tim@isrnix.UUCP (06/28/83)
It seems that our "expert" on Capitalism hasn't studied much economics
if Tom Craver doesn't understand the reason for farm subsidies.
Have you ever heard of something called the "cobweb function", Tom?
It is an economic effect which occurs when you have a combination of
an inelastic demand (like the demand for food-you absolutely NEED some
minimun but you also can't eat above some maximum) for a commodity
and a periodically inelastic supply-once fields are planted each
year that's pretty much it-the farmer can't go back in the middle of
the season and either plant more crops (it will be too late) or
it would be kindof irrational to take out crops already planted.
Hence the cobweb function results in which farmers responding
to high prices will then vastly overplant which results in prices
where they really can't afford to live which leads to farms going out
of business which leads to less production, incredibly higher prices
and so forth-the thing is with the cobweb function is that instead of
following the usual path towards equilibrium between supply and demand
(which is your supposedly wonderful virtue of Capitalism when it works
as it's supposed to) you get a situation of wild fluctuations in which
supply and demand grow increasingly divergent-there are periods of
glut and periods of famine. THUS under our terrible "socialistic"
govt since the New Deal in the 30's we have had the system of farm
subsidies to keep prices stable -if weather conditions etc result
in a very big crop the gov't will buy up the excess to keep prices higher
so farmers stay in business and continue to produce the incredible
cornucopia of agricultural products we enjoy in this country. We have
one of the most, if not the most , successful agricultaral systems in
the world -prices for food have not gone up all that much since the
farm subsidy programs were instituted and we enjoy a plentiful supply.
Twas not always thus--but this is the blessing of the terrible
"government intervention"! Besides the subsidy programs the gov't
has supplied all sorts of other help to agriculture-farm extension
agents,the many agricultural colleges founded under the Merril Act
which have done much of the research which has resulted in our very
efficient agricultural production, and other aids. And we have
one of the most productive agricultural systems in the world--
hmmmm wonder how that could have happened with all this involvement
of big bad government? Government in a democracy is merely the people
getting together to help themselves. I think that idea is
WONDERFUL!!!!
Tim Sevener
decvax!pur-ee!iuvax!isrnix!timjj@rabbit.UUCP (06/29/83)
Tim Sevener points out the alledged "cobweb" effect in the farm and produce market. He then points out that our current socialist government eliminates that effect, and argues that a republican government (in the sense of governing a republic, not a government run by the republican party) that supports capitalism wil not. He clearly misses one point, namely that the CAUSE of the cobweb effect is an ill-considered behavior on the part of the producers. Ill-considered behavior is clearly not capitalistic behavior, because, even though SOME producers will make more money in the shortage market, most will be broken in the surplus market, and losing one's business is clearly not a practice encouraged by a capitalistic society. I think that Mr. Sevener's comments inadvertantly point out the real problem with today's government and today's economy, specifically the lack of LONG TERM PLANNING. I am certainly aware of Drucker, et. al., and the "five year payoff" management style, I just don't believe in it. Some of the industries that do are: The steel industry. | referring | The automobile industry. |to the U.S. | The consumer electronics industry. | companies | The recent performance of these companies should leave no doubt as to the results of this style of management. While the individual farmer, steel executive, or what have you, may see the promise of huge profits in the next five years, just by eliminating those wasteful research facilities, engaging in a little circumspect market manipulation, etc, (all of which are BIG wins according to the current economic theories) the problems of obsolescence (What say GM, RCA, TI, INTEL, IBM, DEC?), market instability (as someone else, or the government, steps in to take advantage), etc, will destroy the ill-considered gains very quickly. The US is currently on an anti-science, anti-research, anti-technonogy, anti-business kick that has cleanly removed it from the forefront of both economic and scientific leadership, and is continuing to affect the US (look at the derivatives, they are still negative, but at least less so, in the last 2-3 years). This trendiness (both in management and social behavior) is encouraged by the illusion that the government can, and will, make good on any dislocations that are caused by the current trend(s). This illusion is brought to us, of course, by politicians (Tip O'Neil and Alan Cranston come to mind, as do Jesse Helms, James East, Strom Thurmond, and Ted Kennedy) who know that we, the public, are unwise and stupid enough to believe that their short term malificence (which is ONLY intended to buy votes, a process that used to be called bribing) can last. The difficulty, of course, is that the government has no means of production, and can merely continue spreading the diminishing wealth farther and farther, making us all poorer. This illusion of government ability is the root of the current economic and social instability. /* FLAME ON FULL */ Wake up, you damned fools! It's not the fault of the government, the schools, the businesses, the big companies, or the Arabs, it's your own fault. It's you (anti-business liberals, anti-science conservatives, anti-technology naturists, labor unions, nihilists all in the long run) who are reaping the results of your own stupidity. You must be willing to sacrifice some of your comfort and smugness for a while to bring the country (hmm, world, it certainly isn't just the US that's like this) back on its feet. There's enough for all, if you follow the philosophy of making more instead of destroying what you now have. The idea of "I want more, to hell with the other guy" just won't work in the long run, because the other guy will just fight for his share, instead of working with you to build more, just as the idea of sharing without regard to productivity will discourage any production at all, as the individual will be willing and able to sit back and let someone else do the necessary work, since it doesn't matter how much that individual produces. Well there you have it. Capitalism requires the human organism to overcome shortsighted greed, a difficult prospect. Communism, on the other hand, (even in a pure form) requires not only setting aside greed, but the willingness to work without any visible reward, an even more difficult prospect. A republican government has the ability (through its economic systems) to encourage farsighted behavior, while a socialist one does not. It also (as contrasted with the socialist government) has mechanisms that provide rewards for ingenuity and hard work. A communist government does not even admit to the existance of problems in human behavior, let alone provide for a reward mechansim, an even more shortsighted view. Up the republic!
