group, but race- distinct from the rest of the people of Asia. The assumption was that they were, inherantly, superior to other Asian peoples.

While this Japanese bias has been lessened recently, it still shapes national character. Rice is one reflection of this. Sushi is another- the assumption is that these products are uniquely Japanese, and that non-Japanese people can not make them as well. I want to be clear about this- I'm not saying that Japanese people are prone to bias. I am trying to talk about a market trend in Japan.

[QUOTE=Fiona]I am sorry, I do not quite follow. I understand that you don't agree with the article I linked but you go on to say the Chicago economists have a mixed record and you tend to agree. What is it you agree with ?[/quote]
I'd actually rather not get into it here, if that is okay. I don't think it will forward the discussion in any way. I will say that for a period of a few decades, from the 1950's to the 1970's, the University of Chicago was a premier institution. The philosophy and economics departments were especially exemplary, regularly on par with Harvard and other schools of a similar caliber. Many of the Latin American economists that fueled the various development theories were trained at Chicago (ie: the "Chicago boys"). However, the successes of those heady times have not been borne out over the long term, and the 30 year depression that has plagued virtually all of Central and South America is blamed in no small part on the Chicago-trained economists.

[QUOTE=Fiona]I know nothing about Poland or China, but Ireland is successful precisely because it has benefited from the CAP. Their growth dates from when they joined the EU, as I understand it.[/QUOTE]
Actually, that isn't true as I understand it. Their success does not cooincide with their joining the European Economic Community. The UK and Ireland joined in 1973, but Ireland didn't really develop until the 1990's. This was more to do with the creation of the Common Market in 1993. Tech compaines from all over the world realized that they could set up shop in Ireland for relatively little, and from there they had access to Europe and a viable labor pool. The CAP helped, but the big boom was in the technology sector because of a labor pool that was educated, english speaking, and under-utilized. In that regard, Ireland had many factors that helped speed up the development. However, after hundreds of years of repression and poverty, a good decade was well deserved, don't you think?

(Maybe I shouldn't be bringing up Irish history with someone from the UK...)

[Fiona]

Ummm... I don't think so. The "Market" that I mean is the US domestic food market, because that is where the subsidies go to. Granted, with NAFTA and other american trade agreements food is exported throughout the hemisphere. The starving people in LDCs are never a part of the market, so it isn't a selection bias to not include them- the fact is they aren't ever a part of this economic model.

I shouldn't have used the word starving because it was misleading. I really meant to refer to the people in the US who are hungry, and the greater numbers whose food supply is insecure (see earlier post).These people are in the same market and they do count.

Have you read Amartya Sen's Development as Freedom? He is a Harvard professor and is fabulously intelligent. I think that some of the ideas that he writes about in the book might be very relevant.

I haven't read the book. I think this might be the same person who gave the Reith lectures last year, and if so I have some very limited acquaintance with the work. I will make a point of getting this book though it may take me some time, and more to read and digest it. Thanks for the tip.

Why do you have a problem with any explanation using Demand in the Econ sense? This is, basically, an Econ discussion, so I don't really know what other vocabulary would work best. If we were discussing philosophy (another area I studied) I would use philosophical terms where necessary, with the hope of advancing the dialogue.

I suppose I have trouble with this because the words have an ordinary and an economic meaning. Some of the people I hear talking about the subject trade on the ambiguity. You do not do this and I mean no slur. While I am not advocating jargon where none is required, the words do have specialised meanings in economics and I am not sure this is always clear.

Actually, I was trying to explain a statistical anomoly and identify an outlier. What I tried to say was that the behavior of the Japanese, as a people, has been observed to be such that they place a premium on buying Japanese rice. This isn't the case with all other agricultural and consumer products, and so rice is atypical in this regard.

Well, we're all allowed our opinions. IMO, Economics is an astounding tool, one of the few disciplines that does a good job bridging the gap between social and hard sciences.

