30-06-2005 16:01									#31
	Re: Econ Dev Prof sez that . . . Support Apolyton, buy GURPS/ Alpha Centauri

quote: Originally posted by Lawrence of Arabia developped countries are a) self sufficient in agriculture products and b) more productive in terms of agriculture. why then is it that developped countries feel the need to subsidize agricultural products to the tune of $350 bn a year?

Your professor is wrong.

On point a, obviously Canada and developed European countries are not self-sufficient in things like coffee, tea, tropical fruit, etc (the same probably applies to the US)

As for b, it depends. In a given year, Canada may have a bumper wheat crop while the US does not. So Canada would be more productive in that given year.

As for the question of why have subsidies, even if it would be cheaper to buy all food from overseas, it may not be in the best interests of a country to do so. Yes, it might be cheaper, but the decision to use subsidies is not based just on price.

There are health safety issues, like mad cow disease. Countries that have no cattle farms must rely on others countries that may not have strict health regulations.

There is a question of choice. Canadian beef tastes differently from Australian beef, but in Hong Kong, it is extremely difficult to get Canadian beef.

The French argue that it is necessary to protect small farms in order to maintain a flow of specialized items like different varieities of cheese.

Finally, there is the argument that maintaining financially uncompetitive farms is necessary for national security. Domestically grown food is required in times of war.

	30-06-2005 16:28									#32
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Just because an industry is self sufficient and productive does not mean it is competitive .

	30-06-2005 17:42									#33
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self sufficient is not defined by a variety of goods. A country could produce enough food, but not have such things as coffee and tropical food.

By the definition, USA is self sufficient despite not growing some types of food

	30-06-2005 19:34									#34
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quote: Originally posted by TheStinger subsidising your farmers so your country can be self suffcient is just about ok, but to subsidise production so that your surplus undercuts the prices of developing countries is economicaly inefficient and morally wrong

Why do you think it's morally wrong?

	30-06-2005 19:45									#35
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Because its forcing people into abject poverty.

	30-06-2005 19:46									#36
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quote: Originally posted by TheStinger Because its forcing people into abject poverty.

	30-06-2005 19:50									#37
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of course it does, if your only possible living is selling a product at prices kept low because of 1st world subsidies and the removal of the those subsidies would enable a modest living then those subsidies are moraly wrong. Yes some 1st world farmers go out of business they won't see thei children die of dysentry though

	30-06-2005 19:54									#38
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quote: Originally posted by TheStinger of course it does, if your only possible living is selling a product at prices kept low because of 1st world subsidies and the removal of the those subsidies would enable a modest living then those subsidies are moraly wrong. Yes some 1st world farmers go out of business they won't see thei children die of dysentry though

Of course? What exactly makes it immoral? And where does the 'force' come in?

	30-06-2005 20:36									#39
	Re: Econ Dev Prof sez that . . . Support Apolyton, buy GURPS/ Alpha Centauri

quote: Originally posted by Lawrence of Arabia developped countries are a) self sufficient in agriculture products and b) more productive in terms of agriculture. why then is it that developped countries feel the need to subsidize agricultural products to the tune of $350 bn a year?

Does this include the stuff where we pay people to not grow food/cash crops/etc in some instances?

	01-07-2005 01:26									#40
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yeah, im gonna go to his office hours i think.

	01-07-2005 02:50									#41
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You know LoA, it's ok to disagree with him. This **** aint math.

	01-07-2005 02:57									#42
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i dont necessairly care about agreeing or disagreeing; i mean hes a professor at a university. he's not out there applying it. i wanna understand why he said that, and then agree or disagree. but on the exams and problem sets, im gonna have to agree with him.

	01-07-2005 02:59									#43
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quote: Originally posted by Lawrence of Arabia but on the exams and problem sets, im gonna have to agree with him.

That's a strange university you go to. We never had to agree, just demonstrate that we understood.

	01-07-2005 03:33									#44
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yeah but its based on the Arthur Lewis model, (ya know, the guy who won the nobel prize for economics?,) the model that won him the nobel prize, so theres not much disagreeing to do when its mathematical.

	01-07-2005 03:44									#45
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quote: Originally posted by Lawrence of Arabia yeah but its based on the Arthur Lewis model, (ya know, the guy who won the nobel prize for economics?,) the model that won him the nobel prize, so theres not much disagreeing to do when its mathematical.

Sure there is.

	01-07-2005 09:11									#46
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quote: Originally posted by Shogun Gunner self sufficient is not defined by a variety of goods. A country could produce enough food, but not have such things as coffee and tropical food. By the definition, USA is self sufficient despite not growing some types of food

Not within this context. Economic decisions in developed nations are not based on the minimum amount of food required to keep a country alive. Instead, decisions are made on what people want rather than what they need to survive.

