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Really raises the question - should vital infrastructure, like food production, be built in an attempt to maximize profit or resiliency? Have things swung too

Really raises the question - should vital infrastructure, like food production, be built in an attempt to maximize profit or resiliency? Have things swung too far in one direction?

financetechbro 2y ago
Feels like we’ve swung exceedingly far. Our drive to capture efficiencies through economies of scale make us very vulnerable to systematic disruption
- Karellen 2y ago
  > Our drive to capture efficiencies through economies of scale Is that what's happened here? It looks to me more like the billionaire/PE class's drive to capture rents through monopolies is a more accurate lens to view the situation through. Especially as it's the trope namer for chickenization https://en.wiktionary.org/wiki/chickenization https://en.wiktionary.org/wiki/chickenization https://pluralistic.net/2022/04/17/revenge-of-the-chickenized-reverse-centaurs/ https://pluralistic.net/2022/04/17/revenge-of-the-chickenize... https://duckduckgo.com/?q=chickenization&ia=web https://duckduckgo.com/?q=chickenization&ia=web
  - graemep 2y ago
    I think both are true. It also goes far beyond farming - it applies to many supply chains.
afavour 2y ago
To my mind there's no question that it's swung too far. But it's very easy for me to live in the country and say "oh I get all my fresh produce from the local farm!" when there are cities of millions of people that need feeding too. Scaling while retaining resiliency is not easy.
- jghn 2y ago
  I live in a city and buy most of my fresh produce, meat, and dairy from local farms.
  - phil21 2y ago
    Which is not scalable for the entire big city. My parents are organic market gardeners, and there is simply no way that model could scale up enough to feed that many people cheaply. Food budgets would have to go back to the 1940's or earlier - where they were a significant fraction of take home pay. Now they are almost a rounding error comparatively. I don't necessarily think that would be a bad thing. A lot of the asset price inflation like homes can be tracked to food and consumer goods taking an increasingly lesser portion of the family budget. Re-balancing this seems wise to me.
    - jghn 2y ago
      You put your finger on what I think is the real issue: whether or not access to cheap food is a net benefit or not. I also won't claim to have the perfect answer but do feel we've gone at least a bit too far in one direction.
      - cj 2y ago
        I think we've only "gone too far" in the sense that cheap food also means unhealthy food, generally. Access to cheap food would be wonderful if it were healthy! Unfortunately the cheapest food is typically the worst food for your health.
        jghn 2y ago
        Yes, and I think it goes beyond "healthy", depending on one's definition. Part of it is also that "cheap" tends to lead to monocultures and other patterns that are more easily disrupted. An example being the Cavendish banana, which for most of the western world is the only thing they know of when the word "banana" is mentioned. And now the banana supply of a large part of the world is in danger of going extinct [1] And there's also ecological health. "Cheap" tends to promote mass production in certain areas and shipping everywhere. "Cheap" tends to promote less sustainable farming practices. That sort of thing. [1] https://www.foodandwine.com/banana-extinction-8715118 https://www.foodandwine.com/banana-extinction-8715118
codemac 2y ago
In many cases maximizing profits increases supply through efficiency, especially in the case of things like food. Increased supply is usually considered a safer place than a lower supply if it's vital. Every step you take that makes food more expensive, some use cases of food are no longer possible (say, free eggs in all elementary schools or something). How many of these uses are we ok eliminating so the wealthier population has a more consistent/resilient supply?
epistasis 2y ago
> built in an attempt to maximize profit or resiliency I think framing it as an either/or is a bit of a mental trap. They are sometimes in opposition, sometimes not. For example, those farms which were not resilient are not maximizing their profits, since they've had more than a year of warning of avian flu. They were operating to minimize work and costs, not maximize profit, and they are losing out on a ton of it right now. Those operations which built with resilience, or got lucky, are swimming in profits right now.
- Chabsff 2y ago
  The issue with that reasoning is that it fails to take into account that risk is a commodity now. It's often more profitable to go for short term profit and offload your risk to an insurer who amortizes that monetary risk in a pool containing a bunch of other industries. For critical services like food production, that's a problem. "Well, we don't have food, but it's okay because screw production went well" doesn't make sense socially, but our system makes it so monetarily.
  - epistasis 2y ago
    I'm not sure in what sense you mean risk is a commodity, and why it's a problem. I'm also unsure what changed to make it so now, as opposed to having ever been so. Those who actually took risk into account and planned accordingly have profited wonderfully. Those who did not take risks into account lost their bet. Eggs are priced higher for some, but are pretty much available everywhere still, and have not dipped below some sort of minimal level of availability. In California, past shortages were far far worse than this one, and even then the egg shortages were in no way catastrophic to the economy or health of humans. Of all the times in history, ever, we are at the lowest possible risk of famine. Instead, our abundance of high calorie food is the biggest risk to the health of Americans. So I would like to understand your point a bit more if you have the time to elaborate.
    - mlyle 2y ago
      > Those who actually took risk into account and planned accordingly have profited wonderfully. I don't know why you're saying this. Imagine I'm investing. If I "take risk into account" and select stocks anyways, I may lose a bunch of money one year. But I expect to make more on average than bonds. Looking at a year where bonds excel compared to stocks doesn't mean that I failed to "take risk into account." Likewise, a conventional producer of eggs that has now had a significant downturn in production may be having a bad year, but this doesn't mean that they're not following a profit maximizing strategy or not taking risk into account. > Of all the times in history, ever, we are at the lowest possible risk of famine. I think this is making the same kind of mistake: looking at today's outcome and assuming that reflects the risk picture. We're not observing too much famine right now. But we could certainly have a more of a risk of the most catastrophic possible famines now because of things like monoculture, critical links in production, climate risk, etc. Just looking around and saying "all is great today" or "conventional egg producers are having trouble today" or "stocks are down 15% for the year" does not capture the picture of risk, particularly for rare events. The best we can do is try to interpret sentinel events like this one and think about what else can happen.
bluGill 2y ago
1000 years ago we were much less resilience, and that despite farmers then optimizing for that and not profit. (read acoup.org for long discussions on what farming was really like over different times in history)
conradev 2y ago
A surprisingly large amount of the United States' crop yield comes from rain falling on non-irrigated fields (85%). Our biggest crop is corn, and corn is very water-sensitive at specific points in its growth. There is no infrastructure to protect there – only infrastructure to build (irrigation), for better resiliency.
tshaddox 2y ago
Surely “profit versus resiliency” is solely a matter of time preference.
- SketchySeaBeast 2y ago
  True. It's really a matter of maximizing profit when measured between quarter. Resiliency isn't a factor in that equation.
stickfigure 2y ago
> be built The passive voice is disingenuous. Do you buy local farm products? You vote with your wallet. Make your choice, like everyone else.
concordDance 2y ago
Profit works very well if there are many food sources with uncorrelated problems. Still works fairly well as long as capital owners are smart and use insurance (who in turn advise their users on how to reduce their risk).
Frost1x 2y ago
We as thoughtful human beings can consider non-extreme points where we find other optimizations that aren’t necessarily around profit or resiliency. We can create a new metric called “human progress mertric” where we consider profit as a strong driver but also put weight on things like resiliency and allow profit to slide a bit so our real goal is better achieved. Rarely ever, IMO, are worthwhile goals entirely profit optimized or resiliency optimized. Some blend tends to be best, and sometimes you can even have both simultaneously (they’re not always inherently mutually exclusive, although those taking in the winnings may want it to be).

