It’s 36 hours late, but here’s the Monday Message Board for this week. Fire away on any topic (as usual, civilised discussion and no coarse language, please).
17 thoughts on “Monday Message Board (on Tuesday)”
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John Quiggin 
I wanted to seek and/or offer clarification on a few points in the other JQ article in the weekend’s AFR, the one reviewing Mickelthwait & Wooldridges “The Company: A Short History of a Revolutionary Idea”. I have certainly been impressed by ideas of agency costs ever since I came across them explicitly in my MBA; it strikes me that the concept, with the institutional temptations towards it, is highly relevant to the outworkings of indirect representative democracies (“it doesn’t matter who you vote for, a politician will always get in”, etc. ad nauseam).
The piece chops and changes between “corporation” and “joint stock company”, which is a special type of corporation. But they work differently and have different consequences. I think dolebludger looked at the changes when one particular mutual society considered becoming a company. These specific types of corporation should be distinguished rather than blurred.
As for the role of companies in bringing together capital, on the one hand this can be handled differently (though still generally needing artefacts like corporations); and on the other, it is largely a historical need. We should bring out the extent to which companies are still necessary for this purpose by virtue of their own particular strengths, and the extent to which they are only necessary because – like ground cover plants – they tend to exclude the alternatives. For instance, private individuals rarely have the necessary funds in their own persons these days, precisely because so many pools of capital are already held in an intermediated way on their behalf, in the form of companies. No more of the entrepreneurship that was so common a century and more ago in Britain, with financial partnerships between wealthy aristocrats or businessmen on the one hand, and innovators or specialists on the other (Rolls and Royce, Boulton and Watt, etc.).
There is something similar in the change in companies’ behaviour to be more than extensions of individuals. To a great extent, companies acting diversely is merely more intermediation; if company divisions were separate entities, apart from any true synergies (which is unlikely with that separation), they would be just as useful to the wider economy and their own particular owners. It seems to me that they merely function in a similar ground cover way, mostly tending to exclude smaller distinct entities in ways that don’t actually cause any benefits. We might well be better off with less going on here too, if the only gain is within the structure of the companies doing it, an accounting artefact.
I don’t know if these areas were addressed by the authors and filtered out by JQ, or if either or both knew about them but cut them for reasons of space as they didn’t seem material, but I think they are worth expanding on.
Here’s some sobering news I heard before Christmas.
On Deutsche Welle I heard that during each of the last 5 years the world consumed more wheat than it grew. Europe’s reserves of wheat were basically gone.
A little earlier, I heard Lester Brown of the World Watch Institute say that for grains generally consumption exceeded supply during each of the last 4 years.
Good news for our farmers? Maybe.
A little earlier again I heard an English agronomist say that for every degree increase in temperature an extra 10% water was required for the same yield.
Last year in Oz average rainfall, according to the Fin Review (today) was 476mm on average, a mere 4mm above the long-term average. The average maximum temperature, on the other hand, was 28.55 degrees, 0.65 degrees above average.
i wanted to bring up keynes idea for the bancor (so nice when great economists have the same ideas as one, even if you independantly came up with them as an ignorant schoolboy)
actually, the general idea of money, exchange rates and the gold standard is my pet interest at the moment…so economists enlighten me…(i think ive read most of the wikipedia pages on it…a great site: http://www.wikipedia.org )
Brian raises the wheat issue, but with half the world’s popoulation residing in Asia, relying on rice for 80% of its calories, rice production has also been in the news lately. For a good overview of the size and challenges of the rice problem try http://www.abc.net.au/science/slab/rice/story.htm
Climatic changes aside, for any of you who are anti-GM food, the rice problem outlined, will hit your stance pretty hard.
PML, the book has some discussion of different types of company and I wrote a fair bit about it in the first draft of my review, but I couldn’t fit it into the main flow of the argument, so I cut it out again.
I hope to tackle this issue soon.
Thanks for the reference, Observa. Lester Brown was mainly talking about rice in the context of population increase and, of course, global warming.
I have no beef with GM technology as such, especially when it is being used to enhance production rather than harm other species, as often is the case in pest resistance.
The larger problems come in the impact of corporate farming on peasant farming, the ruthlessness of the multinational agenda, with array of threats, bribes and lies.
It is easy to be impressed by what is happening in research stations, but these new varieties often don’t perform in the field where the climatic, soil and bio-environments are different. You often get a forced switch to monoculture, a much higher cost base and reliance on a broader market mechanism for distribution. The reality often is farmers in debt, lower yields and produce at a price that many can’t buy.
The result in parts of India, for example seems to be poorer nutrition, more starvation and ibdebted and/or starving peasants killing themselves.
I’ll try to find the reference later, but one Indian expert said it is pointless having Vitamin A rice when 500 million Indians can’t get 2 decent feeds of any kind of rice. If they do, it does them little good as vegetable consumption has reduced in India by 12% in recent times, largely because of the moves to industrial and corporate farming, with cash crops, monocultures etc.
