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b_b  ·  3732 days ago  ·  link  ·    ·  parent  ·  post: Paul Krugman: The Libertarian Fantasy

    I submit that the way to cure this disease is to eliminate it, not to beg people with compromised incentives to rejigger it so it will possibly be it less harmful.

I don't know what the best prescription is, but I would imagine you and I would probably agree that subsidizing certain crops, to the benefit of certain firms and the detriment of others, is a practice that should be done away with. The US currently grows around 4500 or so calories per person per day. Waste in the system in endemic, but currently the incentives encourage waste.

The question is can we envision what the state of farming would look like were subsidies and fertilizer regulations eliminated? Subsidies were first introduced in great numbers as a reaction to the Dust Bowl, if I'm not mistaken. The Dust Bowl itself resulted from a combination of sub-optimal farm practices and drought. Subsidies were introduced to help struggling farmers, as well as to encourage price smoothing, so that markets would be less volatile. The effect has been to encourage as much growing as possible, precisely because of the lack of volatility in the market. If we were to eliminate the subsidies, my guess is that we wouldn't all of a sudden have an idealized market, but rather we would revert back to boom and bust agriculture (this time aided by a lack of regulation about how much fertilizer we can dump in the water, perhaps exacerbating the booms), something no one wants. Another alternative is to incentivize (subsidize) crops that are good for us, but of course that opens up a debate about what, exactly, "good for us" means (and I can guarantee that the greedy leeches who make the food pyramid and its ugly bastard cousins would get to tell us what's good and what isn't--Frosted Flakes for everyone!!!).

Despite that over abundance of calories, we currently don't grow enough fruits and vegetables in the US for each of us to eat our daily recommended portions. This is sad, but I don't think more subsidies will fix the problem.

The problem (to be clear, the problems to which I'm referring are disease and environmental catastrophes) appears to be intractable. The markets can't be trusted to be rational. The externalities are too great and too protracted to be built into prices. For example, diabetes from eating nothing but corn byproducts could take 30 years to set in. No market that reacts with daily speed will account for the trillions we will spend in the coming years treating diabetes and cardiovascular diseases. My gut is to tax corn, but were corn eliminated altogether another stand in would take its place. We could tax foods that derive a certain percentage of calories from processed sweeteners, but we saw the outrage the Bloomberg felt after his bungled elimination of large size sodas. People won't stand for taxes on bad behavior; and anyway, I'm not sure taxing poor people is ever a good solution to any problem. Maybe we could offer tax credits for people buying vegetables. This is problematic, because whenever there's a government handout, lobbyists will line up to make sure they get theirs. Preferred government vegetable growers would be popping up in short order.

It's a tough problem. For now, I subside on mostly fruits and vegetables bought and paid for by my work in the stroke field. I guess I get the best of both worlds. It's perhaps a cynical way to exist, but I wouldn't mind being put out of business by a healthier population.