Reply #123: You don't get it

[Nederland]

I completely understand what the OP is saying, you just don't understand why it's mathematically impossible. If you had looked at my link, you'd understand that total food sales in the US is around 1 trillion dollars. Now I understand that what the OP is saying is that number does not represent the "true" cost of food in this country. There are all sorts of other costs involved not reflected in that number: health, environmental, and social costs. I get that, and in fact I agree with it. However, what I'm saying is that even with those extra costs, food could never be so expensive that even the wealthy couldn't afford it.

How do I know this? Simple, I'll break it down for you step by step.

As my link explains, nominal food costs are around 1 trillion dollars a year. Now the total GDP of the US is around 10 trillion dollars, so nominal food costs represent 10% of the total economy. Now whatever additional costs are missing, they have to be represented in the GDP, because the GDP represents the total economic activity for the entire country. Social costs, medical costs, environmental costs are all in there somewhere--they have to be because GDP is by definition the sum of all economic activity in the country.

So let's assume that every single dollar of the GDP is in actuality related to food production. That's an absurd assumption of course, because there are lots of things going on in the US economy that have nothing to do with food; but let's just make that assumption to get an idea of the worst case scenario of what food really costs. So here is the kicker, and I'll put it on a separate line for emphasis:

Even if "real" food costs include 100% of the total economic activity in the country, the "real" price of food would only increase by 10 times.

Get it? Since the price we think we pay for our food (the nominal price) represents 10% of GDP, and the the most it could actually cost is 100% or GDP, the most food could actually be costing us is 10 times more. It simply can't possibly cost any more than that. It's mathematically impossible. So ask yourself this: Could Bill Gates still afford to buy food if its price increase 10 times? I think so.



QED