Famine, Crop Yields, Food Surpluses, Irrigation, Plow, Crop Rotation, Cultivars, Fertilizers, Pesticides, Tractor, Railroad and Ships

Posted by PITHOCRATES - June 5th, 2013

Technology 101

(Originally published May 23rd, 2012)

Because of Advances in Farming Fewer People could Grow more Food

Cold weather kills people.  A lot of people throughout history have died during winters as they exhausted their food supplies.  That’s why preparing for the winter was serious business.  You had to store enough food to carry you through the winter.  And if the fall harvests were poor it spelled big trouble.  And famine.  It’s hard to imagine what this was like.  A long winter ahead of you with an insufficient food supply.  It was scary.  For it meant some people would die before the spring came.  Hard to fathom this in a day where you can actually drive your car through a blizzard to your favorite greasy diner or fast food restaurant for a delicious hot meal to take off the chill of the coldest winter day.  It wasn’t always like this.

And it wasn’t only long winters that killed people.  Sometimes the long summers did.  Where there were insufficient rains.  And drought.  That destroyed crops and drastically reduced fall harvests.  You don’t hear much about famine these days in the U.S, Canada, Britain, France, Germany or other advanced nations.  But underdeveloped and impoverished nations suffer famine to this day.  Why?  Two primary reasons.  Improved crop yields.  And improved transportation.  The advanced nations have them.  The impoverished nations don’t.

Improved crop yields create food surpluses.  Key to civilization itself.  Food surpluses allowed a middle class to arise because everyone did not have to grow food.  Because of advances in farming fewer people could grow more food. Those who didn’t have to grow food could think about other things.  Including ways to further improve crop yields.  By creating better tools.  Better techniques.  Better food storage.  And when you do all of these things you not only have enough food for yourself and for your surplus you have enough to export.  To those who do not have enough food.  Even allowing people to live in areas that cannot produce food.  For they can trade for food.  Thanks to these surpluses available for export.

Food is so Plentiful and Inexpensive Today that the Problem in America is not Famine but Obesity

Early farms relied on the fertile soil of river banks.  The spring flooding of the rivers raised river levels.  When the water retreated it left behind fertile soil.  Eventually we learned how to take control of our water resources.  And used it to make fertile land away from river banks.  Using irrigation.  Bringing the water to the land.  Probably the next great development was the plow.  Which let us take control of the land.  We tilled the soil to aerate it.  To control weeds.  To mix in organic material.  Such as manure.  To prepare it for planting.  And we used irrigation to bring those crops to harvest.

We then developed crop rotation to replenish nitrogen in the soil.  And to control pests.  Certain pests attack certain crops.  By rotating crops pest infestation couldn’t spread and return year after year.  Families of crops need certain nutrients.  Rotation prevents the depletion of any single nutrient.  Then we took control of the plants we grew.  By creating new plants.  Cultivars.  Using selective breeding to increase grain size, the number of grains per plant, improve disease resistance, etc.

Then we turned to chemistry.  Creating fertilizers.  And pesticides.  These two advancements alone exploded crop yields.  Never before did so few grow so much with so little.  We maximized the agricultural potential of land year after year.  And then we mechanized the farm.  Introducing the tractor.  Allowing the same number of farmers to cultivate more land.  So not only did their existing lands yield more they added more high-yield lands to explode yields.  Creating huge food surpluses available for export.  And slashing the price of food across the board.  From the bread we make from wheat.  To corn-fed beef.  Food is so plentiful and inexpensive today that the problem in America is not famine but obesity.  Obesity is bad but it takes a lot longer to die from obesity than it does from famine.  And we enjoy all of those delicious things that are making us so fat.  While there’s nothing to enjoy when starving to death.

We were able to Raise Crop Yields to such High Levels we have Food Available for Everyone in this World

As crop yields increased more food entered the market.  Good for people.  But bad for farmers.  Because they depressed crop prices.  Large farms that cultivated more land could still make a profit.  But the small farmer who didn’t cultivate more land just saw his revenue fall.  Until his revenue fell below his costs.  Leaving him unable to service the debt he incurred to mechanize his farm.  Causing bankruptcy.  Which happened a lot in the Thirties.  Causing all those bank runs during the Great Depression.

