Doug's Darkworld

The economy is in free fall, we are involved in two endless wars,  people are rioting. Could it get worse? Yes, that’s what I have been saying since last July. Pay attention people! I got the map above from this fine site. And as far as I can tell, it’s pretty darn accurate. (click on the image for the full size view.)  What does it mean? It means that we are going into 2009 with a substantial percentage of the world’s agricultural regions experiencing drought, in some cases severe and historically unprecedented drought. Rivers and lakes are drying up in Australia for example, it has been suffering severe drought since 2004.  The author claims that not only locally, but in a global sense the current drought conditions are historically unprecedented. I’m not sure how accurate that is, but I wouldn’t argue with him. I checked he’s not making this up. And whether historically unprecedented or not, it’s definitely a period of unusually widespread drought.

So, what does this mean? There are a number of unpleasant aspects to this situation. The first thing is that food prices should continue to rise through the year. In the west this will be annoying, though most of us in the west don’t spend a huge percentage of our income on food, so it won’t be debilitating. Poor people, and other people in the world who spend a larger percentage of their income on food are going to be hurt very badly by this. And if food shortages get bad enough, people will starve. Again though, it’s the third world poor who will starve preferentially. This is because much of the food exports from the third world are their governments main source of hard income, so for the most part they will keep selling food to the west while their own people starve. Our dollar menus in the USA may become five dollar menus, but at least we won’t be starving. Granted some of us will feel bad about eating food that was effectively stolen from the third world, but since that’s been true all our lives, I suppose it won’t bother too many.

We’re not completely off the hook in the west though, this is problem will also compound the world’s economic problems. Agriculture related businesses like farms and food processors are already hurting, the USA’s largest chicken processor folded in December. Any business in these drought struck regions that depends on water will have trouble.  At the very least the price of water is going to be going up, and that’s going to come out of everyone’s pockets. And in fact shortages of water are already limiting growth and development in some parts of the world, including the USA. The point here is that these droughts are going to affect all of our wallets in a number of indirect ways, it won’t just be the price of food that goes up because of this.

Lastly, this is not going to help the world politically. Everyone knows what a food riot is, widespread food riots are a definite possibility this year. And oddly enough, this likely will translate into further political instability and unrest. Which, as the discerning reader has already realized, is going to also have negative economic impacts. I suppose the makers of police riot gear may experience boom times (I expect royalties if anyone makes a killing on the stock market because of that tip) but everyone else is going to again suffer in the pocketbook if there is wide spread food shortage related instability.

I should also point out, this global drought is not terribly surprising. Even ignoring global climate change, the world experienced unusually good weather for much of the last half of the twentieth century. So it’s not terribly surprising that we are experiencing some bad times, sooner or later one draws a bad hand in any poker game. And as far as science is concerned, not only was this a statistical inevitability, it’s more than likely part and parcel of global climate change. (They aren’t calling it global warming anymore because they got tired of explaining that climate and weather are two different things, and that global warming didn’t mean the world was going to warm up everywhere.) No, global climate change means just that, as the worlds average temperature increases, the world’s weather systems will change and destabilize, resulting in more extremes. Some might have noticed that while some parts of the world are experiencing drought, other parts of the world are experiencing record rainfall and flooding. And too much water is almost as bad as too little water in terms of agriculture, so again, the problem is worse than it appears.

The worst case scenario is that this could get really really bad. We are already heading into the most problematic summer since the thirties in terms of widespread risk of economic calamity, instability, and even war. It would not be surprising if millions starved to death, in fact that may be the best case scenario. The world has very limited food reserves, and if these drought conditions do cripple agricultural output as much as they might … tens of millions or hundreds of millions could starve. Half the human race starved in the 535-536AD global crop failure, while we may be more advanced now, there are a lot more mouths to feed. And there is no technological substitute for food, it’s not like we can quickly convert the world’s mind numbing arsenal of weaponry into food.

Well, not directly at least. Would people and nations use their weapons to steal food? As a formerly famous politician once said “You betcha.”

(The above image is claimed as Fair Use under US copyright law. It is not being used for profit and is central to illustrating the post. I think Eric de Carbonnal may have even prepared the graphic himself, I highly recommend his site and will be linking to it regularly. Credit and copyright:  Market Skeptics/Eric de Carbonnal. A fly in the ointment is of Biblical origin: “Dead flies cause the ointment of the apothecary to send forth a stinking savour: so doth a little folly him that is in reputation for wisdom and honour.” — Ecclesiastes 10:1)