Sometime before 1989, a Soviet official asked economist Paul Seabright who was in charge of London’s bread supply. Seabright gave him an answer that is comical but also true: ‘nobody’. The bread we eat turns up on our tables thanks to an incredible team effort (bakers, machinists, electricity suppliers, distributors etc etc). And even more incredibly, there is no-one in charge of that team.
It just happens.
Hold that thought in your head for a bit, and bear with me while I take a detour via some current (very popular) non market ideas about food distribution.
In the recent (and very stoushy) climate change threads on this blog, Legal Eagle flew the flag for equality in the face of other considerations that often engage those on the political left. In various comments, I pointed out that I was less concerned about equality: like many people on the libertarian right, given a choice between liberty and equality, I will often (but not always) sacrifice the latter value to the former.
This can seem callous to those who aren’t aware of the economic reasoning behind it, so I’ll explain.
Many of you will be familiar with John F Kennedy’s famous quip that a ‘a rising tide lifts all boats’. The tide, of course, is that of prosperity, something with which much modern politics is concerned, at least in liberal democracies, and also in the authoritarian capitalist states. Note, however, that Kennedy’s quip doesn’t suggest that the tide of prosperity will close the gap between the different boats. Indeed, it often doesn’t. It just means that, over time, everyone will be better off.
Because attempts to close the equality gap between boats have been so fraught (and often downright murderous), I am quite happy to live with this sort of inequality. There are rich people and there are poor people, but as long as the latter are getting better off over time, I’m not terribly concerned about what the rich people are doing.
I am concerned, however, if anyone (be they rich or poor) tries to tell me what I should be doing. This includes things that rich people like to force on others (everything from barriers to market entry to attempts to tell me what I should eat and how to raise my children) and poor people like to force on others (everything from telling me who I should employ in my firm to arguments against abortion). Of course — as Noel Pearson pointed out in the piece Legal Eagle quoted — there are poor greenies. Of course there are also likely to be wealthy anti-abortionists and poor promoters of a ‘closed shop’. In my experience, however, the stereotypes have a fair degree of accuracy. Doctors and lawyers — these days — are much better at abusing their scarcity power and raising barriers to entry than trade unions. Poor people tend to be religious.
And rich people tend to be green.
There’s also a variety of inequality that even a right libertarian like me isn’t willing to tolerate. That’s a situation where poor people start to go backwards in absolute, not just relative terms. I don’t mind the rich getting a lot richer as long as the poor get a bit richer. I won’t wear the rich getting richer while the poor go backwards. And any time I see a policy that looks like it’s heading in that direction I will call it out, especially if the policy proposers engage in deliberate obfuscation of the fact that implementation will have that effect.
A current favoured hobby-horse of the rich and green is what is known around the traps as the ‘locavore’ or ‘local food’ movement. This crowd fail ECON101 on so many levels that I’ve often wanted to see them sliced and wrapped in plastic, but I’ve been sadly remiss in getting around to doing it myself. Fortunately, Virginia Postrel has done the job for me in an excellent piece for The Wall Street Journal.
Before moving on to Postrel’s piece, for those unfamiliar with this aspect of greenie-ism, I’d best provide a definition. According to G Feenstra and M Roosevelt, the local food movement is:
A collaborative effort to build more locally based, self-reliant food economies – one in which sustainable food production, processing, distribution, and consumption is integrated to enhance the economic, environmental and social health of a particular place” and is considered to be a part of the broader sustainability movement. “It is part of the concept of local purchasing and local economies, a preference to buy locally produced goods and services. Those who prefer to eat locally grown/produced food sometimes call themselves locavores or localvores.“
In economic terms, the local food movement is an attack on two foundations of the modern, free-market economy (the one that’s been lifting everyone’s boats on a rising tide of prosperity for a long time now). Those two foundations are the division of labour and comparative advantage.
The effect of undermining those two foundations is — very simply — to make food more expensive, especially fruit and vegetables. People who advocate ‘local food’ consumption seldom admit this, but Postrel caught leading locavore Michael Pullan out doing just that:
Michael Pollan, the best-selling author of “The Omnivore’s Dilemma” and a leading advocate of buying locally grown food, recently upset many of his fans by daring to put numbers on his oft-repeated prescription to “pay more, eat less.” Eight dollars for a dozen eggs? $3.90 for a pound of peaches?
Those figures were way too specific and way, way too high to go unnoticed. The humanistic foe of industrialized eating suddenly sounded like a privileged elitist, and the local-food cause seemed insensitive to cash-strapped shoppers.
But Mr. Pollan was only being honest. Patronizing local farmers who produce in small batches tends to cost more. You may find some peak-season bargains at the farmers’ market, but there’s no such thing as a free locavore lunch. Getting fruits and vegetables only from local farms necessarily limits variety—few crops are available everywhere all the time—and it doesn’t come cheap. Economies of scale apply even to produce.
