So says the Center for Global Development’s (CGD) Kimberly Ann Elliott in a recent post:
As a start, CGD colleague Connie Veillette and John Norris from the Center for American Progress identified five ways to “make aid more effective and save more than $2 billion.” Three of their five recommendations involve cuts in subsidies for farmers, shippers, and NGOs that would make US food aid policies more flexible, responsive, and development-friendly… and save a half billion dollars. In addition, Connie and John recommended cutting at least $1.5 billion from farm subsidies, which go disproportionately to larger, richer producers.
Increasingly in the congressional debate, the $5 billion in “direct payments” that go to farmers every year — regardless of crop prices or yields, and on top of any other subsidies they receive — have moved squarely into the budget-cutting bulls eye. Eliminating those payments, which were created almost two decades ago as part of a failed effort to reform farm subsidies, is certainly justified, but those payments are delinked from production and cutting them would do little to reduce the global distortions imposed on developing-country producers. There is also another $10-12 billion in trade-distorting subsidies that undermine incentives to invest in agriculture in developing countries – those should not escape the budget ax.
I have addressed this topic many times on this blog in order to make the exact same point Connie Veillette and John Norris make. In chronological order:
Chronocentrism: “This Time It’s Different”
Chronocentrism has been defined by British science journalist Tom Standage as “the egotism that one’s own generation is poised on the very cusp of history.” It is to time what ethnocentrism is to ethnicity.
From Fukuyama’s The End of History and the Last Man — “History is directional, and its endpoint is capitalist liberal democracy” — to Rifkin’s The End of Work — “We are entering a new phase in history, one characterized by the steady and inevitable decline of jobs” — to Millenarians, present-biasedness and the belief that the old rules no longer apply seem insuperable for many people.
Nowhere was this clearer than when the world’s population hit seven billion a few weeks ago. Never mind the past 25 million years of human evolution, during which humans always managed to develop technologies to feed themselves. Never mind the fact that famines are man-made and not directly caused by a lack of food to go around. Never mind all that: many commentators saw fit to inform us that the old rules no longer applied, and that we were about to enter an era of starvation and famine.
The Four Most Dangerous Words in the English Language
But chronocentric policy making can be dangerous. The four most dangerous words of investing — “This time it’s different” — are also the four most dangerous words in the English language.
Going back to the example of the world at seven billion, if you believe we have crossed a special population threshold beyond which we will experience constant starvation and famine, you are probably willing to adopt drastic population-control policies that would curtail the freedom to have as many children as they want many people currently enjoy.
Would that be right? And how confident would you have to be that “this time it’s different” to justify a potential loss of welfare spread out over so many people?