Greed isn’t always the problem it can lead to solution

Tim Worstall writing on food speculators finds that supply and demand work to prevent shortages.

We can see that, as a result of various bits of weather around the world, wheat is going to be in shorter supply than we had hoped some months back. If we all kept on consuming wheat as we had expected to some months back there’s a chance (a risk, a chance, not a certainty) that we’d run out before the next harvest(s) came in.

And we really would rather not face that medieval problem of the hungry time, when the barns are empty but the crop not yet ripe in the fields.

So, how would we avoid this? Well, the speculators are doing this for us. . .

Read the rest and reach the logical conclusion he does:

. . . Just point human greed at the problem and it gets solved.

There are those who disagree, I know, but what’s their solution? Bureaucrats?

Hat Tip: Quote Unquote

4 Responses to Greed isn’t always the problem it can lead to solution

  1. Josh says:

    Interesting point. If something is broken and no one is willing to fix it, that means that you can’t make any money fixing. Give people monetary benifits for fixing things in our system that is broken. Agree?


  2. Cadwallader says:

    Can’t fault this. Good post.


  3. JC says:

    Unfortunately, for every speculator sending a market signal there’s 20 politicians and a bureaucracy bound and determined to crush the signal.



  4. gravedodger says:

    The basic tenet of the market was explained graphically to me when fresh out of college and with very little else to learn I went to a YFC meeting where guest speaker was Bill Smith, head of whatever Maf was called then (1960) in Rangiora.
    His theme was never plant dear spuds.
    Some will not get the message so explanation:
    The crop will take some time to mature so by the time the harvest of the crop from the dear seed comes to market it will be part of a glut resulting from the kneejerk market reaction to get a piece of the action triggered by the very high returns that led to the high seed price.
    Meanwhile the steady as she goes producer doing what his soils, climate and strategy make profitable in the long term will just watch with amusement as the speculative few make the time honored mistake Bill was warning against.
    A bit like changing a lambing date after a disastrous storm, why will the capricious soul who controls the weather not play around and give another burst to coincide with the new date next year. But that is the law of averages not the law of supply and demand, here endeth the sermon.


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