Subsidizing Food


The latest from the Middle East:

Jordan’s King Abdullah II on Tuesday dismissed Prime Minister Samir Rifai and his cabinet after widespread protests by crowds of people inspired by demonstrations in Egypt, Tunisia and elsewhere.

The weekly demonstrations, which have drawn momentum from the unrest in the region and were joined Friday by thousands across Jordan, reflect growing discontent stoked by the most serious domestic economic crisis in years and accusations of rampant government. Demonstrators protested rising prices and demanded the dismissal of Rifai and his government.

One of the staples of op-ed page commentary is complaints about third-world governments that subsidize food and fuel to keep prices down. It’s inefficient! The market should set prices! And so it should. But events of the past couple of weeks certainly make the decision to subsidize a lot more understandable, don’t they? If it’s a choice between market efficiency and keeping your head off a pike, market efficiency is going to lose every time.

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