Prices and Things Organic

I majored in Econ in undergrad and always appreciate the clarity of economic thinking as a problem solving tool. Not to say I’m an economist. But I believe, generally, in the power of prices and the power of markets to articulate and communicate the value that a society or community places on a specific action or good. All the regular stuff notwithstanding. Meaning, I also believe that there needs to be a rule of law and there needs to be a justice system and that the legislative branch and the executive branch should work to provide a solid framework and underpinning to the markets so that the relevant actors can work together with some level of confidence.

All that being said, at the end of the day, and again with all those other things acknowledged and notwithstanding, prices are important things. They are signals. They are representations. They communicate something.

So, as much as I want to get on board with all my lefty pals and cohorts who bemoan the state of the food industry, and talk with conspiratorial glances about the corn lobby and how evil everyone is and how bad fast food is and how we don’t even know what we’re eating and god isn’t it awful and I don’t want to harm the chickens or the cows, etc. As much as some of that is true. And the food industry is best not inspected too too closely because we’ll be fearful of what comes out.

As much as all of that, I do think it’s important to remember that, whatever article is written in the New York Times, and whatever story NPR is going to run, all other things being equal, cheaper calories is a good thing. Cheaper calories means people can spend their money on things other than food. Cheaper calories means that people need not work as hard to, literally, put food on their table.

So as much as I want to hold up a placard and march somewhere because of the evil big companies, I do find it helpful to remember that, were everything to be organic and wholesome, and were every chicken and every cow treated with the utmost dignity and respect, and were no chemicals used in the production of our food, we could all feel better about ourselves in our major metropolitan markets, and we could pat ourselves on the backs, and yell at smokers on the street, and tell people how much better we all were than they are.

But the majority of people would have suffered a very significant cut in their wages and standards of living would have dropped and people would be hungrier and less well fed and life would be worse for most people.

And I’m sure, 100% sure in fact, that there are people that want to whip out studies that say, no, actually, big food is artificially propping up prices, and things would be cheaper if we all bought local and had our own tomato gardens, etc. and I just want to reassure you, with that same level of 100% confidence, that those people are totally and completely full of shit, as it relates to the possibility of things being cheaper and better by being more expensive.

Prices matter. Prices tell us something. If there’s a solution that’s significantly more expensive than there is a high likelihood that that solution is worse. Maybe not for your soul or your feeling of self-satisfaction. But for the world and for people’s ability to live and do things that they want to do, as opposed, perhaps, to things we want them to do.

People that are strident about eating organic and free-range and are vitriolic and full of anger about the food industry in the United States and the world are, in essence, saying, “Let them eat cake.” Seriously.

ManyPeaks

I have always been amazed that 12 Budweisers are priced many multiples -- 8x in the Nineties, 4x now -- higher than a gallon of gasoline. Even as a beer drinker, the latter seems so much more valuable. Not to mention you can homebrew your own beer but not refine your own gasoline from the backyard oil well.

Talk about prices telling you something about societal values !

theflyingchange

You can have my beer when you pry it from my cold dead hands, 'Roo.

mattray

Sam --

You have to ask yourself why the prices are so cheap, and what are the hidden costs not revealed in the monetary prices. For example, is a 99 cent burger really 99 cents when to raise the cattle acres and acres of Brazilian rainforest have been decimated? So poor people are fed in America with food that is killing them, and thousands of miles away poor people lose their homes in the Amazon to big agribusiness. The only reason food costs 99 cents is because someone else is getting hurt. And that someone is usually the very poor people you are trying to defend.

Corn is subsidized so that it can be used in almost every product in your local supermarket. Most people have at least some allergy to corn. And although corn is cheap, it's solely due to artificially suppressed prices. So farmers who would otherwise grow a more healthy product don't, because the government pays them not to. What results is that the supply of fresh vegetables is so low in most places in the US that the price is kept artificially high, thus preventing people from getting a good deal on good food.

Prices do tell us everything. They tell us that government and corporate intervention in the markets skews the playing field, tipping it toward large industry, environmental destruction, and wasteful practices, and away from quality, local produce.

As for the idea that cheap calories are helpful to the poor, that is a gray area. A person can eat 2500 calories of cheap garbage and still be hungry. A person can eat 1500 calories of nutritious food and feel completely satisfied. Likely they are about the same price in dollars, and the social cost of the latter one is far lower.

The solution to the problem is to stop subsidizing corn (syrup) and subsidize vegetables. Or simply give free healthy food to the poor (through food stamps, etc.). It would cost no more than the current costs (hidden and overt) of big agribusiness.