Really raises the question - should vital infrastructure, like food production, be built in an attempt to maximize profit or resiliency? Have things swung too far in one direction?

financetechbro 2y ago

Feels like we’ve swung exceedingly far. Our drive to capture efficiencies through economies of scale make us very vulnerable to systematic disruption

Karellen 2y ago
> Our drive to capture efficiencies through economies of scale Is that what's happened here? It looks to me more like the billionaire/PE class's drive to capture rents through monopolies is a more accurate lens to view the situation through. Especially as it's the trope namer for chickenization https://en.wiktionary.org/wiki/chickenization https://en.wiktionary.org/wiki/chickenization https://pluralistic.net/2022/04/17/revenge-of-the-chickenized-reverse-centaurs/ https://pluralistic.net/2022/04/17/revenge-of-the-chickenize... https://duckduckgo.com/?q=chickenization&ia=web https://duckduckgo.com/?q=chickenization&ia=web
- graemep 2y ago
  I think both are true. It also goes far beyond farming - it applies to many supply chains.

afavour 2y ago

To my mind there's no question that it's swung too far. But it's very easy for me to live in the country and say "oh I get all my fresh produce from the local farm!" when there are cities of millions of people that need feeding too. Scaling while retaining resiliency is not easy.

jghn 2y ago
I live in a city and buy most of my fresh produce, meat, and dairy from local farms.
- phil21 2y ago
  Which is not scalable for the entire big city. My parents are organic market gardeners, and there is simply no way that model could scale up enough to feed that many people cheaply. Food budgets would have to go back to the 1940's or earlier - where they were a significant fraction of take home pay. Now they are almost a rounding error comparatively. I don't necessarily think that would be a bad thing. A lot of the asset price inflation like homes can be tracked to food and consumer goods taking an increasingly lesser portion of the family budget. Re-balancing this seems wise to me.
  - jghn 2y ago
    You put your finger on what I think is the real issue: whether or not access to cheap food is a net benefit or not. I also won't claim to have the perfect answer but do feel we've gone at least a bit too far in one direction.
    - cj 2y ago
      I think we've only "gone too far" in the sense that cheap food also means unhealthy food, generally. Access to cheap food would be wonderful if it were healthy! Unfortunately the cheapest food is typically the worst food for your health.
      - jghn 2y ago
        Yes, and I think it goes beyond "healthy", depending on one's definition. Part of it is also that "cheap" tends to lead to monocultures and other patterns that are more easily disrupted. An example being the Cavendish banana, which for most of the western world is the only thing they know of when the word "banana" is mentioned. And now the banana supply of a large part of the world is in danger of going extinct [1] And there's also ecological health. "Cheap" tends to promote mass production in certain areas and shipping everywhere. "Cheap" tends to promote less sustainable farming practices. That sort of thing. [1] https://www.foodandwine.com/banana-extinction-8715118 https://www.foodandwine.com/banana-extinction-8715118

