The UN says that the problem is 1 billion hungry people. Columbia University scholar Jeffrey Sachs explains that the solution is foreign aid that attacks the “poverty trap.” Then, markets can develop and people can become more productive. By contrast, NYU scholar William Easterly says that aid is actually the problem. With free markets and the right incentives, success comes when people figure out their own solutions.
This Foreign Policy article on world hunger presents the debate and then the work of its authors, 2 scholars from MIT. Introducing people from Indonesia and India, they illustrate the complexities of world hunger. The discuss calories and productivity, the impact of pregnant women taking iodide pills and working men consuming iron supplements. They ask why people might choose tastier food rather than a healthier diet of eggs and bananas.
Here you can see UN graphs on hunger around the world. You might want to look at this Foreign Policy article and this article for some good discussion.
The Economic Lesson
How are world hunger and the British coastline similar? Mathematician Benoit Mandelbrot could tell us. Dr. Mandelbrot was the father of fractal geometry and the idea that the closer you look, the more you see. From a distance, the British coastline will appear straight. However, looking closer and closer increasingly reveals indents and zigzags. Consequently, Dr. Mandelbrot believed that it was actually much longer and even infinite. The significance? Something we might think is simple is really complex.
An Economic Question: Pondering how to diminish world hunger, consider the following from Duke University behavioral economist Dan Ariely. “…So we either simplify the problem and offer a solution, or embrace the complexity and do nothing.”
Agree or disagree? “Both the jayhawk and the man eat chickens, but the more jayhawks, the fewer chickens, while the more men, the more chickens.”
The quote is from 19th century economist Henry George but it relates to a report from the FAO (Food and Agriculture Organization of the United Nations). Predicting that the world will have (approximately) 2.3 billion more people in 2050, the FAO said we will need 70% more food production.
Can we do it? The debate continues between the doomsters and the boomsters. Saying production cannot keep up with population, doomsters like biologist Paul Ehrlich look back to Malthus. Meanwhile boomsters, like Julian Simon say that human ingenuity and the incentives of higher prices lead to more production.
The Economic Lesson
Where are food prices? Summarized by Bloomberg, currently sugar and oilseeds (which include soybeans, sesame seed, sunflower products, canola) have been the primary reason for a 25% climb since December, 2009. The last big jump was during 2008 when a 43% spike in the FAO Index reflected higher cereals and rice prices and led to food riots in poorer nations. A handy site for seeing the current state of food production in developing nations, country by country, is here.
As economists we have so many variables! When the price of a commodity skyrockets, the result is less supply because the cost of production increases. On the other hand, as we saw with oil, when price goes up, it creates incentives on the supply side to, 1) produce more 2) innovate; create an alternative.