Mark Thoma points us to Famine
I really need read this book. Mark Thoma: "Could it Happen Again"
I've been reading a book called Famine, and they were far more common in the past than I realized. It notes that, historically, societies have been able to deal with one year of bad harvest. It's not costless, and sometimes markets or governments do not deliver the food where it is needed, but there is generally enough food in reserve to augment the poor harvest sufficiently to avoid widespread hunger (this was no accident historically, governments kept food in reserve to smooth variations is supply). But when there are poor harvests two years in a row, whether it be from natural disasters such as weather problems or human caused problems such as war, then the problems become severe. No matter how well markets or governments work, there aren't generally enough supplies in reserve to withstand two consecutive years of substantially reduced harvests.
This book, together with the financial crisis, make me wonder just how insulated modern societies are from these kinds of problems. Could the world withstand two consecutive years of food shortage? I suppose we believe, as we believed with the economy, that modern institutions and technology insulate us from such problems, it can't happen in our advanced societies. But what would happen if an unexpected volcano's emissions blocked sunlight for two harvests, or if some fungus or bacteria suddenly appears wiping out grain supplies worldwide for several years? How bad would conditions be, and how bad would fights between nations get if there truly was a worldwide food shortage?
Based on the stylized facts I know, I believe large-scale famine could very easily happen again. All we need is a little more demand growth from rapidly advancing countries like China and India, a little bad luck with the weather, and continued stagnation and bad governance in the some of the poorest countries. Put it all together and, well, it seems both scary and plausible.My guess is that we are closer to the edge than we like to believe.