To fight this free fall in crop prices countries enacted tariffs and import restrictions.  The British Corn Laws kept out the less expensive foreign food so the landowning aristocracy could maximize their profits.  And when the British repealed the Corn Laws and adopted free trade everything the landowning aristocracy feared happen.  Food became inexpensive and plentiful.  In large part because of the United States.  Who was maximizing their crop yields.  And then using the railroad to ship their surpluses to the great rivers.  The Ohio.  The Missouri.  The Mississippi.  Where they loaded these surpluses onto steamships.  Where it traveled down the Mississippi to the Port of New Orleans.  Where they transferred it to ocean-going sail ships and steamers.  Bound for Europe.  And Britain.  Where this food fed hungry people.  And cut into the profits of the wealthy landowners.

But it wasn’t only in the United States.  Soon other great agricultural countries produced food surpluses that they shipped all over the world.  Winters still happen.  Droughts still happen.  But they don’t happen everywhere at the same time.  And because we were able to raise crop yields to such high levels we have food available for everyone in the world.  And truck, rail and ships can move that food anywhere it is needed.  Which is why we can drive to our favorite greasy diner or fast food restaurant during a blizzard on the coldest day of winter and enjoy a fresh glass of orange juice, coffee, eggs, hash browns and sausage.  No matter where you live.  As long as you live in a country that supports free trade.

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New Zealand attacks America for Subsidizing and Protecting their Farmers

Posted by PITHOCRATES - June 16th, 2012

Week in Review

You’re probably not familiar with the Trans Pacific Partnership (TPP).  But it’s a pretty big free-trade deal.  Or an attempt at one.  But few Americans have heard of this.  Including members of Congress.  Who can’t get any details out of the Obama administration about the current negotiations.  Which are primarily held in secret.  But they’re talking about it in New Zealand.  And they are even less happy about these negotiations (see NZ must stay staunch on TPP by Matthew Hooton posted 6/16/2012 on The National Business Review).

The Americans want us to pay more for Nikes, entertainment and pharmaceuticals, weaken Fonterra and tinker with Telecom.

It’s a deal we’ll gladly do if they stop subsidising and protecting their farmers, and give us unfettered access to their market.

That, roughly, is the deal on the table for the Trans Pacific Partnership (TPP).

The risk is that our trade negotiators will buckle, conceding the former without gaining the latter.

Instead, they should walk unless New Zealand and our free-trade allies get everything we want.

The TPP began as a New Zealand and Singaporean-led initiative in the 1990s, privately encouraged by the Clinton Administration.

Its purpose was to provide a genuine free-trade path for those members of the Asia-Pacific Economic Co-operation (Apec) forum who meant it.

You sure hear a lot from the government about China’s unfair trading practices.  Saying their idea of free trade isn’t fair trade.  But ‘fair trade’ depends on one’s perspective.  Apparently.  For when the Chinese trade at an advantage to the Americans that isn’t fair.  But it is fair to trade at an advantage to the New Zealanders.  Funny how that works.

Free trade is good.  Free trade is fair.  Because of David Ricardo’s Comparative Advantage.  Where countries produce what they can produce most efficiently.  And trade for what others can produce more efficiently.  Thus all countries use their available resources most efficiently.  And create the greatest amount of wealth from their resources.  Thus maximizing wealth creation for all trading partners.  And increasing their standards of living.  This is what free trade gets you.  Even when it comes to the farm.

Some in Britain fought against the repeal of the Corn Laws for the longest time.  Mostly the landed aristocracy who liked selling their crops at high prices.  Because if their markets were open to U.S. farm exports pouring out of America that competition would force them to lower their prices.  And they didn’t want that.  They wanted the British to pay higher prices for their food.  So they could earn more.  But they eventually repealed the Corn Laws in Britain.  And food prices fell.  Good for the hungry.  Bad for the landed aristocracy.  But good for the British Empire.  Which reached its greatest wealth and glory during the second half of the 19th century.  Because of David Ricardo’s Comparative Advantage. 