I have moved this around a bit. I think this is where we completely part company. I do not think that economics bridges the gap between social and hard sciences. I am not even sure that is possible. Hard science has been very successful in fields where it applies, and it is natural that all other disciplines should want to apply those methods to their subject matter in the hope of making similar progress. I see that some of the models (eg supply and demand) try to emulate the kind of model which gave us f = ma in physics. However in physics there are limited variables and it is possible to do controlled experiments. In social science it is not and cannot be.

At the same time, in hard science you have to specify the scope of the theory. IE you have to identify factors which would change the outcome (and preferably control them) BEFORE you do the experiment. I do not see that economics does this. Rather it seems to explain "anomolous" outcomes after the event, using any convenient or plausible factor which comes to hand. It appears to amount to saying that people will behave like this except when they don't. We can't predict when they won't, only exclude the outcome after they didn't. I may not be explaining this well, but I hope you can see what I'm driving at. Can you tell me what the statistics are which identify Japan as an anomoly ? Can you show me any further work which identifies eg nationalism as a factor in economic decisions; shows the quality and quantity of the influence it has, and correctly predicts the outcome ? Without some such process it seems to me that counter examples (which are fatal to hard scientific theories) are wrongly characterised as anomolies rather than as refutations.

Don't put words in my mouth

.

You are right and I apologise.

I am trying to talk about a market trend in Japan.

So am I. You give one possible explanation and I gave another. I make no claim that mine is scientific. To me it is as plausible as yours, though

I'd actually rather not get into it here, if that is okay. I don't think it will forward the discussion in any way. I will say that for a period of a few decades, from the 1950's to the 1970's, the University of Chicago was a premier institution. The philosophy and economics departments were especially exemplary, regularly on par with Harvard and other schools of a similar caliber. Many of the Latin American economists that fueled the various development theories were trained at Chicago (ie: the "Chicago boys"). However, the successes of those heady times have not been borne out over the long term, and the 30 year depression that has plagued virtually all of Central and South America is blamed in no small part on the Chicago-trained economists.

OK, you know a lot about this and it would probably take you a long time to explain. I'm sure it is complicated. I would only say that this touches on my earlier point. The economics department was exemplary but it seems that when the theory was put to the test it failed. In what sense is this exemplary? In hard science this would settle the matter and we would no longer believe the earth is flat. That's why I don't think this is in any way related to hard science.

Actually, that isn't true as I understand it. Their success does not cooincide with their joining the European Economic Community. The UK and Ireland joined in 1973, but Ireland didn't really develop until the 1990's. This was more to do with the creation of the Common Market in 1993.

I don't really know what you mean by the Common Market here. This is what the UK and Ireland joined in 1973, but the term was changed on the basis of subsequent treaties, first to the EEC and then the EU. The term Common Market has not been used in the UK for ages.

Tech compaines from all over the world realized that they could set up shop in Ireland for relatively little, and from there they had access to Europe and a viable labor pool. The CAP helped, but the big boom was in the technology sector because of a labor pool that was educated, english speaking, and under-utilized. In that regard, Ireland had many factors that helped speed up the development. However, after hundreds of years of repression and poverty, a good decade was well deserved, don't you think?

I can only offer personal and anecdotal observation. I first started going on holiday to rural Ireland in 1984. It was underdeveloped and very poor. However there were infrastructure projects all over the place then, which were funded by the EEC. The farmers were benefiting from the subsidy, or so they said. This has continued since then. I last visited this year and the evidence of prosperity is everywhere, at least as indicated by increased quality housing developments; shops and restaurants etc. Tourism has increased immensely and this has also helped. It is not surprising that there would be a time-lag before the positive effects showed clearly. As to the labour pool, it didn't exist before that happened and in fact, as I understand it, it has largely been met by the reversal of the Irish diaspora. But, as I said, this is mere observation and there may be a lot of other things going on.

By the way, don't worry about talking about Ireland. I don't know what you attribute to me, but it might be helpful for you to know that I am Scottish. Or maybe you haven't heard of us

[Lestat]

@ Fiona : still gathering source material for a more coherent narrative, in the mean time I will try to answer some of the questions & criticisms you raised.

