The Everyday Economist

Today’s pictures are different. “This is a silent tsunami,” says Josette Sheeran of the World Food Programme, a United Nations agency. A wave of food-price inflation is moving through the world, leaving riots and shaken governments in its wake. For the first time in 30 years, food protests are erupting in many places at once. Bangladesh is in turmoil (see article); even China is worried (see article). 

So begins the story in The Economist.  Of course, this has led to outrageous claims that food “doesn’t spontaneously show up on grocery store shelves.”  It does, however, when the market is allowed to operate.  In reality, it is the fact that governments around the world have subsidized biofuels and established protectionist regimes to prevent the cheaper, foreign competition thereby pushing prices above the levels of affordability for many in the developing world.

There is little doubt that the market will continue to get the blame, while governments scramble to demagogue markets and offer solutions that involve more government involvement.  The solution is quite simple.  As Sean Corrigan explains, “Feed the world? — Then free the market!”