PDA

View Full Version : Free market economics at t-nation


Neal Winkler
05-08-2008, 07:53 AM
Today t-nation posted an article about grass-fed beef, and during the intro, the author had this to say:

In an actual free market economy, only an idiot would grow corn, because it costs about a dollar more to produce a bushel of corn than the corn is worth. And you can't eat debt. However, in our country, the government pays farmers to raise corn that the market doesn't want. These subsidies have created a vast surplus of corn, which is sold to feedlots and force-fed to obese couch-potato cows.

It takes about 16 pounds of corn and soy to make just onepound of grain-fed beef. Multiply that by the thousands of tons of grain fed beef produced annually in this country. Under normal supply and demand, corn-fed beef wouldn't exist: it's only possible (by which we mean "profitable") because of about 5 billion dollars a year in government subsidies.

Simply stated, the government uses your tax dollars to pay off farmers and cattle growers who produce inferior food that in fact poisons you. Think about that on April 15.

Is the first sentence true? Even if it is true, it doesn't follow that no corn would be raised, as farmers would find cheaper ways to produce corn in the absence of subsidization. Of course, I'm not defending corn, not to mention that IMO subsidization of corn is both immoral and illegal (there is no constitutional authority for the federal government to create a Dept. of Agriculture).

At any rate, let's assume that it is true that it takes a dollar more to produce a bushel of corn than the corn is worth. Given the fact that in the absence of subsidization farmers could find ways to make corn production profitable (they just currently don't because they don't need to), there is no telling what the ratio of grass-fed to corn-fed beef would be on the free market. So, the claim that corn-fed beef would not exist on a free market is dubious. Of course it's possible that farmers COULDN'T find ways to make corn profitable, it's certainly the case that subsidization makes things possible would of never come about on the market, but again, one cannot be sure either way.

Dave Van Skike
05-08-2008, 10:18 AM
Today t-nation posted an article about grass-fed beef, and during the intro, the author had this to say:



Is the first sentence true? Even if it is true, it doesn't follow that no corn would be raised, as farmers would find cheaper ways to produce corn in the absence of subsidization. Of course, I'm not defending corn, not to mention that IMO subsidization of corn is both immoral and illegal (there is no constitutional authority for the federal government to create a Dept. of Agriculture).

At any rate, let's assume that it is true that it takes a dollar more to produce a bushel of corn than the corn is worth. Given the fact that in the absence of subsidization farmers could find ways to make corn production profitable (they just currently don't because they don't need to), there is no telling what the ratio of grass-fed to corn-fed beef would be on the free market. So, the claim that corn-fed beef would not exist on a free market is dubious. Of course it's possible that farmers COULDN'T find ways to make corn profitable, it's certainly the case that subsidization makes things possible would of never come about on the market, but again, one cannot be sure either way.


Not sure where they pulled the specific numbers but I have seen the analysis in a number of places that basically feed corn is a losing venture (not the corn you eat at thegrocery store, that's a different strain) and the combination of subsidies and tax rebates are how most feed corn producers make money.

PBS had a great litttle documentary a couple weeks ago on two guys leasing and planitign an acre of corn and folwlign the product through the produciton chain...their take away point was that it's a loser. Worth look is you can find it.

http://www.pbs.org/independentlens/kingcorn/

I think the Dept of Ag is brought to you by the commerce clause.. Article 1, Section 8, Clause 3

A lot of differing opinions on whether it's been stretched too far, wetland regs, air and water qualtiy on the one hand, ATF, Dept.s of Ag etc on the other.

Neal Winkler
05-08-2008, 11:08 AM
I would argue that if the Dept. of Agri. comes out of the commerce clause then anything having to do with economic policy comes out of the commerce clause, i.e. the constitution grants full fleged facism or socialism or some combination thereof. Perhaps we need a department of computers to ensure the quality of computers, or a department of cell phones (USDCP).

