Tuesday, 31 May 2011

Oxfam's recipe for hunger

Oxfam has issued a report warning of food crises coming our way. How accurate these predictions will prove is anyone’s guess. Half of the problem is due to the bogey of ‘climate change’, which, as ever, makes things worse everywhere and better nowhere.

Unsurprisingly the solution they propose is massive government intervention, including price controls, which is hardly likely to help. If demand is rising and supply stagnant, then of course prices will rise. This will lead to an increase of production, as producers cash in on the higher prices, which in turn will bring prices down, unless at every point intervention hampers the market from functioning. Price controls will disconnect the market mechanism for boosting production and thus precipitate the very shortages Oxfam is warning of. However, it is not wholly oblivious to the negative effects of interventionism, and is calling for the end of biofuel subsidies.

I don’t doubt the seriousness of the issues covered in the report, nor do I like the way the world food market is dominated by a handful of massive corporations, another thing pointed at in the report, but Oxfam’s solution makes no economic sense.

Increasingly so-called charities are diverting their attention away from actual charitable work towards political lobbying, which as far as I know is forbidden, although I don't see why it should be. Nevertheless, pushing for government intervention is political, although amongst the state-loving denizens of the politico-cultural hegemony, this passes without remark.

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