Concerning Ireland, see attached copy of article from a survey of Ireland that appeared in the Economist in October 2004. When Cuchulain talks about the Common Market he actually means the Single Market, created by the Maastricht Treaty (and he got his dates right).
(sorry for not reformatting, lack of time).

[QUOTE=Fiona]Nevertheless a lot of British and American jobs are now being lost to India so it looks to me as if they are doing pretty well.[/QUOTE]
Concerning India, another quote from a survey of India & China:
"THE justified pride that India takes in its IT prowess, and the outsourcing boom it has helped spawn, cannot disguise its irrelevance to the vast mass of Indians. The entire industry employs only about 1m people. According to estimates by NASSCOM, its lobby, income in 2004 from exports of software and services, and from outsourced services such as call-centres, reached nearly $17 billion, equivalent to a quarter of India's merchandise exports. But the industry makes up only 4% of India's GDP, and only a small fraction of the service sector as a whole."
And:
"At present, roughly 70% of Indians live in the countryside"
So on the scale of India's 1 billion size mainly rural population the success in these sectors is not enough to make the country as a whole an economic succes.

[Cuchulain82]

[QUOTE=Fiona]I shouldn't have used the word starving because it was misleading. I really meant to refer to the people in the US who are hungry, and the greater numbers whose food supply is insecure (see earlier post).These people are in the same market and they do count.[/quote]
This is a very fair critique and I don't really have a good answer. I would say that hunger in the US, like the rest of the world, is not fixable just by giving out surplus food. The truth is that there are a pleathora of food programs for people who need them- on low income, gov't. assistance, etc. However, hunger in the US persists. I don't know the specifics about this, but programs like Food Stamps and help for pregnant mothers do exist, and many people take advantage of them.

[QUOTE=Fiona]I haven't read the book....[/quote]
I have only read parts, but I can not overemphasize the importance of Sen's theories in the recent ideas about Development. If you were at a lecture with him, I am jealous.

[QUOTE=Fiona]I suppose I have trouble with this because the words have an ordinary and an economic meaning. Some of the people I hear talking about the subject trade on the ambiguity. You do not do this and I mean no slur. While I am not advocating jargon where none is required, the words do have specialised meanings in economics and I am not sure this is always clear.[/quote]
Fair enough. I see your point. However, they are technical terms, and they are the best terms to use in the realm of Econ. I'm certainly no economist, so I try to keep the terms general- if I tried to do anything more, I would make a mess of it I'm sure.

[QUOTE=Fiona]I have moved this around a bit. I think this is where we completely part company. I do not think that economics bridges the gap between social and hard sciences. I am not even sure that is possible.[/quote]
Maybe I should have given a better explanation. I said that they "do a good job" bridging the gap. What I meant was that they did a good job, especially relative to other social sciences that have made similar attempts. Econ, in my mind, does the best job using theories and models to predict future trends. For example, price floors and ceilings are well documented by economists. This is in contrast to other disciplines, like Anthropology or Philosophy. Where attempts have been made to systematize those fields, imo this has hurt the product.

This is getting into my personal worldview. However, I will say this- all sciences, hard and soft, are tools, not truth. If we could know the truth in physics or math, there wouldn't be revolutionary paradigm shifts like non-Eudlidian (ie- Lobachevskian) Geometry or Einstein's Physics. Econ, imo, is a pretty good tool, and by this I mean that it does a good job systematizing and predicting factors that are, by your own admission, impossible to isolate or replicate.

I think that the real place we diverge is in worldview. From what you've written, you take the approach of radical doubt- not accepting anything but what is proven absolutely. I personally take a more subjective point of view-anyone who has been here a while knows I believe firmly in subjective reality. For me, this means that I really treasure facts, and the more general a fact is, the better it is. Exceptions to rules are important, but only in the sense that they help refine and make better the rules and more accurately use the tools.