Interesting that after the British Corn Laws the Americans would be protecting their farmers.  Less than a century later the Americans caused the Great Depression in part by trying to protect their farmers (the mechanization of the farm caused food prices to fall leading to the farm loan defaults, price supports, tariffs, etc.).  And still are.  Forcing Americans to pay higher food prices.  By keeping less costly food out of the market.

People may attack free trade.  As they may attack free market capitalism.  But what we have isn’t really free trade.  Or free market capitalism.  It’s more rent-seeking mercantilism than the profit-seeking capitalism that replaced it.  For awhile, at least.  The progressives launched their attack on capitalism around the turn of the 20th century.  And have been fighting it ever since.

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Famine, Crop Yields, Food Surpluses, Irrigation, Plow, Crop Rotation, Cultivars, Fertilizers, Pesticides, Tractor, Railroad and Ships

Posted by PITHOCRATES - May 23rd, 2012

Technology 101

Because of Advances in Farming Fewer People could Grow more Food

Cold weather kills people.  A lot of people throughout history have died during winters as they exhausted their food supplies.  That’s why preparing for the winter was serious business.  You had to store enough food to carry you through the winter.  And if the fall harvests were poor it spelled big trouble.  And famine.  It’s hard to imagine what this was like.  A long winter ahead of you with an insufficient food supply.  It was scary.  For it meant some people would die before the spring came.  Hard to fathom this in a day where you can actually drive your car through a blizzard to your favorite greasy diner or fast food restaurant for a delicious hot meal to take off the chill of the coldest winter day.  It wasn’t always like this.

And it wasn’t only long winters that killed people.  Sometimes the long summers did.  Where there were insufficient rains.  And drought.  That destroyed crops and drastically reduced fall harvests.  You don’t hear much about famine these days in the U.S, Canada, Britain, France, Germany or other advanced nations.  But underdeveloped and impoverished nations suffer famine to this day.  Why?  Two primary reasons.  Improved crop yields.  And improved transportation.  The advanced nations have them.  The impoverished nations don’t.

Improved crop yields create food surpluses.  Key to civilization itself.  Food surpluses allowed a middle class to arise because everyone did not have to grow food.  Because of advances in farming fewer people could grow more food. Those who didn’t have to grow food could think about other things.  Including ways to further improve crop yields.  By creating better tools.  Better techniques.  Better food storage.  And when you do all of these things you not only have enough food for yourself and for your surplus you have enough to export.  To those who do not have enough food.  Even allowing people to live in areas that cannot produce food.  For they can trade for food.  Thanks to these surpluses available for export.

Food is so Plentiful and Inexpensive Today that the Problem in America is not Famine but Obesity

Early farms relied on the fertile soil of river banks.  The spring flooding of the rivers raised river levels.  When the water retreated it left behind fertile soil.  Eventually we learned how to take control of our water resources.  And used it to make fertile land away from river banks.  Using irrigation.  Bringing the water to the land.  Probably the next great development was the plow.  Which let us take control of the land.  We tilled the soil to aerate it.  To control weeds.  To mix in organic material.  Such as manure.  To prepare it for planting.  And we used irrigation to bring those crops to harvest. 

We then developed crop rotation to replenish nitrogen in the soil.  And to control pests.  Certain pests attack certain crops.  By rotating crops pest infestation couldn’t spread and return year after year.  Families of crops need certain nutrients.  Rotation prevents the depletion of any single nutrient.  Then we took control of the plants we grew.  By creating new plants.  Cultivars.  Using selective breeding to increase grain size, the number of grains per plant, improve disease resistance, etc. 

