Categories
Economics Environment Science & technology

[359] Of the third agricultural revolution

http://www1.oecd.org/publications/observer/216/f-toc.htm OECD's L'ObservateurWhat do I think of genetically engineered food?

After more than a year of thinking, I am still undecided on the issue despite being a green. Another green related issue that I am undecided is the usage of nuclear power. James Lovelock’s supportive statement on nuclear power as a short run solution to the problems brought upon by the six greenhouse gases has not helped me form a concrete opinion for or against nuclear power.

Genetically modified food has the capacity to save millions and possibly a few billions from hunger. Technology has helped revolutionized agricultural sector before the Industrial Revolution and now, we are on the eve of another agricultural revolution, apart of a larger ongoing life science revolution.

The only difference between the last two with today’s revolution is the tools that were and are used.

Back in the 18th century, new techniques of growing crop were discovered. The introduction of machineries helped distribute nutrient better throughout farmlands. Soils were more protected by four field crop rotation. More importantly, this revolution jumpstarted the industrial revolution that forever changed mankind’s course of history.

The second agricultural revolution happened in the mid 20th century with the introduction of fertilizers and pesticides. Output increased greatly thanks to the development done during the Second World War. This revolution introduced to us pesticide; one of them is a chemical known as DDT – the one that persuaded Rachel Carson to write Silent Spring. In the book, she familiarized the public with the idea of food chain and that in turn prepared the world for modern environmental movement.

Now in this new revolution, we are playing with the building blocks of life itself – the proteins that create you and me and all living beings. We are playing God and scarily, we excel at it. In fact, we have managed to create new species of plants and animals for better or for worse, for a greater purpose or for our mere amusement. For instance, fluorescence fish is one of the first ever genetically modified pets in the world. This fish, glow in the dark.

The capability to save millions of lives is the key point presented by the people that believe in GE food. This point is particularly attractive when you are dying from hunger in Africa due to drought, war or any unwelcome situation. The people that believe in GE food are confused by the opposition to such technology. One of the proponents of GE food is the giant biotechnology firm Monsanto of which, according to Wikipedia, controls 70 per cent of the world genetically engineered crop supply.

One of the arguments against GE food is safety. Unlike the effect of pesticide, the effect of GE food is still unknown. It would take several years, or even decades before the effect takes place. Furthermore, some assert that GE plants somehow alter soil composition in a negative way, making the soil less fertile and impedes future food output.

Though people may disagree on a lot of things, in my opinion, the benefits could be seen in the short run, almost immediately, if the distribution system is efficient, which I doubt very much. The ugly side of the story would probably be revealed in the future – nobody knows for sure. It all depends on your investment horizon, as few economists that I have the pleasure of knowing would have called it.

For this lack of information, I will always err on GE issue. But for all I know, I may have eaten some of it unknowingly.

However, cases like the Monsanto versus Schmeiser, a multimillions/billions firm against a small Canadian farmer, tend to force me to side with typical greens even if I disagree with some of the greens.

p/s – Akamai, one of the main players in the World Wide Web, is having a problem. As a result, countless sites such as Yahoo!, CNET, Reuters and Greenpeace going at a very slow pace since late Friday. Sometimes, the page loading process even failed.
Suddenly, the world seems to be slowing down.

Categories
Economics Environment Humor Personal Politics & government

[358] Of French Constitution and the word environment

The French Parliament is inserting the word environment into their constitution. And the Green opposes such change.

Very amusing. Of all fractions, it is the Green that opposes (the other lefties abstain) instead of the right.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
p/s — Safire is a goddamn hilarious man. He hates the French, he hates the democrat and he hates the penny. And yeah, abolish the penny! LOL!
Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
pp/s — I thought the oil price was stabilizing at the new price. But, the new price is at $42.45 per barrel – no thanks to the newest incident in Saudi Arabia. And hell, air travel is going to be expensive.
Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
ppp/s — Jeffrey Chen died in a plane crash on Monday. I first read about it in the paper but I was not sure whether it was the same Jeff that I knew. A news through the Solar Car Team’s mailing list later confirmed this, unfortunately.

I don’t really know him because I didn’t really talk to him a lot. But I do remember that he was cheerful in most cases and he gave me rides to and fro Ypsilanti and Ann Arbor. And he did smile to me whenever he bumbed up with me.

May God bless him.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
p4/s — A joke on Bush for comparing so-called war on terrorism with WWII.

If Bush was alive on December 8, 1941:

“My fellow Americans. Yesterday was a day that will live in infamy. We were the victims of a vicious and unprovoked attack by the Empire of Japan.Therefore, I have decided to attack Spain.”

Categories
Economics

[355] Of another 7.0%

For the first quarter according to Bank Negara (Malaysian central bank for you non-Malaysians), Malaysian gross domestic product has grown for 7.6%. That is quite high and it definitely reminds me of the days during the Asian boom when Malaysia and a few others Southeast Asian countries earned the Asian tigers nick. Back in those days, Malaysia had consistently grown for more than 7.0% annually.

