06-08-2004 03:29									#211
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quote: You can consider comparative advantages, but you either have to say the supply changes or it doesn't change. Which is it?

but thats where the problem is. since some countries have comparative advantages, the graph doesnt demonstrate what their advantage is compared to the countries that are subsidized. since you dont know, you cannot tell if poor farmers will benefit from a removal of first world subsidies. this graph only shows one dimension of it and ignores the crux of the argument, which is that their advantage is being crushed by the rich.

not only that, it misleeds everyone into thinking that with a removal of subsidies, prices will increase. as you saw on the Adam Smith graphs, this only occurs when the supply is totally subsidized by foreign countries (the mali example.) and that country has no comparative advantage in producing it. in the US cotton example, prices remain the same when subsidies are removed. the difference is where the money is going.

	06-08-2004 07:58									#212
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quote: Originally posted by Lawrence of Arabia but thats where the problem is. since some countries have comparative advantages, the graph doesnt demonstrate what their advantage is compared to the countries that are subsidized. since you dont know, you cannot tell if poor farmers will benefit from a removal of first world subsidies. this graph only shows one dimension of it and ignores the crux of the argument, which is that their advantage is being crushed by the rich.

Ok. Do you believe the subsidies increase overall supply to the world market or not?

	06-08-2004 11:12									#213
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The non-subsidized farmers only produce less after the price falls. So you have to accept that the price falls atleast in the short run. I think you're saying that in the long run the price will go back up to where it was, because so many non-subsidized farmers reduce or stop production.

This is why that's not so. The world demand curve for agricultural products is downward sloping, but not vertical. People will buy more food at lower prices. So an increase in supply will bring the price down. An increase in supply from some producers will cause others to reduce production, but not by the same amount, because the consumers consume more at the lower price. The price never goes back up. You can't have a price/quantity point that is not on the demand curve unless you have some price manipulation.

	06-08-2004 20:57									#214
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quote: The world demand curve for agricultural products is downward sloping, but not vertical. People will buy more food at lower prices. So an increase in supply will bring the price down. An increase in supply from some producers will cause others to reduce production, but not by the same amount, because the consumers consume more at the lower price. The price never goes back up. You can't have a price/quantity point that is not on the demand curve unless you have some price manipulation.

i agree, the demand curve is downward sloping, but it is very inelastic - you arnt going to eat massive amounts of more food because its cheaper. but an increase in supply from some producers (through subsidy) will NOT cause others to reduce production, because 1) that is their livelyhood, and 2) they have nothing else to do, 3) other first world suppliers will scream for a subsidy and 4) in third world countries, the cost of living is much lower, so even if they make very little profit they will continue to produce because they can still live.
the subsidy will replace foreign imports in that market, but will not lead to changes in price, as long as the domestic market is the one being subsidized.

	06-08-2004 22:27									#215
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quote: Originally posted by Lawrence of Arabia i agree, the demand curve is downward sloping, but it is very inelastic - you arnt going to eat massive amounts of more food because its cheaper. but an increase in supply from some producers (through subsidy) will NOT cause others to reduce production, because 1) that is their livelyhood, and 2) they have nothing else to do, 3) other first world suppliers will scream for a subsidy and 4) in third world countries, the cost of living is much lower, so even if they make very little profit they will continue to produce because they can still live. the subsidy will replace foreign imports in that market, but will not lead to changes in price, as long as the domestic market is the one being subsidized.

It doesn't matter if the subsidies replace foreign imports or not. The price will not stay the same. The problem is that you aren't looking at how it plays out. The first event is an increase in supply from the subsidy. The second event is a fall in price. The third event is the fall out of producers because of the lower price. It doesn't happen in an istant. It's a process.

	06-08-2004 22:36									#216
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quote: Originally posted by KrazyHorse quote: I don't know. Do you like putting millions of people suddenly in poverty? FARMERS HAVE BEEN SUBSIDISED FOR THE LAST 40 GODDAMN YEARS GET OFF THE FARM, FOR ****'S SAKE

I would love it if we let the land here revert to tallgrass prairie and bur oak savanna.