ucbesvax.turner@ucbcad.UUCP (06/30/83)
#R:isrnix:-25300:ucbesvax:7500019:000:3283 ucbesvax!turner Jun 29 05:10:00 1983 Ah, but "Cui Bono" indeed! Over the decade that farm subsidies have been in place, we have seen an unparalleled concentration and industrialization of agriculture. Not that these things are so terrible in themselves, but just look at how it has been done. You are taking as your premise: "U.S. Ag is good, U.S. Ag is subsidized", therefore at least these subsidies have been good." I don't think U.S. Ag is so great. What do I think is wrong? Several things: 1) The germ plasm of the seed varieties for various staples are becoming the property of subsidy-fattened food conglomerates. They have, in fact, a vested interest in thinning out the genetic diversity of farmlands, since it is leading to a monopoly situation which would be very hard for competitors to break. 2) Farmers tie up huge amounts of capital in farm equipment inventory by letting land lie fallow. And write off the equipment depreciation on their taxes. Huge famines might be raking the Sahel, or Somalia--but we can't let world wheat prices be deflated by selling stockpiles of grain, no sirree. What about our nation's sturdy *farmers*? (Del Monte, General Foods, etc.) 3) Technology-intensive (really, energy-intensive) farming which is favored by the economies of scale that large, government-aided food companies can establish, is eating away our farmland by soil compaction and exhaustion, polluting rivers with nitrogen fertilizers, and poisoning the food chain with pesticides. Laissez Faire would probably be better than this. Collectivized farming (USSR and China, with Cambodia being a rather grisly example) is not in itself a solution. Voluntary cooperatives of farmers are, I think, intrinsically more humane, since they never approach the scale of large corporations, can coordinate their own marketing policies, and understand better the uses of charity, since they require it of each other in order to survive. The advantages of competition can be balanced with the advantages of cooperation. Radical cooperativism has spontaneously appeared during times of upheaval. The Makhnovists in the Ukraine fought for peasant self- determination, against both White and Red armies. The anarchist collectives in Spain were a response to centuries of landlord negligence--and were quite productive and profitable, even with a civil war raging around them. In Nicaragua, similar efforts were rather quickly blunted by the Sandinistas. Peasants who wished to undertake their own land reforms had to move quickly, or else put up with the government's slower version, a bureaucratic process mainly designed to give the appearance of not coming down too hard on some of the larger land-holders--while actually stabilizing a situation whereby the government could take a private, smoothly-run industrial operation into its own hands, without changing the working conditions significantly. This is a travesty of revolution. In the supposedly socialist countries, Big Brother says "I know best." In the supposedly capitalist countries, Big Brother collects money, and then hands it to big companies, saying, "You know best." In both places, small farmers look up, and say: "but we were here before you." Blam.
myers@uwvax.UUCP (06/30/83)
Whew! Jj is a bit, ummm, uninformed. An example is his assertion that a socialist "government" cannot be as far sighted as a "republic". Might be nice if he defined his terms. Socialism is an economic form, not a type of government. Same with communism. It's just that it has become popular parlance these days to call governments which tout a particular social system to strive for by the name of the desired economic form. Don't confuse some of the "actually existing socialisms" with what could be achieved in the more developed countries. One doesn't have to give up a democratic political system to deal a death blow to the CMP, although it is a real possibility which must be prevented. Hasta Luego, Jeff Myers@uwvax