	01-07-2005 10:14									#47
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quote: Originally posted by KrazyHorse Basically, a factory worker or software engineer in the first world is so much more productive than a farmer in the first world is, that without subsidies 1st world farming could not provide a living wage to its practitioners...

That's Relative Advantage

For example, a person may make $20 an hour as a plumber in the US, but only $12 as a farmer. So it's disadvantage for the person to be in farming.

	01-07-2005 10:15									#48
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quote: Originally posted by Lawrence of Arabia yeah but its based on the Arthur Lewis model, (ya know, the guy who won the nobel prize for economics?,) the model that won him the nobel prize, so theres not much disagreeing to do when its mathematical.

Maths is just a tool.

GIGO, you see.

	01-07-2005 10:17									#49
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quote: For example, a person may make $20 an hour as a plumber in the US, but only $12 as a farmer. So it's disadvantage for the person to be in farming.

yeah but wages are dependant on productivity.

	01-07-2005 10:22									#50
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quote: Originally posted by Lawrence of Arabia yeah but wages are dependant on productivity.

Yes, but productivity inside the same country, not with another country.

A person may be more productive in the role of a farmer when compared to one in, say, Lower Elbonia, but he is still going to make less then when he becomes, say, a lumberjack.

	01-07-2005 10:31									#51
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quote: Yes, but productivity inside the same country, not with another country. A person may be more productive in the role of a farmer when compared to one in, say, Lower Elbonia, but he is still going to make less then when he becomes, say, a lumberjack.

well lets say you have two jobs. agriculture and manufacturing. if manufacturing becomes more productive and thus higher wages more people will move towards it until productivity and marginal returns to labor equalize productivity between agriculture and manufacturing.

	01-07-2005 10:35									#52
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quote: Originally posted by Lawrence of Arabia well lets say you have two jobs. agriculture and manufacturing. if manufacturing becomes more productive and thus higher wages more people will move towards it until productivity and marginal returns to labor equalize productivity between agriculture and manufacturing.

Yup, that's when agriculture has to start paying more for workers, and become less competitive against 3rd World countries.

	01-07-2005 10:35									#53
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quote: Originally posted by Lawrence of Arabia well lets say you have two jobs. agriculture and manufacturing. if manufacturing becomes more productive and thus higher wages more people will move towards it until productivity and marginal returns to labor equalize productivity between agriculture and manufacturing.

You've got this backwards. If productivity increases in one wages will fall there, and they will eventually fall in the other sector.

	01-07-2005 10:47									#54
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quote: You've got this backwards. If productivity increases in one wages will fall there, and they will eventually fall in the other sector.

why is that?

	01-07-2005 10:50									#55
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Yeah, that is strange, since as productivity has increased throughout history, wages have increased.

	01-07-2005 10:58									#56
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quote: Originally posted by Lawrence of Arabia why is that?

The immediate effect of productivity increase is a decrease demand for labor. Whether or not that leads to a decrease in wages is debatable, but according to the laws of demand wages will go down. In actuality they stick. The surplus in labor however puts pressure on wages in the other sector. The law of supply says that wages will fall in that sector. Again, in actuality they usually don't much.

The increase in productivity increases the potential for higher wages only. Another force has to actually cause the increase in wages.

	01-07-2005 11:00									#57
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quote: Yup, that's when agriculture has to start paying more for workers, and become less competitive against 3rd World countries.

what happens is that manufacturing drives higher productivity in agriculture, raising both productivity and wages in the agricultural sector, making them competitive again.

	01-07-2005 11:02									#58
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quote: The immediate effect of productivity increase is a decrease demand for labor. Whether or not that leads to a decrease in wages is debatable, but according to the laws of demand wages will go down. In actuality they stick. The surplus in labor however puts pressure on wages in the other sector. The law of supply says that wages will fall in that sector. Again, in actuality they usually don't much. The increase in productivity increases the potential for higher wages only. Another force has to actually cause the increase in wages.

no, the immediate effect of productivity is increased production by what you already have. marginal product increases. since W = P MPL, where w is wage, P is price of the good, and MPL is marginal product or labor, as MPL increases, so does W. P is exogenous.

	01-07-2005 11:05									#59
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quote: Originally posted by Lawrence of Arabia no, the immediate effect of productivity is increased production by what you already have. marginal product increases. since W = P MPL, where w is wage, P is price of the good, and MPL is marginal product or labor, as MPL increases, so does W. P is exogenous.

This violates the laws of supply and demand. If wages increased in the agricultural sector during the mechanization of agriculture no labor would have ever migrated to the city and into the manufacturing sector.

	01-07-2005 11:16									#60
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Actually it's not a violation. It's an assumption of full employment in the short run under the condition of productivity improvement.