Here's the mission statement of the USDCP:

USDCP has created a strategic plan to implement its vision. The framework of this plan depends on these key activities: expanding markets for cell phone products and support international economic development, further developing alternative markets for cell phone products and activities, providing financing needed to help expand job opportunities and improve housing, utilities and infrastructure in Silicon Valley, enhancing cell phone safety by taking steps to reduce the prevalence of radiowave hazards from the manufacturing line to your ear, improving reception and options by providing assistance and education and promotion, and managing and protecting America's public and private cell phone towers working cooperatively with other levels of government and the private sector.

Hahahahaha, I made that from the USDA mission statement. *sigh* Give me a break it's a crappy rainy day.... ;)

Dave Van Skike
05-08-2008, 11:14 AM
Dude...I'm just saying..

Reasonable minds can differ on the interpretation of the various Articles. You can always get in the big game and further a different point of view but you've got a fair amount of case history to push back on. Might need to go to law school.

Neal Winkler
05-08-2008, 12:09 PM
Oh no, I'm not trying to jump on you or anything, please don't take it that way. Reasonable people always disagree. I think too often people get in the habit of thinking that if someone disagree's with them then they have some sort of "bad" agenda, or are stupid, or whatever. Not true, and in fact it may be youself that has the agenda and you don't realize it all the while believing you are the rational thinking, altrustic truth seeker. Confirmation bias baby! My agenda may be that as a libertarian I want the Constitution to allow as little government as possible, thinking that's what the founders intended (they weren't of equal intention, see Hamilton for example), and that documents should always be interpreted with the authors intention in mind (I'm not a postmodernist). Perhaps that's all or some of that is false.

One point of possible contention that we could discuss is the implication "might need to go to law school." Being an idealist, I would like to believe the Constitution was written so that the every man could understand, otherwise, how can he be sure what his rights are? If the Constitution is too difficult to decipher such that only an expert schooled in it's esoteric ways can understand (like the tax code) than this an imminent danger to liberty because you can never be sure of what your rights are and the government could tell you anything it want ("yes these are your rights, I'm sorry but you really have to go to law school or spend 500 hours going through case documents to understand why"). See what I'm saying? Perhaps I'm wrong though!

Anyways, I'm having too much fun making new government departments, so here's another: The U.S. Dpeartment of Physical Fitness! After all, personal trainers recieve money for their services so this falls under the commerce clause.

With overwieght, obesity, and nutritional diseases such as heart disease and cancer at all time record highs, the USDPP has been created to further the efforts of the USDA to create unique nutrition and exercise opportunities for the benefit of the nations health.

USDCP has created a strategic plan to implement its vision. The framework of this plan depends on these key activities: expanding markets for personal training services, further developing alternative markets for fitness products and activities, providing financing needed to help expand job opportunities and improve gym facilities, utilities and infrastructure across the U.S., enhancing exercise safety by taking steps to reduce the prevalence of injuries from dangerous free weight lifting, improving adherence and enjoyment by providing assistance and education and promotion, and managing and protecting America's public and private gyms working cooperatively with other levels of government and the private sector.

You may want to know a little more about the USDPP. The USDPP will do it's best to sucessfully pass legislation that will prohibit any personal trainers from making claims about the health benefits of their exercise programs unless they meet USDPP exercise guidelines. Only machine based training, focusing on 8-12 exercises (1 for each major muscle group) and monostrucural cardiovascular training shall meet these guidelines. Don't worry, we're from the goverment and we're here to help you, which is exactly why we will do our best to enforce regulations that prohibit the use of kettlebells or C2 rowers(after all, we needed to protect you poor defenseless souls from raw milk and cooking oils with saturated fat).

Furthermore, any exercise program that meets USDPP guidelines has the option of recieving the USDPP healthy stamp of approval for a nominal fee of $4,000 (secret: sorry, only machine based exercise programs can recieve this stamp of approval because the Nautilus lobbyists had nice airplanes with pretty stewardesses, whereas Robb Wolf could only offer me a ride in his Ford Pinto with a picture of Natalie Portman in the glove box).

