Aztec Corn God

We watch TV on DVD and online. We don't watch much TV on TV. But last night, I caught the tail end of John Stossel's "Myths, Lies, and Downright Stupidity." Stossel isn't particularly radical in his libertarianism, but he's focused and persistent, and I'm glad he somehow manages to remain on the air. Last night, after tackling various gambler's fallacies and the myth of the deadly plummeting penny, Stossel took on Ethanol in a segment called "Sacrificing Our Children to the 'Corn God'."

You can see a treatment of the economics of Ethanol in this Mises.org daily article from a couple years ago:

"Ethanol and the Calculation Issue" by Peter Anderson

Stossel's coverage was pretty good. I give it an A- overall. For an A, he would have had to be a bit more explicit on the difference between the coercive wealth transfer called government subsidies, and the voluntary "wealth transfer" called commerce. (I use the scare quotes, because of course "wealth transfer" implies a zero-sum game, whereas voluntary commerce is positive sum.)

Stossel did stick to his guns with one politician whose name I won't bother to look up. This bandit kept saying "Ethanol is good for America" to all of Stossel's objections that it really isn't. When Stossel confronted him with the fact that the Ethanol scam robs taxpayers on behalf of Big Agribusiness, the gonif replied that we're currently being robbed by oil-rich Arabs. In other words, better to be robbed by Americans than by non-Americans!

I wanted Stossel to emphasize the difference between the first robbery, which is done (please forgive the apparent redundancy) through coercion, and the second "robbery" which is, in fact, voluntary exchange. Instead Stossel sort of smiled in disbelief and cut to another scene. Maybe he thinks his audience is smart enough to see the bald-faced lie for what it is. But he also interviewed a guy from the Cato Institute who claimed that Ethanol subsidies are a wealth transfer from those who buy corn to those who produce corn. That statement is just plain wrong and it helps to confuse the whole distinction between transfer and commerce. In fact, Ethanol subsidies transfer wealth from everyone — corn consumer or not — to corn producers.

For the full A+, I would have wanted Stossel to emphasize more who the puppet master is behind this swindle. We were told that politicians need to "worship the corn god" if they want votes from the Midwest — Indiana in particular — but mentioned only briefly was Archer Daniels Midland. Let's put the blame where it belongs, shall we? Corporate welfare isn't the result of selfishly short-sighted voters, or scheming politicians. It's the result of the corporate lobbyists who run the whole game. ADM isn't the "supermarket to the world" as its motto claims; it's the paragon of economic fascism — a critically important concept which accurately-but-misleadingly goes by the name "corporatism" both in the 1930s and today.

In "Nixonian Socialism," Murray Rothbard offered this definition: "an economy in which big business reaps the profits while the taxpayer underwrites the losses…."