In other words, local food is for the rich. The poor are excluded from this particular market. Now, as mentioned above, I have no trouble with that. People can do what they like with their money, including spending a small fortune on food or bequeathing everything they own to a cats’ home. If the poor miss out, that’s unfortunate but not the end of the world. Even poor people in the industrialised world live like Roman emperors in days gone by, at least in terms of light, heating, warmth, diet, education and health care. They may miss out on a few orgies but that’s neither here nor there (I suppose that’s what ASBOs are for). The industrial revolution has made kings and princes of all of us. It’s when rich people’s personal preferences translate into policy proposals that we need to start doing some serious costing and honest accounting. Postrel continues:
The locavore ideal is a world without trade, not only beyond national borders but even from the next state: no Florida oranges in Colorado or California grapes in New Mexico, no Vidalia onions in New York or summer spinach in Georgia.
Fully realized, that ideal would eliminate one of the great culinary advances of the past half century. Unripe peaches notwithstanding, today’s supermarket produce departments are modern marvels. American grocery shoppers have choices that would have been unimaginable only a few decades ago. When I was growing up in the 1960s and 1970s, the only way to get fresh spinach or leaf lettuce was to plant a garden. Avocados were an exotic treat, asparagus came in a can, and pomegranates existed only in books.
Now my neighborhood supermarket sells five types of lettuce, plus spinach, endive, escarole, radicchio, frisée, rapini, three kinds of chard, mustard greens, dandelion greens and kale. That’s not including all the cabbages—or, of course, the prewashed salads in a bag that have particularly boosted fresh-spinach purchases. In this ordinary produce department, you can buy not only avocados, asparagus and pomegranates, but everything from purple baby cauliflowers to spiky kiwano melons that look like some kind of scary deep-sea creature. Need portobello mushrooms, Japanese eggplant or organic ginger at 2 a.m.? The store is open 24/7.
This cornucopia of choice and convenience is a tribute to logistical ingenuity and gains from trade, the very progress the local-food movement is sworn to overturn. For those of us blessed with a Mediterranean climate, giving up imports means higher prices. For everyone else, it means a far more limited diet.
I’ve picked on the local food movement in this piece, but it strikes me that many environmental proposals will have a similar effect: that is, they will make the poorest poorer in absolute, not just relative terms. I should also point out that it is relatively rare, these days, for a policy proposal to have that effect, even if only in the short run. The last time (in the UK at least) a policy proposal had the effect of undermining the steady rise in prosperity enjoyed by the poorest over the last 200 years was the Poll Tax.
I am old enough to remember the riots that convulsed Britain in the wake of that enactment, and because I’m a lawyer over here I happen to know that non-compliance was so great that the UK government was forced to abandon its attempts at enforcement. The legal system threatened to buckle under the weight of conscientious objections. It was living proof of Henry David Thoreau’s observation that if enough people disobeyed a law, then the government’s choice was either to change the law or put half the population in gaol.
The UK government changed the law.
Here is Postrel again:
The local-food movement’s ideological parochialism would be dangerous if it were somehow enacted into law. But as persuasion, it tends to focus on the positive: the delights of local peaches and fresh cider, not the imagined evils of Chilean blueberries and prepeeled baby carrots. In this regard, it resembles the English Arts and Crafts movement of the late 19th century. William Morris, who is remembered today more for his wallpaper and book designs than for his social theories, didn’t manage to overturn the industrial revolution. But he and his allies left a legacy of beautiful things. Pleasure is persuasive.
It is important, as Postrel notes, to pierce the veil of beauty and pleasure offered up by the Green movement, just as it is important to demand realistic projections of the effects of climate change. Professor Stephen Schneider’s comments about ‘runaway greenhouse’ in the Insight episode on which Legal Eagle appeared are instructive on this point. It is also vitally important not to allow the Greens to have too much control over the environmental policy agenda; although they’ve managed to skewer Penny Wong in the climate change portfolio, I’m glad for Australia’s sake that she’s been replaced by a sensible trade unionist like Greg Combet. They will find it much harder to shift him if policy proposals land on his desk showing that the people he used to represent will be poorer in absolute terms.
There’s another thing, too. Unlike many libertarians, I’m willing to admit that there is such a thing as market failure. I don’t think it’s very common, but it does exist. Free market food distribution, however, is so far from market failure as to be invisible from where I sit.
To the extent that food distribution is distorted, it is by agricultural tariffs and subsidies that lock many developing world producers out of global markets. I often buy Nigerian garlic at a local Afro-Caribbean ‘provisioner’. It is without exception better than the EU-grown garlic available in Sainsbury’s. The reason it is more expensive is because EU farmers are protected by tariffs and rewarded with subsidies. Strip away that protection and we’d all be able to enjoy inexpensive, high quality Nigerian garlic at competitive prices.
But it would come from Nigeria, not Spain or France.
I don’t want people who would put themselves in charge of London’s bread supply running the country. I think the dizzying answer to the Soviet official’s question — ‘nobody’ — is representative of the best in us, at least when it comes to feeding the poor.