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01 / 05
Agricultural Subsidies in Wealthy Countries Hurt African Producers

Blog Post | Food & Hunger

Agricultural Subsidies in Wealthy Countries Hurt African Producers

By artificially lowering commodity prices, subsidies prevent African producers from earning a fair price for their labor.

Summary: Africa is the poorest continent in the world, containing over a billion people living in extreme poverty. This article argues that international agricultural subsidies perpetuate this poverty by forcing African farmers to compete on an uneven playing field.


It’s estimated that in 2021, approximately 490 million of Africa’s almost 1.4 billion people lived on less than $1.90 per day. To get a sense of African poverty, note that 9 of the 10 poorest countries are in sub-Saharan Africa. Many factors cause Africa’s underdevelopment, but contrary to what some may think, the continent’s economic prospects are far from hopeless. Indeed, even in the developed world, much can be done to help improve the lives of millions of the world’s poorest people. If we in the West are to help those that we proclaim to care about, one of the first policies to go should be price-distorting agricultural subsidies.

Western (and Chinese) subsidies are bad for many African farmers. Africa relies on commodity exports, and when developed states dole out gargantuan sums of money to domestic producers, global commodity prices fall. These subsidies not only waste an enormous amount of taxpayer money, but by artificially lowering commodity prices, subsidies distort the price mechanism and prevent African producers from earning the fair market price for their labor.

The case study of cotton subsidies impacting West African producers illustrates this phenomenon well.

The four West African countries that have a significant interest in the global cotton trade are Benin, Burkina Faso, Chad, and Mali. Together they are known as the Cotton-4. They are all on the United Nations’ Least Developed Countries list and collectively earn about 60 percent of their total crop revenue directly from cotton.

The Cotton-4 countries only produce about 3 percent of the world’s cotton. China and the United States combined produce over 40 percent, even though African farmers are often more efficient at producing cotton. Why do China and the United States produce so much more when their cotton farmers are comparatively inefficient? One reason is because the U.S. and Chinese governments funnel huge amounts of money toward cotton production, which distorts incentives and causes farmers to artificially increase supply.

Although the price-distorting effects of these subsidies have been known for decades, governments continue to enact policies that impoverish Africans. A 2007 Oxfam study reported that if the United States eliminated cotton subsidies, the global price of cotton would rise between 6 percent and 14 percent. This would lead to a significant increase in West Africa’s yearly revenue and could help lift thousands of Africans out of poverty. However, the United States went on to spend over $7 billion on cotton subsidies in the past decade and is projected to give domestic cotton farmers a further $700 million in aid this year.

Thankfully, the desire to reduce agricultural subsidies in the United States has become an increasingly popular and bipartisan issue. The libertarian Cato Institute, the conservative Heritage Foundation, and the liberal Brookings Institution have all called for agricultural subsidies to be reduced. Unfortunately, the largest price-distorter of all, China, shows no interest in changing its protectionist leanings.

The Chinese government has spent over $41 billion on cotton subsidies in the past decade and uses high tariffs to prevent African producers from being able to sell cotton in the lucrative Chinese market. Chinese subsidies have also been criticized due to evidence highlighting that the Chinese Communist Party uses cotton production to exert control over ethnic minorities.

More than 85 percent of Chinese cotton is produced in Xinjiang province, home to many of the nation’s Uyghur Muslims. The Xinjiang Production and Construction Corps, a Chinese-owned paramilitary organization, produces about 33 percent of all Chinese cotton. The $41 billion of Chinese cotton subsidies have not improved the lives of poor Chinese cotton farmers. Rather, these funds may have been used to build prison complexes and textile factories that are home to and staffed by the coerced Uyghur minority.

While cotton subsidies are a fine example of how U.S. and Chinese policies are hurting Africans, the impact of unfair agricultural policies on poorer Africans reaches far beyond the cotton sector.

Another example of subsidies hurting the incomes of the world’s poor can be seen in the European Commission’s recent attempt to protect the EU’s dairy farmers by purchasing 380,000 metric tons of skimmed milk powder. This decision created an enormous stockpile of milk that resulted in global milk prices plummeting. Unsurprisingly, African dairy producers took the brunt of this economic blow.

To get a sense of just how big a problem agricultural subsidies are, in 2016 the United States, the European Union, and China spent $33 billion, $100 billion, and $212 billion, respectively, on trade-distorting agricultural subsidies. African producers are being forced to compete on an uneven playing field, and unfortunately, they are losing.