Citing IRRI is an interesting twist. My understanding is that IRRI does its science inside the critique of agribusiness, monoculture and export rather than subsistence. In that sense it is a model agency. See http://www.irri.org/ … CSIRO has had a productive association with it as well.
And Brad Collis, who was involved with the ABC and Ecos articles indicated by Observa wrote a very good history of CSIRO called “Fields of Discovery”, (A&U 2002) which I would recommend to anyone interested in public policy, governance and the public/private interface. Besides being a powerful read and a heroic research job.
One of the more interesting wars going on in the world at present is the war between two agricultural paradigms. One is based on peasant farming with most food eaten near where it is produced, but combined with that is the cash crop (eg cotton in West Africa).
The other paradigm is the huge corporate conglomerate which can spread their risks over multiple climatic regions and depend on high inputs and extensive marketing, branded products etc. There is no doubt the second paradigm is winning, but there is stern resistance as evidenced at Cancun.
One interesting manifestation is the landless peasants’ movement in Brazil, who are now saying that they will continue to be screwed unless they can change the first world neoliberal paradigm of production and trade. Whether President Lula can or actually wants to do it for them is an interesting question.
If anyone thinks living in the first paradigm represents a bed of roses, they would do well to read an article published in Time Asia v 154, no 2, July 19, 1999 by Michael Fathers ‘Plight of the living and the Dead’. He tells how in the badlands of Uttar Pradesh people, often relatives, report someone dead and then take over the title to their land. It is often not easy in the Indian bureaucracy to bring yourself back to life again. The lands under dispute are often incredibly small, eg. the size of a baskett ball court. The URL is http://www.time.com/time/asia/asia/magazine/1999/990719/souls1.html
Brian, I reckon most of what you wrote is simply wrong. Its true that many crop varieties perform better in the research farm than in the field – but that’s why you have crop trials and demonstration projects. And why is the switch to new varieties “forced” as you assert – do you think farmers, peasant or multinational, are not capable of working out what is in their own best interest? And don’t you think having cheaper food might benefit urban and rural poor alike?
And I shouldn’t have to point out how ridiculous is the “it is pointless having Vitamin A rice when 500 million Indians can’t get 2 decent feeds of any kind of rice” claim. That’s like saying it is pointless to add fluoride to our water when a billion people don’t have access to clean water.
It is only improved agricutural production through science, along with the rural reorganisation (yes, sometimes painful) needed to implement the science, that has let country after country spring the Malthusian trap in the last 200 years. India is the latest of these – despite your anecdote, starvation is far rarer in India now than it was 30 years ago.
Whether the ‘green revolution’ can continue indefinitely is unknown, but only those blind to evidence can deny its benefit to date.
We have to be careful about our levels of generalisation here. It is possible to cite examples of increased production caused by new varieties, and societies which have had to create broadacre farming due to population pressure as well – where the traditional peasant ownership model doesnt work.
But it is also possible to cite a large number of examples – the Philippines being one and Guatemala and Honduras others – in which kleptocratic ogligarchs have forced peasants or tribal people off their own land and subsistence farming systems to create large cash crop farms dependent on international trade. Then the farmers drift to the cities.
Yes, scientific farming increases yields and productivity. But of what, and for who? How often do the original inhabitants benefit? It is not a matter of blaming science, but of understanding power and the global economy.
After all, the Enclosure Acts tore UK rural society apart in much the same way. Ask the Scots why they ended up in Canada, New Zealand and Australia… (just to cite an example)
derider,
i dont think weve quite sprung the malthusian trap yet (although you do imply only temporarily in your final statement)
people that think technical progress is the solution to our problems never understood the general point of malthus though.
having said that, im not anti-progress; science and technology genuinely make our lives better.
the optimal solution (for the quality of life of individuals) i think is to have sustainable (a good word thats become a bit bleh) progress.
for me this means population limitation, at some point (which i guess has already occured in china, a country which i think the partial green revolution actually created more poor…but i have no references yet so this is a mere hunch)
thus the way forward, for me is political solutions combined with progress, for the problems that tech progress will never fix.
fr’instance, from the abc article above:
“And we urgently need more to keep up with the world’s rapid population growth.”
comments like this are total rubbish. lets say the fringe of the population is always going to be poor. like an ever growing circle, the fringe gets bigger and bigger.
if only 1% (pretty optimistic) of the world’s population was going hungry, continually feeding them and growing the population would make things worse.
this is harsh, but reality.
why dont people say: “we urgently need less people to keep up with the world’s rapidly exhausted feed supply (and water, and energy, and oil, and space, and clean air)”
grr…me again…but does anyone else find this ridiculous:
“But the source of the problem – unchecked population growth”
and then in same paragraph:
“Today, only around 3 billion people consume rice, so world rice production must increase by 60% in the next 20 years to meet the needs of the 2020 population.”
they even outright explicitly mention the source of the problem and then launch straight into the diatribe. Why do they think population growth is inevitable but we can do something about even more miracle rice.
dd my original comments were simply reporting news items I’d heard. But I think it was the second bunch of comments you objected to. I have to say I’m trying to come to terms with India and find it difficult. Ditto for China.
