I'm back from vacation, and the quality of economic analysis in our nation's Newspaper of Record hasn't changed:
Everything is not peachy: From households to nations, we need to get serious about food self-sufficiency. Self-sufficiency isn't a sexy idea. At best, people who say they're interested in being self-sufficient are stereotyped as dour, old-fashioned rural types. At worst, they're seen as fanatical survivalists planning for an apocalypse. Economists also tell us that self-sufficiency is an anachronism. Instead, it is specialization that produces wealth, and economies – including the world economy – produce the most wealth when everyone, including countries, specializes in what they do best and then trades their products for the other things they need. The more specialization, the more connectivity among specialists, and the more trade along those connections, the better.
Unlike many, the authors appear to have read what economists have to say. But they don't understand it.
But there are problems with this model. As we specialize, we become more dependent on other people, industries and regions in the global economy. That may be fine for non-essential goods such as children's toys and kitchen appliances, but should we depend on others for life's essentials such as food? Also, specialization at the global level tends to reduce the diversity of producers and products – a small number of large, highly efficient producers often comes to dominate the market for specific goods. In complex systems from economies to ecologies, however, lower diversity usually means lower ability to adapt to rapidly changing circumstances. And, finally, all that connectivity among specialized producers around the world makes everyone more vulnerable to cascading system failures: a shock or failure in one part of the global system can propagate through the rest of the system in the blink of an eye, like a row of falling dominoes.
Taken to an extreme, the dominant economic model of specialization, connectivity and trade reduces the resilience of our communities and societies – our ability to take care of ourselves in volatile times.
This is exactly wrong. Specialisation and trade reduces exposure to catastrophic risk. In countries that insist on self-sufficiency, a bad harvest means starvation. In countries that participate in world markets, a bad harvest means a trade deficit in food.
Worthwhile Canadian Initiative 
Would these clowns write such equally nonsensical tripe about physics or chemistry? What makes them think they have a clue about economics?
You talk as though self-sufficiency and participation on markets were mutually exclusive.
And as though efficiency were more important than resiliency.
In a market consisting of specialists connected by distributors, the distributors rule. Those who control the channels of distribution are the primary beneficiaries of the increased market efficiency, while the specialized producers and consumers are faced with reduced options. Producers and consumers are prevented from buying or selling anything except what the distributors are willing to distribute. Further, producers must sell for the price distributors set, and consumers must pay the price distributors demand. And there is no pressure on the distributors to be reasonable or fair about the difference between these prices. In consequence, wealth is extracted from the man in the street and concentrated in the hands of a decreasing number of increasingly consolidated global corporations. With increased efficiency, of course.
The result is that oligopoly inexorably replaces capitalism.
And oligopoly is always and everywhere a bad, bad idea.
The argument is mistated, I agree, but it is not entirely invalid. Anybody who knows any ecology knows that specialisation increases the risk that some change in the environment will be catastrophic. You may argue that trade mitigates this risk of specialisation, but it doesn’t remove it. His problem is that he framed the problem in terms of trade but not in terms of specialisation.
EclectEcon, people like this write about physics and chemistry all the time. Have you never heard of these dire predictions about global warming, acid rain, GM crops etc that are supposedly based on science?
This is exactly wrong. Specialisation and trade reduces exposure to catastrophic risk. In countries that insist on self-sufficiency, a bad harvest means starvation. In countries that participate in world markets, a bad harvest means a trade deficit in food.
Yeah, but you try to tell that to kids these days…
No, the error in thinking is that economics and specialization only apply to national boundaries. FOr example, the article is not suggesting everyone has a peach tree. The article is suggesting trade and specialization within the boundaries of Canada with the goal of being self sufficient.
Mr Gordon – participating in world markets and self sucfficency are not mutaully exclusive as you seem to think. Second, from an environemtal perspective, specialization in farming raises a whole other set of ecological problems.
Economics is not a real science – it is a fuzzy science and is subservient to other factors – always has been and always will be. Comments like this from a “profeswsor” are why it should go back to being called political economy.
participating in world markets and self sucfficency are not mutaully exclusive as you seem to think
Could you explain why not? Because the whole idea of self-sufficiency is being sold as a way to avoid being obliged to trade for food. If you’re self-sufficient, why trade?
When you are self-sufficient, you can choose to trade to satisfy your wants; when you specialize only in what you do best, you are forced to trade to satisfy your needs. Of course, it is to the oligopolists’ advantage to lure or pressure everyone else into the latter position; this is called “globalization.”
zero, why stop at national self-suffiency? What if Quebec was ever to separate from Canada? Maybe the other provinces should ensure they are self-sufficient in maple syrup and delicious poutine. Or what if the Albertans ever decide to take all their oil and join the U.S.? The other provinces better ensure they are self-sufficient in beef, or we’ll all be in trouble.