While some may acknowledge the negative impacts that subsidies have on developing countries, many more attempt to defend the policy because they incorrectly believe that these funds are allocated to struggling farmers in developed countries. The case of U.S. subsidies illustrates how this belief is false. In 2016, the median household income for U.S. farmers was $76,000, which is 29 percent higher than the median income for all U.S. households. In addition, commercial family farms, which have a high median household income of $167,000, received 69 percent of commodity payments and 78 percent of insurance indemnities. These funds are not being allocated to farmers struggling to get by.

Removing subsidies is difficult because people assume that doing so will hurt agricultural workers. However, New Zealand’s experience in reducing aid to its agricultural sector demonstrates that countries need not fear the consequences of ridding themselves of wasteful protectionism.

Before the 1980s, New Zealand’s farmers enjoyed high levels of government support. Due to a budget crisis, the government removed agricultural protections in 1984, and farmers were forced to compete with global producers. Despite predictions that such action would end family farming and cause large numbers of farmers to move off their lands, just 1 percent of farmers were forced out of the market. Instead, New Zealand’s farmers adjusted and began to explore new markets. Productivity rose, market-distorting effects brought about by government funding went away, and today, New Zealand’s farming sector is dynamic and internationally competitive. The same story could happen in the United States, Europe, or anywhere else.

Free markets improve productivity and increase prosperity. On the other hand, as seen in New Zealand, subsidies distort prices, cause land to be allocated in ways that maximize an individual farmer’s ability to acquire government money—rather than in a way that makes land more productive—and hurt both domestic consumers and overseas producers.

Too many governments that lament living conditions in the developing world implement policies that keep people impoverished. Developed countries need to align their policies with their rhetoric and start helping African producers by removing subsidies and simply allowing the market to work. In doing so, their own economies will become more efficient, and millions of people across the world will be richer.

Wall Street Journal | Economic Freedom

Australia to Abolish Nearly 500 So-Called Nuisance Tariffs

“The Australian government has announced it will abolish close to 500 ‘nuisance’ tariffs from July 1, reducing the cost of importing everything from toothbrushes to roller coasters and bumper cars.

Described by the center-left Labor government as the biggest unilateral tariff reform in at least two decades, removing the tariffs will cost the budget $19.9 million (30 million Australian dollars) in lost revenue annually, but help to streamline $5.6 billion (A$8.5 billion) in annual trade.”

From Wall Street Journal.

Blog Post | Progress Studies

Turgot and an Early Theory of Progress

Turgot, a French statesman, economist, and early advocate of economic liberalism, was one of the first to ponder how we achieve moral and material progress.

Summary: Progress, though central to modern life, was rarely thought about until the last two centuries. During the Enlightenment, thinkers such as Anne Robert Jacques Turgot connected freedom with progress, emphasizing the unique human capacity for cumulative knowledge. Turgot’s ideas laid some of the groundwork for modern liberalism and economic theory, influencing thinkers and policies long after his time.


Progress through the Ages

Though progress is an essential ingredient of modern life, it is an ideal that has only been acknowledged, discussed, and debated extensively in the last two hundred years. At first, it might seem odd to say large swathes of people did not always think deeply about progress. But this view ignores that the vast majority of our distant ancestors used the same tools in their daily lives that their ancestors, from hundreds of years in the past, had used in their time.

Broadly speaking, the Greeks and Romans viewed civilization like any other living organism; it grows then dies like all living things. The expected historical norm was the cyclical rising and falling of civilizations. Though some, such as the Epicurean philosopher Lucretius, theorized briefly about progress, this was an idiosyncratic line of inquiry at the time. Medieval thinkers viewed their age as a dark period in the shadow of an illustrious past. The word “progress” was alien to the human lexicon for thousands of years.

But this changed dramatically with the Enlightenment, a European intellectual movement characterized, in part, by a new confidence in the power of reason to catalog, observe, and experiment upon our natural environment. An advocate for Enlightenment ideals and ambassador for liberalism in its early days, Anne Robert Jacques Turgot, was among the earliest to examine the dynamics of progress. Importantly for classical liberals and libertarians alike, Turgot was the first to establish the connection between freedom and progress. Turgot believed without freedom, human progress would revert to cycles of development and decline.

Turgot’s Life, Education, and Career

Turgot was born in Paris to a distinguished Norman family that had long served the French monarchy as royal officials. Turgot’s father was Michel Michel-​Étienne, a Councillor of the Parliament of Paris and one of the senior administrators in the city of Paris. His mother, Dame Madeleine-​Françoise Martineau, was a renowned intellectual and aristocrat.