I found the article I recalled querying the efficacy of Vitamin A rice in India. It was Devinder Sharma’s ‘Biotechnology will Bypass the Poor’ of 29 September, 2003 from ZNet, but it’s at http://www.countercurrents.org/en-sharma300903.htm (If you substitute “hungry” for “poor” you find it was originally published in The Ecologist, v 31, no 7 Sept 2001)
Now the apology. The 500 million I think may be the number living on less than one $US per day. Sharma reckons there are 320 million hungry in India, and that hunger and poverty are getting worse. You, dd, use the term “starvation” and your statement may not be incompatible with Sharma’s. We lack definitions. For example I’ve read that 40 million Americans are “food insecure”, but I doubt whether they all count as hungry in Sharma’s terms.
Where I really bombed was on the Vit A deficiency, which Sharma puts at 12 million.
“Forced” may be too strong a word, but there is no doubt at all that there is heavy pressure behind Monsanto’s GM push. At the action end false claims seem to be made. Vandana Shiva says 80% increased yield was promised on BT cotton. The result was an 80% reduction in yield according to her. Shiva identifies some of the ways Monsanto operates, but the literature on this is quite extensive. Shiva’s article is at http://www.countercurrents.org/en-sharma200703.htm In Australia, for example, there was an SBS doco showing Monsanto’s penetration of peak farmer groups.
“Forced” is not too strong a word when it comes to conditions imposed by the IMF and the World Bank. David mentions Honduras. For the story there go to an article by Patricia Hewitt (see http://www.guardian.co.uk/wto/article/0,2763,1041047,00.html). The IMF forced them to open their markets to subsidised US rice in 1991 resulting in the decimation of the local industry. Such examples are quite numerous and worrying.
I have no definite opinion on the Malthusian problem. Sharma reckons there is enough food in India to feed every-one if effectively distributed. I simply don’t know. My bias is towards reducing the population to give the rest of the biosphere a go.
I do know that there is conflict between the two paradigms of peasant agriculture on the one hand and industrial/corporate agriculture on the other. Sometimes this conflict amounts to shooting in South America and the Zapatistas in Chiapas for example. I don’t know how this matter should be resolved. Vandana Shiva reckons we’re all dead if we go the corporate way.
I do know that there is a tendency towards monopoly involved in the whole GM push.
I do know that we should think about these things. I’m going to henceforth distrust all stats coming out of India (see Sharma’s ‘The Algebra of Poverty” at http://www.dsharma.org/hunger/algebra.htm)
Just to clarify that Vitamin A rice issue, Sharma is saying that the 12 million who are vitamin A deficient in India won’t be reached by the vitamin A rice. The problem is that you have to pay for the seed supplied from GM companies and buy a new lot every year. If you are a poor rice grower you can’t afford it and the resulting product is likely to be dearer also.
Furthermore, GM products are not as well adapted to local farming environments, especially marginal farming areas. In fact they are often designed for a different continent. That, plus management issues, seems to be why they often don’t perform.
I heard two experts on developing country agriculture talking on ABC RNs “Bush Telegraph”. Improved crop varieties was well down on the list of improvement measures. From memory, better roads was top. GM technology, they thought, should only be used to speed up local crop breeding. Unfortunately that is not the way the game is being played.
There’s one thing I’d like to bring out about GM, to confute those who argue that nature has been modifying genomes all along without causing any disaster.
There’s a fundamental difference between evolution and the wider process of manipulation that uses GM as a technique. Evolution involves the interplay of two different processes, spontaneous mutation and natural selection, that occur on very different timescales. Effectively, each mutation can be considered in isolation and adaptation will occur across whole ecologies through natural selection. The physical process, like the mathematical models for it, is stable and non-chaotic.
We have no such behaviour with GM generating change faster than it can be assimilated. The point isn’t whether this or that change is likely to be stable and safe, but whether the process of generating change is likely to overwhelm the processes of assimilation and adaptation. It’s a process of keep going until you get it wrong, Russian roulette.
That was extremely well said, PML. It’s possibly not as bad as the cane toad, but I have had a concern as to what might happen as a result of new genes being put out there.
A related problem is the reduction of the gene pool for any species that is subject to GM seed treatment. For crops like rice, canola, maize and cotton we could end up with only those varieties that 5 or 6 multinationals choose to market to the world. Already there have been concerns about the elimination of root stock of maize in Mexico and the loss of the enormous number of varieties of cotton in Gujerat in India.