But of course, this is nothing compared to China, which is growing at almost 10%. Then again, China has only recently started to develop its economy. In contrast, I have read a report somewhere that states a country in Africa has a growth rate of about 70% – my guess, there is not even a toilet bowl there.

Forget about the toilet and let us concentrate on a few things that caught my eyes. Actually there are only two things. First:

The underlying fundamentals will continue to accord flexibility for monetary policy to support stronger economic activities, without creating inflationary pressures.

What flexibility? The Ringgit is pegged to the Dollar! Bank Negara is obliged to buy or sell the US Dollar in order to keep the exchange rate fixed at a certain rate. There is little room for maneuvering when it comes to monetary policy.

Secondly:

Interest rates can remain low for some time to come to support the growth momentum.

That sounds totally like Alan Greenspan. I am starting to wonder if all central bankers speak the same language.

Categories
Economics Politics & government

[354] Of separatism and globalization

Earlier today, one of the leaders of Islamic separatist in southern Thailand has been quoted saying that he has given up the idea of an independent state. His word, of which I am sure, was approximately translated to English from Malay:

This is the age of globalization. The world has moved on and there is no more room for separatism.

I have nothing but respect for the separatist leader. This is the wisdom that every other separatist movement the Aceh people, the MILF, the ETA, the IRA, the Quebecois and probably all around the world lack given the situation today. Though I am sympathetic of my fellow Muslim Malay brothers’ cause, I cannot help but feel their struggle is hopeless.

These southern Thai states lack the resources to develop their states alone and the political muscle to defend its interest just like East Timor. Though I am a green and in turn an advocate of decentralization, I feel an independent East Timor is a mistake. To support my view, East Timor, being small and powerless, has frequently been bullied by Australia in matter concerning its southern maritime border.

Even if they managed to break away from the Kingdom of Thailand and formed an independent state consisted of the Thai Malay states of Yala, Narathiwat and Pattani, they will probably be too dependent on Thailand or on their cultural ally, the Federation of Malaysia. Therefore, given a hypothetical scenario of independence, their political freedom in my opinion will be fairly limited relative to other stable sovereign nations. In the long run, these states will probably rejoin Thailand or become the members of the Malaysian Federation.

To Wan Kadir Che Man, the separatist leader, here is for you – hail to common sense.

p/s – Bye bye Houllier.

pp/s – James Lovelock and nuclear power. Via GreenSpin Watch and The Challenge.

Categories
Economics

[349] Of unsustainable growth

Nowadays, almost everything concerns gas prices and inflation. I have been reading everything with great interest and actually observed the two build-ups since February this year. And somehow I had treated the two as separate matters happening simultaneously, coincidentally.

One day, as I was lying on bed and almost bored to death, my mind wandered to the two issues and I said “Eureka!”

Let us touch on inflation first.

Inflation occurs when there is too much money being printed by the central bank. Inflation also erodes the real value of things related to money because unfortunately and weirdly, a lot of contracts are set in nominal term. Yet, despite inflation’s somewhat acidic nature, inflation is not at all that bad as long as it is not turning into hyperinflation, of which my professor describes as inflation on steroid.

The reason is because the ability to print money — the source of inflation — brings a huge benefit to the economy. One benefit of increasing the money supply is lower interest rate. (Another advantage of printing money is seignorage but only a myopic would consider this)

Larger money supply decreases the interest rate and a low interest helps stimulate investment. And at the same time, the stock market is a proxy of investment. Whatever good for the stock market is good for investment. Whatever good for the investment is good for the output.

The Federal Reserve has kept a very low interest rate for the past few months. It has been so low that cutting the interest rate further is almost impossible. This expansionary monetary policy — hand in hand with Bush’s expansionary fiscal policy — has helped the US to get out of the recession.

As a result, consumers demand more stuff; more stuff is being asked at a given price level. Now, given supply is constant, price will go up.

Let us move on to the second picture.

The crude oil price – which pretty much influences a lot of other stuff – has been going up mercilessly. A few things accredited to the rise of gas prices are China’s rapid industrialization and the US economic recovery. If this price shock is temporary, the short run aggregate supply should go up and then return to more or less its previous level as what had happened during the oil crisis in the 70s. This happens with the assumption of all things being constant, of course.

But, a recent report by Reuters suggests that high gas prices might be a permanent instead of a temporary phenomenon. This is consistent with the expansion of the aggregate demand. Plus, our voracious appetite for gas and the decreasing supply of gas probably tops up the effect of greater aggregate demand on prices.

And all the time, we are complaining about inflation and gas prices but I believe we are barking on the wrong tree. Rather, we should be whining on over-expansion that is happening, probably, on all fronts.

This growth is not sustainable. It is clear that supply can no longer keep up with demand and in some instances, supply is dropping. Thus, we must slow down before hell breaks loose.

And you know what could have slowed down the growth and prevented all of these nonsense?

I bet my head on externalities of the now nearly defunct Kyoto Protocol. But no! Somebody says the Protocol would limit economic growth.

Well, I say have fun with your growth and your $2/gallon gas.