From: gil@tillage.DIALix.oz.au (Gil Hardwick)
Newsgroups: sci.environment
Subject: Save the Planet and the Economy at the Same time!
Distribution: world
Date: Mon, 04 Jan 93 03:01:03 GMT
Organization: STAFF STRATEGIES - Anthropologists & Training Agents


In article <JMC.93Jan2220249@SAIL.Stanford.EDU> jmc@cs.Stanford.EDU writes:

 > I suspect that "equitable terms of trade" is a bad idea.  Presumably
 > it means an agreement about prices.

I certainly did *not* mean "equality", nor any untenable agreement on
prices, rather a fair and reasonable opportunity to participate. The
free ride on protected price agreements regardless of the market leads
to corruption and stagnation, where to allow the challenge of problems
to be overcome invigorates the mind and rejuvenates the economy.

 > Consider the U.S. sugar quotas.  This permits each of a number of
 > sugar producing countries to sell their quota amount within the U.S.
 > at U.S. internal prices which are far higher than world prices.  These
 > quotas were established as the result of a compromise between
 > importers and domestic sugar producers.  They can incidentally be used
 > for rewarding friends and punishing enemies.  The Cuban sugar quota,
 > one of the largest, was abolished when Castro went communist.
 > Countries with quotas can get U.S.  prices for part of their
 > production and undercut Castro for the rest of the market and still
 > make a profit.  This puts Cuba in a bad way.  It would be very hard
 > for a new country to get into the sugar producing business, because it
 > probably couldn't get a U.S. quota.

Not just between countries. There was a major conflict a few years ago
between Queensland and Western Australia, where Queensland being the
major Australian sugar producing State sought to veto the development
of a new sugar industry on the Ord River Project in the far north of
Western Australia. However, patient planning and astute negotiations
combined with a change of government in Queensland brought progress.

 > Any agreement about prices requires quotas in order to prevent new
 > producers from undercutting the "fair" prices.  If such an agreement
 > had been in effect, it would have been very hard for China to get
 > quotas when Taiwan and Korea, etc. already had them.  Now all they
 > have to do is compete on price and quality.  You might also get
 > anomalies.  If Taiwan had a quota for toys at a certain price, as
 > their manufacture got more efficient, Taiwanese manufacturers and
 > workers might make "windfall" profits, while less efficient
 > countries campaigned against any reduction in the quota price.

Which offers China the opportunity to diversify their economy without
bothering too much for the moment with sugar. The Chinese palate leans
very much toward sour and bitter rather than sweet, and with abundant
sugar cane growing throughout South China to supply their domestic
market quotas are merely a foreign currency issue.

In the meantime, both Cuba and China have plenty of sugar, creating a
thorn in the side of US foreign policy. Cuba in a bad way? I wonder who
has to remain on the alert for price undercutting of sugar, and use up
so much energy and talent policing the situation? So long as people
have the basics to make a living for the time being, they can wait.

 > Within the U.S., a similar role has been played by the concept of
 > parity.  The idea was (a bit before 1910) that there ought to be
 > a certain ratio between the price an American farmer received for
 > each bushel of wheat, corn, etc. and the prices farmers paid for
 > a "market basket" of things farmers buy.  Politicians soliciting
 > the farm vote would promise to support prices at 100 percent of
 > parity.  We still have the price supports, though not at 100
 > percent of parity.  As it happened, farming became more efficient
 > faster than most other branches of the economy.

We have tried that here too, but for the past 30 years such parity
has declined by around 50% causing a massive depopulation during the
1980s of those farming areas dependent on world markets, while the
so-called "poor" areas in the South West are remarkably stable and
self-supporting while gaining a very reasonable income from niche
crops, cottage industries, local employment and other opportunities.

But we need communities established throughout the country, for other
reasons including land rehabilitation and effective environmental
management, and especially to prevent urban decline through the sudden
and massive influx of the now impoverished farming families who have
lost the support of banks in the wake of corruption of world markets
for political reasons you describe above.

Problem is, arbitrarily dividing the world up between "friends" and
"enemies" for support or punishment is more greatly detrimental to the
majority of impartial and disinterested neighbours, while those you
regard as your real enemies just continue to thumb their noses at you.

So we are now working on other more traditional support mechanisms
for sustaining rural communities, and in that respect we have more
to learn from China and Cuba than the US, whose foreign policies have
certainly *not* been designed to do us any favours.

Some "friend", not.

Gil