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From: tim@isrnix.UUCP
Newsgroups: net.politics
Subject: Govt and Agriculture
Message-ID: <253@isrnix.UUCP>
Date: Tue, 28-Jun-83 12:33:18 EDT
Article-I.D.: isrnix.253
Posted: Tue Jun 28 12:33:18 1983
Date-Received: Wed, 29-Jun-83 10:36:17 EDT
Lines: 43


It seems that our "expert" on Capitalism hasn't studied much economics
if Tom Craver doesn't understand the reason for farm subsidies.
Have you ever heard of something called the "cobweb function", Tom?
It is an economic effect which occurs when you have a combination of
an inelastic demand (like the demand for food-you absolutely NEED some
minimun but you also can't eat above some maximum) for a commodity
and a periodically inelastic supply-once fields are planted each
year that's pretty much it-the farmer can't go back in the middle of
the season and either plant more crops (it will be too late) or
it would be kindof irrational to take out crops already planted.
Hence the cobweb function results in which farmers responding
to high prices will then vastly overplant which results in prices
where they really can't afford to live which leads to farms going out
of business which leads to less production, incredibly higher prices
and so forth-the thing is with the cobweb function is that instead of
following the usual path towards equilibrium between supply and demand
(which is your supposedly wonderful virtue of Capitalism when it works
as it's supposed to) you get a situation of wild fluctuations in which
supply and demand grow increasingly divergent-there are periods of
glut and periods of famine.  THUS under our terrible "socialistic"
govt since the New Deal in the 30's we have had the system of farm
subsidies to keep prices stable -if weather conditions etc result
in a very big crop the gov't will buy up the excess to keep prices higher
so farmers stay in business and continue to produce the incredible
cornucopia of agricultural products we enjoy in this country.  We have
one of the most, if not the most , successful agricultaral systems in
the world -prices for food have not gone up all that much since the
farm subsidy programs were instituted and we enjoy a plentiful supply.
Twas not always thus--but this is the blessing of the terrible
"government intervention"!  Besides the subsidy programs the gov't
has supplied all sorts of other help to agriculture-farm extension
agents,the many agricultural colleges founded under the Merril Act
which have done much of the research which has resulted in our very
efficient agricultural production, and other aids.  And we have
one of the most productive agricultural systems in the world--
hmmmm wonder how that could have happened with all this involvement
of big bad government?  Government in a democracy is merely the people
getting together to help themselves.  I think that idea is 
WONDERFUL!!!!
 
                  Tim Sevener
                  decvax!pur-ee!iuvax!isrnix!tim