Well there is also geopolitical point to this subsidies. USA made prices of some crops so cheap that many countries dropped their production as they could not compete with prices. Nowadays they are dependent on imports from USA. That is a check mate position.
"US farm subsidies DO benefit foreign consumers as they get to eat cheaper food that are subsidized by the American taxpayers." this is only true in first world countries, in Third world countries where foreign trade isn't the norm. Subsidies eliminate competition, and cause places in Africa and india to not be able to compete. You can look at what corn subsidies has done to the farmers in mexico.
Subsidies always distort the market, and cause competition to be more readily erased, which, in the agricultural sector that we have in America now, has lead to huge Megafarms.
I think starving people worldwide would disagree. Subsidized products have led to less domestic production for foreign countries and complete dependence on the US. If 8 out of 10 years subsidies are a good thing, what happens in the two years it is not. When US or worldwide prices spike, countries poor in the ability to produce food starve. All while we are funneling our produce to ethanol. Our farmers benefit, theirs suffer. This is head they win, tails they lose because it is not a free market
Note that even if US farm subsidies managed to overwhelm the agricultural industry of a certain foreign country, it would still produce a net gain for the economic well-being of that country. The money and capitals saved on buying and producing food would then be invested in somewhere even more profitable than farming (i.e. manufacturing). My point is that we need to approach the issue by identifying the real victims (American taxpayers) of the subsidies before we can establish any conclusion.
Here in the UK farmers have negative profit margins. If it wasn’t for farming subsidies they’d never make any money selling food at the current market prices. The insane part is that on the whole the nation is at a net loss of money. By subsidising we ruin competition. One day the money will run out and what then? How do we convince farmers to produce food with no monetary incentive?
@@bigeddiespaghetti5618 then they shouldn't be allowed to export or go out of business. It makes no sense to drive developing countries out of competition.
The main reason third world farmers don't do well in global market is because their productivity sucks. US has one of the most (if not THE most) technologically advanced and efficient farm industry in the world that produces huge amount of food with minimum labor input. The chance is that, even without subsidies, US farmers are still going to dominate the global market on their own (abid earning less profits) - another reason why we should abolish subsidies.
excess production caused by US farm subsidies often ends up as foreign american aid, which has had the effect of driving out local farmers in the horn of Africa
So an export subsidy allows this: a U.S farmer sets the price for his goods at say 20$ per bushel while the world price is 15$ per bushel. Then, the U.S government pays the 5 dollar difference to facilitate the trade between a foreign country and the U.S farmers?
US farm subsidies DO benefit foreign consumers as they get to eat cheaper food that are subsidized by the American taxpayers. While I am all for free market and abolishing subsidies, people need to be more careful in arguing against farm subsidies. Subsidies are wrong because they are paid out of the (unwilling) taxpayers' pockets. Americans are actually doing the rest of the world a great favor by subsidizing them to eat our food.
Why should we be forced to help those countries? If we wish to help them, we can willingly give from our own wallets or from our own farms. The correct solution to this problem, however, is to give us no choice? To assume we will make the wrong choice (and the wrong choice by whose standards, I might ask) and instead fix our decision?To not let them develop their own industries or find their own partners?
Not necessarily, US subsidies of farms increases agricultural output beyond its natural level(as farming is more profitable for US producers). This increased supply drives Global prices down which means that third world farmers receive a lower income from their yield. Which, logically, reduces their standard of living.
Farm subsidies ARE horrible. Americans can first do themselves a favor and save money by abolishing farm subsidies and trading with developing nations for lower-cost, higher-quality food. This not only puts tax money back into our hands, but we are then able to buy cheaper food, and at the same time help boost an economy of a developing nation.
@@ethangray8527 yea but if we're subsidizing them aren't we the ones suffering. If I have to buy your machine and pay for the product then you shouldn't be in business.
He's suggesting that we lose money per unit on farm exports, (since his theories don't work applied to agriculture). It's ideology over profits. See my 2 videos ("Michael Pollan Rebuttal 1" & 2).
Art of street work out Actually, the reality is that the farm economy does not work that way very much at all (for 150 years). I show 4 proofs for how that is true in my videos, "Michael Pollan Rebuttal." 1 farm prices are very inelastic, (see citation in part 1 video); 2 when price floors were lowered and removed, prices followed them right down to the lowest prices in history, (with the US losing money on farm exports over decades); 3 when Canada, Mexico and Australia got rid of subidies, (as when they didn't) they had problems of oversupply. (Subsidies are irrelevant, and cover up the problem. No subsidies are needed with the fix.) 4. There is abundant econometric research showing that with low or no price floors, prices are low (more than shown in the videos).
