The invisible hand at work - gives and takes

At the onset of World War I, Britain imported 60% of its food and roughly 80% of its grain for bread (basically wheat), as a result of its laissez-faire trade policies and the enclosures. Initially, the government thought the market could ensure food supplies, but quite soon it had to step in, even more so when Germany’s unrestricted submarine warfare commenced in January 1917. The government increasingly regulated both price and supply of bread, “whatever else was in short supply, the supply of breadstuffs had to be maintained”. It took over importation and in April 1917 it took also control over the mills from the private sector. In 1918 all staple foods were regulated in price and many were rationed. People were encouraged to produce their own food; herds of cattle and sheep were reduced.

The policies worked so well that it is estimated that during the war the average provision of food was 3,500 calories, compared to 3,400 calories the years preceding the war (the quality of food didn’t necessarily improve, for instance fruit and vegetable consumption plummeted).

Even more interesting is that the difference between the diets of rich and poor decreased in war time. This was a result of that the government intervened in the food distribution and access as the market is simply not geared towards equitable distribution. It is inherent, almost a definition, in an unregulated market that the distribution is inequitable as it is based on economic purchasing power and not needs. So this observation is not saying that the market doesn’t work. It does work as a market should, but that doesn’t equal that it produces a result society wants. The invisible hand doesn’t always do the right thing.

(extract from Global Eating Disorder-the cost of cheap food)