Sunday, June 24, 2012

Pernicious Rent Seekers

COAST has for years tried to point out the folly of those who would pick the winners.  We note for example the phrase that cropped up while Obamacare was being crafted, “You’re either at the table or on the Menu.” 

Such a turn of phrase doesn’t come about often.  So when it does, one would be mindful to pay attention.  Of course, it recently came out that the Drug Lobby was in fact at the table.  Ordinary citizens were not at the table, and of course, we ended up on the menu.

This weekend, the WallStreet Journal reports of another sickening example of the type of rent-seeking that decent people of all political stripes should abhor.

It seems that in the 1980s the Indian government passed a law requiring that all wheat be packed in jute bags.  This is not because jute provides a safer, healthier or more economic packaging.  No, it was to prop up the jute industry.  And what is the end result of this law?  A jute shortage.  Such that much of India’s wheat cannot be packaged for want of jute.  Now of course the monsoon season is coming and “13% of the nation’s 50.2 million tons of wheat stocks were under makeshift shelters and at risk of spoiling from water.”  

Oh, and 42% of India’s children suffer from malnutrition!

No one is accusing the Indian government of doing this on purpose.  Certainly they cannot have intended to kill children just to prop up one industry.  But then this little coda comes in:

Industry representatives from Bangladesh, which is the only other country with a major jute industry, met with Indian government officials in New Delhi in May to offer to export bags to fill the shortfall in Madhya Pradesh.
But Indian officials told them they were unable to accept sacking from Bangladesh, as the jute law is meant to protect only Indian producers and farmers.

And that, my friends, is how you say, “you’re either at the table or on the menu” in Hindi.

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