Edible Economics by Ha-Joon Chang (2022)
In this light yet insightful book the author takes you on a whirlwind tour twining food and economics. Each chapter starts with historical and cultural context of a food item and then goes off in multiple tangents, ultimately converging to a thought/lesson in economics.
The book is structured very differently than what I have captured in my notes below. I have only taken out some stories I found interesting:
Brazil and ethanol blending
*As the largest producer of sugar cane in the world, Brazil had experimented with the use of ethanol as a fuel for motor cars since the early twentieth century.
*After the first Oil Shock in 1973, the Brazilian government introduced an ambitious programme to promote the substitution of petroleum with ethanol.
*Brazil’s 1975 National Ethanol Program (Proálcool) subsidized both sugar producers’ investments in ethanol production capacity and the price of ethanol at the pump.
*In the late 1970s, car producers operating in Brazil (such as Fiat and Volkswagen) even developed engines that could exclusively be run on ethanol.
*By 1985, 96% of all new cars sold in Brazil had all-ethanol engines. Since then, there have been ups and downs for the programme, with fluctuations in oil price, sugar cane production and the scale of government subsidies.
*The launch of the ‘flexi-fuel’ cars, which can run on any mixture of gasoline and ethanol, by Volkswagen in 2003, followed by other manufacturers, has secured ethanol’s place as a major energy source for Brazil.
*Today, ethanol supplies 15% of Brazil’s annual energy production.
How slavery built America
*Cotton and tobacco alone accounted for at least 25% and up to 65% of US exports throughout the nineteenth century. Without these the US could not have imported the machines and the technologies that they needed for economic development from the then economically superior European countries.
*Enslaved Africans didn’t just provide (unpaid) labour, they were also very important sources of capital –slaves were used as collateral for mortgages centuries before the home mortgage. In colonial times, when land was not worth much, most lending was based on human property.
*Individual-slave-based mortgages were lumped together to form tradable bonds, just like modern-day ABSs (asset-backed securities). These bonds were sold on to British and other European financiers, enabling the US to mobilize capital on a global scale and also to develop its financial industry into a global player.
*In 1791, the slave rebellion of St Domingue (today’s Haiti) stopped the westward expansion of Napoleon, which in a way forced France to sell Louisiana to the US.
Technological innovation in dye industry
*The invention of artificial dyes in Britain and Germany devastated producers of natural dyes all over the world.
*Artificial red dyes, such as alizarin, wiped out the riches of Guatemala. At the time, Guatemala heavily depended on the export of cochinilla (cochineal), a highly prized crimson dye that was used to dye Catholic cardinals’ robes.
*When it developed the technology to produce alizarin out of coal tar in 1868, BASF (which was later mass-producing fertilizer out of thin air) was making the most prized red colour from the blackest thing – coal.
*BASF also developed the technology to mass-produce artificial indigo, another highly prized dye, in 1897, and destroyed the indigo industry in India, ruining the livelihood of many Indian labourers, not to speak of bankrupting many British and other European indigo plantation owners.
Nothing natural about ‘natural’ resources
*Until the 1880s, Brazil had a monopoly over rubber. But the Brazilian economy was hard hit when the British smuggled the plants out of Brazil and established rubber plantations in their colonies in Malaysia, Sri Lanka and other tropical areas.
*In the 1970s Malaysia was producing half the world’s rubber. It suffered from the increasing competition from various types of synthetic rubber developed in the first half of the twentieth century. Malaysia subsequently diversified into other primary commodities, like palm oil, and into electronics.
*Rubber may be a Brazilian crop, but the three largest producers of rubber these days are Thailand, Indonesia and Malaysia. Brazil isn’t even in the top ten.
*In the mid-1980s, Vietnam exported virtually no coffee, but subsequently it increased its coffee export very quickly. Since the early 2000s, it has been the second-biggest exporter of coffee in the world, after Brazil, seriously affecting other coffee-producing countries.