Turgot, as the youngest son in his family, was expected to join the church, the usual career path for a younger son in 18th-​century Europe. He began studying at the Sorbonne in 1749, but after a year, he decided he could not become a priest because he refused to conceal his beliefs that were at variance with the teachings of the church. Turgot was suited to being a student; he studied voraciously, reading history, literature, philosophy, and the natural sciences, interests he would maintain until his death.

Sorbonne Lectures: Early Ideas on Progress

While studying at the Sorbonne, Turgot made his intellectual gifts known and was elected by his fellow students to the position of Prieur. This mostly honorary position called for an occasional speech to be delivered publicly. The content of these speeches was inspired by Turgot’s interaction with Bishop Bossuet and his idea of “universal history.” Turgot’s innovation was to give a secularized account of humanity’s universal history. Turgot, like the ancients, accepted that all things live and then die. However, he maintained that humans have a unique capacity for language and memory, allowing them to pass down knowledge that accumulates incrementally over the centuries, leading to ever-​increasing stores of knowledge for the whole of humanity. Though this may seem like a simple idea today, for the time, it was revolutionary, and these speeches established Turgot at a young age as France’s foremost thinker on progress.

One of his speeches now survives as an essay entitled “A Philosophical Review of the Successive Advances of the Human Mind.” It is debatable whether Turgot is the first person to theorize about progress, but we can say with certainty that Turgot is best known for identifying the relationship between freedom and progress.

Turgot’s “A Philosophical Review of the Successive Advances of the Human Mind”

Unlike his inspiration, Bishop Bossuet, Turgot articulated a secular account of progress. Turgot does not entirely exile God from the discussion, but he relegates God to being a prime mover rather than a prime intervener in human affairs. For Turgot, progress does not come from divine providence but is a uniquely human phenomenon.

Turgot defined stages of civilizational development, beginning with hunting, then pastoral, and finally agricultural. Two years prior, in 1748, in The Spirit of the LawsMontesquieu had done the same. However, Montesquieu used these stages to illustrate how topography and climate influence human activity. Turgot’s stages are not separated by varying climates but by human developmental differences. Turgot argued human activity and civilization are influenced not only by climate and topography but also by degrees of social development, progress is not a mere descriptive conclusion; in Robert Nisbet’s words, “it is a method, a logic, of inquiry.”

Where Does Progress Come From?

For Turgot, the natural world is an unending cyclical succession of death and life —whereas human civilization shows signs not of constant decay but rather ever more vitality. Humans are unique creatures because of their capacity for language, writing, and memory. Because of these capacities, the knowledge of particular individuals becomes “a common treasure-​house which one generation transmits to another, an inheritance which is always being enlarged by the discoveries of each age.”

All humans have the same potential for progress. However, nature distributes our talents unevenly. Our talents are made practical by a long chain of circumstances. Turgot wrote, “Circumstances either develop these talents or allow them to become buried in obscurity.” But from this infinite variety of circumstances, progress slowly develops unequally at first, but its benefits spread to the whole human species over time.

Humans’ collective capacity for memory means that even amidst war, famine, and disaster, they can preserve and continuously improve their knowledge of the world. Writing prophetically before the economic miracle of liberalism, Turgot says, “Amid all the ignorance, progress is imperceptibly taking place and preparing for the brilliant achievements of later centuries; beneath this soil the feeble roots of a far-​off harvest are already developing.”

Progress Requires Experimentation

Unlike many of his philosophical contemporaries, Turgot greatly admired artisans and mechanics, people who worked with their hands to create new machines. Unlike Rene Descartes, Turgot did not believe the greatness of his century came from a superior set of ideals, attributing it instead to new inventions. Ultimately, Turgot believed we were indebted to artisans rather than philosophers for much of the comforts in our daily lives.

Behind all science lies experimentation. Turgot understood he could not give a complete account of how progress would unfold because a large part of it was down to chance and unique circumstances. He wrote, “Any art cultivated over a period of centuries is bound to fall into the hands of some inventive genius.” Turgot elaborates, “Chances lead to a host of discoveries, and chances multiply with time. A child’s play can reveal the telescope, improve optics, and extend the boundaries of the universe in great and little ways.” This might seem like fanciful thinking, but when Alexander Fleming discovered penicillin, it was due to a simple mistake that yielded a crucial element of modern medicine, while Edison had to experiment over 1000 times before creating an effective light bulb which thereafter illuminated the entire world. There is no set path for progress to take. That is why we must leave people the maximum freedom to experiment and try new ideas to maximize future progress.

