RSSEthanol Craze Starving Poorer Countries
J.J. Jackson* | April 15, 2008 |
Ethanol is one of those things that if it were not for government, would not be on the market. With subsidies at home to drive down the costs and protectionist tariffs to keep out cheaper versions of the fuel, Americans have seen large portions of their food crops diverted to make fuel. That means less corn, etc for food and in turn means more expensive food. This is not just the trend here, but around the world and people are finally starting to catch on.
The idea of turning farms into fuel plants seemed, for a time, like one of the answers to high global oil prices and supply worries. That strategy seemed to reach a high point last year when Congress mandated a fivefold increase in the use of biofuels.
But now a reaction is building against policies in the United States and Europe to promote ethanol and similar fuels, with political leaders from poor countries contending that these fuels are driving up food prices and starving poor people. Biofuels are fast becoming a new flash point in global diplomacy, putting pressure on Western politicians to reconsider their policies, even as they argue that biofuels are only one factor in the seemingly inexorable rise in food prices.
In some countries, the higher prices are leading to riots, political instability and growing worries about feeding the poorest people. Food riots contributed to the dismissal of Haiti’s prime minister last week, and leaders in some other countries are nervously trying to calm anxious consumers.
At a weekend conference in Washington, finance ministers and central bankers of seven leading industrial nations called for urgent action to deal with the price spikes, and several of them demanded a reconsideration of biofuel policies adopted recently in the West.
No, it is not a joke. It is simple economics and yet another lesson as to what happens when government sticks its fingers where they don’t belong.
Government thinks that it can simply “mandate” things and that they will become reality and be good for us. The reality is that all that government does is skew markets and hurt the people that can least afford the costs of their benevolence – the poor.
Socialism doesn’t work. Government mandates do not work. But we’ll keep trying them because too many Americans, and people around the world for that matter, are enamored with government solutions to so-called “problems” invented by charlatans like Al Gore.
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