codemac 2y ago

In many cases maximizing profits increases supply through efficiency, especially in the case of things like food. Increased supply is usually considered a safer place than a lower supply if it's vital. Every step you take that makes food more expensive, some use cases of food are no longer possible (say, free eggs in all elementary schools or something). How many of these uses are we ok eliminating so the wealthier population has a more consistent/resilient supply?

epistasis 2y ago

> built in an attempt to maximize profit or resiliency I think framing it as an either/or is a bit of a mental trap. They are sometimes in opposition, sometimes not. For example, those farms which were not resilient are not maximizing their profits, since they've had more than a year of warning of avian flu. They were operating to minimize work and costs, not maximize profit, and they are losing out on a ton of it right now. Those operations which built with resilience, or got lucky, are swimming in profits right now.

Chabsff 2y ago
The issue with that reasoning is that it fails to take into account that risk is a commodity now. It's often more profitable to go for short term profit and offload your risk to an insurer who amortizes that monetary risk in a pool containing a bunch of other industries. For critical services like food production, that's a problem. "Well, we don't have food, but it's okay because screw production went well" doesn't make sense socially, but our system makes it so monetarily.
- epistasis 2y ago
  I'm not sure in what sense you mean risk is a commodity, and why it's a problem. I'm also unsure what changed to make it so now, as opposed to having ever been so. Those who actually took risk into account and planned accordingly have profited wonderfully. Those who did not take risks into account lost their bet. Eggs are priced higher for some, but are pretty much available everywhere still, and have not dipped below some sort of minimal level of availability. In California, past shortages were far far worse than this one, and even then the egg shortages were in no way catastrophic to the economy or health of humans. Of all the times in history, ever, we are at the lowest possible risk of famine. Instead, our abundance of high calorie food is the biggest risk to the health of Americans. So I would like to understand your point a bit more if you have the time to elaborate.
  - mlyle 2y ago
    > Those who actually took risk into account and planned accordingly have profited wonderfully. I don't know why you're saying this. Imagine I'm investing. If I "take risk into account" and select stocks anyways, I may lose a bunch of money one year. But I expect to make more on average than bonds. Looking at a year where bonds excel compared to stocks doesn't mean that I failed to "take risk into account." Likewise, a conventional producer of eggs that has now had a significant downturn in production may be having a bad year, but this doesn't mean that they're not following a profit maximizing strategy or not taking risk into account. > Of all the times in history, ever, we are at the lowest possible risk of famine. I think this is making the same kind of mistake: looking at today's outcome and assuming that reflects the risk picture. We're not observing too much famine right now. But we could certainly have a more of a risk of the most catastrophic possible famines now because of things like monoculture, critical links in production, climate risk, etc. Just looking around and saying "all is great today" or "conventional egg producers are having trouble today" or "stocks are down 15% for the year" does not capture the picture of risk, particularly for rare events. The best we can do is try to interpret sentinel events like this one and think about what else can happen.

bluGill 2y ago

1000 years ago we were much less resilience, and that despite farmers then optimizing for that and not profit. (read acoup.org for long discussions on what farming was really like over different times in history)

conradev 2y ago

A surprisingly large amount of the United States' crop yield comes from rain falling on non-irrigated fields (85%). Our biggest crop is corn, and corn is very water-sensitive at specific points in its growth. There is no infrastructure to protect there – only infrastructure to build (irrigation), for better resiliency.

tshaddox 2y ago

Surely “profit versus resiliency” is solely a matter of time preference.

SketchySeaBeast 2y ago
True. It's really a matter of maximizing profit when measured between quarter. Resiliency isn't a factor in that equation.

stickfigure 2y ago

> be built The passive voice is disingenuous. Do you buy local farm products? You vote with your wallet. Make your choice, like everyone else.

concordDance 2y ago

Profit works very well if there are many food sources with uncorrelated problems. Still works fairly well as long as capital owners are smart and use insurance (who in turn advise their users on how to reduce their risk).

Frost1x 2y ago

We as thoughtful human beings can consider non-extreme points where we find other optimizations that aren’t necessarily around profit or resiliency. We can create a new metric called “human progress mertric” where we consider profit as a strong driver but also put weight on things like resiliency and allow profit to slide a bit so our real goal is better achieved. Rarely ever, IMO, are worthwhile goals entirely profit optimized or resiliency optimized. Some blend tends to be best, and sometimes you can even have both simultaneously (they’re not always inherently mutually exclusive, although those taking in the winnings may want it to be).