Obstacles to Progress

Turgot feared the main impediments to progress were conventional thinking and concentrated interests that benefited from the status quo. Turgot believed a concentration of power in any area would lead to stagnation and decay in all aspects of life, whether cultural, economic, or political. Inherited ideas, or what John Stuart Mill would later call, “dead dogma,” stop people from appreciating new knowledge. Turgot recommended we follow the facts because, “The greatest genius will not question a theory unless he is driven by facts.”

Turgot’s Laissez Faire Economics

After his time in the Sorbonne, Turgot turned his attention to politics. In 1752, he started climbing the political ladder as a substitut and later a conseiller in the Parliament of Paris. While living in Paris, he frequented salons, gathering places for intellectuals to come together to debate and discuss ideas. While attending, Turgot met the intendant of commerce, Jacques Vincent de Gournay, the man perhaps best known for popularizing the term laissez-​faire economics. In an effort to promote the study of economics, de Gournay gathered a group of young men, including Turgot.

During this time, Turgot became acquainted with physiocrats such as Quesnay, who argued that the state should not regulate commerce to promote economic growth, but leave markets free. Inspired by his mentor de Gournay and his friends like Quesnay, Turgot became one of the foremost advocates of free trade in France, if not the whole of Europe, before the days of Adam Smith.

When de Gournay died in 1759, Turgot wrote a fitting eulogy that summarized de Gournay’s beliefs while expanding Turgot’s own positions on how best to run an economy. The result is a short essay entitled “In Praise of de Gournay,” where Turgot develops his laissez-​faire philosophy.

Establishing the Idea of Economic Liberty

Turgot’s eulogy is the most complete statement of his economic beliefs that survives. Speaking on his mentor’s behalf, Turgot argues that, “The general freedom of buying and selling is therefore the only means of assuring, on the one hand, the seller of a price sufficient to encourage production, and on the other hand, the consumer, of the best merchandise at the lowest price.” Turgot, like de Gournay, believed that if people were left free to make their own decisions, there would not be anarchy like people expected, but instead harmony. Individuals, driven by self-​interest, make their own decisions with the information available to them, and by acting on their own interests, they unwittingly promote the interests of the whole of society.

Many of the regulations governments impose are attempts at stopping fraudulent sales or scams. Turgot wrote that, “To suppose all consumers to be dupes, and all merchants and manufacturers to be cheats, has the effect of authorizing them to be so, and of degrading all the working members of the community.” On top of regulations, the government imposed a long list of different taxes on every kind of labor. Turgot believed a more concise and understandable tax system would help repair France’s then-​failing economy.

Turgot’s thinking on spontaneous order anticipates that of later scholars like F.A. Hayek. Turgot argues that complex systems, such as economies or whole societies, emerge and organize without central planning. The idea of spontaneous order challenges the misconception that only top-​down, state-​run authorities can craft efficient and free societies. Turgot asserts that the doctrine of laissez-​faire “was founded on the complete impossibility of directing, by invariant rules and by continuous inspection a multitude of transactions which by their immensity alone could not be fully known, and which, moreover, are continually dependent on a multitude of ever-​changing circumstances which cannot be managed or even foreseen.” In short, almost 200 years before Hayek’s “The Use of Knowledge in Society,” Turgot was arguing that an individual, group of individuals or even an entire government would never have access to the mountains of information required to “manage” the economy.

Like his mentor, Turgot was for free trade and a government that mostly stayed away from trying to manage the minutiae of the economy. Turgot believed people did not need to be managed; quite the opposite, their productive energies needed to be unleashed upon the world.

Political Career

Though a prominent theoretician on economic and philosophical matters, Turgot was never an academic. Though academically gifted, Turgot wanted more than for his ideas to be discussed in salons; he wanted them to be implemented for the benefit of France. In 1761, Turgot was appointed as the tax collector of Limoges. Turgot eliminated complicated taxes and abolished the despised corvée, a form of unpaid labor demanded in lieu of taxes. Throughout his time in Limoges, Turgot dedicated himself to removing obstacles in the way of the poorest in society earning their daily bread. By 1773, when Turgot left, Limoges was one of France’s more prosperous areas; as a reward for his achievement, he was appointed as Controller General of France by Louis XVI.

With his new position, Turgot had ambitious plans. He aimed to implement several economic reforms, including free trade, reducing the lower classes’ financial burdens, and removing feudal privileges. Turgot’s reforms faced strong opposition from powerful concentrated interest groups among the day’s nobility, clergy, and guilds. Ultimately, Turgot resigned in 1776, never holding a political position again. He spent his final years at his family estate, buried in his studies and correspondence, dying at the age of fifty-​four.

