August 31st, 2008, 7:38 pm
QuoteOriginally posted by: katastrofaLet us assume that the politicians remain as they were and consider the actions of speculators ceteris paribus. Do you think they will make the situation of hungry people better, worse, or have no impact on it (on average)?If speculators have had any impact, it has been to cause a smaller number to starve now rather than a much larger number to starve later.Speculation on food shortages is the canary in the coal mine and one doesn't blame the canary when the coal mine explodes. Speculators would not be flocking to commodities if there were not solid fundamental reasons to expect a serious future supply/demand imbalance (e.g., BRIC affluence, global warming, etc.) And by increasing food prices now in response to the long-term threat of shortages, people have the motivation to take the steps that Cuchulainn recommends. Thus, I would conclude that speculation improves the resiliency of the food system, improves price elasticity, and reduces the long-term death toll from starvation.