Please Don't Derive Policy From Morons

I realise that kills socialism, but....

Our latest example of someone we really, really, should not be deriving public policy from is Henry Dimbleby:

The food system is a $12 TRILLION beast.

What role does red-blooded capitalism have to play in fixing it?

1/ Food is 12% of global GDP ($12T) and employs a third of the world’s workforce.

Yet, it causes $13T of harm annually to health, nature, and climate. A net loss.

Oh Lord. Jeebus.

So, the $12 trillion is the turnover of the food industry. The contribution to GDP is how he’s calculated it too. OK, that’s fine. GDP is value add, he’s measuring value add. But, crucially, he’s measuring “captured” value add.

That is, what gets spent in wages and profits of those involved in the food industry. Because that’s one of the definitions of GDP, all incomes. Which is the same as the value of all production or again the same as the value of all consumption. But it’s always “at market prices”. That is, what people get to collect in terms of production, what people are able to capture in terms of incomes or what people have to spend in terms of consumption.

Yes, this is important.

So, that $13 trillion in damages. No, I’m not going to do anything so stupid as to bother with how he reached that number. I’m sure there’s lots of lovely dodgy numbers about shortened lifespans and so on in there. Economic losses from the obese not being able to work and so on.

Let’s laughably, suggest that number’s OK. OK - it’s not commensurate with the market value of the food business. Because people might have to suffer these costs - assuming they’re true - but they’re not paying them. They’re external to the market transaction.

Might seem like a distinction you’re not happy accepting but I assure you it’s a real one.

We need to get to a figure for those externalities which is commensurable. Which is net externalities, not negative only. We need to do like Stern did with climate change. Yes, that Hampshire will be able to grow champagne is an addition to human happiness - mark that one down. Losing Flipper would be a loss. Mark that down. We need to get to that net number.

So, if there were no food what would happen? Well, in 90 days we’d all be dead. There would be no economy. Global GDP is $100 trillion -ish. So, the positive externality of there being food is $100 trillion, the negatives are $13 trillion, we’re making an $87 trillion profit on the deal.

Sure, sure, it might be possible that we could improve the food industry. But the claim we’re making a net loss is idiocy of the highest order.

Don’t derive public policy from morons and really, pay no attention to the ignorant trying to play with economics.

It’s actually possible that we should take this further. Extinction is a one time event, there’s no coming back from that. So there’s an argument that we should capitalise that loss of no food. Which, at the average Stern discount rate of 1.4% would give us a capital value of $7,100 trillion. At a cost of $13 trillion a year. 0.2%. Bit of a fucking bargain, really.

But then hiring the man who used to sell fish finger sandwiches to tell us all how to eat always was a dodgy idea in the first place.