Finally, anyone participating in dangerous exericse programs such as Crossfit must pay an additional sin tax.

Thank You,

Neal Winkler (Secretary of USDPP).

{Note: I'm just having fun! :)}

Dave Van Skike
05-08-2008, 02:20 PM
you seem to have a passion for these ideas. you consider volunteering for a campaign or a libertarian non-profit? many are understaffed.

Garrett Smith
05-08-2008, 02:47 PM
Passion is Neal's middle name...

Mike ODonnell
05-08-2008, 03:06 PM
whereas Robb Wolf could only offer me a ride in his Ford Pinto with a picture of Natalie Portman in the glove box

I'm holding out for Jessica Biel......I mean....seriously.....I just love her wonderful personality...and she aint too shabby to look at either...http://dontcostnothing.files.wordpress.com/2007/07/jessicabiel_hot.jpg

What's a thread with the words "T-nation" without pics of half naked beautiful women.

Allen Yeh
05-08-2008, 06:41 PM
Passion is Neal's middle name...

Is there such thing as a second first name?

Neal Winkler
05-09-2008, 03:47 PM
Dave, I was a delegate for Ron Paul to the RNC but was not elected.

Dave Van Skike
05-09-2008, 05:04 PM
that sounds about right. good work.

Jason Steele
05-09-2008, 05:32 PM
Today t-nation posted an article about grass-fed beef, and during the intro, the author had this to say:



Is the first sentence true? Even if it is true, it doesn't follow that no corn would be raised, as farmers would find cheaper ways to produce corn in the absence of subsidization. Of course, I'm not defending corn, not to mention that IMO subsidization of corn is both immoral and illegal (there is no constitutional authority for the federal government to create a Dept. of Agriculture).

At any rate, let's assume that it is true that it takes a dollar more to produce a bushel of corn than the corn is worth. Given the fact that in the absence of subsidization farmers could find ways to make corn production profitable (they just currently don't because they don't need to), there is no telling what the ratio of grass-fed to corn-fed beef would be on the free market. So, the claim that corn-fed beef would not exist on a free market is dubious. Of course it's possible that farmers COULDN'T find ways to make corn profitable, it's certainly the case that subsidization makes things possible would of never come about on the market, but again, one cannot be sure either way.


If memory serves, farmers were on the verge of not growing crops in the post-Depression era because supply was greater than demand, thus the price for agricultural products was abysmally low, and they wanted their piece of the pie too. Good ol' FDR (yes that is sarcasm) instituted many of the limits on farm production that are still in use in one form or another today. By limiting said supply for decades has steadily driven the price of corn (and other agricultural commodities) higher, and the advent of governmental mandates for biofuels has driven it even higher (don't get me started on that one). True free market pressure would bring the price back down to a theoretically agreeable price for both producer and consumer.

It seems like a bit of a stretch of the Commerce Clause to institute such mandates, but I'm no Constitutional authority (although I do agree with the sentiment that the average person's interpretation is just as legit as a supposed experts opinion).

Feel free to correct any of the above, I am but an amateur economist.

Tom Rawls
05-11-2008, 08:15 AM
The way the corn subsidies work, actually the large commodity companies--like ADM--are the one who are getting a great deal. They buy the corn at below cost, then the govt tops up their payment to the farmers.

This system goes back to Richard Nixon and his sec of ag Earl Butts (not FDR). The policy was to subsidize farmers to grow more, and have lower prices at the supermarket. It has worked.

If you didn't have the subsidies, farmers would plant less, prices would go up, and voters would expect the govt to solve the problem. This little "socialistic" system is the pet of allegedly conservative Republicans in the Midwest.

Yael Grauer
05-11-2008, 08:56 AM
Yes it is true and the book the Omnivore's Dilemma goes into very specific detail regarding this.