Trade and Agriculture

On Thoroughbreds

by Eli Lehrer on June 7, 2007

in Nano & Biotech, Precaution & Risk

Iain,

Interesting points. I’m no expert on horse racing but my understanding is that the the races in the American Triple Crown of Thoroughbred Racing are. . . .limited to thoroughbreds. I’d assume that the same is so for the British and Irish Triple Crowns. So, by definition, I’d think that no non-thoroughbred has ever won. The values of racehorses remain high and will continue to go up for at least three reasons:

First, like all sports, racing has arbitrary rules that change slowly if at all. And one of them is that horses must have specific bloodlines. I’d suspect that we would see little change even if times started getting decidedly worse. It’s just the rules of the game.

Second, it’s likely that thoroughbreds are still the fastest horses around.

Last, race horses as “prestige” assets for that multi-millionaires the same way that people with hundreds of millions buy vineyards and people with billions start new airlines and buy big league sports teams. The return on all of these investments is pretty bad on the whole but there’s prestige and “club membership” that goes along with having them. Also, of course, the very rich–often not without reason–have egos that let them think they can earn the outsize returns that a few lucky people with these assets manage to collect.

Enormous race horse prices, of course, still carry a lot of information but it’s not necessarily information about the likelihood of winning or even of making money.

Warmer Winters Are Good for You

by Richard Morrison on June 7, 2007

in Global Warming

The front page of the Washington Post has an astonishing article by foreign correspondent Doug Struck on the positive – yes, positive – effects of global warming:

QAQORTOQ, Greenland — The biggest island in the world is a wind-raked place, gripped by ice over four-fifths of its land, prowled by polar bears, its coastlines choked by drifting icebergs and sea ice. Many of its 56,000 people, who live on the fringes of its giant ice cap, see the effects of global warming — and cheer it on.

“It’s good for me,” said Ernst Lund, a lanky young man who is one of 51 farmers raising sheep on the southern tip of Greenland. His animals scramble over the cold granite hills of a dramatic fiord, his farm isolated from the nearest town by a long boat ride threading past drifting mounds of ice, followed by a jolting truck trip along seven miles of gravel road.

“I can keep the sheep out two weeks longer to feed in hills in the autumn. And I can grow more hay. The sheep get fatter,” he said.

[...]

“Already we are starting our sentences by saying, ‘In the days when it was cold,’ ” reflected [Karo] Thomsen, 45, who in 1991 became the first Greenland woman to ski across the ice cap. “We’re starting to talk about it like it was history, and it’s only been about five years.”

Her husband has mushed for thousands of miles across the northern edges of Greenland, Canada and Alaska to match the record of the legendary explorer Knud Rasmussen. Yet he dismisses with a wave any sentiment over the shrinking ice.

“With the warmer weather, we don’t have to fight the cold so much. Our health is better. Our equipment doesn’t break down so much, and we don’t use so much fuel. The time for industry is longer, and there are more places we can go by boat,” [Ono] Fleischer, 59, said before a lunch of reindeer meat in his house overlooking Ilulissat. “I can’t think of any negative consequences.”

[...]

…Global warming could be an opportunity to develop other resources. Four oil companies have applied to explore off shore, mining companies are sniffing out uranium and gold, and two aluminum companies want to build smelting plants and use the gushing glacial meltwater for hydroelectric power.

“Of course there will be negative impacts on the environment,” [Environment Minister Alfred] Jakobsen acknowledged. “But we have to have an income. We cannot just be a living zoo. It would be hard for Greenland not to utilize these gifts from nature.”

Acknowledging that a changing climate has both pluses and minuses? That’s heresy at a place like the Post, to saw nothing of the activist-industrial complex here in DC. Let’s keep an eye out for any hasty resignations or any editors who suddenly decide to “spend more time with their families.” The alarmist crowd is going to be wanting heads to roll over this one.

For Myron’s take on the upside of warmer winters in cold places, check out his “On My Mind” column for Forbes last year here.

Improvement of the Breed?

by Eli Lehrer on June 6, 2007

in Economy, Nano & Biotech

Of course, Greg, it’s worth noting that the organizations you refer to appear to be largely falling down in their efforts to improve their breeds. I’d predict that, particularly in horse racing, we’ll ultimately see a lot of cloned animals competing.

