The return of Malthus (7 April 2008)

In his NYT column today, Paul Krugman, writing about food prices' recent rapid climb, sounds a grim, almost Malthusian note, concluding that "cheap food, like cheap oil, may be a thing of the past." Wheat prices are astronomical already, and rice stores have become so depleted in Asia that many producing countries are threatening to stop exporting the grain. (I have seen the writing on the wall. Last weekend, I went to Pacific Supermarket and bought a 20-pound bag of Nishiki brown rice. Get it while you can; that's all I am saying.) Krugman cites a few factors contributing to the problem -- oil prices, droughts -- and really lays into the biofuel industrial complex.

The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a “scam.”
This is especially true of corn ethanol: even on optimistic estimates, producing a gallon of ethanol from corn uses most of the energy the gallon contains. But it turns out that even seemingly “good” biofuel policies, like Brazil’s use of ethanol from sugar cane, accelerate the pace of climate change by promoting deforestation.
And meanwhile, land used to grow biofuel feedstock is land not available to grow food, so subsidies to biofuels are a major factor in the food crisis. You might put it this way: people are starving in Africa so that American politicians can court votes in farm states.

Alongside the theme of neutralizing the farm lobby is a hint of population-control politics that we haven't heard much about since its heyday in the late 1960s, when widespread affluence was considered a problem in the West and books like Paul Ehrlich's The Population Bomb were being sold in drugstores in pocket-size paperbacks. The idea that food prices will remain high (i.e. that food supply will remain scarce, that we have reached some new plateau of productive capacity that caps that supply) could be seen as a harbinger of food rationing and famine, and an indicator that Malthus's scenario is finally coming to pass -- namely that food supplies can't keep up with a population that grows exponentially. But now the problem takes a slightly different form; with so many people wanting to eat luxuriously, the resources necessary for everyone to eat at all are being hoarded and consumed by the more affluent. Krugman calls it "the march of the meat-eating Chinese" and notes "the growing number of people in emerging economies who are, for the first time, rich enough to start eating like Westerners. Since it takes about 700 calories’ worth of animal feed to produce a 100-calorie piece of beef, this change in diet increases the overall demand for grains." In other words, developing countries want to imitate the standards of living that Americans have inaugurated as the prerequisites of economic maturity. National diet (as with wasteful patterns of energy consumption) can function as mark of national status and can stifle potential political unrest with luxuries, and this leaves little room for conservation.

The problem, then, is not so much a population explosion, but an explosion of those who expect middle-class comforts (and those who use those comforts for political control). Not a Malthusian issue so much as a Veblenesque one: That package of expectations and the ideology of entitlement that goes along with it, will probably come under increasing fire. Hence the cult of asceticism that has derived from the environmental movement -- the way to be even more middle-class in terms of prestige, from this point of view, is to deprive yourself for a noble cause -- limit your choices by viewing them through the lens of "sustainability." (Whether that can be adequately defined to make it an operational distinction is an open question.) With this ideology, at least the status hierarchy is being leveraged to accomplish some good.

Oh, and on a related note, Jon Taplin points to Merrill Lynch analysts explaining that American households spend more on debt service than food.