Famine in Niger

Lordy be, there\’s famine in Niger again. And we\’ve the usual nonces at Comment is Free shouting about how awful the free market is. My response, C&P from there:

Oh dearie, dearie, me.

Right, famine. Horrible: we should do something about it. As, indeed, we do. As mentioned above, there\’s nothing in any free market philosophy that says the starving should be left to starve: nothing that excludes charity.

OK, now, what should we do about it? Yes, we know the signs: the pastoralists are slaughtering their cattle as the pasture dries up, meat prices are falling. This is a well known sign of impending problems (see, markets can actually send us signals through prices!).

We could:

1) Send food aid. This tends to take 6-10 months to arrive. Not much good for those who will starve in the next few months. We could give that food away. This discourages farmers from planting the next crop: why make all that effort to grow millet (for example) if the market is full of free stuff? So, the free food aid route is late and has the unfortunate side effect of entirely killing farming where the food is given out.

Or we could:

2) Give poor people money. With this they can go and buy food. We have preserved the market and the incentive for the next crop to be planted, raised and harvested. And we have also stopped people dying in the interim. Plus, handing out banknotes is really rather faster than shipping food in. Can be done in a couple of weeks if people get their skates on.

One more thing giving money to the poor to buy food does. It raises the price of food. This increases the incentive for farmers to plant more grain for the next harvest. Plus it incentivises areas outside the famine area to send food into it to sell. Again, we have used the market and prices to send a signal: there\’s a food shortage here, you can make a profit by supplying food to it.

Now, of course, I can be accused of some dreadful neo-liberalism here. Markets, all the time markets and nothing but markets. However, I do in fact have reality on my side.

Amartya Sen is a Nobel Prize winning economist. He won his prize for his studies of famine in the 20th century. More specifically, what causes them and how to deal with them.

His most important observation was that famines do not come about because of a general shortage of food. As several will note, Ireland exported food during the Great Famine: Ethiopia during the one of the 80s. What actually happens is not the absence of food. It is the absence of purchasing power, of the money to buy the food, among certain segments of the population.

So, the answer is not to screw over the farmers by offering everyone free food: it is to give money to purchase food to those who do not have the money currently to do so.

The answer, if you like, to a market failure like an impending famine is not to abolish markets and prices, it is to intervene in the market to make it function better: to remove the failure, not the market.

Just give money to poor people.

Just like we do here actually: we don\’t deal with unemployment or food poverty by insisting that the government or Sainsbury\’s give away free food. We give poor people money to go and buy it.

6 thoughts on “Famine in Niger”

  1. Excellent comment. However, giving the poor money cuts out the middle persons – those who currently get paid to decide how the aid money is spent – and instead empowers the poor to make such decisions for themselves, meeting their own needs in the ways they see fit.

    And we can’t have that, can we?

  2. Dunno about the exact situation in Niger, but you may also find that government is buggering things up. Let’s assume the famine is lilited to an area roughly corresponding to a chunk of Niger. Let us also assume that outside the famine area there is surplus food, but that’s another country. What’s the betting a combination of Niger and other law prevents grub moving from Point A across a border to Point B?

  3. “Dunno about the exact situation in Niger, but you may also find that government is buggering things up.”

    I believe that “government is buggering things up” pretty much sums up the problems of the entire African continent in a nutshell.

  4. Timmy, are you a closet socialist?

    First you say:
    “…there’s nothing in any free market philosophy that says the starving should be left to starve…”
    Err, well actually there is. Surely if un-competitive companies should be allowed to fail (i.e. die), then presumably in the interests of consistency free marketeers should believe the same about people and labour that are un-competitive. Isn’t the free market just Darwinian-ism writ large in economics? But, as you apparently don’t believe in free markets, then I guess you must be a socialist, yes?

    Then you start quoting and supporting Amartya Sen, for crying out loud. It will be David Blanchflower and Paul Krugman next I suppose.

    And then to top it all you say:
    “The answer, if you like, to a market failure like an impending famine is not to abolish markets and prices, it is to intervene in the market to make it function better: to remove the failure, not the market.”

    I thought the whole point about free markets is that they are supposed to be so perfect that there should never be any need for any intervention. Your friends at the ASI are going to love you for that one.

    Welcome back comrade!!!

    Tim adds: Given that Eamon Butler has written a whole book that points out that markets aren’t perfect my views won’t come as a surprise to those at the ASI.

  5. Ah, Cantab83, that’s a long and nasty bow to pull. Why should any free-marketer have to believe that people and companies are the same and should be treated the same ? Seems perfectly reasonable to me to believe in free markets and be quite consistent in believing that where people are in danger of dying from want that we can assist in the name of charity, voluntarily of course.

    And as you should know, markets are very rarely free and perfect. If they were maybe you would not need to intervene much, but natural disasters can invoke responses from one that need not be doctrinaire.

    A little base level trolling I suspect.

  6. ……Then you start quoting and supporting Amartya Sen, for crying out loud. It will be David Blanchflower and Paul Krugman next I suppose……

    I don’t know about Blanchflower, but Tim has certainly quoted Krugman before.

    When trying to persuade a bunch of academically challenged lefties, quoting Friedman is hardly going to help is it.

    …….Surely if un-competitive companies should be allowed to fail (i.e. die), then presumably in the interests of consistency free marketeers should believe the same about people and labour that are un-competitive…….

    The whole point of letting uncompetitive companies fail is to free up the resources they are using, not least their human resources.

    It is difficult to see how the resources needed to maintain a human body can be better utilised, by allowing that body to die. Its not like we are short of decayable organic matter, and the unique combination of such matter that make up a person is a wonderfully effective use of such matter.

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