The Lectern: Forethought about energy, food price crises
There was a fascinating, and somewhat scary, story on the front page of the weekend edition of London's Financial Times (one of the world's great newspapers, incidentally -- and beginning to be more widely read in the United States) discussing the fact that security experts in the United States and elsewhere are beginning to regard the increasing prices of energy, but above all of food, as a serious security threat for the West. The worry is that these price rises (again, especially for food) will produce political instability in developing countries -- riots, overthrow of governments and tensions that could lead to wars.
One of my reactions to the story was: Why didn't more people (including me) see this coming, and creating problems (especially) for developing nations? It shouldn't have been hard to predict that economic growth in the developing world would increase demand for food and energy, as standards of living increased. And production of neither kind of product responds quickly or reliably to increased demand -- food production levels are fairly dependent on weather, and energy production levels on various political decisions by countries such as Saudi Arabia about how much oil to produce and on the vagaries of oil exploration. So, looking at it now, it doesn't seem like rocket science to have anticipated that economic growth in poor countries eventually might become self-limiting as food and oil inflation created economic and social strains.
Somebody who thought through these possibilities might have invested in energy company stocks a few years ago, or predicted that the stock market's rise would stall or go into reverse. And I'm sure some did -- and got rich from it. I know I didn't think through these things myself, for which I'm slightly mad, or disappointed, at myself. More significantly, I wonder to what extent people in our government were thinking in these ways two or three years ago and, if so, whether they tried, but failed, to get political or agency leaders to try to do something early on to mitigate the effects of the problems we are seeing now.
Posted by Steve Kelman on Jun 24, 2008 at 12:10 PM