Response to Michael: Part 1

This will be the first part in a series that I hope to do about globalization, food production, and sustainable economic development. I’m titling them ‘Response to Michael’ because these thoughts were brought together in a great discussion/debate one evening about the pros and cons of the globalization of food production and capitalism in general. My friend Michael brought up some challenging arguments and prompted a stimulating conversation and a number of ideas that I’ve since been wrestling with. I hope to receive comments and feedback in order to continue to develop my position on the issues and hear criticisms from those who hold different opinions.

Challenge 1: Why take up globalized and industrialized food production as a cause rather than other kinds of globalization?

This question took me by surprise and I had trouble articulating a response at the time, but after giving it more thought, I feel like I can better explain this choice. The quick and dirty answer is that the food production system is the one that is most tied up in our natural environment and the least responsive to market pricing, leaving it particularly vulnerable to exploitation and degradation. In addition to these risks, food production is absolutely essential to basic human survival and engenders issues of fundamental rights, which hold more weight for me than luxury goods and light/heavy manufacturing do.

In our discussion I cited waste, inequality, and perverse incentives as particular threats to nature and humans that also often apply to globalization in general. My focus on the food production industry has largely to do with its interactions with the biosphere upon which all of human kind depends. First of all, mass production of food is a kind of contradiction in terms. By treating ecosystems that have evolved over millions of years as if we can isolate inputs and outputs just as we do in factories, we unlearn a great deal of human knowledge about the complexity of natural systems. By choosing the particular genetic components that fit our industrial needs, we are putting genetic diversity at risk and using much more pesticides and herbicides to protect the resulting crop vulnerabilities. Also, by using fossil fuels in our inputs, we have gone from getting two units of food energy for each unit of input energy in the 1940s to one unit of food energy for every ten units of input energy today (1). This inefficiency is a product of the industrial food system we currently depend on. Sure, we can get a lot of food that way, but at what costs and for how long?

Secondly, by allowing global markets to determine food production we remove the local incentives protecting environmental resources from being exploited. Once global food producers own land in foreign countries, they care only about sustaining the transfer of food from one area of high supply to another of high demand, not the conditions of the agricultural area. In this way, our consumption of foreign foods may contribute to soil degradation, pesticide runoff, livestock waste pollution, and the social dislocation of family farmers thousands of miles away without it affecting us at all. We protest the moment a company pollutes in our backyard, but by consuming hundreds of products produced elsewhere we are effectively outsourcing our waste. This may sound at least efficient (as long as those living around the waste are willing participants) but even if that were the case, the interconnectedness of global ecological systems means that individual choices are removed from the collective impact. This is a classic common resource pool paradox. Additionally, the outsourcing of commodity crops leads to dependence on volatile foreign markets that leave developing countries and less diversified farmers at risk for economic catastrophe, as occurred in the coffee crisis of the late 1990s.

Third, by managing our food production systems on market values like efficiency and economies of scale, we subject nature to market valuation. The problem is that markets are not accurate at putting a price on nature, even if it could theoretically be done. Nature is too complex, for one. Scientists don’t know how many species we can lose or how much CO2 we can emit before a tipping point is reached (in other words, there is a problem of unknowable information; a death sentence for efficient markets). Another problem is that markets do not have a mechanism for limiting the scale of production. The earth has a finite set of resources, and markets have no way to keep to a sustainable level. In fact, when resources become scarce, markets assign a higher value, thus making it more profitable to exploit the precious few resources remaining (2). Furthermore, these problems assume that nature has no intrinsic value to begin with, and that the only legitimate value they have is in relation to human use, which is a whole philosophical discussion in its own right.

Finally, there are a number of perverse incentives and misconceptions about food and food production in the modern era that are important for human health and environmental sustainability. Government involvement in agriculture has been torn between focusing on national food security and satisfying the powerful food lobbies, which has given rise to inefficient subsidies and waste. Modern food production prioritizes the food that has the highest profit margins, which generally come from low-cost and nutritionally empty ingredients that are processed into junk food. The marketing dollars poured into processed food advertising is proof enough that our priorities are skewed: Food, beverage, candy, and restaurant advertising expenditures weigh in at $11.26 billion in 2004, versus $9.55 million to promote the California and federal ‘5 a day’ healthful eating program (3). Along with this massive marketing push for processed food, we have seen an obesity epidemic grow to dangerous levels; clearly an undesirable outcome.

There are a lot of problems with the modern food production system, and the US system in particular. Capitalism gets a lot of things right, but it gets food wrong.

