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Re: <nettime> Making a Killing from Hunger
Brian Holmes on Sun, 4 May 2008 22:20:33 +0200 (CEST)


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Re: <nettime> Making a Killing from Hunger


Patrice Riemens wrote:
> our friend Brian has fallen of the edge here.
> 
> In what ressembles so much a conspiracy theory that it is one (**), he
> endorses the rickety combination of the latest version of the capitalists
> need ever fresh terrains of endocolonialst exploitation blame game to that
> very old cow (Roman history anyone?) 'the speculators did it' explanation.
> The whole thing has some traction, but it won't get us all the way over
> the hill.

Hello Patrice -

My abilities in this domain consist mainly in recognizing a good
argument. That's why I sent what I think is a great article, and also
noted that the links are valuable. The one I got the most out of are
these:

http://globalresearch.ca/index.php?context=va&aid=8794
http://www.newstatesman.com/print/200804170026

The point is that the general rise in food prices is driven over the
long term by underlying factors (energy prices, rising demand for
meat, shift to biofuel production) but that the current dramatic price
swings are the result of what the Wall Street wonks are calling a
"commodities super-cycle," i.e. a new round of intense speculation. If
that's the case, then it's almost sure that there will be a boom-bust
in those markets, with a corresponding shake-up of the distribution
system (with middlemen going out of business as prices suddenly fall
back to pre-speculative levels). Given what we're talking about -
filling bellies - this could be nasty if it happens, because a few
months of turmoil is more than poor people can stand.

The thing is that after 30 years of neoliberal globalization, many
countries now specialize in a few crops and depend on imports for the
rest. The system more or less works when the economy is stable, but
when you have big price fluctuations it becomes a real problem. This
is why people have been arguing for "food sovereignty" for so many
years (that was a main argument at the Seattle WTO and in all WTO
protests since then). Food sovereignty (also known as "food security")
means that a country's agricultural economy should not be exposed to
the wild swings of transnational markets.

The general pattern I see at work in the successive bubbles is pretty
much the one described by Karl Polanyi. He says that treating things
as pure commodities, subject only to the laws of the self-regulating
market, leads to the destruction of the basic institutions that
permit human survival. Speculation on housing is already more basic
than speculation on communications technology, but I must say, I
am dismayed to see the process go so far as to affect grain, which
is probably the most basic life-support excepting water and air.
Because this is serious stuff, some countries have already imposed
restrictions on exports of their food production, opting partially out
of the supposedly self-regulating system, and thereby contributing to
the price hikes on the international markets. Check the map at:

http://tinyurl.com/6knmy8

I too did not think much of the idea that speculation could be an
important factor these new food prices, until I started reading the
material that has come out recently. Of course this material could
also be wrong! Or more likely, biased in a particular direction. It
would be interesting for you to respond not just on the basis of
your hunch but with a real argument that gets into specifics. For
that matter, it would be interesting for anyone with a clear view to
respond. Understanding how the world economy works is damn difficult.
One thing, however, seems sure: to speak about speculation in a market
has nothing to do with a "conspiracy theory." Was the dot-com bubble
a conspiracy theory? Is the credit crunch a conspiracy theory? No,
obviously not. These are major events in the functioning of the world
economy, with structural causes. In the wake of real disasters (like
the Great Depression/WWII) those causes can be addressed through
regulation of the markets. That's exactly what happened after WWII.
Today one can hope it will not take such a disaster to force a change.
So honestly, I don't get the point of your post....

best, Brian







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