	06-08-2004 23:16									#217
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eliminating the farm subsidies will make the produtcs more expensive worldwide. so no

	06-08-2004 23:18									#218
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also there's enough food prodcued today in the world to feed everyone. the problem is that in some countries there are institutes to lose weight and in others people are starving (so much for the genetically modified foods theory of "feeding the planet")

	07-08-2004 00:35									#219
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quote: It doesn't matter if the subsidies replace foreign imports or not. The price will not stay the same. The problem is that you aren't looking at how it plays out. The first event is an increase in supply from the subsidy. The second event is a fall in price. The third event is the fall out of producers because of the lower price. It doesn't happen in an istant. It's a process.

look at the US cotton graph provided by adam smith. do you see an 'increase in prices?'

	07-08-2004 00:41									#220
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quote: Originally posted by paiktis22 also there's enough food prodcued today in the world to feed everyone. the problem is that in some countries there are institutes to lose weight and in others people are starving (so much for the genetically modified foods theory of "feeding the planet")

I don't quite see the connection between the two, except as a lame troll.

	07-08-2004 03:38									#221
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quote: Originally posted by Lawrence of Arabia look at the US cotton graph provided by adam smith. do you see an 'increase in prices?'

That is a graph for one nation, not the world.

	07-08-2004 04:22									#222
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quote: That is a graph for one nation, not the world.

its a model thats optimized for subsidization and its effects - the aggregate demand and supply model is not optimized for that. therefore, we will use that model to show what will happen when subsidies are removed.

	07-08-2004 06:23									#223
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quote: Originally posted by Lawrence of Arabia its a model thats optimized for subsidization and its effects - the aggregate demand and supply model is not optimized for that. therefore, we will use that model to show what will happen when subsidies are removed.

That convenient. You're none the smarter for it though.

	07-08-2004 06:32									#224
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well you cant seem to provide a reason for not using the model that AS gave us, other than 'this is a graph for one nation, not the world'. it is also a graph specifically designed for subsidies, while the AS/AD graph on crudely shows what subsidies do.

its like using demand and supply diagram for business economics, when there are much better and more accurate diagrams used to model events.

	07-08-2004 07:40									#225
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quote: Originally posted by Lawrence of Arabia well you cant seem to provide a reason for not using the model that AS gave us, other than 'this is a graph for one nation, not the world'.

How can you get the world price without a model of the world market?

	07-08-2004 22:03									#226
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quote: How can you get the world price without a model of the world market?

you can graph the world price on a domestic model. its common sense. in a country that domestically subsidises its product, you knwo that the world price is below the original domestic made goods.

	08-08-2004 00:47									#227
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quote: Originally posted by Lawrence of Arabia you can graph the world price on a domestic model.

The price is transfered from the world graph. You can't just assume some constant price when the issue is the world market, not the domestic.

	08-08-2004 01:07									#228
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quote: Originally posted by Kuciwalker I don't quite see the connection between the two

Just looked a good opportunity to bring it up

	08-08-2004 02:59									#229
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quote: The price is transfered from the world graph. You can't just assume some constant price when the issue is the world market, not the domestic.

yes you can because the domestic production compared to world is small.

	08-08-2004 03:00									#230
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Happy birthday Kid.

	08-08-2004 13:12									#232
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quote: Originally posted by Lawrence of Arabia yes you can because the domestic production compared to world is small.

The subsidies aren't even for one nation alone. Of course you have to have a world model. What do you have against it anyway? Is it telling you something you don't want to know?

Thank you guys for the birthday wish.

	08-08-2004 22:21									#233
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quote: The subsidies aren't even for one nation alone. Of course you have to have a world model. What do you have against it anyway? Is it telling you something you don't want to know?

but you dont know at what levels other ocuntries subsidize their goods at, nor what their original market prices are, so you cannot include them on the same curve you need to look at them seperate.