[QUOTE=Fiona]Can you tell me what the statistics are which identify Japan as an anomoly ? Can you show me any further work which identifies eg nationalism as a factor in economic decisions; shows the quality and quantity of the influence it has, and correctly predicts the outcome ? Without some such process it seems to me that counter examples (which are fatal to hard scientific theories) are wrongly characterised as anomolies rather than as refutations.[/quote]
As I mentioned, my professor told me this about Japanese rice (and sushi) anecdotally. He is a bonafide Japan expert, so I take what he says to be pretty reliable. If you like, I can e-mail you a link about him, his publications, etc.

Beyond that, I imagine there would be something published on the web about this. Unfortunately, I don't know what it is.

[QUOTE=Fiona]You are right and I apologise.[/quote]
It's okay- no harm, no foul.

[QUOTE=Fiona]OK, you know a lot about this and it would probably take you a long time to explain. I'm sure it is complicated.[/quote]
Like I said, Chicago is a great school with a very polarized effect on people. I, personally, think they have done a lot of harm. If you want to talk about bias, I will admit that this is one of mine...

[QUOTE=Fiona]I would only say that this touches on my earlier point. The economics department was exemplary but it seems that when the theory was put to the test it failed. In what sense is this exemplary?[/quote]
I should have written "exemplary". They were held in high esteem, but over time much of what they have done has borne mixed results.

[QUOTE=Fiona]I don't really know what you mean by the Common Market here. This is what the UK and Ireland joined in 1973, but the term was changed on the basis of subsequent treaties, first to the EEC and then the EU. The term Common Market has not been used in the UK for ages.[/quote]
I mentioned the Common Market and the EEC because the EU wasn't the EU then (duh). I'm sure you knew this, but I like to be specific. If we were talking about the WTO before it was the WTO, I would say the GATT- you get my drift...

[QUOTE=Fiona]I can only offer personal and anecdotal observation. I first started going on holiday to rural Ireland in 1984. It was underdeveloped and very poor. <snip> But, as I said, this is mere observation and there may be a lot of other things going on.[/quote]
I think you are absolutely right. There are tons of factors about Ireland that allowed to rocket to success in the 1990's. The biggest one that is commonly cited now is the tech boom, like I said. The secondary reason that is mentioned is access to the entire European market. Even though I mentioned it as an example, Ireland is actually not a prefect example of a textbook development success- Poland and China are two examples of countries that took the overnight (Poland) and long-term (China) approaches to development. I can write more later, but I am late for an appointment now as is... sorry.

[QUOTE=Fiona]By the way, don't worry about talking about Ireland. I don't know what you attribute to me, but it might be helpful for you to know that I am Scottish. Or maybe you haven't heard of us [/QUOTE]
Oh... Scotland- I have heard of Scotland. As a matter of fact, did you ever hear the joke about the Irish actually inventing the bagpipes?

They gave them to the Scots, but the Scots never got the joke!(highlight)

[Chanak]

[QUOTE=Cuchulain82]...programs like Food Stamps and help for pregnant mothers do exist, and many people take advantage of them.[/QUOTE]

I thought I'd comment on this since its in the realm of my day-to-day work experience.

Particularly since the time of President Ronald Reagan, health and human services programs in the US have been facing steadily shrinking budgets with every passing fiscal year (governmental agencies still run on a fiscal year calendar, unlike most private business, which base their accounting on calendar years). Benefits such as Food Stamps, Women and Infant Children (WIC), and Temporary Assistance for Needy Families (TANF here in Texas) still of course exist, but the qualification criteria and length of program involvement for clients receiving benefits has tightened up considerably in response to reduced funding levels. On their own, the states lack the means to meet the needs of their populations in this regard. The federal government has always covered what the states could not; however, over the years federal support has shrunk to the point where states have had no choice but to tighten their belts.

The formula used by these benefits programs to establish the amount of assistance needed by an applicant, while helpful due to the fact that any assistance is given in the first place, unfortunately falls short of rising costs of living, particularly in the supermarket checkout line. This is an actual crisis in many states and while it has not received national attention yet, I expect it will in the near future. A harbinger of things to come for all aspects of health and human services in the US: the Medicare Modernization Act. This sort of budget-slashing is taking place on all levels of human services in the US, not just the Medicare/Medicaid program.