At least in horse racing, horses clearly have stopped getting better. The times for Kentucky Derby winners have been more-or-less stable since the 1950s. The all-time derby record still dates back to 1974 and, of course, we haven’t had a Triple Crown winner since 1978. Race horses may be getting too inbred: all thoroughbreds, of course, trace their bloodlines to one of three stallions brought to England in the 17th and 18th centuries. Dogs may be getting “better” by the largely physical standards of dog shows but most purebred dogs are really, really stupid. (We had a purebred pug who liked to run in circles. . .in the street. . .in front of cars.)

I want me a racehorse clone.

Can You Clone that Thoroughbred?

by Greg Conko on June 6, 2007

in Economy, Environment, Nano & Biotech, Personal Liberty, Precaution & Risk

USA Today has an interesting article this morning about the position of various purebred animal promotion associations (think American Kennel Club) on animal cloning. While most such organizations (including the AKC) have not yet taken a position, a few of them (including those governing greyhound, harness horse, and quarter horse racing) don’t allow cloned animals to participate. The good news is that only one of the groups mentioned in the article (the Professional Rodeo Cowboys Association) identified animal safety as its ostensible reason for banning such animals. Friends of CEI will likely know from our prior writings on the matter (see here and here) that cloning gives rise to no animal safety issues that don’t also arise in artificial insemination, in vitro fertilization, and even normal sexual reproduction. So, that allegation is a red herring.

What’s noteworthy about the article is that some of the other groups that do not register cloned animals (such as the United States Trotting [horse] Association) indicated that their objection is based solely on the fact that cloning only replicates superior animals; it does not lead to an improvement of the breed, which is the very purpose of those organizations in the first place. That’s an important point to remember. In an environment lightly regulated by government, voluntary associations are capable of stepping in and providing the kinds of market-driven regulation that suits the individualized needs of real people. As wrong-headed as the Rodeo Cowboys’ rationale may be, if you don’t like it, you can take your cloned bull and join another organization or establish your own.

NAFTA redux

by Fran Smith on May 18, 2007

in Environment

CEI, of course, hates to say “We told you so!” As a shy, retiring group, it tries not to toot its own horn immodestly. But two editorials today—one in the Financial Times and the other an op-ed in the Washington Times by our friends at Cato—call out for CEI to crow over its prescient position on the negatives of including non-trade issues, such as labor and environmental provisions, in trade agreements.

The current two editorials point out some of the dangers of the”Bipartisan Trade Deal” that anti-trade and protectionist legislators forged with the embattled and battered Administration. Loads of enforceable labor and environmental provisions now will have to be included in trade agreements, raising sovereignty issues about U.S. law and distorting the potential economic benefits of trade —to U.S. citizens and to people in developing countries.

Since the NAFTA debates, CEI has pointed out the downside of including such provisions even in side letters to trade agreements — and at that time, had virtually no allies for its position:

Many potential critics of including such provisions in trade agreements, including most free market groups, were unconcerned about the NAFTA precedent. After all, they said, it wasn’t really part of the trade agreement itself. The exception was CEI, which sounded the alarm about the side agreement setting a precedent for transnational environmental harmonization. As CEI analyst James Sheehan said: “NAFTA threatens to undermine national sovereignty by internationalizing domestic environmental policies.”

Back in 1992, CEI didn’t make many friends with its principled—and correct—position on NAFTA. But who needs friends when you’re right. Right?

AEI scholar on implications of trade deal

by Fran Smith on May 17, 2007

AEI’s trade expert, Claude Barfield, has written an insightful analysis of the Bipartisan Trade Deal announced last week that incorporates enforceable labor and environment mandates into trade agreements. Others, including many editorial writers, have praised the deal for possibly breaking the logjam on free trade agreements with Peru, Colombia, and Korea. (Don’t count on it, though.)

