When the inflation is on a rise world over, the largest economy in the world is looking the face of recession and the food prices are rising on global level its all natural for a specialists like Amartya Kumar Sen to put forward their arguments on all this. And as judgmental creatures we are, we end up criticizing present rather than propose a future in form of a action.
For introduction, Amartya Kumar Sen is an Indian economist, philosopher, and a winner of the Bank of Sweden Prize in Economic Sciences (Nobel Prize for Economics) in 1998, "for his contributions to welfare economics" for his work on famine, human development theory, welfare economics, the underlying mechanisms of poverty, and political liberalism.
In his blog post he has explained the food mismatch citing example of a country with a lot of poor people who suddenly experience fast economic expansion, but only half of the people share in the new prosperity. The favored ones spend a lot of their new income on food, and unless supply expands very quickly, prices shoot up. The rest of the poor now face higher food prices but no greater income, and begin to starve.
He also takes a dig on the use of ethanol as fuel. Produced mainly from corn in US, it routes the food production for different consumption, and its the poor who has to pay for it. Logic is simple, countries like India, China, Vietnam and Argentina are experiencing rapid development; people move up to better and processed food; the food consumption per person rises and the food export which was coming from these nations earlier lessens or stops. The inflation rises and food prices shoot up, the poor who already were surviving on cheap and small food quantity are forced to hunger. The world’s poor are themselves divided between those who are experiencing high growth and those who are not; and the number of the latter is quite high.
This reminds me of a small game every new batch in FMS, Delhi (India) was made to play in Induction session by the faculty of organizational behavior. Crux of the game was that you may register a high growth or spikes of it in short run on your own. But to maintain growing in the long run, you need the co operation from all others. Same holds true for global economy and with more and more countries on development phase, it is going to hold more and more true for the world economy.
For introduction, Amartya Kumar Sen is an Indian economist, philosopher, and a winner of the Bank of Sweden Prize in Economic Sciences (Nobel Prize for Economics) in 1998, "for his contributions to welfare economics" for his work on famine, human development theory, welfare economics, the underlying mechanisms of poverty, and political liberalism.
In his blog post he has explained the food mismatch citing example of a country with a lot of poor people who suddenly experience fast economic expansion, but only half of the people share in the new prosperity. The favored ones spend a lot of their new income on food, and unless supply expands very quickly, prices shoot up. The rest of the poor now face higher food prices but no greater income, and begin to starve.
He also takes a dig on the use of ethanol as fuel. Produced mainly from corn in US, it routes the food production for different consumption, and its the poor who has to pay for it. Logic is simple, countries like India, China, Vietnam and Argentina are experiencing rapid development; people move up to better and processed food; the food consumption per person rises and the food export which was coming from these nations earlier lessens or stops. The inflation rises and food prices shoot up, the poor who already were surviving on cheap and small food quantity are forced to hunger. The world’s poor are themselves divided between those who are experiencing high growth and those who are not; and the number of the latter is quite high.
This reminds me of a small game every new batch in FMS, Delhi (India) was made to play in Induction session by the faculty of organizational behavior. Crux of the game was that you may register a high growth or spikes of it in short run on your own. But to maintain growing in the long run, you need the co operation from all others. Same holds true for global economy and with more and more countries on development phase, it is going to hold more and more true for the world economy.
Labels: Economics
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