"Peace Clause" on Agrisubsidies in WTO Expired

[Tripledoc]

The international currency, the dollar, is used as a means of exchange. The strength of the dollar is based on the weakness of other currencies and the amount of oil on the market.

Allowing third world farmers to buy more would not autamatically mean a correponding rise in western production of consumer goods. It would merely mean that western consumer goods are in more demand and hence this would trigger a rise in prices. Since the labour unions of the poor nations are weak this would not mean a corresponding rise in wages. Hence real impoverishment through inflation would take place, while there is not a rise in overall world production.

It would mean that the poor nations would be willing to work harder and longer to keep up in paying off the trade imbalance, while the west would sink deeper into unemployment.

[Tripledoc]

And the coresponding rise in unemploymnet in the west would mean a futher expropration of the proletariat, since the selling of labour would now be exclusively a buyers market.

[Spiffor]

Originally posted by Boshko
Exactly how is this a good thing?

Because it avoids that infrastructure gets damaged by wildlife? Roads, tracks, electrical wires, telephone wires etc... All those can get disrupted if there are too many wild animals near them, or if the vegetation groys unchecked.

[Bosh]

The international currency, the dollar, is used as a means of exchange.

Which has absolutely no impact on the strength of the dollar.

the amount of oil on the market.

What? Oil has no more impact on relatively currency strengths than any other commodity.

Allowing third world farmers to buy more would not autamatically mean a correponding rise in western production of consumer goods.

Why on earth not? Most First World factories are running at roughly 80% capacity ATM IIRC, if Third World incomes rose enough so that demand for consumer goods increased then production would inevitably increase.

It would merely mean that western consumer goods are in more demand and hence this would trigger a rise in prices.

This would not have that much of an affect until factories started running at a lot closer to full capacity which is not something that is likely to happen in the foreseeable future at all. Even if factories were running at 100% and increase in demand would lead to a massive increase in investment in new factories (ie a good thing).

Since the labour unions of the poor nations are weak this would not mean a corresponding rise in wages.

So wait what you're saying is:

1. The Third World gets richer (how they get richer is irrelevant).
2. They use their increased money to import consumer goods.
3. This results in increased consumer good prices.
4. This results in increased cost of living in Third World countries.
5. This would result in a drop in the standard of living in Third World countries.

So what you're saying is that a country getting richer automatically makes it poorer. That makes no sense whatsoever. Of course a country getting richer causes some cost of living increases, but this is more than balanced out by the whole, you know, getting richer thing.

Since the labour unions of the poor nations are weak

Can't get too much weaker than US private sector labor unions (in all except a tiny handful of industries).

Hence real impoverishment through inflation would take place, while there is not a rise in overall world production.

Of course. Because increase in demand does not result in an increase in production and getting richer automatically results in getting poorer .

It would mean that the poor nations would be willing to work harder and longer to keep up in paying off the trade imbalance

What??????
Reduction of Third World subsidies would make it easier for the Third World to export agricultural produce to the First World and harder for the First World to export agricultural produce to the Third World. How in the world could this possibly result in Third World trade deficits?

work harder and longer

What in the world do trade balances have to do with working hours????

the west would sink deeper into unemployment.

Where did that come from??

And the coresponding rise in unemploymnet in the west

How would not wasting our money subsidizing farmer result in increased unemployment??

And again all of this inflation talk, even if you were even remotely accurate, would happen if Third World incomes increased dramatically no matter what the source of this increase was. So are you argueing that continued Third World poverty is a good thing?

All those can get disrupted if there are too many wild animals near them, or if the vegetation groys unchecked.

Bah, I like forest
I also like fish since they taste good, and agricultural runoff has resulted in algal blooms that have devestated fish and shellfish populations in many parts of the world.

[Sikander]

Originally posted by Spiffor

Because it avoids that infrastructure gets damaged by wildlife? Roads, tracks, electrical wires, telephone wires etc... All those can get disrupted if there are too many wild animals near them, or if the vegetation groys unchecked.

That's an interesting viewpoint. I must say that I would expect a European to be more likely to cheer a little bit more land going wild. You can always pave it over later if you want.

[Bosh]

Sikander: exactly, why not just spray anything not inhabited by humans with agent orange. That'll get rid of all that pesky wildlife

[Tripledoc]

Boshko.

The western taxpayers are the ones paying for the agricutural subsidies. If the subsidies are taken away that would A) mean that the farming comminty would produce less, B) that the freed funds would have either to be reinvested somewhere else (weapons industry?), or that taxes would go down. This would lower productivity in the west as now people will not have to works as long hours, or only one spouse would be a breadwinner instead of two. Also the demand for western consumer goods would rise. At the same time supposedly western manufacturers would have to produce more for the domestic market, while at the same time producing for the third world. So even then the 80% capacity would mean that they would now work at maybe 200 percent.

