Monday, 29 April 2013

Farming, A Business not a Government sponsored life style....

There is a near masochistic pleasure in listening to the General Secretary of the IFA, Pat Smith, wittering on economic issues. It's not Smith's fault that he dances so deliciously with the sort of mental dissonance which could be weaponised & used as a Sheldon Cooper Exploding Brain Ray, rather this is the daft job he does for the Irish Farmers Association. 

(Let me take my skin out of game. I was one of the countries least able farmers & could not make a living at it even by borrowing very large amounts of money. Now I'm a direct beneficiary of the IFA's rent seeking.)

On Thursday night Smith was part of a three person panel at a Leviathan Discussion concerning the EU in Kilkenny. Neither Junior Minister Lucinda Creighton nor billionaire businessman Declan Ganly showed any interest in countering Smiths more egregious offences against sense, either because they did not take him seriously or because upsetting the declining farming lobby is still taboo. No one pointed out that he was a lobbyist for the state's most subsidised & protected industry. 

"People don't understand how dangerous free trade could be," began one typical interjection, "It's all right if you gain 3 jobs but what if you lose 500 and that happens.You can have to much free trade, free trade needs to be controlled"

This is nonsense. 
Worse it is impoverishing nonsense. 
Free trade improves makes all of us prosperous.
Free Trade is dangerous only to those who do not produce efficiently or satisfactorily for us consumers. The law of comparative advantage, the notion that  free trade works even if one trade partner holds absolute advantage in everything produced, means that free trade makes everybody richer by forcing business to produce what they do best. Price signals tell us where that advantage lies. Free trade forces business to up its game or get off the pitch & let others play with the ball.

The benefits form a virtuous circle: resources are better utilised, total production increases, making that production cheaper & these efficiencies allow the creation of more wealth, resources & trade.

Production of complex goods requires multiple of multiples of trades so the useful effects of free trade multiply & propagate throughout the economy making everything from ipads to cars more available.

There can't be too much free trade: the  benefits accrue from the all-for-nothing nature of the competition forcing resource re-allocation. Controlling free trade is a merely a form of corruption as business seek advantage from politicians and protection from consumers choices.

Therein lieth the problem. Farming is a business not a sacramental national duty. Even if free trade lead us to move completely away from food production that would only happen because we can do other things better. We have no religious duty to farming or farmers. 

When Pat Smith witters about economics he & the audience should be reminded that he speaks for a subsidised lobby group that costs EU consumers over €100billion  between CAP  subsidies & protected higher prices. He should be challenged & made justify every piece of anti-prosperity mercantilism he spouts, from arguing for protection based on Japan's insane rice farmer fetish, to pretending controlled free trade is real. 

We need to stop being masochists. Let's treat ourselves to some vanilla prosperity.

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