1: Sexton, Steven.”Does Local Production Improve Environmental and Health Outcomes?” Giannini Foundation of Agricultural Economics. (http://www.agecon.ucdavis.edu/extension/update/articles/v13n2_2.pdf)

2:Gowdy, John and Carl McDaniel. “One world, one experiment: addressing the biodiversity-economics conflict.” Ecological Economics 15 (1995) pages 185-186.

3: ConsumersUnion.org at http://www.consumersunion.org/pub/core_health_care/002657.html

Advertisements

2 Comments

Filed under Economics, Food Issues

2 responses to “Response to Michael: Part 1

  1. Broderick Dressen

    While I agree with you on many of the fundamental points that you bring up, Andrew, I want to bring in some outside variables that I don’t believe we discussed in length at the dinner table, primarily looking to the modern restaurant and fast food markets.

    I brought up the fact that currently we can go to a Taco Bell and get a 5-layer stuffed burrito, stacked with beans, cheese, beef, sour cream, and a tortilla for 96 cents. Why? Because there is a producer out there who is willing to sell low grade products, a company who is willing to purchase and process them, and a large market who is willing to look past the fact that they are eating unhealthily because it is economically efficient. The problem, I believe, isn’t in that the large scale corporations have taken advantage of a farming market or even that the government is allowing it to do so, rather, it is the current social climate, primarily in America, that has deemed it alright to do so.

    The reason why America has done so: because companies, such as McDonald’s not only offer cheap sources of food, but also offers large sources of job force. ‘An estimated one out of every eight workers in the United States has at some point been employed by McDonald’s.'(1) Our economic climate has driven us as capitalists to drive towards cheap and fast as our means for technology, social interactions, education, and even food consumption and production. If a person can get their burger for a dollar here, knowing full well that the meat was probably shipped from California, the bread processed in a neighboring state, lettuce from outside the country, and cooked in about two minutes, the chances are they are going to buy it, despite what it could be doing to a foreign environment.

    I believe that the government ebbs and flows according to what social norms are present. Companies and economics goes by supply and demand logic, right? So, like we’ve seen recently with fast food restaurants attempting to cater to a healthy diet, what we should be looking to do is attempt to change the social climate, not the political or economic, of food production. Perhaps it could take off, or perhaps, since still a large portion of our society lives paycheck to paycheck and depends on the cheap price of imported goods, we won’t see a change.

    I pose to you, in stead of attempting to take a political change here, like we discussed with a possible beef tax, how you could change the image of food production as a whole in a social environment. Is there a way to change ‘organic’ in to a positive light instead of high brow, rich-person’s food? If one could, wouldn’t that drive the demand of it up, therefore decreasing its price, meaning a more eco-friendly choice? I actually don’t even know if the current term ‘organic’ is eco-friendly by your terms, and therefore irrelevant as a possibility.

    Just some food for thought (hahaha).

    1) Schlosser, Eric. “Fast Food Nation: The Dark Side of the All-American Meal” (2001) page 4.

    • Broderick,

      Thanks for responding! I’m glad you brought up the fast food industry and the social forces at work that are shaping the demand for these products. I agree wholeheartedly that the social problems surrounding our food consumption and production need to change. I do, however, think that both economics and politics make a significant difference in shaping the social perceptions and choices surrounding food consumption. I hear what you’re saying about government responding to social norms, but consider the recent health care legislation. It passed despite polls showing a majority of Americans against it. Those poll numbers are now changing (1), and it shows that politics can act against social norms for the greater good. Economics also plays an enormously important role in determining what choices we make. You mentioned that the price of Taco Bell’s food is cheap enough to reach a broad sector of demand, but that price is determined in a large part by the corn industry, which is propped up by government subsidies. Over the past decade, the Federal Government has poured more than $50 billion into the corn industry (2). The beef and chickens in the tacos are corn-fed and the fountain sodas are sweetened with high fructose corn syrup. It’s not that people look past the problems inherent in the system; it’s that they don’t know about it! The social climate allows for these things partly because the truth is hidden from view and partly because the environmental and economic effects are diffuse and distant. I do agree that one part of the solution is to change perceptions surrounding organic/local/sustainable foods, but increasing demand will not decrease its price in the short term. Increased demand coupled with static supply means higher prices, not lower. Hopefully if we can shift demand and supply simultaneously (or even shift supply first), the transition to a more efficient and just food production system can be smooth. I think the answer is twofold: alter social perceptions by educating people about the impact of their economic decisions and change the incentive structures that are shaping a wasteful and unhealthy food industry. This requires a combination of social education, different economic incentives, and a new agricultural policy.

      1) http://tpmdc.talkingpointsmemo.com/2010/03/poll-with-passage-health-care-reform-bill-gets-5-point-bump-up-overnight.php
      2) http://www.time.com/time/health/article/0,8599,1917458-2,00.html

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s