Monday, June 30, 2014


Garden Earth - Beyond sustainability” (A blog about the future of the planet. Ecology, Environment, Development and Economy are put together and looked at critically”. (31 May) HERE 
The Invisible Hand at Work - Gives and Takes
At the onset of World War I, Britain imported 60% of its food and roughly 80% of its grain for bread (basically wheat), as a result of its laissez-faire trade policies and the enclosures. Initially, the government thought the market could ensure food supplies, but quite soon it had to step in, even more so when Germany’s unrestricted submarine warfare commenced in January 1917. The government increasingly regulated both price and supply of bread, “whatever else was in short supply, the supply of breadstuffs had to be maintained”. It took over importation and in April 1917 it took also control over the mills from the private sector. In 1918 all staple foods were regulated in price and many were rationed. People were encouraged to produce their own food; herds of cattle and sheep were reduced. 
The policies worked so well that it is estimated that during the war the average provision of food was 3,500 calories, compared to 3,400 calories the years preceding the war (the quality of food didn’t necessarily improve, for instance fruit and vegetable consumption plummeted). 
Even more interesting is that the difference between the diets of rich and poor decreased in war time. This was a result of that the government intervened in the food distribution and access as the market is simply not geared towards equitable distribution. It is inherent, almost a definition, in an unregulated market that the distribution is inequitable as it is based on economic purchasing power and not needs. So this observation is not saying that the market doesn’t work. It does work as a market should, but that doesn’t equal that it produces a result society wants. The invisible hand doesn’t always do the right thing.”
Having been brought up as an infant during World War 2 with government controlled rationing of all foodstuffs, I experienced regulated rationing for 5 years.
Wartime austerity was real and poor families like my own received very basic shares of foodstuffs (less fruit and vegatables which presumably the rich could still buy). From observations of a very few better-off families than my own and overhearing conversations among adults, I recall phrases like  “the Black market”, “spivs” and “cheats”.  I had no idea what they meant, butr went around looking for these “Black markets” - I found plenty of drab shops and dirty barrows in the streets, but nothing “Black”.

Observation showed me that some neighbours had better shares of rations than my own. Years later, while rationing worked, I became aware that criminality worked to some families advantages, and stuff “falling off a lorry” also worked to make some fortunate families better off, though I never saw anything falling of lorries, despite my intense interest in watching lorries pass in the street. Moreover poor families worked the system too.

Nobody in our street owned a car, so we travelled when we (rarely) did by tram or bus.   The wartime blackout at night meant there was no street lighting and all windows in every house were covered by thick blinds to prevent enemy aircraft spotting something to bomb.  Moreover, we carried gas masks everywhere we went.

I remember from 1945 onwards the great happiness among neighbours like ourselves when rationing was gradually relaxed.  There may have been a more equitable distribution of necessities measured by statistics, but nobody was keen to stay on government-regulated rationing at all.  Everybody welcome the return to markets; I do not remember any neighbouring family complaing at the end of the rationing of necessities, or the concomitant absence of “luxuries” during wartime.

I observed as a young man that choice and rationing by price is preferred to rationing by regulated orders from distant governments. 

In my first-year economic lectures at Strathclyde, I used to offer an anecdote about the end of rationing in war-time when, as a young infant, we were told that chocolate was now off-ration at a nearby grocers.  As the news spread, kids ran round to a local shop, as I did, clutching pennies to buy this chocolate treat without needing a ration coupon. I had never tasted chocolate before, nor eaten a banana and eggs came as powder in large tins with the stars and stripes on it - thank you America!).  I remember paying my two-pence at the shop counter and receiving a small bar of ‘5 boy’s’ chocolate, and eating it before I left the shop.  I recounted to my 1st year 1970’s class my thoughts when I got outside the shop:  “If the shop owner has all these bars of chocolate, why is he selling them - why doesn’t he eat them?”
It seemed a good way to introduce marginal utility …


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