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The countercyclical asset
Sorry, but the problem has become worse and I have to blog this again:
In Haiti, where three-quarters of the population earns less than $2 a day and one in five children is chronically malnourished, the one business booming amid all the gloom is the selling of patties made of mud, oil and sugar, typically consumed only by the most destitute.
“It’s salty and it has butter and you don’t know you’re eating dirt,” said Olwich Louis Jeune, 24, who has taken to eating them more often in recent months. “It makes your stomach quiet down.”
Posted by Tyler Cowen on April 17, 2008 at 10:47 PM in Food and Drink | Permalink
Comments
Apropos of nothing in particular. This blog has just been blocked by the Chinese government. It's now only possible to view this blog through a proxy server from inside in the Middle Kingdom, which is a shame because I love your blog and this is an inconvenience.
This might change at any moment. Things bounce on and off the forbidden list all the time. It may also be an issue with your hosting company, rather than MR itself. The current political/media climate here is getting more... intense... as the Olympics controversy escalates, it's no surprise that this manifests itself as tighter media controls.
Tragic about Haiti, though.
Posted by: K. Larson at Apr 17, 2008 11:24:37 PM
I don't remember econ 101 that well, but this could be giffen good right?
Posted by: Phil at Apr 17, 2008 11:36:32 PM
Makes you stop your bellyaching about your petty problems, eh?
Posted by: Jacob Oost at Apr 18, 2008 12:10:30 AM
Recommendations for the most effective & efficient way to use one's (very limited amounts of disposable) money to alleviate basic hunger (in Haiti or elsewhere)?
Posted by: Christopher M at Apr 18, 2008 12:33:07 AM
Once in a while though fairly rarely, Kiva.org has a Haiti loan available for lenders (e.g.).
Posted by: at Apr 18, 2008 1:19:26 AM
dude, i'm like totally best friends with your brother russ. i'm having a super time. seriously.
Posted by: Justin at Apr 18, 2008 2:05:05 AM
Perhaps if US "environmental policy" wasn't driving the cost of food up for everyone, this wouldn't be a problem.
Posted by: Brian at Apr 18, 2008 2:29:54 AM
How are Haiti's problems all thanks to the U.S.? Haiti has been quite poor for a long time - certainly longer than interests in biofuel.
Posted by: Gil at Apr 18, 2008 3:21:19 AM
Population: 8,924,553
land: 27,560 sq km
arable land: 28.11%
permanent crops: 11.53% other: 60.36%
Irrigated land: 920 sq km
0-14 years: 41.8%
15-64 years: 54.7%
65 years and over: 3.5%
Religions: Roman Catholic 80%, Protestant 16% 3/4 practicing vodoo
Posted by: Mr.Beachbums at Apr 18, 2008 3:30:23 AM
Yes, this is a Giffen good. My micro textbook had an example of potatoes in the Irish famine doing the same thing.
Posted by: Ed B at Apr 18, 2008 3:47:01 AM
As I understand it, people in Haiti have been eating dirt cookies for decades.
Posted by: Peter at Apr 18, 2008 9:50:01 AM
What can be done in Haiti? Even when we step in to help, it just reverts right back. Food aid to alleviate starvation is good. But most of Haiti's problems seem self-inflicted and impossible for outsider's to solve.
Posted by: jim at Apr 18, 2008 11:46:37 AM
Perhaps if US "environmental policy" wasn't driving the cost of food up for everyone, this wouldn't be a problem.
Perhaps if countries weren't corrupt kleptocracies, they wouldn't be so effected by U.S. Environmental Policies. When did it become the job of the U.S. to provide food for the world?
The misguided bio-fuel program is nobodies business but the U.S.
How are Haiti's problems all thanks to the U.S.? Haiti has been quite poor for a long time - certainly longer than interests in biofuel.
It is the "blame the devil" strategy. When you don't know how to solve a problem, you try to find a scapegoat to blame everything bad on.
Posted by: Rex Rhino at Apr 18, 2008 11:53:48 AM
The food prices hike has sparked a renewed interest for more interventionnist policies in Haïti, like
price controls, state subsidies in order to increase agricultural production. I'm highly
skeptical of their efficiency, but it seems to me that the state should do something...
Does anyone (even with a limited knowledge of the Haitian economy)have a thought about what a government can do to face this situation in the coming months?
Posted by: kalanri at Apr 18, 2008 12:47:40 PM
The mud pies would defiantly be classified as an inferior good, but I think giffen goods are only theoretical. With the case of Haiti, there might actually be a positive income effect because the people are so impoverished.