[Urban Ranger]

Originally posted by Tripledoc
Actually it is amusing that the Economist is advocating a policy that will lead to mass starvation. This will happen if the agricultural subsidies are slashed.

Third World countries that used to able to feed themselves now can't because the farmers were driven out of business by subsidised agri-businesses. The loans they got from IMF/WB for development had to go to purchase of imported food instead.

[Bosh]

UR: Good point.

This would lower productivity in the west

No, it would increase productivity. Productivity is amount produced per hour worked, which would only go up if the distorting effects of farm subsidies were removed. Not having to pay taxes for subsidies and not having to pay inflated prices for subsidised farm produce would also free up money, at least some of which would be reinvested in ways that would increase productivity.

Also keep in mind that farm employment in Western countries is pretty miniscule.

Also the demand for western consumer goods would rise.

Nothing wrong with that.

So even then the 80% capacity would mean that they would now work at maybe 200 percent.

How the hell would removal of farm subsidies result in a 250% increase in demand for consumer goods? This is getting to a Fezzy level of sillyness.

[TheStinger]

Trippledoc did you learn your economics in Moscow Circa 1975

[chequita guevara]

No. Even the commies disagree with him.

[Seeker]

It's just so obvious when you look at the world:

What the HELL are advanced countries doing dominating the market in agricultural products through taxes??

It makes no sense. It keeps the Third World perpetually poor and uncompetitive.

It makes the rhetoric of free trade a sad joke: Sure you have to let our cars, refrigerators, etc dominate your markets....but you still have to buy foodstuffs from us too because we pay to keep a bunch of highly subsidized businessman in operation...don't worry Third World, there will always be a market for sweatshop labour HAW HAW HAW.

[Impaler[WrG]]

Bosko = Right Tripledoc = Wrong

Now that we got that cleared up

Agriculture has become so machinery/fertilizer/investment oriented in the West that it is can practicaly be considered a heavy Industry like Steel Production. Thus anything that aplies to the economics of normal Industry would aply to agriculture. The only real difference is that when the Product hits the market place it is the last thing the consumer will defer purchasing over other comodities if they are forced to do so by poverty. This means that the developed world can produce durable goods AND agricultural products better then the 3rd as oposed to the classic 3rd world makes food, 1st makes durable goods and they sell each to the other Comparitive Advantage situation of the past. The 3rd world is realy screwed now as it has nothing to offer but cheap labor which usualy emigrates (for good reasons) to the first world.


Subsidizing Agriculture production in the west artificialy lowers price as supply often exceeds demand (even considering that in the west Calorie intake is 180% of physical requirments, more then double that of a poor african Country). If massive agricultural subsidies ended in the west the then prices would rise and unless ALL of the money saved was put into subsidizing the income of the poorer segments of our population then they would experience a considerable tightening of the belt as their food cost (already a large % of their budget) shoot up, this would likly lower their domestic consuption of goods and could trigger a downward spiral. The wealthy would ofcorse feel the affect less. Agricultural subsides thus act as a form of Wealth Redistribution in the west and help to support its extensive middle class and Domestic consumption of durable goods.

Thus I feel agriculture subsides in an isolated system are a good thing. Only when it becomes a matter of international dumping on poorer countries is it objectionable for the negitive impact it has on the third worlds ability to fairly compete. I think the solution is to begin to subsidise the agriculture of third world countries to an equal extent that 1st world countries are subsidized. Or for countries with large subsides to impose some find of reverse terrif. Basicaly when ever a farmer wishes to export their subsidized product they must pay the govement a fee to do so esentialy UN-subsudizing the foodstuffs and forcing it to be sold at a high price on the international market. This would atleast help to solve the problem of Dumping but would do little to open the 1st world to 3rd world products as the price in the 1st world would remain artificialy low.

[Tripledoc]

Originally posted by Impaler[WrG]
Bosko = Right Tripledoc = Wrong

I would hope so. I doubt it however.

[Japher]

Impaler

What the HELL are advanced countries doing dominating the market in agricultural products through taxes??

It makes no sense. It keeps the Third World perpetually poor and uncompetitive.

Does it? Does it keep the 3rd World perpetually poor? Many of the 3rd world countries seem to have a hard enough time feeding themselves and their bloated princesses, what are they going to export?

My main problem with ending subsidies is that it would place more dependence on imports for our food stuffs. I am not trying to be against trade, but I personally do not trust the farmers in America enough to not use banned or harmful pesticides, herbicidies, or fungicides so I certainly would not trust the poorly regulated 3rd world countries to do so. Especially since such chemicals are a main reason that developed countries have decent AgBiz. All in all, I am a bit of an isolationist on this, since, IMO, removing subsidies would weaken the infastructurer of the US, and we are a nation that needs that infastructurer more now than ever.