[Fiona]

@ Cuchulain

You misunderstood me. The Reith Lectures are a radio event here and they are available to everybody. As it happens I was wrong. Sen was not the lecturer although the 2000 lectures were related to his work. You can find the actual lectures (given by 4 different people and a royal) here:

http://www.bbc.co.uk/radio4/reith2000/l ... rint.shtml

I haven't got a lot of time now, but I will just say that we seem to be talking at different levels of analysis on the basis of most of your post. My general point is that economics does not do what you ascribe to it and most of the specifics were intended to illustrate that. I do not accept your charge of "radical doubt". But as we say here " I don't mind a joke but I have no heid for nonsense". For example I am not attacking your professor's views on Japan, nor his expertise. I am asking what you would accept as a refutation of the basic theory. Same goes for my comment on the Chicago school; and hunger in the US. Revolutionary changes in the hard sciences happen because you have to commit to a falsifiable hypothesis. When it is falsified it is abandoned. This is what social science cannot or will not do. Without it we need to ditch the word science. BTW you accuse yourself of bias when you talk about the Chicago school. That's not bias. The hypothesis was falsified and you no longer believe it.That is as near as this type of discipline comes to science. Don't beat yourself up about it.

[littlebit]

We need to get the guys in office out. They aren't doing any of us any good in the least. All of their policies have greatly helped just a handful of very large corporations and have defecated on everything else in the process. They aren't Republicans, they're following suit with Coorporatism to the tee. And talking about anti-conservative!
I don't know what it's going to take to fix the mess, because they've managed to buy off the House and Senate quite easily. A revolution?
Like Jaheira states all the time, there needs to be a balance.
And these gluttonous folk sitting in control right now are skewing the balance way in the wrong direction ... old school robber barons with waaaay too much cash.

[Xandax]

[QUOTE=littlebit]<snip>.[/QUOTE]

When bumping a topic, you could at least make sure it has something relevant to do with the topic, and not just a rant about Government.


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[CM]

To continue the subject: http://news.bbc.co.uk/1/hi/business/4349998.stm

I can't find the article right now but there is a speech by Mandelson which shows that the EU will cut subsidies by as much as 50% during the Doha round. This is of course linked with access on services, TRIPs and NAMA (Non-agriculture market access)

Edit: Found one article on it: http://www.eubusiness.com/Agri/051010165857.qcf0oi60

[asdfjklsemi]

I'll confess to not having read my way all through this thread, but it seems worth noting that US farm subsidies today largely go to giant agribusiness conglomerates that surely don't need them (and arguably do spooky things with them), not to small farmers. So I'm concerned not only with cuts or alterations to subsidies, but what exactly is being subsidized in the first place.

[littlebit]

It's not off topic. It's simply generalizing and expressing my views on the overall actions.
It's still relevant.
Asd, you're right, the subsidies do need a complete overhall or something has to change if the small farmer is ever going to survive. Right now too much money is all going to corporate (factory) farming industries and just pennies to the farmers who are trying to do things the way they should be done. The problem with these particular cuts is they are further cutting what little is being given already to the small guys and giving them no alternatives. It ties in with pushing the little guy out...just what big business always does.
So to generalize again, we have a government that is in full support of a handful of large corporations and could care less about "the little guys".
Xandax, thanks for the kind welcome ...
[QUOTE=Xandax]When bumping a topic, you could at least make sure it has something relevant to do with the topic, and not just a rant about Government.
[/QUOTE]

[Vicsun]

It seems that whenever someone tries to argue something about economics but isn't quite sure what to say, or what the discussion is about, they just start criticizing 'big corporations' who 'kill the little guy off', regardless of what the subject matter is actually about. It just seems like such a safe bet. I mean corporations are generally evil and arguing against evil is good, right?