Organic or otherwise, people must have access to affordable food. This we know. But if a dinner of broccoli, white rice, and chicken breast costs just $2.99 to make (it does) then why should we sympathize with those who purchase a Big Mac meal at McD's for the same price? The real issue is access. Without access to clean, fresh food, people are forced choose the garbage that's close by. That is why community gardens are the wave of the future. You see them in all the inner-city neighborhoods of Brooklyn now, because folks want to provide for each other what the free market does not. Cheap, quality eats.

Your post seems to come more from a general dissatisfaction with left-wing idealism. I can agree with you on that -- it is annoying, lazy, and ignorant at worst, and condescending at best. Only action, and hands-on problem solving deal with these issues, not a bunch of whining and wishing. We all have to work to make food healthy and affordable -- organic or otherwise.

But don't let your disdain for those who don't understand basic market forces cloud the fact that basic market forces don't exist in this country. And yes, healthy food is cheap, but people won't buy it if they can't find it.

Obviously everything I'm writing here is something you criticized in your post. However, you provide no details or information to back up your arguments. If you can assure us that we are "full of shit" you better bring the stats, bro. I'm telling you that healthy (not organic) produce is as cheap as McDonald's or Wonder Bread or anything else. I know, because it's what I eat. (I can rarely afford organic, but would def prefer it if it was cheaper).

As for your indictment of advocates for organic and free-range, they are making a personal choice based on information that they have. They are not taking anyone's food away. They are trying to make it easier and cheaper to get quality food, and to do that corporations like Monsanto who are poisoning poor people need to be stopped. If the foodies get off course a little, it shouldn't be forgotten that the rest of us (read you and I) ain't doing shit. So at least someone is fighting the big fish. Whether they are truly sticking up for the little guy is debatable. But they are the people that bring you community gardens and green markets in places like East NY. And no, they are not all white suburban middle class snobs. Many are locals who are fighting on behalf of their neighbors for a better life -- a return to a time when 4 companies didn't control our entire food supply. I wish them luck.

Written with love:)
Looking forward to a face-to-face debate before the next show,
MR

theflyingchange

Matt-
Thanks for the thoughts brother. I know you're writing with love. You're
also always right. We know these things.

First, I completely agree with you that we should stop subsidizing corn. I
hate farm subsidies and I hate artificially inflated prices or suppressed
industries that keep 3rd world countries in poverty because tariffs, quotas
and other mechanisms make importing sugar cost prohibitive.

Second, I'm really targeting the hard-core zealots that are not only making
a choice but do so sanctimoniously and with judgement against people that
can't afford the same choices.

Third, all that notwithstanding, as I wrote, cheaper calories are a good
thing. I know that Michael Pollan and others would say, "Not true. Cheap
calories are worse for you because of diabetes, and obesity, and all these
other things" and, equally, there is no, nor would it be practical to
construct, a full-scale economic study to evaluate the total social impact
of cheap calories on healthcare costs, poverty, living standards, etc.

Fourth, but that's the beauty of market forces. I don't need the study to
know that, ceteris paribus, cheap calories are good things, albeit with
costs. And we should put some faith in the fact that, as messed up as it
is, it's hard to argue that a major agribusiness poultry producer isn't
doing at least some good by creating a poultry product consumable by people
with less dough. That simply cannot be all bad. Even if we ascribe the
worst motivations and tendencies.

Fifth, love back at ya.

mattray

It's actually pretty easy for me to argue that Tyson Chicken (for example) is doing NO good at all. Yes their chicken products are 50 cents or so cheaper by weight than local chicken. But if they went away, there would be a rush by small farmers to fill the void and competition would lower prices. Perhaps not all the way to Tyson levels, but substantially lower.

Tyson pays their workers minimum wage, and the workers last for a year before they get carpal tunnel syndrome from cutting the same chicken parts 8 hours per day. They have been punished and even fired for leaving their stations to use the bathroom. The average poultry worker in Indiana (for example) makes less than 30k and that includes management. The laborers make far less than that. And the birds are often contaminated with salmonella and fed antibiotics which, when consumed by humans, contribute to the mutation and creation of super-bugs that cannot be killed.

Did you know that there are Mexican, Central American, and ex-cons both black and white living in indentured servitude on factory farms throughout the South? The immigrants cannot leave their jobs because they will be deported if they do. And the ex-cons face a life of parole and no job opportunities and choose to sign contracts that keep them virtually enslaved on the farm. Some of the farms even employ prison labor in shady deals to sell cheap produce to local restaurants.

These are real costs that our society just can't bear.

