About half the world depend on rice as their staple food. Yet, only about 5 to 7 percent of the world’s rice production is traded across borders, low for an agricultural commodity, and this percentage is likely to go down. Recently, countries like India, Indonesia, Vietnam, China, Cambodia and Egypt have cut back on rice exports. This seems reasonable because a country may wish to keep the food for themselves.

However, Tyler Cowen, Professor of Economics at George Mason University, argues that restricting rice trade around the world has the long term effect of not increasing supply to match demand.

Export restrictions send a message to farmers that their crops are least profitable precisely when they are most needed. There is little incentive to plant, harvest or store enough rice — or any other crop, for that matter — as a hedge against bad times.

If farmers can get a market price for their rice, they are likely to increase their profits and want to grow more, thus easing the rice shortage. Keeping rice within their countries, dampens the rise in price, and so there is less incentive for a farmer to produce more.

Export restrictions treat rice trade and production as a zero- or negative-sum game where one country’s gain comes at the expense of another. That’s hardly the best way to move forward in a rapidly growing world economy.

A restricted market in rice would "slow the speed of adjustment to changing global conditions."

That may be a compelling argument for easing the restrictions on the rice trade around the world. But, if rice is exported from producer countries, it’s likely to leave less for their own population. Governments would have to make up for this, or some of their population will go hungry.

Andrew Leonard, in Salon.com,

You can’t just wave your hand and declare in the New York Times that the answer to high rice prices is to get rid of all export restrictions, without at the same time providing for some kind of short-term cushion to the millions of people who will be harmed by such a policy today or tomorrow. [..] The great irony that bedevils free trade is that to make it work will require the kind of global attention to winners and losers that might only be possible through a functioning world government that treated all the citizens of the planet as its constituency.

Rusong Wang, President, Ecological Society of China

Society has evolved to make our processes efficient. We have divided the work we do, each of us specialising in certain tasks only. We rely on other specialists in offices and factories far away to make the things we need but don’t make. We know very little about the goods and services we consume. We don’t know who makes them, where they are made, how they are brought to us and how much they cost. Michael Pollan, writer for the New York Times and author of In Defence of Food: An Eater’s Manifesto,

Yet this same division of labour obscures the lines of connection — and responsibility — linking our everyday acts to their real-world consequences, making it easy for me to overlook the coal-fired power plant that is lighting my screen, or the mountaintop in Kentucky that had to be destroyed to provide the coal to that plant, or the streams running crimson with heavy metals as a result.

We work at desks or machines in buildings, spend much time in cars and airplanes, sit in front of television sets. We go to restaurants, movies, shops, and spend time with family and friends. We may be connected to the people we meet regularly, but we are disconnected from our environment.

If we are disengaged from our environment, we are also at a distance from our community. We don’t seem to belong to where we live, don’t know our neighbours all that well, and don’t join any community groups. We rely on specialists, our politicians and corporations, to solve our problems for us. We don’t know enough, or feel capable enough to work them out for ourselves. Pollan,

Virtually all of our needs and desires we delegate to specialists of one kind or another — our meals to agribusiness, health to the doctor, education to the teacher, entertainment to the media, care for the environment to the environmentalist, political action to the politician.

We have progressed our behaviour and our relationships a certain way, one that focuses on the here and now, and which isolates us from cause and effect. What has made this possible? Energy is the driver, and economies with abundant sources of cheap energy have developed cheap and efficient processes so we can have more of everything.

With this economic progress came a climate change problem.

Because the climate-change crisis is at its very bottom a crisis of lifestyle — of character, even. The Big Problem is nothing more or less than the sum total of countless little everyday choices, most of them made by us (consumer spending represents 70 percent of our economy), and most of the rest of them made in the name of our needs and desires and preferences.

Now we are looking to our leaders to help us out of this problem. If only they can.

Graffiti in Chelsea, London, circa 1980’s.

The market generally invests in enterprises that make money, and allows the ones that do not serve the consumer to close. Investors put money into companies that they hope will succeed and provide a return on that investment. This is normal market speculation. The free market is what we live in, and it works.

Until a bubble comes along. That’s when speculation goes into overdrive; some people feed this speculation and others buy into it. This cycle goes on and people make money. Then it all comes to a stop. There are winners and losers. The subprime crisis in America is a property bubble. The winners are the people who got out before the market recognized it as a bubble, and the losers are those who were left holding worthless investments.

Economics, as many have said, is a study of human behaviour in terms of resources, that is goods and services. It’s not a mystery that people want to make money. That’s human nature.

Since Milton Freidman, economists have recognized this and decided it was in society’s interest to leave it alone, unregulated. Investors have in the past decade or so, thought up various investment vehicles designed to make them money. Many of these were simply not regulated by government. Speculators made them appear more valuable than they really are.

And now as they drop down to their real values, people are losing money. The bubble has burst.

But, it’s not the major problem. The real economics in a country is to do with how much it produces in tangible goods and services, not in paper money, and how much of this is wanted by other countries.

What China produces it sells to other countries. America has less and less product to sell to other countries.