*Chocolate is originally from Latin America (Ecuador and Peru), but today the world’s top five producers of cocoa are in Africa and Asia (Côte d’Ivoire, Ghana, Indonesia, Nigeria, and Cameroon are the top five producers)
*China was originally the exclusive producer of tea, but these days India, Kenya and Sri Lanka are also major producers of it.
*The Netherlands may have very little land but it has become the second-largest agricultural exporter in the world – only behind the USA – because it has found ways to augment land through technologies.
Farming prawn, shrimp & other insects
*Huge tracts of mangrove forests are destroyed to make way for prawn/shrimp farms, especially in Thailand, Vietnam and China. Around of one-fifth of the world’s mangrove forests had been destroyed since 1980, mostly to make such farms.
*This is a serious problem as mangrove forests offer protection against floods and storms, serve as nurseries for baby fish.
*Farming insects generates virtually no greenhouse gas and requires only 1.7kg of feed per 1kg of live weight, as opposed to 2.9kg of greenhouse gases and 10kg of feed in the case of beef, the worst offender.
*Insects also require much less water and land per gram of protein produced compared to animals.
*In the 1950s, Japan was the world’s biggest exporter of silk (both raw silk and silk textile), and silk was the country’s biggest export item.
*Japan had a long history of silk textile-making, since it got sericulture from Korea in the seventh century, but its silk industry came to its own in the early post-Second World War years.
Uruguay
*In 1912 Uruguay became the first Latin American country where women won the right to file for divorce without a specific cause. It was one of the first countries in the world where women acquired the right to vote (in 1917). In 2013, it became the first country to legalize marijuana.
*The beef industry is another area in which Uruguay has been at the top of the international league. Currently, it is the country with by far the highest number of cattle per (human) capita.
*The beef industry is imposing huge environmental burdens on the planet in terms of greenhouse gases, deforestation and water usage.
Bananas
*It is estimated that 85% of bananas are consumed in places where they are produced.
*In many African countries, bananas are also brewed into beer.
*In the process of domestication, the seedless mutants were selected for having more edible parts, which led to banana losing its ability to reproduce by natural means.
*Domesticated bananas cannot be propagated without human intervention that involves the removal and replanting of vegetative cuttings of the offshoots. Bananas spread in such a way are, as a result, all genetically identical.
*The Portuguese adopted the word ‘banana’ from Bantu languages of West-Central Africa.
*Colombia and Ecuador are the biggest banana exporters in the world these days.
*Almost all (95%) internationally traded bananas (and about half of all bananas produced worldwide) are of one variety, the Cavendish, even though there are over 1,000 varieties of banana around the world.
*The limited gene pool makes it difficult to control diseases for the banana. Currently, there is a worry that the Cavendish banana, which accounts for 95% of internationally traded bananas, may be wiped out by so-called Panama disease. The banana industry is in this situation because it has repeated its historical mistake of reducing genetic diversity in pursuit of profit.
Neo vs classical liberalism
*Neo-liberalism is a post-1980s version of nineteenth-century classical liberalism. Both versions of liberalism, classical and ‘new’, advocate strong protection of private property, minimal regulation of markets, free trade and free movement of capital.
*Neo-liberalism, however, is not as openly opposed to democracy as the old one was which argued that democracy will allow non-propertied classes to destroy private property and thus capitalism
*Neo-liberalism, differently from classical liberalism, opposes free markets in things like currency (it advocates a strong central bank, which has monopoly over currency issue) and ideas (it advocates a strong protection of intellectual property).
Welfare state
*The point of the welfare state is that, as citizens (and long-term residents), we all get the same package of insurances at a lower price by buying in bulk.
*In 1930, the welfare state (or more technically, social spending, which includes income support for the poor, unemployment benefit, pensions, health and housing subsidies) typically accounted for 1–2% of GDP in today’s rich countries, with Germany having the biggest one at 4.8%. By 1980, these countries were spending 15.4% of GDP on social spending on average. Today (the 2010–16 period), the corresponding figure is 20.8%.
Automation
*Automation may reduce labour requirement per unit of output, but it may also increase the overall labour demand (and thus create more jobs) by making the product cheaper and thus increase the demand for it.