I would encourage you to read up a little here:

http://www.splcenter.org/legal/guestreport/inde...

here:

http://www.hsus.org/farm/resources/research/env...

and here:
http://www.satodayscatholic.com/042806_ModernDa...

"Traffickers have been extremely creative in achieving their ends, he said. Notable was a case in which hundreds of farm workers from Mexico and Central America were smuggled over the Arizona border, where they were met by buses with mechanics aboard to ensure speedy repair of any breakdowns on the way to Florida.

In Florida the Ramos brothers, former fruit pickers themselves, moved 700 slave laborers from field to field and state to state for two years. The workers fell victim to the same debt servitude, being charged for their daily rides out to the fields and the tools they used. They slept on concrete floors in labor camps surrounded by barbed wire (placed to keep them in) with locks on the outsides of doors and windows. This, noted Coonan, was a good clue that these laborers were being held against their will.
Other indicators of forced labor are observing domestic help who never leave their employer’s house or German shepherd dogs guarding farm laborers’ quarters, he said."

"In another Florida case, human traffickers recruited crack-addicted men from homeless shelters, keeping them in virtual bondage picking oranges. The men were paid in crack cocaine and beaten the rest of the time to keep them working."

That is just the tip of the iceberg. Is it okay for one human to be in modern day slavery? No it is not. It is not about being a bleeding heart. It is about understanding the basic economic truth that these prices you laud result in death. That is non-negotiable, it is fact. There is nothing radical about saying that. These cases have been reported on 60 Minutes and 20/20 and other news magazines and then simply forgotten. The solution is to enforce the law, end slavery in America, and take away the advantages that these large farms have (with lobbying, forced labor, environmental dumping). They need to be forced out of business so we can have real competition between many small farmers and bring prices down naturally.

Also, Sam, it is vitally important that we as a society, think about our society itself and what it should look like. I am aware that chicken that is 50 cents cheaper can be a big deal to some people. So let's make it 50 cents cheaper without all the horrible social, environmental, and health costs. It can be done.

mattray

P.S. this Vanity Fair article on Monsanto was last year's must read:

http://www.vanityfair.com/politics/features/200...

Mike

A few general comments here:

1. Farming, labor practices, and animal slaughtering can and should be done in a more humane manner.
2. My instinct tells me that despite some sensational stories, these practices have tended to get better over time, not worse.
3. It always makes good press to write a story about orange pickers suffering from arthritic castration and getting paid in crack cocaine. But to say "Archer-Daniels-Midland responsibly fed [x] billion people this year" -- well, that headline isn't so exciting, and probaly doesn't make a good story on 20/20 or whatever evening news program.
4. Agricultural work in the 3rd world cannot be appealing work. It is undoubtedly brutal in many cases. I feel priveleged to not have to do it. But for a lot of those workers -- what is their better option? I'm not sure it would improve their lives if the US stopped trading with 3rd world nations, and simply decided to grow everything in-house.
5. I don't think Sam was saying McDonald's is the only affordable option. A dinner of broccoli, rice, and chicken breast is a great dinner. Who is saying that poor people don't have access to this? Most any poor person in the US does have access to this. If they choose McD's instead, that's lamentable, but that's not the point here.
6. If it weren't for modern agricultural innovations -- innovations developed by BIG BUSINESS -- then many, many millions of people around the world would have starved, who are now alive.
7. If further agricultural innovations - like genetically modified food - are not adopted soon, en masse -- over the ojections of whiny liberal countries like France, then many many millions more people around the world WILL STARVE in the future, many of them poor people in the 3rd world. This is a sad, but true, demographic reality.

End of story.

mattray

@ MIke re: your points

1. agreed
2. Likely true, but it shouldn't happen to even one person, should it?
3. The stories go way beyond what I posted earlier. Have you read the Vanity Fair article i posted above? Try this on for size: Monsanto in the dark of night spreads their own genetically modified seeds onto private small family farms. When their patented crops turn up on thos family farms, Monsanto sues the farmers out of business for patent infringement, gobbles up their land, and further cements their monopoly. It's not just crackheads that are victimized, it's ordinary folks. Real people, not stats. Predatory monopolies answer to no one, not even government. IT HAS TO STOP.
4. This is a common argument. "Slave labor is better than starving to death." I don't have a response, I can't purport to know what is in the best interest of someone else. I can only point out what i think is a disgrace, and hope that there is a better way that doesn't involve these mega corporations who, in many cases, don't value human life.
5. Have you ever lived in a poor neighborhood and shopped in the area? In many, if not most, there is a dire lack of fresh produce. Some ghettos have none. ZERO. In Cleveland i used to have to drive almost an hour to get an apple that wasn't rotten. Access to fresh food does not exist in many poor areas. FACT
6. I am not blanketly indicting big business, I am lamenting the monopolies under which we now live. I'm sure you would agree that monopolies are not healthy for the economy. Banking, agribusiness, it is everywhere. It is not good for us. So don't try to twist my arguments and paint me with the broad brush strokes that satisfy your desire to see everything as left and right. it is more complicated than that and you know it.
7. It all has to come back to France, doesn't it. Very sad. Why don't you try meeting some poor people and see how they live. it has nothing to do with France, dude. People are starving RIGHT NOW, not in ten years. Agri-business is not trying to feed the world, they are trying to make money, like any other business. They don't give a shit about you or I or anyone, just their bottom line and their shareholders. END OF STORY.