If anything, your example only strengthen my argument. The fact that American farmers continue to lead the world in agricultural exports despite inefficient government subsidies like the one you mention proves my point that abolishing subsidies would not alter existing US dominance in the global market. Third world farmers should realize the futileness of competing with the Americans and move on to do things that are more profitable for them - like growing flowers for example.
Your argument would be valid if 1) third world farmers can't just change job and do something else and 2) poor people there do not benefit from the cheap American food in any way. In reality, farmers in Japan, South Korea, Taiwan etc responded to US subsidies by growing different agricultural products and even took advantage of it by making secondary products out of cheap US grains, wheat etc. Free market punishes country that does the subsidy (their taxpayers), NOT the rest of the world.
"I stand corrected with pleasure."
I wish more people were like that today.
“I stand corrected, with pleasure.”
- This man is a hero.
Humility of this man deserves a clap.
The guy that asked Friedman the question was a real gentleman.
I have watched a good few of these videos, is it just me or were people more intelligent and respectful back then?
Yes.
yup
100%, ironically
Get out of youtube, social networks make us dumber :D
Apparently, yes. And they valued and respected reason and evidence.
"So you take a dollar out of the right hand pocket of people, in order to put 75 cents back in the left pocket"
We miss you Milton.
That quote is Keynes in a nutshell. Friedman spittin, facts.
The man who asked the question was very gracious. Nice to see that some people have the character to accept when they are wrong.
We sure need Milton Friedman today. You are missed.
hahahahah "heads I win, tail you lose!" That's so witty and well worded, I love it!
This is what we get when intelligent people ask questions instead of leftist college kids.
We're not doing the poor farmers in Africa a favor by selling food at below market prices. We've destroyed agricultural economies by doing so
Best channel on TH-cam, or TV!!!
ok
All subsidies are about transferring resources to the politically well connected. It is no more complex than that.
Well there is also geopolitical point to this subsidies. USA made prices of some crops so cheap that many countries dropped their production as they could not compete with prices. Nowadays they are dependent on imports from USA. That is a check mate position.
"US farm subsidies DO benefit foreign consumers as they get to eat cheaper food that are subsidized by the American taxpayers." this is only true in first world countries, in Third world countries where foreign trade isn't the norm. Subsidies eliminate competition, and cause places in Africa and india to not be able to compete. You can look at what corn subsidies has done to the farmers in mexico.
false! late but still valid response
Hayek explained subsidies very well. The answer to LibertyPen's rhetorical question is simply a resounding NO on both accounts.
This is incredible I’m really glad I found this thanks.
Subsidies always distort the market, and cause competition to be more readily erased, which, in the agricultural sector that we have in America now, has lead to huge Megafarms.
There has never been a subsidy that didn't encourage inefficiency
Not only that, we have tariffs on imported cane sugar. Which further incentivizes FCS as a cheap sweetener. Spot on about Shakespeare, though!
Thats a big ass question sir.
I think starving people worldwide would disagree. Subsidized products have led to less domestic production for foreign countries and complete dependence on the US. If 8 out of 10 years subsidies are a good thing, what happens in the two years it is not. When US or worldwide prices spike, countries poor in the ability to produce food starve. All while we are funneling our produce to ethanol. Our farmers benefit, theirs suffer. This is head they win, tails they lose because it is not a free market
Note that even if US farm subsidies managed to overwhelm the agricultural industry of a certain foreign country, it would still produce a net gain for the economic well-being of that country. The money and capitals saved on buying and producing food would then be invested in somewhere even more profitable than farming (i.e. manufacturing). My point is that we need to approach the issue by identifying the real victims (American taxpayers) of the subsidies before we can establish any conclusion.
Friedman supports subsidizing banks in the event of a deflation.
hodoprime to prevent depression as the result of bank runs.
Because the Fed exists. That is their sole job. I don’t think he wanted the Fed to exist either, though.
Don’t agriculture subsidies guarantee enough food for the nation? Is that guarantee worth the extra cost of tax and increased prices?
Here in the UK farmers have negative profit margins. If it wasn’t for farming subsidies they’d never make any money selling food at the current market prices.
The insane part is that on the whole the nation is at a net loss of money. By subsidising we ruin competition.
One day the money will run out and what then? How do we convince farmers to produce food with no monetary incentive?
