Mini Hunger Course
Economic Causes of Hunger
Unemployment: Not enough jobs.
- Frictional Unemployment: People inbetween jobs (short term - not a contributor
- Cyclical unemployement: Based on business cycle and recessions (medium term
- requires public support programs).
- Structural unemployment: Based on long term economic changes. Declining industries,
mechanization, increased demand for higher skills. (longer term - requires support
for retraining and education).
Efficient but has short comings
Consumer Vs Producer Soverignty
Consumer soverignty is not absolute. Modern large scale production produces large
industries (economies of scale, entry barriers), this limits competition and leads
to producer soverenty (high market share, control over pricing). This can also limit
competition in labor markets, lowering wages and increasing unemployment. This power
balance between producer, consumer and labor varies widely over time, industry, and
Markets naturally cater to those with
purchasing power. The poor have little money to spend, therefore their economic desires
do not register in the market. Government must often step in to provide assistance
with necessities like food, housing and health care.
Operates best when return on investment occurs in the short run and the benefits
are limited to those participating in the transaction (works well for consumer goods).
But does not work well where the benefits are widely distributed and the return on
investment occurs over the longer run (education, defense, infrastructure, health
care: requires a greater emphasis on public investment). If public investment is
limited this can reduce opportunities and worsen hunger.