Mike

Matt,
Thanks for your reply. I don't disagree with most of what you're saying. Sorry for twisting your arguments, I didn't mean to oversimplify things, I'd agree it's all very complicated. I think most everyone would object to slave labor. Maybe we just differ on what is the right mechanism for making progress. I would just add a couple of things.
First -- small farms vs. agri-business. I'm all for small farms and small farmers. I lover fresh, organic food. I just don't think it's a viable option for feeding the masses. Small farms lack the scale for that. It's not efficient. If poor people just ate locally grown food, they'd simply have much less money left to buy things like heat, clothes, basic staple goods. Which I think was kind of Sam's point from the beginning.

Second -- poor people lacking access to fresh foods, especially in ghettos. This is a tragedy and I don't know what the immediate answer is. But again, to Sam's point, food prices get cheaper over time in real terms. Wal-Marts now offer full-lines of groceries at low prices. Food itself is not unaffordable. If the problem is the system of distribution, I don't have the answer to that. But it's probably not a problem of small farms vs. agri-business.

Finally -- Agri-business making money and the bottom line. Agreed, they are trying to make money. But the profit motive, while not ideal, is the best mechanism we have of distributing goods and services. Sorry to play Adam Smith here, but that's exactly the point. Many places and societies have tried other mechanisms. Most of them have failed, and many horribly (millions died/starved under Stalin, Mao, and currently in North Korea). I'm sure you could say there's a happy medium. Perhaps. But I haven't yet been convinced on the specifics of what that happy medium is. Archer-Daniels-Midland is far from perfect, but it uses the price mechanism to feed a lot of people, with results that could be much, much worse. I will have to read your article about Monsanto now. I don't doubt that they've committed some atrocities. I've also read analysis that says their innovations have and will enabled more food to get to more people. I'm sure there's some good and some bad, as in most things.

mattray

Mike -- thanks for your thoughtful reply. You guys make a good point about affordability. I really think the difference between us is that i have the view that food (like health care) is a fundamental societal good that should not be left up to the free market alone. If small, local farms need to be subsidized to bring the prices down for the poor, then i say let's do it. The free market is fairly efficient for many things, but eating, breathing, and going to the doctor should not be left up to profiteers exclusively. They need some tweaking so society can be what we all want it to be -- a fully realized society not a hodgepodge of wealth and tragedy.

I don't believe we should have a central government plan for this, I think everything can be solved locally if the resources are there. I do find it interesting that those who can't tolerate a large ominous central government, will tolerate large ominous mega corporations.

Wal-mart is the perfect example. They are able to provide cheap food because of their sources and because of their distribution network. But because they are not local, they often don't have the best interests of their community in mind the way a local business would. You see this in the way they treat their employees and in the way they squeeze out local competitors. it's pretty hard to be a small business owner in a Wal-mart town because you can't compete. That may be the free market at work, but i'm not sure it is the kind of society we want, because it lacks choice, both for the consumer and for the worker.

Mike

I agree that the Wal-Mart effect is a difficult one to evaluate. The way it crowds out local business owners is a problem. Communities pay the price for that. On the one hand, when Wal-Mart arrives, lower income parents can now afford more clothes for the children. On the other hand, local businesses shut down, community life suffers, and a big chunk of the town's commercial activity becomes owned by a big corporation hundreds/thousands of miles away.

I'm not saying anything new or profound here, of course. More than anything, I'm simply agreeing with you on this point. Both outcomes have costs. In some ways consumers do have fewer choices, even if they have more purchasing power. I'm not sure how to strike the right balance, other than to outright ban Wal-Mart's, as I believe has actually happened in some communities.

Matt Unger

Er...not really.

Knight Berman Jr

Sam, just wanted to say that I came here by way of a post you made on Panos' Brew recently. Very glad that I did! Such an inspiration, thank you.

theflyingchange

Knight-
Thanks! Great to have you come by. Hope you dig everything.

Sam