You criticize economics and say it should be called “political economy”, but in actuality, the argument you make is a political one (i.e. recognizing the “special” importance of national boundaries). The logical economic argument that Professor Gordon makes actually ignores the largely irrelevant (from an economic standpoint anyway) national boundaries. And provincial boundaries for that matter.
I’ve yet to see someone make a good economic argument for why provincial (or intra-country) trade is a good thing but international trade is a bad thing. there are lots of weak political arguments however.
Houlie4 – my point is there is no such thing as a purely economic decision – economics is subservient to other disciplines. The use of efficient market is food production is important of course. But any Nation State needs to be able to feed its population in terms of calories. Trade should be used to supplement variety. If you are arguing to get rid of the nation state good luck with that.
A second issue in food is understanding the role of the middlemen or distributor. This mundane topic, more at home in a dreary business school than the big thinking economics department is critical in any assessment of the food market. Economists don’t have a real understanding of what the farmer gets as opposed to other people in the chain. The value add seems to get the bulk of the dollars goes and the two are often substituted for each other.
A third issue is that food is special and needs to be treated as such. Why is it special – because food is a need and is very personal. Food is also special in that it is something that done in small quantities at home can actually be better than what is produced industrially or professionally.
Thanks for the response.
More on the food – sorry but this is a passionate issue.
Given the Maple Leaf problem, how should we deal with out of control distribution systems? Notice the Health Canada doctor saying it’s one thing for a local butcher to poison a small number of people but the Maple Leaf foods is worrisome?
Food also requires legislation, for both safety and quality. I would suggest you read Cooks Illustrated – they often do blind taste tests and the European products generally win. The whole idea that cheap is good does not work with many processed foods like cheese. Too often the peaches canned in Indonesia are substandard to peaches canned here. So this must mean economists should only talk about unprocessed staples right? But what about things like wild salmon that only exist in a few areas? Or grass fed beef?
in countries that insist on self-sufficiency, a bad harvest means starvation. In countries that participate in world markets, a bad harvest means a trade deficit in food.
In countries that participate in world markets, a bad economy means starvation, see haiti etc. While specialized agricultural production can be extremely beneficial from a wide variety of viewpoints (buying grass fed new-zealend mutton is probably more economically sound and environmentally friendly than buying grain-fed Canadian mutton) it doesnt ensure food security anymore than being food-self sufficient does. Crops fail, but then so do markets, and even succesful specialized markets dont necessarily prevent starvation – if its more profitable to sell my corn for ethanol than for tortillas, i will, your not having food to eat is an unfortunate consequence.
a little late with this response and I may be talking to nobody, but here goes anyway…
i see where you’re coming from zero, and I consider myself a bit of a foodie, so part of me wants to agree with you that food is “special” and needs to be treated as such. but i think its simply too easy to make that argument about loads of “needs” (substitute energy, housing, etc, etc) to justify it. Its more of an opinion than an argument to say that food is a need and is personal, and therefore we should be self-sufficient with its production.
I also don’t quite understand the trade/quality link you make in your post. I agree, cheap is definitely not always best when it comes to food. but why do you assume people/countries only trade to obtain the cheapest goods, and not necessarily better goods? To me that seems more the point… if Indonesian peaches are so crappy, why would you argue against Indonesians buying our apparantly better peaches and producing something they’re better at? Or if there is a demand for low-quality Indonesian peaches, why would you worry about it at all?
I would agree that often the best and freshest (and most expensive, but that’s a different story) ingredients you’re likely to find in a given area are produced/grown locally. But I’m sure most consumers like having options too, particularly in the winter season.
particularly in the winter season
If it weren’t for access to foreign markets, Canadians would spend most of our time without access to fresh fruit and vegetables.
“Specialisation and trade reduces exposure to catastrophic risk”
Absolute statement, and absolutely wrong.
Are all economists clowns?
In some particular cases, specialisation and trade might reduce exposure to some kind of catastrophic risk. In some particular cases reasonable self suffiency might reduce exposure to some kind of catastrophic risk.
Food for thought: what happens if some terrorist start to systematically sink (largely unprotected) merchant vessels circling the world?
I think the authors of the article had a very good term for those who think that we should organise our lives around that sort of eventuality:
fanatical survivalists planning for an apocalypse
And even then, self-sufficiency won’t be of much help. The starving mutant hordes that appear over the horizon on that fateful day will be more numerous than your stock of bullets.
“Food for thought: what happens if some terrorist start to systematically sink (largely unprotected) merchant vessels circling the world?”]
Very quickly the nations of the world check the satellite data and destroy the terrorists. That’s what happens. Do you really think the Chinese wouldn’t?
I’ve been to Canada a few times and like the place a lot. You’d have to do some intensive cultivation to become self-sufficient in tea, and that’s a “need” not a “want”.
dave heasman, satellites to hunt terrorists hey that was funny thanks :).