The General Economics Thread

Well, food waste in developed countries does contribute to world hunger in the sense that overconsumption drives world food prices higher than they would be otherwise.

That assumes that global food prices are why there is world hunger, which isn’t always true. People who rely on subsistence aren’t impacted by world food prices (if anything they benefit from them going up), people who are hungry due to a lack of security reducing food availability aren’t impact by world food prices (warlords take the food because they want power, not because they can’t afford to buy it).

The people going hungry because food is to expensive aren’t in a remote village in Africa, they’re in a huge city in India.

Parents in the West go with the Africa example in part because it makes starving people a more “distant” problem to their kids. They presumably think it would be too harsh to go “eat your veggies, think about the homeless people dying on the streets outside of our neighborhood who would love to eat them!”

It's ironic because the parents are offering an explanation that actually makes the problem worse, not better. If they let the kids eat less, consumption would go down, which would be better for the kids health, and contribute something toward helping the poor somewhere in the world.

Granted, the parents do not actually care about the problem anyway in those cases. They just want to guilt their kids into finishing their food.

Why do parents want to force-feed their children anyway?

Depends on the parent. Maybe they don't like wasting money they spent on the food. Maybe they feel insulted if the kid rejects their cooking. Maybe they've got insecurity issues and take comfort in seeing their kid eat a lot.

At this point though we're less Economics and more Parenting topic territory.

Edited by M84 on Dec 30th 2018 at 1:20:02 AM

Also the fourth option of children consequently avoiding all the remotely healthy options on the plate and not resorting to "because I said so". I know I was guilty of that.

My parents scared me into eating veggies by telling me I'd get sick and die if I didn't eat them after "because I said so" became less effective.

Edited by M84 on Dec 30th 2018 at 2:29:43 AM

My parents let me chose what to eat, if I didn’t like a healthy food than they would find a way to prepare it that I would enjoy or would find an alternative healthy food that I enjoyed.

@Clarste: Usually because they want their kids to eat something other than junk food. Which they will do if their parents let them.

To return to the topic, hunger in Africa isn't a result of too little food, it's mostly because they're poor and can't afford the food that's available. Also, subsistence farmers don't always produce enough food to be able to buy other essentials (such as tools, work animals and fertilizer), or to set aside anything for bad years. One dry growing season or major illness can ruin a family.

That's why large-scale, international (South-South) risk mitigation needs to be enacted. Africa's unstable weather patterns due to relative lack of mountains means droughts are a persistent hazard. Independent farmers are unsustainable: co-ops are vital, but that's only the first step.

Well, before you can have said risk mitigation programs, you first need stable governments, which much of Africa's issues come back to.

You also need to be sure that droughts are the main problems and not floods.

Droughts, floods, persistent and cyclical wind systems eroding everything with few natural windbreaks for massive distances, unstable weather systems, fewer stable microclimates than diverse biozones, massive changes in soil composition within relatively short distances (ants, termites and dung beetles/ scarabs try, bless their cotton socks, but there are many different kinds of ant, termite and dung beetle each with slightly different needs and Africa is just so massive and covers so many climate zones, so they can't be consistent as they shape their ideal of landscaped garden — with the added complications of hippo-, rhino-, elephant- and human bulldozers wrecking their work from time to time)...

People often forget how big Africa is. Which is the main issue. Africa can swallow the entirety of North America and ask for a fair amount of South as seconds to plug the gaps.

And, yes: Africa does do snow. Temperate forest (of various kinds), subtropical rainforest (comes in flavours, depending on which one we're talking), tropical rainforest (never quite the same from eroded mountain to mountain), savannah (there's choice: what kind do you want, Guv?), desert (rock, sand, gravel, salt, glass, regularly slightly moisturised, not seen decent dew in years, saw snow last winter — pick), semi-desert (and, if you think the full desert can get different, yeouch, are you in for a surprise), swamp-and/or-floodplain (fresh, salt, brackish, periodic, continual, inland, mangrove, toxic volcanic jobbies, bioactive and parasite-filled jobbies...), lakes (each unique), high altitude escarpment, below sea level valleys... I could be here all day listing just how many and various the zones get.