Then we turned to chemistry.  Creating fertilizers.  And pesticides.  These two advancements alone exploded crop yields.  Never before did so few grow so much with so little.  We maximized the agricultural potential of land year after year.  And then we mechanized the farm.  Introducing the tractor.  Allowing the same number of farmers to cultivate more land.  So not only did their existing lands yield more they added more high-yield lands to explode yields.  Creating huge food surpluses available for export.  And slashing the price of food across the board.  From the bread we make from wheat.  To corn-fed beef.  Food is so plentiful and inexpensive today that the problem in America is not famine but obesity.  Obesity is bad but it takes a lot longer to die from obesity than it does from famine.  And we enjoy all of those delicious things that are making us so fat.  While there’s nothing to enjoy when starving to death. 

We were able to Raise Crop Yields to such High Levels we have Food Available for Everyone in this World

As crop yields increased more food entered the market.  Good for people.  But bad for farmers.  Because they depressed crop prices.  Large farms that cultivated more land could still make a profit.  But the small farmer who didn’t cultivate more land just saw his revenue fall.  Until his revenue fell below his costs.  Leaving him unable to service the debt he incurred to mechanize his farm.  Causing bankruptcy.  Which happened a lot in the Thirties.  Causing all those bank runs during the Great Depression.

To fight this free fall in crop prices countries enacted tariffs and import restrictions.  The British Corn Laws kept out the less expensive foreign food so the landowning aristocracy could maximize their profits.  And when the British repealed the Corn Laws and adopted free trade everything the landowning aristocracy feared happen.  Food became inexpensive and plentiful.  In large part because of the United States.  Who was maximizing their crop yields.  And then using the railroad to ship their surpluses to the great rivers.  The Ohio.  The Missouri.  The Mississippi.  Where they loaded these surpluses onto steamships.  Where it traveled down the Mississippi to the Port of New Orleans.  Where they transferred it to ocean-going sail ships and steamers.  Bound for Europe.  And Britain.  Where this food fed hungry people.  And cut into the profits of the wealthy landowners.

But it wasn’t only in the United States.  Soon other great agricultural countries produced food surpluses that they shipped all over the world.  Winters still happen.  Droughts still happen.  But they don’t happen everywhere at the same time.  And because we were able to raise crop yields to such high levels we have food available for everyone in the world.  And truck, rail and ships can move that food anywhere it is needed.  Which is why we can drive to our favorite greasy diner or fast food restaurant during a blizzard on the coldest day of winter and enjoy a fresh glass of orange juice, coffee, eggs, hash browns and sausage.  No matter where you live.  As long as you live in a country that supports free trade.

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Mercantilism, Royal Navy, Napoleon, Pax Britannica, Corn Laws, David Ricardo, Comparative Advantage, European Union and NAFTA

Posted by PITHOCRATES - May 22nd, 2012

History 101

Mercantilism gave Britain the Royal Navy which Ushered in the Pax Britannica

Great Britain had a rough go of it at the end of the 18th century.  They lost their American colonies in the American Revolutionary War.  A war that started over the issue of taxation to pay for the previous Seven Years’ War.  So instead of securing new revenue to pay down old debt they incurred new debt.  The French Revolution closed out the century.  Causing concern for some in Britain that their monarchy may be the next to fall.  It didn’t.  For the constitutional monarchy and representative government in Britain was a long cry from the absolute monarchy that they had in France.  So revolution did not come to Britain.  But war did.  As the French expanded their revolution into a European war.  Pulling the British back into war with their old enemy.

With a large conscripted French Army and the concept of total war France made total war.  Napoleon Bonaparte won a lot of battles.  Conquered much of Europe.  Even marched back and conquered Paris.  Proclaimed himself emperor of France.  And continued waging war.  Including an ill-conceived invasion of Russia.  Which marked the beginning of the end for Napoleon.  And the French Empire.  Weakened from war France saw her old nemesis, Great Britain, rise as the first superpower since the Roman Empire.  And like the Romans’ Pax Romana Britain entered a century of peace.  Pax Britannica.

The reason the British could do this was because of their mercantile past.  They set up colonies and international trade networks.  And they used the proceeds from that lucrative trade to finance the greatest naval power then in the world.  The Royal Navy.  And the Royal Navy would help keep the peace in the Pax Britannica.  She became the world’s policeman.  Making the world safe for trade.  Especially on the high seas.  But then something interesting happened.  She broke from her mercantile past.  Because they saw the shortcomings of mercantilism.  One of which produced wealthy landowners at the expense of a hungry population.

