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Futures markets and long term contracts don’t help people eat. You can’t eat food that doesn’t exist due to droughts, floods, freezes, fires, or pestilence.
by otterley 5y ago
Futures markets and long term contracts don’t help people eat. You can’t eat food that doesn’t exist due to droughts, floods, freezes, fires, or pestilence.
- eru 5y agoNeither can the government produce food out of a vacuum. So?
- piva00 5y agoThat's why... They stockpile.
- eru 5y agoStockpiling is a rather straightforward operation. In addition, the benefits of stockpiling are both rivalrous and excludable. Ie stockpiles are not a 'public good'. So the private sector is perfectly capable of stockpiling, too.
- marmarama 5y agoBut the private sector generally doesn't stockpile, because the cost of maintaining a stockpile exceeds any immediate economic benefit of doing so. It is economically inefficient almost all of the time. Very occasionally it becomes useful, but current accounting practice, corporation law and shareholder demands do not have mechanisms for incentivising it. One of the key roles of government is to provide services that are economically inefficient but are a public good.