Economics And Environment

Ok... It's been a long time since I wrote here. I had planned on writing about the free market system in sports and how that's contributing to the fall of hockey, but I 'm going to write about something else.

My friend and I were talking the other day about his internship. He works for the Michigan environmental council, or something like that. Anyways, he started talking about how Michigan is starting to encourage local businesses to purchase more and more from local producers. The logic behind this is that local food travels less distances (cutting down on pollution, Did you know in michigan the vegetables you purchase in Meijer travel an average of 2,000-3,000 miles>), is eaten sooner off the plant (giving more nutrients), supports local farmers and puts money back into the local economy, but also it is environmentally better to purchase food locally grown because the same nutrients that were taken from the land, end up going back in. Plus having plants helps cut down on pollution through their whole respiratory system (aren't Plants great!?!).

So the Economist in me decides to ask him a question (It's really Calvin's fault for this. Their Busniness requirements had me take four Econ classes. Not fair at all!). In my international Economics class we talked about Free Trade between nations and producing on creating a competitive advantage (i.e. If Canada produce 12 bottles of beer per 10 hours and 6 computer chips per 40 hours and the U.S can produce 12 bottles of beer per 14 hour and 6 computer chips per 41 hours... Canada has a competitive advantage in producing beer because they can more beer per computer chip than the US can and vice versa, the U.S has a competitive advantage in producing Computer Chips because it costs them less Beer per Chip. Very rudimentary economics, but it will work for what we're describing).

So Free Trade economics tells us that the U.S should produce only computer chips and Canada should produce only beer and that will raise the world wide production of computer chips and beer (mmmm.... beeeer....).

But Environmentally speaking, the if the U.S produces only computer chips, they will increase pollution due to the lack of greenery around it and Canada, who is exporting their beer for computer chips is losing the nutrients that were in the soil, thus slowly raping the land of it's resources, bleeding it dry.

How does this fall into International Economics? Well, last year at the U.N free trade talks African farmers were upset at the U.S because the U.S is pressuring them into free trade agreements, but they are upset at the U.S government giving huge subsidies to Cotton Farmers in the southren states so that they can continue to keep their farms running. (Subsidaries in a Free Trade Market are a big no no) This means that the U.S is paying through the nose to keep their few farmers from going bankrupt, even though the U.S is not a big player in the international cotton market. Africa is, infact they are the worlds greatest cotton supplier. You can imagine how upset they are when the U.S is lecturing them on how to run their countries businesses in a free trade market while the U.S is losing money to infringe on one of Africa's main source of international income.

But, environmentally speaking, the U.S may actually have a leg to stand on. Those farms are kept from being turned into parking lots, industrial parks, etc... etc... and they help keep the balance in the local ecological family. Keeping things realitively healthy basically, and we all know the U.S does not need any more pollution production.

So basically, what did my friend and I conclude? Well, our world has become a global market and trade between countries is as natural as breathing. Yes, you need a competitve advantage in producing certain products, but you should also look at the long run. Countries like Canada, Africa and others who have an economy based off of natural resources, should be careful in what and how much they export. In the long run it is not healthy for the land to take nutrients out and not replace them, and countries like the U.S and Britan should also be warry that they do not over run with industry so that they become reliant on other countries for food and they destroy nature to put up the next mirco chip plant.

Economics is a difficult but interesting subject. There are no right answers (which helped me get a B in my one class even though I was skipping once a week for the last half of the semester). There's no cut an dried sollution, which makes for interesting, long, drawnout conversations and arguements at time. Kinda like this post.

Later