Letters to the Editor
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The gap between consequences and the magical payoff is even wider.
"How the World Works has no problem with the theory that in the long run, high prices for food commodities and a completely free trade regime would result in greater production (provided farmers don't run into absolute constraints -- such as a lack of land or water or fertilizer inputs.)"
Good point. I would add a bigger problem is the long run is beyond what real people and real suffering can measure. Just ask the rust belt - where are those magical new jobs and opportunities to make up for those lost to trade?
It's annoying when economists use "period of adjustment" and other abstract terms to avoid mentioning real human suffering, but it's infuriating how frequently they lie about the scale, both in impact and length.
There are people who never recovered from losing everything in the savings and loan bailout. The older workers who have their pensions vanish in the Enron collapse didn't recover with the market.
And people who starve to death, or have their health permanently damaged by the shock of free trade will not recover. Those bankrupted by trade will not have any money to boost production.
This is what is happening in India right now. The hunger problem in India is not about a food shortage, it's because vast amounts of the population cannot affort to eat. India's position in the world economy relies on having cheap labor due to massive economic and infrastructure inequality. Without the massive underclass, it couldn't attract investment. This disparity hits rural areas hardest - farmers are killing themselves in record numbers, thousands per year. The less cheap local food there is, the more India's poor is at the mercy of imports and high priced big producers, and thanks to subsidies they can make more exporting rice. Thus you have hunger in the midst of abundance.
Markets thrive on scarcity and speculation - those seeking profits have no interest in who starves as long as they get paid and they get paid more then demand is greater than supply. So no, in fact free trade doesn't lift all boats, it swamps most of them.