This week, Nafeez Mosaddeq Ahmed warned in the Guardian that food riots, spurred on by increasing prices and volatility, are going to make social unrest like the Arab Spring the "new normal."We now know that the fundamental triggers for the Arab spring were unprecedented food price rises. The first sign things were unraveling hit in 2008, when a global rice shortage coincided with dramatic increases in staple food prices, triggering food riots across the middle east, north Africa and south Asia. A month before the fall of the Egyptian and Tunisian regimes, the U.N.'s Food and Agriculture Organization (FAO) reported record high food prices for dairy, meat, sugar and cereals.Since 2008, global food prices have been consistently higher than in preceding decades, despite wild fluctuations. This year, even with prices stabilizing, the food price index remains at 210 - which some experts believe is the threshold beyond which civil unrest becomes probable. The FAO warns that 2013 could see prices increase later owing to tight grain stocks from last year's adverse crop weather.Citing a Royal Society Paper, Ahmed claims that "we may face the prospect of civilisational collapse within this century."
Or not, says Marc Bellemare, a Duke University agricultural economist who is currently studying the effects of price volatility on social unrest. The main problem, he points out, is that food prices are actually going back down. According to Bellemare, Ahmed's analysis falls short by not taking inflation -- how much food you can buy today with your money versus what you could have gotten before for the same amount -- into account.
As Bellemare told FP:
The analysis on which this claim rests is one that looks purely at the correlation between food prices and food riots, and thus does not disentangle the causal relationship from that correlation. Second, and perhaps more importantly, the FAO's food price index is indeed equal to 210, but that is nominal price measure. In other words, because that number is not adjusted for inflation, comparing an index of 210 today with an index of 210 just a few years ago is like comparing apples and oranges. To truly speak of price thresholds, one should instead look at real prices. That is, at prices that are adjusted for inflation. Real prices tell a different story; one which shows that food prices today are not much higher than they were in September 2007, well before the food price crisis of 2008....
...MOREWe know a bit about models and attempt to include some version of this disclaimer in most posts:
We Are Now One Year Away From Global Riots, Complex Systems Theorists Say
Always reminding ourselves that just as using the tools of markets (bid/ask etc.) does not make cap-and-trade* market-based, using the tools of science (maths) does not make sociology a science.
Economists can use a lot of math and the great majority failed to forecast the recent unpleasantness.
Still we remain hopeful that we can make a buck or two from the Complex Systems Institute's output.
Plus, the NECSI faculty seem pretty credentialed and could probably get away with an actual argumentum ad verecundiam rather than the fallacious type....
Or, as George Box but it so perfectly:
"All models are wrong, but some are useful"
-George E.P. Box
Section heading, page 2 of Box's paper, "Robustness in the Strategy of Scientific Model Building"
(May 1979)