It's like writing South America off as nothing but pampas grass and desert, while forgetting it kind of does some (stonkingly diverse) mountains and a bit of (again, massively diverse) rainforest.

Edited by Euodiachloris on Jan 2nd 2019 at 12:08:36 PM

I just used a dry growing season as an example of one of the things that can fuck up a subsistence farmer's livelihood and kill his children. Too much rain, an unseasonable frost or heat wave could be just as bad, and in some parts just as likely. So can too good of a growing season, for that matter, if it means that crop prices fall.

Edited by Ramidel on Jan 3rd 2019 at 4:37:25 AM

Global poverty is dropping significantly, so we are already doing a decent job. To do a better one would require, as someone pointed out, less corrupt and more democratic institutions of governance. That would require a significantly deeper commitment, which the developed countries are reluctant to make.

So, this isn't exactly an "economics" issue, but I don't think we have a topic specifically about consumer banking.

Wells Fargo is experiencing a massive system outage with its online services, starting at around 6:30 AM EST today (11:30 AM GMT). It's been reported in a few outlets, including USA Today.

My wife was unable to pay for something with her bank card this morning, called me in a panic, and I discovered the problem while trying to log in.

It's not normal for these kinds of systems to be down for 5 hours or more. I normally maintain the position that "break up the banks" is a strawman talking point that doesn't directly address the actual problems associated with the U.S. financial system, but this incident does highlight the risk of a massive institution becoming a single point of failure for millions of people.

Is it better to have lots of small banks to limit the risk if something goes wrong, or a few large institutions that can invest a lot more resources into security and uptime so that incidents like this are less frequent, but more impactful when they do occur?

Edited by Fighteer on Feb 7th 2019 at 11:52:05 AM

Technically speaking, the reason why "break up the banks" became a rallying cry is because of the "too big to fail" problem and the moral hazard (and ethical implications) of consequently bailing out banks that screwed up.

Is Wells Fargo that bank that has been recently in the news for ... something?

Wells Fargo got in trouble a few years back for a massive fraud scheme that involved creating lots of new customer accounts without their knowledge or permission in order to pump up their profit reporting.

Edited by Fighteer on Feb 7th 2019 at 12:12:20 PM

Breaking up the banks came out of the 2008 financial crisis, and the news that the big seven financial instituions, which had taken on too much debt and were no longer solvent, were "too big to fail," so we had to bail them out, at a considerable cost to the public. By breaking them up, we would be creating redundancy in the financial system, so that 1) A crisis of that sort would be less likely to happen in the first place, since different banks could be counted on to pursue different investing strategies, spreading risk across a greater number and types of financial instruments, 2) in the even of a crisis occurring, there would be more banks around and losing a few to bad investment strategies wouldn't hurt the national economy so badly. The kind of crisis we were envisioning at that time wasn't necessarily electronic in nature, but very similar considerations apply. If there were more independent electronic fund transfer networks out there losing one or two of them wouldnt hurt so many customers at once, and would be less likely to have a market-wide impact.

The first two items you mention are exclusively about investment banking, not retail banking, and a long time ago we had regulations mandating that the two be separate. There's been a lot of pushing to reinstate some version of those, and I think we need to continue working on that.

As for the third, I'm not sure it's feasible, or even possible, to disentangle the computer networks that enable financial transactions. Anyone can experience failures, and the larger the institution, the more incentive and resources they have to maintain maximum uptime. It's not a black and white situation. More downtime with fewer customers affected vs. less downtime with more customers affected; distributed risk vs. concentrated risk.

Anyway, it seems that the incident was resolved after about six hours. Sheesh. Although their web services still seem to be running very slowly.

Edited by Fighteer on Feb 8th 2019 at 9:26:19 AM

https://www.thedailybeast.com/john-galton-wanted-libertarian-paradise-in-anarchapulco-he-got-bullets-instead

This article talks about yet another attempt at a libertarian utopia that ended up exactly like Bioshock's Rapture. I was actually kind of horrified to find out just how many attempts to make a Rapture-esque paradise have happened in real life.

Hobbes Was Right... Well, actual Hobbes. And, with a few updates.

Friends don't let anarcho-whatever-Objectivist friends set communities up without making them play the whole Shock series, first. :/