So What does the Price of Soybeans have to do with Smog in Buenos Aires?

When I was younger, my friend’s father would often respond to our childhood rantings with the question, “but what’s that got to do with the price of tea in China?”  I still don’t really understand what it means, but in this increasingly globalized world, there is a direct causal link bewtween the price of soybeans and smog in the Argentinian capital city of Buenos Aires.  The causal mechanism is outlined in this Bloomberg news report:

April 17 (Bloomberg) — Smoke from fires set by farmers to clear fields for grazing covered the city of Buenos Aires and shut down some highways leading into the Argentine capital.

Interior Minister Florencio Randazzo called the smoke a “disaster” and said 292 separate fires covering 70,000 hectares (173,000 acres) had been detected in the provinces of Buenos Aires and neighboring Entre Rios.

Farmers are burning more land as they create pastures for cattle that previously grazed fields now dedicated to soybeans, said Randazzo.  An 89 percent increase in soybean futures prices in the past year, part of a global explosion in food costs, has prompted Argentine farmers to increase the area sown to the oilseed by 10 percent, according to the Agriculture Secretariat.

“Those responsible are farmers who are burning their meadows to cut costs and maximize profits without considering the consequences,” said Randazzo in a news conference at the Presidential Palace. “We are conducting investigations to find those responsible.”

Notice this chart of soybean prices below and the fact that many farmers are moving into the soybean growing business and I think we could have the potential for an intermediate-term top in the soybean market.  As in many speculative markets, many would-be speculators rush in just at (or even just after) the top has been set for that particularly stock or commodity.  It’s not a surprise the the record number of sales transactions for US real estate occurred in the month (around Summer 2005) as a top was setting in.  If I had to bet, I’d wager that many of those new soybean farmers will wish they had remained cattle farmers.

Globalization, the Catholic Church, and Classroom Pedagogy

A while back I had the opportunity to allow a job candidate to come in and use my intro to IR class to give a her candidate classroom lecture. Following the 40-minute lecture–after the candidate and the rest of the faculty had left the room–I asked my students to anonymously write down their impressions of the teaching style of the job candidate. One of the responses was particularly illuminated and the latest news about the Catholic Church’s efforts to reform the concept of sin reminded me of that student’s response. The student’s response was (and I’m paraphrasing here):

“I didn’t like that she went around the room and made everyone answer her introductory question. I pay $40,000 in tuition annually and I have the right to sit in the classroom and be bored and do nothing if that’s what I want to do.”

I felt sorry for this student, because s/he has forgotten a couple of important rules about life, let alone post-secondary education: first, you only get out of something what you put in. Second, and more important, the whole classroom experience is a social experience, and the outcome of the educational process is not only a function of what the student him/herself is doing, and what the instructor is doing, but what others in the classroom are doing as well.

Apropos of the preceding, here is news from the London Times online, which demonstrates the Catholic Church’s approach to the concept of sin:

seven_poster.jpg…[Bishop Gianfranco Girotti] said that priests must take account of “new sins which have appeared on the horizon of humanity as a corollary of the unstoppable process of globalisation”. Whereas sin in the past was thought of as being an invididual matter, it now had “social resonance”.

“You offend God not only by stealing, blaspheming or coveting your neighbour’s wife, but also by ruining the environment, carrying out morally debatable scientific experiments, or allowing genetic manipulations which alter DNA or compromise embryos,” he said.

Bishop Girotti said that mortal sins also included taking or dealing in drugs, and social injustice which caused poverty or “the excessive accumulation of wealth by a few”.

He said that two mortal sins which continued to preoccupy the Vatican were abortion, which offended “the dignity and rights of women”, and paedophilia, which had even infected the clergy itself and so had exposed the “human and institutional fragility of the Church”.

Maybe it’s time for Brad Pitt and Morgan Freeman to do a sequel to Seven. 🙂