Society is complex. To provide food and energy to millions of people living in cities requires many efficient networks, from countrywide electricity grids to local van deliveries.

As our societies grew, they reached a point when they became too big to manage. Large hierarchies broke into networks of smaller groups which distributed decision-making to more and more people. To wit, our modern western societies are more resilient than monolithic societies such as the old Soviet Union, in which decision making was centralised. Even today, Communist China has allowed free enterprise cultures, and their many networks, to exist in cities like Hong Kong and Macau.

So as societies become more complex they become more interdependent. However, the downside to this is that because we are networked, if there is a failure in one part, it soon spreads to the rest of society.

Thomas Homer-Dixon, political scientist at the University of Toronto and author of The Upside of Down, "Initially, increasing connectedness and diversity helps: if one village has a crop failure, it can get food from another village that didn’t." However,

The intricate networks that tightly connect us together - and move people, materials, information, money and energy - amplify and transmit any shock. A financial crisis, a terrorist attack or a disease outbreak has almost instant destabilising effects, from one side of the world to the other.

As these networks become more efficient, for example, through companies becoming more efficient, they become more ‘finely tuned’, and a collapse in one network can effect the rest of the system.

The world is now faced with problems such as food shortages, population growth, the growing divide between the world’s rich and poor, financial instability, weapons proliferation, disappearing forests and fisheries, and climate change. These will result in stresses within society, indeed, some networks will face breakdown. Homer-Dixon,

This is the fundamental challenge humankind faces. We need to allow for the healthy breakdown in natural function in our societies in a way that doesn’t produce catastrophic collapse, but instead leads to healthy renewal.

Perhaps, it’s not about saving the planet but about saving civilisation.

Capitalism is a free market system, that is, people decide what they want as consumers, and the market provides. It works because effort is directed to what people want, and not to what someone says people should have. If people want something they are prepared to exchange value for it. So in an exchange both parties benefit because each has something the other wants.

Essentially, a worker exchanges his time and effort for goods that he needs such as food, clothing, shelter and, for many people in the developed countries, items such as designer wear, fast cars, expensive holidays. The West wants cheap goods and services, and cheap labour in developing countries provides them. Robert Skidelsky, Professor Emeritus of Political Economy at Warwick University, ".. the market system is the most efficient engine for lifting people out of poverty: it is doing so at a prodigious rate in China and India."

The market system has a lot going for it. But, what morals are we adopting when we advocate capitalism? Skidelsky,

It has often been claimed that capitalism rewards the qualities of self-restraint, hard-work, inventiveness, thrift, and prudence. On the other hand, it crowds out virtues that have no economic utility, like heroism, honour, generosity, and pity.

You win some, you lose some.

It’s easy to blame the market system for bad moral choices. People should be able to decide when they are consuming too much at the expense of others.

But the market system relies on a particular motive for action – Keynes called it “love of money” – which tends to undermine traditional moral teaching. The paradox of capitalism is that it converts avarice, greed, and envy into virtues.

It does this through sophisticated advertising which seriously influences peoples behaviour, "In a world of ubiquitous advertising, there is no natural limit to the hunger for goods and services."

The market is not perfect, and ‘ morally vulnerable’. The solution is

.. not to abolish markets, but to re-moralize wants. The simplest way of doing this is to restrict advertising. This would prune the role of greed and envy in the operation of markets, and create room for the flourishing of other motives.

There is a debate going on about the amount of oil reserves in the world. On one side there are the ‘peak’ theorists who say that we have, or soon will have, reached our maximum production capacity, and we will face dwindling reserves. On the other side are the oil companies and the governments of oil-rich nations who have a vested interest in saying there is much more we can extract.

These groups can then increase oil prices by saying that the extra money is needed to research and develop new production facilities. People believe this and are prepared to pay these higher prices.

Jim Hansen, director of the NASA Goddard Institute for Space Studies and adjunct professor of earth and environmental sciences at Columbia University’s Earth Institute, says this is dangerous because it is diverting resources away from developing alternative sources of energy,

The basic trick is oil producers overstating fossil-fuel reserves. Government “energy information” departments parrot industry. Partly because of disinformation, the major efforts needed to develop alternative energies have not been made.

As the reality of limited supply begins to bite production will begin to decline, and Hansen is scathing in his rebuke,

.. fossil-fuel moguls will make more money than ever. They’ll continue to assert that there’s plenty more oil, gas or coal to be found, aiming to keep the suckers on the hook. Indeed, they may find somewhat more in the deep ocean, under national parks, in polar regions, offshore, and in other environmentally sensitive areas. They don’t need much to keep the suckers paying higher and higher prices. [..] The fossil-fuel industry is launching a disinformation campaign, and they have powerful influence in capitals around the world.

There is a real problem here. Governments who should have the long-term public interest as a priority, are having to accommodate large corporations and oil countries in their drive for more and more profit.

When will we know that the long-term public interest has overcome the greed? When investors, companies and governments begin to invest en masse in renewable energies, when all aim for zero-carbon emissions.