Another neoliberal miracle By Scott Sumner

Talk to almost any academic, and you’ll hear nothing but negative opinions about neoliberalism. Meanwhile, out in the real world this ideology continues to improve the lives of billions of people, at a faster rate than at any other time in human history.

Do you recall how the Soviet Union used to continually suffer from poor harvests due to “bad weather?” During the 1970s, US farmers made lots of money exporting wheat to feed hungry Russians. Guess which country is now the world’s largest wheat exporter:

So how did this miracle occur?

This roaring output is the result of a confluence of short- and long-term factors. Since the Soviet Union’s collapse, farming has undergone a gradual transformation from “a fantastically ineffective collective model to effective capitalism”, says Andrei Sizov, head of SovEcon, an agricultural consultancy in Moscow. Although the state’s overall role in Russia’s economy has grown, agriculture has largely remained in private hands, fuelling competition.

And Russia is one of the few countries that will actually benefit from global warming:

The future also looks bright owing to global trends. As populations grow, so too should food consumption, especially in some of Russia’s largest export markets, such as Turkey. Rising temperatures and improving technologies mean longer growing seasons, higher crop yields and wider swathes of arable land in much of Russia. “Everyone is moving north,” says Yuri. His son has started farming in the Belgorod region, closer to Moscow.

So why don’t most intellectuals understand the beauty of neoliberalism? Because they don’t understand economics. It’s that simple.

PS. There is no shame in not understanding economics. The list of fields I do not understand is probably ten times longer than the list of fields I do understand. Opera, quantum mechanics, French poetry, organic chemistry, etc. Heck, I couldn’t even explain to my daughter how a TV set works.

Merry Xmas and Happy New Year.