The Arms-Control Morass

European Community make their products uncompetitive in world markets, thus creating surpluses. So to try to repair the damage from the first intervention, they intervene further and subsidize exports. These subsidies have a new set of unintended effects. They drive world prices lower—in many cases below what they would be if the governments hadn’t intervened in the first place.

Who benefits? Nations that import a great deal of their food. Such as the Soviet Union.