Mmm... Bail-Out Burgers...

I feel like it's fairly obvious that the economy U.S. industrial agricultural system is Keynesian in nature. As corn found its mammal with humans and our post war surplus of chemical fertilizer, the government provided the first subsidy to farmers that would eventually snowball into the corn industry that we know today. This ammonium nitrate allowed farmers to produce larger and more consistent yields of corn, which allowed the country to support a larger population without risk of famine. More mouths to feed meant an increase in consumption, which Keynes thought to be the root of all economic activity, as "all productive activity is designed to satisfy consumption." (Posner) Corn and humans developed a particularly unique economic relationship in that rate of production not only met the current consumption demands but essentially increased it. As food became so widely accessible and affordable, a family with 2 children could suddenly afford to feed another 3. As generations progressed, the growth rate was exponential and the supply had to match.

This is a relatively simple instance of supply and demand with regards to the price of corn and it's myriad incarnations, but there was also the pressure of failing to meet this demand – a failure that, at its worse, could result in starvation. Pollan gives us a quick history of the government farm programs that were initially designed to limit production and ensure that corn prices stay high enough to sustain and support farmers. The agricultural business was booming and – in accordance with Keynes’ theory of avoiding fiscal austerity during a boom – the government kept adding fuel to the fire. With Russia in famine, Earl Butz and crew saw a major profit opportunity and encouraged an extreme overproduction of corn (supply/demand), which invariably led to continued overproduction (dive in corn prices) and a need for government to subsidize farmers to keep production possible – cough, cough, General Motors, cough.

This decision to bail out the farms kept America from bankrupting itself and potentially avoided a famine. The logic is incredibly Keynesian, but the problem is that we do it every year. We haven’t fixed the system. Keynes’ economic theory relies very much on the emotional and psychological nature of consumers and wants to avoid creating panic and paranoia. Obviously we’d all be terrified if we thought food would suddenly become scarce, but the government “regulation” and bail-out (for lack of a better word) approach to our agricultural system has created a vicious cycle that doesn’t seem to have an end – besides a heart attack, that is.