Barfield focuses on the implications of the labor provisions and notes:

It is not clear what our promise to abide by the Declaration amounts to—under international law, or in disputes arising from the FTAs. On the one hand, the Declaration was not passed as a binding ILO Convention; on the other hand, in international trade and environmental cases, NGOs and governments have repeatedly—with mixed success—pointed to preambles, hortatory statements and declarations of principles as “soft” law that ultimately becomes binding. Thus, the administration may well have positioned itself on a slippery slope.

The claim that the “sovereignty card” will insulate the U.S. in the future—that in the end only the U.S. Congress can change U.S. law—is disingenuous. This was a big gun hauled out during the Uruguay Round negotiations to assuage fears that foreign law would trump U.S. law. But the dirty little secret that has emerged since then is that strong domestic and international pressure will come down on future U.S. governments if a labor standards dispute occurs and the U.S. loses. Charges of bad faith and callous unilateralism will inevitably tip the political calculus against defenders of noncompliance.

This is not energy independence

by Iain Murray on May 17, 2007

in Economy, Environment

Anyone who saw Good Morning America today will at last have been clued in to how the ethanol boondoggle is driving up the price of breakfast. And it’s not just the US this affects. As Lester Brown of the World Resources Institute has said:

Since the United States is the leading exporter of grain, shipping more than Canada, Australia, and Argentina combined, what happens to the U.S. grain crop affects the entire world. With the massive diversion of grain to produce fuel for cars, exports will drop. The world’s breadbasket is fast becoming the U.S. fuel tank.

The food and fuel economies are being merged by the misguided ethanol policies. This means that variations in the price of fuel now also have a direct impact on the price of our foodstuff as well. This makes our economy more petroleum-centric, not less.

As the Russian revolutionaries said, Dai Kleb!

Sell the Elephant to Save It

by Richard Morrison on May 15, 2007

in Economy, Environment

The International Fund for Animal Welfare is complaining about people selling items made from elephant ivory on eBay, arguing that such sales hurt elephant populations by encouraging poaching. That’s almost certainly true, but only because of the current system of trade which criminalizes profit and ignores the property rights of people in countries to which elephants are native.

The answer, as with the dwindling global population of other threatened species like the tiger, is to allow private ownership of wildlife resources. This will encourage sustainable harvesting and give owners the motivation necessary to keep poachers at bay. You can read all about this approach in a book by Ike Sugg and Urs Kreuter titled “Elephants and Ivory: Lessons from the Trade Ban,” published by the Institute for Economic Affairs in London.

Don’t Count Your Cobs Before They’re Grown

by Richard Morrison on May 10, 2007

in Environment

Corn growers are riding high these days, as ethanol moves into place as the default alternative fuel for automobiles. Lots of money is pouring into expanding both growing and refining capacity. But not all portents are positive:

Lurking behind [Archer Daniels Midland]‘s gloomy news are doubts about the future of corn ethanol. A growing number of analysts, once bullish on the product, are warning that an oversupply may be coming as soon as this year. On Apr. 27, a Lehman Brothers report projected that production will outstrip demand in the second half of 2007, measuring the domestic thirst for corn ethanol at 420,000 barrels per day but supply at 445,000 barrels a day, mainly because the U.S. lacks the infrastructure to move the product to market.

Corn field

Could the nascent ethanol boom be quickly hurtling toward an ugly bust? Only Ceres knows for sure.

UN on biofuels — implications and tradeoffs

by Fran Smith on May 9, 2007

The United Nations has just published a report that sets out some of the challenges and implications of the widespread production of biofuels. And it’s a pretty good effort in asking the right questions and recognizing that there are tradeoffs involved in the push for biofuels.

Titled “Sustainable Bioenergy: A Framework for Decision Makers,” the report focuses on the impact of bioenergy development on such issues as food security, the structure of agriculture, trade, foreign exchange balances, and energy security, as well as biodiversity and climate change.

Yet, nothing human or ecological is straightforward. And so it is with biofuels, perhaps particulary liquid biofuels. Will biofuels push out food crops, raise food prices, and exacerbate food security? Will biofuels create unexpected negative rather than positive external environmental effects? Could biofuels even exacerbate the impact on climate when the entire production chain is taken into account? How will increased investment in biofuels affect trade patterns? What would a sustainable approach to bioenergy look like? These questions need to be addressed.

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