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Ramo
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Austin, Texas, USA
Oct 1999
time: 23:33
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quote:
1. Now that it will be profitable to create an agribusiness in the third world, you can expect many new agribusinesses to emerge and compete for the now-open market. This will increase production, until the market balances itself out.
2. I don't know for the US, but in Europe, agrisubsidies come along with production quotas. That's because the EU tries for a long time not to contribute to the fall of world food prices. The more we produce, the lower the overall prices, and the more the EU must pay for subsidies, so it's a sound plan.
Should we remove the agrisubsidies, these production quotas will have no reason to exist anymore. Agribusinesses and family farmers alike won't show restraint in their production. They'll produce with even more heart that their profit per unit will freefall, and they'll try to make up for the loss by selling more units. |
Don't these two claims contradict each other? If the West produces more, there wouldn't be an open market for third world agribusiness to pick up the slack; if the third world produces more, the prices would be too low for a lot of unsubsidized agribusiness to be very profitable.
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Spiffor
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CPA - Evil Clone brigade
Nov 2001
time: 06:33
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quote:
Originally posted by Ramo
Don't these two claims contradict each other? If the West produces more, there wouldn't be an open market for third world agribusiness to pick up the slack; if the third world produces more, the prices would be too low for a lot of unsubsidized agribusiness to be very profitable. |
The new companies won't open to "pick up the slack". They'll open because they'll think they can corner the market by having lower prices.
This will very rapidly result in the freefall of food prices. The western agriculture will react in two different ways:
- family farmers will see their production costs definitely higher than the market price. Most of them will have no way to lower their production costs enough to match the market price. They'll be put on the dole.
Those family farmers whose production is still cheaper than the market price will increase their production as much as they can, to try keeping the same overall profit.
- agribusinesses will still have their production costs lower than market price (because the human costs are proportionally much, much lower in an agribusiness than in a family farm), and they'll also produce more in order to keep the same overall profit, after the freefall of profit per unit.
What I describe is a common crisis of excessive supply. They happen all the time in unregulated markets, so I don't see what is contradictory with it.
This would be contradictory only if you believe that businesses only open to satisfy an unsatified demand. This is not true: businesses can open in order to make profit by being more competitive than others in an already satisfied market. Third world agribusinesses will definitely believe they can take the market from western hands, and they'll probably be right.
Last edited by Spiffor on 02-08-2004 at 22:39
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Last Conformist
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of Calakmul
Jul 2003
time: 06:33
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quote:
Originally posted by Kuciwalker
Yes, but if what it says about capitalist economies turns out to be false... |
Much of what it says about capitalist economies is true*, some is false, and on some the jury's still out. This, however, is beside the point; if someone claims to be a Marxist, one can certainly fault him for analyzing capitalist economies in non-Marxist ways; you can demand consistency from your opponents, regardless of they're factually wrong or not.
* A while ago, a libertarian on CFC, in a desperate attempt to deny that Marx was right about anything, tried to deny that in a capitalist system, workers normally do not own the objects they produce.  Too bad I couldn't find a Marx quote saying the sky was blue.
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Sandman
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Sinister Penguin
Aug 2001
time: 05:33
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quote:
Indeed, Sandman, and the third world countries will continue to produce these cash crops. I thought we were talking about food here however. Are the Burkinabe markets flooded with American cotton, or corn? Are they flooded by European sugar, or wheat products? |
Cotton and sugar are just about the most subsidised products there are. And you can bet they get dumped just as much anything else, despite the developing world being unequivocally more efficient at growing these crops.
quote:
Given that only I (and maybe Che) are buying into this myth, they sure have done a pretty poor job at it. At least the Monarchs had most of their population believe in their myths. |
Times are changing. The myths are losing their potency, and people are questioning whether farmers really are 'the guardians of the countryside' or 'part of our heritage'. It's a nice wee revolution, in fact.
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I think the myth of the "****ing peasant leech" is much more widespread, don't you? |
It's no myth that farmers get special treatment that the rest of us are denied. Subsidies, set-aside, quotas, tarriffs, etc. Why should their lifestyle be propped up at taxpayers expense?
The farmers still have welfare, free education, free healthcare, and other socialist stuff to fall back on - like the rest of us. Why do they deserve so much more?
quote:
What does this problem have to do with Marxism. The system is capitalist whether there are subsidies or not. |
Er, Marxism is somewhat related to capitalism.
But it's a good example of a privileged group inventing a series of myths to justify their position in society. Like monarchy and the notion of divine rights, for example. Or the super-rich and trickle-down economics.
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02-08-2004 21:57
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