Essay Winner: Max Bodach

Earlier this semester, the Econ dept hosted an essay writing contest inviting students to explore, advance, apply, or illustrate an idea that they found most appealing, counter-intuitive, or poignant in their economics classes. We had 4 winners in no particular order:

• Kealan Vasquez
• Niklas Jenkins
• Max Bodach
• Mairead Kennon

As winners of the essay contest, the students attended the Southern Economics Association conference in late November and they'll have their essays published here. So, without further ado:

Mr. Max Bodach: How Economics Solved Famines

My time studying economics as part of the Political Economy & Government major has been extraordinarily fruitful. One idea that has consistently stuck in my head from the very first time we discussed it in Dr. Bartsch’s Principles of Macroeconomics class is the idea of how international trade and the price system virtually eliminate the prospect of famines.

Famines have been with the human race for nearly all our history. Chapter 47 of Genesis relates how Joseph, serving as Pharaoh’s chief executive, expropriated all Egyptian land except for priestly holdings and then levied a 20 percent tax on all grain production in order to stockpile for famines. Famines ravaged European populations, notably in mid-18^th-century Ireland, and sparked mass migrations. Millions of people in the developing world died due to malnutrition and starvation. The scourge of famine has stalked us for millennia, claiming billions of victims.

While many solutions have been proposed and experimented with, only one solution has actually demonstrably reduced the incidence of famines significantly. The twin innovations of international trade and a price system solve a problem that has consistently bedeviled humanity.

Prices communicate an enormous amount of information to an enormous number of people. They incorporate supply of a particular product, demand for a particular product, and the expectations of both producers and consumers in how the price will change. The communication of scarcity is particularly helpful in the famine context because food producers know where to direct their resources in order to take advantage of rising prices (and therefore rising profits). They also help food consumers decide how to allocate and prioritize their scarce resources in order to achieve maximum utility in any given situation,

However, in order for the price system innovation to function effectively, trade liberalization must be in force. Free international trade (or at least trade without significant barriers) enables producers in food-rich countries to meet food demand in diverse markets across the world, which helps stave off famines before they even begin. International trade, prices, and an interconnected world have prevented more famines than ever before in history.

The only famines that occur in the modern era are caused by armed conflict. This is a massively underappreciated aspect to daily life that improves the outcomes of millions of people worldwide. The abstract insights that come from a systematic study of economics have a concrete consequence in millions of lives. This insight helped me understand the value of economics and of economic thinking more broadly, and I am grateful to Dr. Bartsch for explaining it more eloquently than myself.