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Comment by whimsicalism | Hacker News Reader

> not a marketplace failure. Remove the subsidies and the market would quickly find the higher price at which dairy farmers could produce milk profitably and consumers would purchase it.

If it is in our societal interest to produce more milk so people can eat, and the market doesn't do so, requiring subsidy, then that is a failure of the market to meet society's need.

You're conflating the failure of a marketplace to function properly (as in smooth functioning of supply, demand, liquidity, etc) with the failure of the marketplace to provide social benefit.

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I think there is another angle here too which is whether or not milk should be a staple. The market could function properly. It would mean people drink less cows milk and more other milk substitutes which could be good for everyone in the long run.

I'm actually vegan, so I'm here with you there, but my first priority is calling out free-market-evangelism where I see it.

By the government subsidizing milk production you are in a small way,via taxes, supporting the dairy industry. If you're vegan for health reasons I assume you don't care, but if you are for ethical reasons I think that should make you a bit uneasy.

The free market can empower to make their own decisions on what they think is moral. In most cases that's a much better choice than the government deciding for you.

Is excess milk production really a social need though? According to the market people would generally rather spend that money elsewhere.

Via the subsidy the U.S. is forcing everyone to spend a small portion of their income on milk production.

> According to the market people would generally rather spend that money elsewhere

Or some people don't have the money to spend on it at all. This is the fundamental issue with using "willingness to pay" as proxy for "utility consumer gains."

The appropriate way to fix that problem would be to directly give the money to the people who have trouble paying for food, instead of giving it to dairy farmers.

This (some kind of UBI) does seem like the best solution to give those that don't have money a say what we produce.

But this still doesn't address tail risk like war or disasters. Importing 100% of the nation's food might make sense from a market POV but is a significant risk from a strategic POV. Markets do not seem to handle low probability events very well.

Who is importing 100% of their food?

US is a net exporter of food products.

Do you know who lacks food? China!

Subsidizing the heck out of corn and soybean production while keeping average income low has resulted in an unbelievably unhealthy diet, and incredible external costs to the environment, while centralizing and corporatizing agriculture and making a small number of people extraordinarily wealthy.

There are many better ways of accomplishing the geopolitical goal of maintaining enough food supply and production capacity to keep people going in a crisis.

Just because SAD has had a lot of milk in it for the last 70 years, doesn't mean that we actually need it.

Milk consumption dropped and we need to drop financial incentives for it.

I had never heard of this abbreviation, so in case someone else is similarly curious, it appears "SAD" in this context stands for "standard American diet": https://en.wikipedia.org/wiki/Western_pattern_diet

Excess milk production acts as a buffer, because shortages in food can be quite severe depending on what happens any given year and it takes a while to ramp up production in response.

The program was developed in response to shortages of milk during wartime.

Farm subsidies generally serve a few purposes in the US:

1. Maintaining the political support of farmers

2. Maintaining surplus food production capacity in case of some contingency (e.g. war).

The same is true for many developed countries. The US government actually produced “government cheese” with surplus milk to help support dairy farmers, providing the cheese to schools and welfare recipients. The EU has also experienced subsidy-related supply surpluses, including a “butter mountain” and a “wine lake”.

FoodStamps was literally created to give farmers money, indirectly.

There's one issue with supporting individual products - government cannot change these rules with the consumption patterns of individuals.

As such - it's not the subsidies that are the primary issue, it's the fact that the government decided that milk gets the subsidies... but almond milk gets the full market price.(As in - vegans are actually financing carnivorous american lifestyle more, than the other way around)

There have been counterexamples, such as federal dietary guidelines that promoted margarine as healthier than butter.

In any case, almond farming in particular is just awful.

for certain people, the point of a market is not to meet people's needs, it is to "function efficiently," so they'll never think a failure to meet society's need is a market failure, that's just "the way things are, money doesn't grow on trees commie!"

'Market failure' is a term of art, and it's generally best to avoid redefining terms of art unless there's a very compelling reason to do so.

Failing to meet people's needs is definitely a problem, but not a uniquely market-driven one. If there is a specific phenomenon which causes markets to fail in the delivery of socially desirable goods, it would be good to come up with a specific description and corresponding term of art.

Reread the thread.

> 'Market failure' is a term of art, and it's generally best to avoid redefining terms of art unless there's a very compelling reason to do so.

The person conflating "market failure" with what they were talking about is the GP.

The original comment was about the market failing to accomplish a goal, which is a perfectly idiomatic usage.

I sort-of agree with you, but I was directly responding to the phrase:

>"... they'll never think a failure to meet society's need is a market failure..."

Fair, I didn't actually read that comment that closely.

I was the one who first used the phrase market failure (wrongly, I gather). But the GP only used the idea that a market failed at something: "a failure of the marketplace", which is what my point still stands on.

If they only meant to talk about "market failures" as such, then they are guilty of pedantry

And people wonder why I don't consider economics a science. It's skience at best...

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