Famine in America

Would you rather walk to work or bring your lunch? -- Dinty Ramble

   Consider this question: What happens when government is reluctant to intervene in a crisis? Conservative economic theory says leave things alone and the problems will resolve themselves.
   History shows otherwise.
   The British government expected the private sector to resolve food distribution problems when the Great Famine struck Ireland in the 1840s. But merchants wanted to reap high profits from the increased demand for food, so the government in London did nothing to stop "famine profits." Large quantities of food grown in Ireland were exported. Result: Millions of people with no money to pay higher prices for food died of starvation.
   In 1940, the U.S. government met fierce opposition to a plan that would limit profits, even as it encouraged war preparation. Manufacturers wanted the high profits from munitions sales, but the government banned "war profiteering."
   In addition, a lack of government control can also cause a crisis. After the Wall Street Crash of 1929, when the financial system collapsed, commercial banks and investment banks were separated. Decades later, however, lifting the ban precipitated another financial crisis, and only government intervention saved financial institutions -- those deemed "too big to fail" -- from collapsing and taking depositor and investor funds down with them.
   Economic theory is one thing. But when it doesn't work, reality requires government intervention.
   Harvard economist Amartya Sen has shown that famines can be prevented if there is the political will to do so. There has not been widespread famine in India since independence in 1947.
   Historian Christine Kinealy of Drew University has documented the export of food from Ireland in the 1840s even as millions starved.
   Currently, drought in the American Midwest is destroying    the corn crop, creating a shortage of food for livestock and for use in making ethanol for fuel.
   Economics 101: Reduced supply as demand holds steady means higher prices. Consequently, farmers sell off their herds because they can't afford feed corn. In turn, this leads to higher prices for beef, etc., at the consumer level.
   Meanwhile, federal laws requiring ethanol in fuel draws corn away from what might otherwise be used for food. And as the supply of corn drops and the price rises, costs are passed on to consumers for everything from meat to margarine to auto fuel.
   Which brings us back to the opening question: Would you rather walk to work or bring your lunch? (Assuming, of course, that you have a job and money for food.)
   So the failure of the corn crop and the subsequent widespread shortages and higher prices could well lead to famine in America.
   Unless there is enough political will to prevent it. And that requires government intervention.