*During the nineteenth century in the US, automation eliminated 98% of the weaving labour required to produce a yard of cloth, but the number of weavers actually grew by four times, because the demand for cotton cloth, thanks to the lower price, increased so much.
Post-industrialism
*The discourse of the post-industrial age, originating from the 1970s, starts from the simple but powerful idea that people increasingly want finer things as they become richer. When most people have the basic things (food, clothes, furniture, car) the consumer demand shifts to services – eating out, theatre, tourism, financial services and so on. At that point, industry begins to decline, and services become the dominant economic sector, starting the post-industrial age of human economic progress.
*The advocates of post-industrialism fundamentally misunderstand that what is driving deindustrialization is mainly changes in productivity, not changes in demand.
*The more prevalent view of Switzerland is that it is a model for the post-industrial economy, in which prosperity is based on services, like finance and high-end tourism, rather than manufacturing.
*On the contrary, Switzerland the most industrialized economy in the world, producing the largest amount of manufacturing output per person.
*We don’t see many ‘Made in Switzerland’ products because it specializes in what economists call ‘producer goods’ – machines, precision equipment and industrial chemicals – that ordinary consumers, like you and me, do not see.
*The secret of Swiss success is the world’s strongest manufacturing sector, and not things like banking and upmarket tourism, as we commonly think.
*Contrary to the myth of post-industrialism, the ability to produce manufactured goods competitively remains the most important determinant of a country’s living standards
*Manufacturing is still the main source of technological innovation. Even in the US and the UK, where manufacturing accounts for only around 10% of economic output, 60–70% of R&D (Research and Development) is conducted by the manufacturing sector. The figure is 80–90% in more manufacturing-oriented economies like Germany or South Korea.
Myth of free trade
*The best example of myth in economics is the distorted historiography that tells us that Britain and then the US became the world’s economic hegemons because of their free-trade, free-market policies – when they were the countries that most aggressively used protectionism in order to develop their national industries.
*While forced free trade was spreading around the globe throughout the nineteenth and the early twentieth centuries, protectionism was the norm among the countries in Continental Europe (except in the Netherlands and Switzerland) and North America.
*The US was a particular offender in this regard – it had average industrial tariff rates around 35–50% between the 1830s and the Second World War, which made it the most protectionist country in the world during much of this period.
Miscellaneous
*Lime is the key ingredient in the Brazil’s national alcoholic drink, caipirinha. It’s made from lime juice sugar, and cachaça, Brazil’s national liquor.
*Originally, carrots, which come from Central Asia used to be white. Subsequently, purple and yellow varieties were developed. The now-dominant orange variety was developed in the Netherlands only in the seventeenth century.
*People made high investments in education in the Confucian countries not because Confucius emphasized erudition but because land reform and other policies introduced after the Second World War increased social mobility and thus the return to education.
*The Carolina Reaper, with up to 2.2 million SHU for the hottest specimen, has been recorded as the hottest chilli in the world.
*The Universities of Oxford and Cambridge did not accept non-Anglicans (e.g., Catholics, Jews, Quakers) until 1871 and didn’t award degrees to women until 1920 and 1948 respectively
*Though engineering is one of the most male-dominated subjects, but 50% of engineering graduates are women in Cyprus.
*The gender wage gap is around 20% on average worldwide, although it could be as high as 45% as in Pakistan or Sierra Leone or as low as zero, as in Thailand, or even negative, as in the Philippines or Panama.
*The search for the cure for scurvy was so important in the discovery of vitamin C that the scientific name for the vitamin is ascorbic acid, which literally means ‘anti-scurvy acid’.
*Brazil’s manufacturing sector, which accounted for around 30% of its national output in the late 1980s declined to just above 10% by the end of its Pink Tide.
*Germany is the largest producer of rye, 33% more than the next biggest producer, Poland. Rye is so important for Germany that it even features prominently in its historiography.
*The Spaniards brought chocolate back home from Mexico in the sixteenth century after their conquest of the Aztec empire, which is why the current names of the substance derive from the Aztec word, xocolātl.
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