Mark Lynas on economics

So is it time to follow in the steps of the UK environment minister Phil Woolas and reassess the potential of GM? As Woolas says: "There is a growing question of whether GM crops can help the developing world out of the current food price crisis. It is a question that we as a nation need to ask ourselves." So is he right?

I doubt it. For starters, the current food price crisis is only partly about supply. Yes, falling harvests have affected the amount of food available, and the recent severe flooding in the US midwest certainly won't help the situation. But, as with oil, rising demand is the biggest factor driving prices towards the stratosphere. As countries such as India and China get richer and adopt more western diets, they consume more meat, sucking grain off the market to feed growing numbers of livestock. The misconceived rush to biofuels has further intensified the problem, gobbling up vast quantities of corn and soya in order to produce the fuel Americans and Europeans need to feed their addiction to the car. Underlying all this, the human population continues to grow, adding another 80 million mouths every single year.

Lynas's article is another candidate for the hotly contested "Dumb Guardian Article of the Year" award. It's just ignorant verbiage to say "it's about demand rather than supply". If demand goes up, then either supply goes up to match it or the price goes up and pushes demand back down again. You can't separate the two. The price is changing because supply and demand are out of kilter. End of.

Comments

[Obnoxio The Clown]

"Guardian article completely fails to represent reality in economics, preferring instead to plow a furrow for whatever wanky bullshit is chattering classes subject du jour" shocker!

[Kit]

As Henry Hazlitt wrote in "Economics in One Lesson":

"...demand and supply are merely two sides of the same coin."