@@bigeddiespaghetti5618 then they shouldn't be allowed to export or go out of business. It makes no sense to drive developing countries out of competition.
@@bigeddiespaghetti5618they would raise prices.
The main reason third world farmers don't do well in global market is because their productivity sucks. US has one of the most (if not THE most) technologically advanced and efficient farm industry in the world that produces huge amount of food with minimum labor input. The chance is that, even without subsidies, US farmers are still going to dominate the global market on their own (abid earning less profits) - another reason why we should abolish subsidies.
excess production caused by US farm subsidies often ends up as foreign american aid, which has had the effect of driving out local farmers in the horn of Africa
Great video!
how can the artificial home price gone up ? isnt the role of subsidy lower price and greater quantity ?
So an export subsidy allows this: a U.S farmer sets the price for his goods at say 20$ per bushel while the world price is 15$ per bushel. Then, the U.S government pays the 5 dollar difference to facilitate the trade between a foreign country and the U.S farmers?
What a genius!!
I've been waiting to for this!
US farm subsidies DO benefit foreign consumers as they get to eat cheaper food that are subsidized by the American taxpayers. While I am all for free market and abolishing subsidies, people need to be more careful in arguing against farm subsidies. Subsidies are wrong because they are paid out of the (unwilling) taxpayers' pockets. Americans are actually doing the rest of the world a great favor by subsidizing them to eat our food.
Why should we be forced to help those countries? If we wish to help them, we can willingly give from our own wallets or from our own farms. The correct solution to this problem, however, is to give us no choice? To assume we will make the wrong choice (and the wrong choice by whose standards, I might ask) and instead fix our decision?To not let them develop their own industries or find their own partners?
Yes, while the farmers in their own countries cant sell their own produce and die of hunger.
Not necessarily, US subsidies of farms increases agricultural output beyond its natural level(as farming is more profitable for US producers). This increased supply drives Global prices down which means that third world farmers receive a lower income from their yield. Which, logically, reduces their standard of living.
simple as control the food, control the people.
Let them eat cake
It is very true!!!!!
it [subsidies] distorts the flow of scarce resources with alternative uses to their most valued use
Someone read some sowell 😲
Farm subsidies ARE horrible. Americans can first do themselves a favor and save money by abolishing farm subsidies and trading with developing nations for lower-cost, higher-quality food. This not only puts tax money back into our hands, but we are then able to buy cheaper food, and at the same time help boost an economy of a developing nation.
Then the farmers here suffer and lose out. And the food we would get would be of a lot lower quality.
@@ethangray8527 lower quality than the northAmerican Food? I highly doubt it
@@ethangray8527 yea but if we're subsidizing them aren't we the ones suffering. If I have to buy your machine and pay for the product then you shouldn't be in business.
He's suggesting that we lose money per unit on farm exports, (since his theories don't work applied to agriculture). It's ideology over profits. See my 2 videos ("Michael Pollan Rebuttal 1" & 2).
That ideology base on reality of economy
Art of street work out Actually, the reality is that the farm economy does not work that way very much at all (for 150 years). I show 4 proofs for how that is true in my videos, "Michael Pollan Rebuttal." 1 farm prices are very inelastic, (see citation in part 1 video); 2 when price floors were lowered and removed, prices followed them right down to the lowest prices in history, (with the US losing money on farm exports over decades); 3 when Canada, Mexico and Australia got rid of subidies, (as when they didn't) they had problems of oversupply. (Subsidies are irrelevant, and cover up the problem. No subsidies are needed with the fix.) 4. There is abundant econometric research showing that with low or no price floors, prices are low (more than shown in the videos).
Agriculture like everything else is controlled by corporations
If anything, your example only strengthen my argument. The fact that American farmers continue to lead the world in agricultural exports despite inefficient government subsidies like the one you mention proves my point that abolishing subsidies would not alter existing US dominance in the global market. Third world farmers should realize the futileness of competing with the Americans and move on to do things that are more profitable for them - like growing flowers for example.
Your argument would be valid if 1) third world farmers can't just change job and do something else and 2) poor people there do not benefit from the cheap American food in any way. In reality, farmers in Japan, South Korea, Taiwan etc responded to US subsidies by growing different agricultural products and even took advantage of it by making secondary products out of cheap US grains, wheat etc. Free market punishes country that does the subsidy (their taxpayers), NOT the rest of the world.
Didn't Trump just fork out $16B in agriculture subsidies?
Sadly
Only for the big corps, the small ones were left to bite the dist
Sad.
Because we actually need babysitters.