When the British repealed the Corn Laws in 1846 Food Prices fell and the Standard of Living Rose 

The British Corn Laws were a series of laws protecting those who grew cereal crops.  The stuff we grow that has edible grains.  Corn, rice, wheat, barley, etc.  What we call staple crops as they form the basic sustenance of humans everywhere.  We grow these in greater abundance than all other foods.  And when you look at the grain size you come to one realization.  It takes a lot of land to grow these crops.  And who owns large tracts of land?  The landowning aristocracy.  A small group of people with a lot of wealth.  And a lot of political influence.  Hence the Corn Laws. 

The Corn Laws were legislation with one goal.  To prevent the British people from buying less expensive food.  By either forbidding any importation of cheaper grains until the domestic price had reached a certain price level.  Or adding tariffs to the less expensive imports so the landowners could still sell their grains at higher prices.  Thus preserving their wealth.  And they made specious arguments about how lower-priced food was actually bad for the people.  For it was just a way for manufacturers to maximize their profits.  For if food was cheaper they could pay their workers less.  Being the greedy bastards that they were.  So the only fair thing to do was to keep food prices high.  To keep the living wage high.  To force manufacturers to pay their workers more.  You see, the only way to help the poor and middle class was to let the wealthy landowners become even wealthier.  By keeping the price of the food they sold high.

Opposition grew to the Corn Laws.  People studied the works of their fellow countrymen.  Adam Smith and David Hume (both Scottish).  And the Englishman David Ricardo.  All great economists and thinkers.  Who were all proponents of free trade.  Ricardo’s Comparative Advantage basically proved the case of free trade over the protectionism of mercantilism.  Eventually the political power of the landowners could not overcome the economic arguments.  Or a famine in Ireland.  And, in 1846, they repealed the Corn Laws and adopted free trade.  Food prices fell.  Leaving people with more disposable income.  To purchase the goods the Industrial Revolution was making.  Increasing their standard of living.  While small famers had to leave their farms being unable to farm efficiently enough to pay their bills at the prevailing prices.

The Success of NAFTA proves David Ricardo’s Comparative Advantage

Mercantilists and other opponents to free trade like to point at the human costs.  Small farmers losing their farm.  Just so they can preserve some semblance of privilege to protect the high prices in their industry.  But it was becoming more and more difficult to make the argument that the masses were better off paying higher prices.  Because they’re not.  Lower consumer prices increase the standard of living for everyone.  Higher living standards create healthier living conditions.  And reduces child mortality.   For the greatest killer of children in the world is poverty.

The British were both a military and an economic superpower during the 19th century.  But someone was chasing her.  The Untied States.  Who was feeling her economic oats.  Her economy would catch up and surpass the British.  Making it the mightiest economic power of all time.  How did this happen?  Two words.  Free trade.  The United States was the largest free trade zone in the world.  The economic advantages of all those states trading with each other freely across their state borders made Europe stand up and take notice.  And in response created treaties that ultimately led to the European Union and the Eurozone.  To replicate the large free trade zone of the United States.

Back across the Atlantic the Americans, Canadians and the Mexicans took it up a notch.  And created the North American Free Trade Agreement.  NAFTA.  Extending the free trade that existed in each of their countries across their international borders.  The mercantilist fought against this.  Because protectionism, restrictions and tariffs helped the privileged few protect the high prices in their industry.  In America they talked about a great sucking sound as all American jobs went to low-wage Mexico.  Some manufacturers did move to Mexico.  Primarily because like the small farmers in Britain after the repeal of the Corn Laws they could no longer sell at prices to meet all of their costs.  But it was not as the mercantilists predicted.  Yes, imports increased.  In 2010 they were up 235% from pre-NAFTA 1993.  But exports were up, too.  Some 190% for the same period.  Proving Ricardo’s Comparative Advantage.  By focusing on what we do best and trading for everything else all countries do better.

