Anybody familiar with Malthusian theory can tell you that the recent unrest around the world over food prices is not surprising. I have been personally preaching the problems of overpopulation and industrialization for years, and I will say that for the first time in my life it sucks to be right. What's even more depressing is that World Bank analysts predict that the happenings of the past months undo the efforts to overcome poverty over the past seven years. Oddly enough, one of my first posts on this blog warned against the effects of using food crops to grow fuel sources like ethanol and bio diesel. Now it seems that the fragile regimes of Haiti and Egypt are facing a hungry revolutionary mob. What's worse is that the food is on the shelves, only the population cannot seem to afford it. For those not familiar with Overpopulation and Thomas Malthus, I would invite you to take this time and do a Google search. However, I will warn you that what you read is not for the faint of heart.
Monday, April 14, 2008
Let them eat cake!
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Be careful on your interpretation of Malthus' population theory. His population theory is rather morbid and time has proven Malthus wrong. For instance, he does not include changes in technology, politics, and globalization; all of which contribute to a country's level of overpopulation. What I see as one contributing factor to food price crisis is the large stockpile of American currency that many developing countries have held in their Fed equivalents, aiding in currency stability. Thus, when the dollar drops in value so do many foreign currencies; which can make a bad situation worse. Don't get me wrong; I am without a doubt a two handed economist and do not want to discount rapid industrialization in these countries which has led to increased disparity between the rich and poor. The Gini coefficient may shed some light on this issue of inequality in the near future. Overpopulation may be a problem in these countries but I feel that the larger problems are corruption, political instability, and growing income inequality. Some of which may be due to increased industrialization, but we must not forget that shocks to the US economy can unleash an economic tsunami which may impact the entire world.
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