Turgot’s Importance to the History of Liberalism

Though unsuccessful in his reforms, Turgot’s efforts put laissez faire and liberalism on the political map. They were no longer mere theories but practical policies. The writings of Turgot are still valuable because they help remind us of a simple yet fundamental truth: that progress consists not in merely more capital goods but in an ever-​increasing store of cumulative knowledge. His writings also illustrate that progress was a relatively rare phenomenon before the Enlightenment, only experienced in brief glimpses by select pockets of the human population. Despite being a busy and politically engaged figure, Turgot’s ideas nonetheless had a massive impact on the intellectual history of the Western world.

Legacy of Turgot

It is difficult to overstate the impact of Turgot’s ideas and work as a politician. He has garnered many admirers, including the economist Joseph Schumpeter and libertarian thinkers like Murray Rothbard. Turgot’s career in economics was brief but brilliant. Thinkers like Turgot, his mentor Vincent Gournay, and his friend François Quesnay were responsible for France being among the first countries to implement laissez faire economic policy and for integrating liberal ideas into the public consciousness. Without the intellectual and political efforts of people like Turgot, liberalism and economic freedom might have remained obscure ideas relegated to a select group of obscure intellectuals.

A version of this article was published at Libertarianism.org on 11/14/2023.

Blog Post | Human Development

1,000 Bits of Good News You May Have Missed in 2023

A necessary balance to the torrent of negativity.

Reading the news can leave you depressed and misinformed. It’s partisan, shallow, and, above all, hopelessly negative. As Steven Pinker from Harvard University quipped, “The news is a nonrandom sample of the worst events happening on the planet on a given day.”

So, why does Human Progress feature so many news items? And why did I compile them in this giant list? Here are a few reasons:

  • Negative headlines get more clicks. Promoting positive stories provides a necessary balance to the torrent of negativity.
  • Statistics are vital to a proper understanding of the world, but many find anecdotes more compelling.
  • Many people acknowledge humanity’s progress compared to the past but remain unreasonably pessimistic about the present—not to mention the future. Positive news can help improve their state of mind.
  • We have agency to make the world better. It is appropriate to recognize and be grateful for those who do.

Below is a nonrandom sample (n = ~1000) of positive news we collected this year, separated by topic area. Please scroll, skim, and click. Or—to be even more enlightened—read this blog post and then look through our collection of long-term trends and datasets.

Agriculture

Aquaculture

Farming robots and drones

Food abundance

Genetic modification

Indoor farming

Lab-grown produce

Pollination

Other innovations

Conservation and Biodiversity

Big cats

Birds

Turtles

Whales

Other comebacks

Forests

Reefs

Rivers and lakes

Surveillance and discovery

Rewilding and conservation

De-extinction

Culture and tolerance

Gender equality

General wellbeing

LGBT

Treatment of animals

Energy and natural Resources

Fission

Fusion

Fossil fuels

Other energy

Recycling and resource efficiency

Resource abundance

Environment and pollution

Climate change

Disaster resilience

Air pollution

Water pollution

Growth and development

Education

Economic growth

Housing and urbanization

Labor and employment

Health

Cancer

Disability and assistive technology

Dementia and Alzheimer’s

Diabetes

Heart disease and stroke

Other non-communicable diseases

HIV/AIDS

Malaria

Other communicable diseases

Maternal care

Fertility and birth control

Mental health and addiction

Weight and nutrition

Longevity and mortality 

Surgery and emergency medicine

Measurement and imaging

Health systems

Other innovations

Freedom

    Technology 

    Artificial intelligence

    Communications

    Computing

    Construction and manufacturing

    Drones

    Robotics and automation

    Autonomous vehicles

    Transportation

    Other innovations

    Science

    AI in science

    Biology

    Chemistry and materials

      Physics

      Space

      Violence

      Crime

      War

      Bloomberg | Cost of Living

      Swiss Remove Tariffs to Ease High Cost of Living

      “Known for its high living costs along with its chocolate and cheese, Switzerland is making a bold move in the era of trade protectionism that should make things a little cheaper: saying goodbye to industrial tariffs.

      Starting in January, 95% of all imports will enjoy duty-free status, promising more affordable goods like cars, household appliances and clothes. That’s up from 81% currently. Tariffs will remain on agricultural products.

      While this move wipes out half of customs revenue in a country that’s home to the World Trade Organization, it’s expected to boost competitiveness and moderate the elevated prices for everyday items.”

      From Bloomberg.