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British Corn Laws and Empire, the U.S. Free Trade Zone and the Eurozone

Posted by PITHOCRATES - November 29th, 2011

History 101

With the Royal Navy, the Steamship, the Railroad and the Telegraph, Great Britain Peacefully Ruled and Led the World

The British Corn Laws were on the books from 1815 to 1846.  To protect domestic cereal farmers from less expensive food imports.  By adding a tariff to these grain imports.  Increasing their price.  So they weren’t any cheaper than the domestically grown grain.  Interestingly it was the few great landowners who wanted these tariffs.  Not the people who had to buy the food.  For paying more for food meant they had less to spend on clothing and other things.

When it came to consumer prices the people were always for free trade.  Because whatever they earned it never seemed enough.  So paying more in taxes was never a good thing.  These wealthy landowners even put forth the argument that paying higher food prices meant higher wages.  In a feeble attempt to maintain these tariffs.  They said that manufacturers just wanted cheaper food so they could pay cheaper wages.  Because if food wasn’t that expensive their workers wouldn’t need as much pay.  And, of course, the greedy manufacturers would just pocket more profits.  Much like the greedy landowners were doing thanks to the Corn Laws.  But their greed was somehow different.

Well, free trade won out.  Eventually.  And they repealed the Corn Laws in 1846.  And, as expected, food prices plummeted.  Soon they imported more food than they grew.  Because it was cheaper.  And it freed up more money for use elsewhere in the economy.  Stimulating innovation and invention.  Taking the Industrial Revolution to new heights.  And raising the standard of living for all people.  Not just the wealthy landowners.  The British Empire reached its zenith in the 19th century.  After the defeat of Napoleon there was about a century of peace called the Pax Britannica.  Where Great Britain became the global policeman.  With the Royal Navy, the steamship, the railroad and the telegraph, Great Britain peacefully ruled and led the world.

The U.S. was a Large Free Trade Zone with a Common Currency, Language, People and Customs

The British were the most advanced nation in the 19th century world.  And the richest.  Her empire dominated trade.  Her rule of law and common currency made that trade efficient.  It was a giant free trade zone within her empire.  But it couldn’t last.  The cost of maintaining the empire, plus a world war, was just too much.  Her economic might faded.  While another rose.  In a former colony.  The United States.

The sun never set on the British Empire.  Because it was that big.  Reaching around the globe.  Connected by long lines of communication.  And an imperial British culture uniting different peoples.   Who knew different cultures, laws and money.  Whereas as the United States had all the advantages of empire (size and range of resources) without any of the disadvantages.  The U.S. was a large free trade zone with a common currency, language, people and customs.  The states comprising the U.S. were as big as countries in other parts of the world.  But trade could flow between any two states without custom duties, tariffs or even inspections.  It was truly free.

When the Industrial Revolution reached the United States, the economy took off and never looked back.  By the end of the 19th century she was challenging the British Empire.  And rapidly overtook her.  There was another global policeman in town.  All because of a giant free trade zone that was as big as a continent.

The ‘United States’ of Europe created the Eurozone and a Common Currency (the Euro) to Compete with the U.S.

The United States is such the perfect model of free market capitalism that Europe created the Eurozone and a common currency (the Euro) to compete with the U.S.  And it worked.  For awhile.

The ‘united states’ of Europe as a whole has a larger economy than the U.S.  But they have their problems.  For a common currency is only part of America’s success.  The U.S. is a united federation of states with one set of federal laws, language and culture for interstate commerce.  Something Europe doesn’t have.  And probably never will.  European countries have far too much history and culture.  And nationalism.  They will never unite politically.  Like the United States.  Or the British Empire, for that matter.

The key to the British Empire was that it was British.  One currency.  One language.  One set of laws.  One culture.  For interstate trade, at least.  Just like in the country that surpassed her.  The United States.  Still, there’s nothing wrong with being a smaller economic power than the U.S.  As long as you have free trade your people can enjoy a high standard of living.  Without the added responsibility of being the global policeman.

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