Posted by: Rob at Apr 18, 2008 2:56:56 PM
Um, my understanding is that the cookies are, roughly, prenatal vitamins. They're made from a specific type of mud from a specific region, containing minerals important for pregnant women.
So I suppose this is like saying that Americans who take multivitamins containing zinc also eat dirt, since they are so poor.
I think lots of people got hoodwinked on this "so poor they eat dirt" story; I'd say it's basically a hoax.
Posted by: Peter St. Onge at Apr 18, 2008 4:38:06 PM
I mean, starving people eating butter? And the manufactured cookies are bought from vendors, with cash, who transport the dirt from far away?
Posted by: Peter St. Onge at Apr 18, 2008 4:45:00 PM
That looks so sad, doesn't it? So it seems that wheat and butter have capped (at least that's what the best(?) bakery in Lyon (France) told me). Will food prices follow and in the end go down? In developing countries? Or does price (downward) sluggishness kill this?
Posted by: chgs at Apr 18, 2008 8:32:36 PM
It would help a lot if the U.S. would drop some or all of the policies that drive up the cost of food. It would help even more if every other government on earth did so as well.
As for Haiti, I have a plan that might help.
Start by occupying the country. The population is only 9 million, so 200,000 troops should be more than adequate, though of course we don't presently have them to spare.
Next, study up on how the British governed India. Apply the same model, with some modernizations. What we now call 'human rights violations' must be minimized.
The colonial service should be recruited internationally, especially from France and other Francophone countries. Americans aren't very good at this, and don't much like learning foreign languages.
The brightest of the natives should be sent to universities in the U.S., France, and other advanced countries. Make sure to choose institutions with a few professors willing and able to explain how and why Marxism was a disaster in practice, so as not to produce too many Ho Chi Minhs.
In two or three generations, Haiti should have enough natives trained in honest and efficient administration to dispense with the colonial service. It can be emancipated, with some hope that it will fare as well as India.
Of course this will be expensive, though perhaps not as expensive as the Iraq adventure. The natives will probably resist. I would, since I wouldn't actually expect an American occupation to be carried out with such benevolent motives.
This is a fantasy, since political support for such a project would be negligible. I wouldn't really support it myself, being the libertarian curmudgeon that I am.
Assuming the U.S. was willing to expend enormous resources to save the Haitians from themselves, I think this is the best plan.
Posted by: David Tomlin at Apr 18, 2008 8:48:30 PM
DavidT, we've invaded Haiti before, and we've put (and kept) the cronies in power that are the reason for the wretchedness of the place. Occupying the country will only cause more of the same.
http://soc.hfac.uh.edu/artman/publish/article_94.shtml
http://www.globalsecurity.org/military/ops/haiti.htm
Posted by: Tangurena at Apr 18, 2008 9:29:27 PM
"But most of Haiti's problems seem self-inflicted and impossible for outsider's to solve."
While true that we can't solve Haiti's social problems, that doesn't mean we shouldn't take short-term action to help prevent people from starving to death.
The correlation between US agricultural policies and tariffs on one hand and higher food prices (in the US and the developing world) and lower food supply (by our favoring the import of non-staple products like coffee and cut flowers) on the other seem obvious to me. So one thing we could do is to follow our own gospel and open our agricultural markets.
Posted by: joel at Apr 19, 2008 2:36:55 AM
'. . . we've invaded Haiti before . . .'
The U.S. occupied Haiti for almost two decades, 1915-34.
I suggested that two generations of colonial rule might achieve the modest goal of making Haiti a reasonably well-governed third world country, as British colonial rule apparently did for India.
One might speculate that India would be better off, or no worse off, if the British had never ruled there. I'm inclined to doubt that. Of course it's an old controversy with a vast literature.
A stronger objection would be pointing out the former British colonies that haven't fared so well, like Pakistan or Burma.
The Haiti project is likely to fail for a number of reasons. One might be that U.S. policy makers think it's in their interest to keep Haiti undeveloped, but I don't think that's very likely. More likely it would be because of mistakes in execution, or because Haiti's problems are just too intractable.
High probability of failure is another reason, along with the expense, that this isn't really a good policy choice.
Given the assumption that improving conditions in Haiti is a high U.S. policy priority, I don't see a better plan.
Posted by: David Tomlin at Apr 19, 2008 10:01:06 AM
As Peter St. Onge notes above, there's a reason for eating dirt under these circumstances.
http://en.wikipedia.org/wiki/Geophagy
Posted by: ZBicyclist at Apr 20, 2008 5:16:38 PM