To keep on the tangent we've started: why is the fact that the little guy will die off bad? Economists generally take a utilitarian approach to things, where the majority of people are the consumers. It's the consumers' wellbeing that generally matters. Farming is an industry which can be generally be accomplished a lot more efficiently (read: cheaply or easily) on larger scales. I'll take a short break to make an analogy. Say you were moving into a new apartment and wanted one of your friends to help you move your furniture. Would you ask Fred who's a tiny straw of a man, or would you ask Bob who used to be an award-winning weight-lifter? Chances are, if you act in a rational manner, you'd ask Bob. He's all muscular and wouldn't even break a sweat moving your piano from one corner of the room to the other and then back again. As a matter of fact, Bob finds it so easy to move heavy stuff around, buying him a beer later would be enough to return the favor. And that's not because he has a big heart and is happy to help you, but because moving your furniture around was effortless for him. If Fred were to help you though, you'd have to buy him a bottle of whiskey to make up for his sore back after lifting all those heavy chairs to your apartment. And he probably still wouldn't consider it even, not because he's a total ass, but because he worked so hard to accomplish what is basically the same task. Having Bob help you would make everyone better off.

Now, if you didn't want to move your furniture, but instead wanted someone to grow you some food - you really want a bushel of wheat. Would you ask Fred to do grow it knowing he'd have to work for three weeks or would you ask Bob knowing he can get that bushel of wheat out in half an hour? When paying Bob, you'd just have to pay him for half-an-hour's work, because that's how much he worked. Paying Fred, you'd owe him money for two weeks worth of work. Even though you pay Bob less, you pay just enough so that both of them break even i.e. Bob isn't worse off than Fred would be if you had payed him. To put it in terms of utility, you'd lose more utility by having Fred work for you than having Bob work for you, even though they'd both receive the same amount of utility from you when you pay them.

The one quote that really stuck out at me was:

the farmers who are trying to do things the way they should be done

Why is there an arbitrary way in which things should be done? Shouldn't the best way be whatever way is easiest and produces the best results? Which would also happen to be big farms in our case?

I'll post again, on topic this time , after I've read the articles CM posted.

Also, the theme just changed when I hit 'preview post'. That's pretty awesome.

[Lestat]

@ Vicsun: if politicians "sell" farmsubsidies to the general public with the argument that they are to help small struggling farms, to keep a traditional form of life alive and/or to keep a nice landscape, it's only fair to point out that subsidies mainly go large industrial type of farms who plant large fields of the same crop which to not exactly contribute to a nice landscape. And that is for instance what is happening in France.

[littlebit]

Vicsun, you may be fine with eating genetically modified and pesticide covered foods ... and I guess you think it's a fine idea for one company to be able to patent pigs and seedstock ... and then actually charge and sue the small farmers because one giant companies patented, genetically altered, bee killing seedstock contaminated the "little farmers" own fields. You may think that's perfectly fine, but I certainly don't. Not when the large companies forcing the little guys out decide it's perfectly fine to put profits way ahead of public health and keeping the environment safe for our children. No way.
And no, the easiest way is not the best way and it's already being proven.
Taking it down to a small scale, do you actually think it's better for everyone who has a weed growing in their yard to hop in there car, drive to walmart and buy a bottle of roundup, drive back and spray the poison on the plant then to just bend over and pull the weed? Which is more economical? WHich choice is better for you? Which choice whould you choose if you wanted to keep your pets and kids safe?
Back to the big scale ... I'll be darned if I'll sit back and let any bought off government force me to feed my children food that can do them harm simply because it's more profitable for the guys who mass produce it.
When the small guys, who do it the right way, are being pushed out, they are tampering with my families source of safe food. They take away my choice. That's what's wrong with just a few large companies running everything.
(And yes, there is a right way to produce bountiful amounts of food without damaging the environment or altering the genetic code or pumping poison on and in it... and by being humane.)

[Dottie]

@Littlebit: The use of genetically modified food or the use of pesticide or patent laws is not the same question as whether small or large scale production is preferable. It's different issue.

@Vicsun: That was a horrible analogy. shame on you. Good post though.