Friday, April 18, 2008

World Hunger & Capitalist Failure

Child labor in southern India, 1974.
                                                                                  Photo: Hans Sandberg

The issue of hunger may not be on everybody's lips, but it soon will, becuase it's serious, it's global, and it's not going to go away anytime soon. It’s time to replace the stupid war on terror with a war on poverty and hunger. If you feed and educate the hungry, you wont need to fight them in the streets. Even the Roman’s knew that.

But things were supposed to get better all by themselves the neo-conservatives told us. All that was needed was for the big bad government to step aside an let the markets do its job.

Here is how a narrow-minded economist feeds the hungry:

  • Let’s say that supply of food goes down, while demand stays high or goes up
  • Well, this will lead to higher prices, telling the producers to make more food, or luring new producers,
  • Hence supply increases, and voila,
  • Equilibrium is restored as a new balance is reached between supply and demand, leaving everybody if not happy, so least unable to become any happier without changing the rules of the game (which is what economists mean by ceteris paribus, i.e. everything else being the same).
When the whole wide world applies this model, we have complete globalization. Trade flourishes, and the benefits of trade and specialization (i.e. it’s cheaper to buy shoes than make them yourself) brings wealth to everybody -- unless governments interfere with taxes and tariffs.

Then we have places such as Haiti, where Saint Louis Meriska worries for his children. New York Times tells the story:

Saint Louis Meriska’s children ate two spoonfuls of rice apiece as their only meal recently and then went without any food the following day. His eyes downcast, his own stomach empty, the unemployed father said forlornly, “They look at me and say, ‘Papa, I’m hungry,’ and I have to look away. It’s humiliating and it makes you angry.”

The article opens with a sentence that makes you think Karl Marx and Friedrich Engels and their 1848 pamphlet the Communist Manifesto:

Hunger bashed in the front gate of Haiti’s presidential palace. Hunger poured onto the streets, burning tires and taking on soldiers and the police. Hunger sent the country’s prime minister packing.

Well, communism is pretty much dead, except maybe in Nepal, but capitalism is quickly loosing it’s raison d'être. Remember that Adam Smith wrote that if we wanted our bread, we were better off relying on the baker’s greed than his charity. This is true, unless our pockets are empty, and he can earn his dough by selling artisanal bread to the rich. Capitalism isn’t picky. It’ll always survive one way or the other. But people need food to live, and if the distribution of income and property is skewed enough, capitalism will not deliver even the basic stuff people need to survive.

Which is why we have governments, laws and regulations and social security. The German ”Iron Chancellor” Bismarck knew that unless you provided a modicum of security for the workers, they would line up with the socialists. So he introduced health insurance and 13 weeks of sick pay for workers in 1883. Even America got the message under FDR, and instead of an angry working class, we got a relatively comfortable middle class.

On a global scale, this didn’t happen, which is why we never got peace, and it took so long to fend off the ”communist threat”. After the Berlin Wall came down, and China opened its doors for business (but not freedom), we had a chance to fix the world, and take care of the poor and hungry. It didn’t happen. Instead we got globalization, which although great in principle didn’t bother with the underlying structural problems in this world. There was no global social security, and the rich of this world – including the wealthy oil sheiks of the Middle East - preferred to invest their enormous surpluses in financial assets than in improving the lot of their fellow human beings.

With no global democracy or modern Otto von Bismarck, we got on one hand Osama bin-Laden and his Al-Qaeda and on the other George W. Bush and his imperial presidency.

And while they were locked in a mad balance of terror, the world changed, and shit happened. In many ways this changes are wonderful: China and India leapt from Walt W. Rostow called the take-off stage to the age of high mass-consumption (at least for a segment of the population). But an ocean of people were left behind, while the bakers of this global world catered to those with purchasing power.

The last couple of years seismic shifts in the global economy, combined with natural events and human folly now prevents Saint Louis Meriska from feeding his children.

Unless the world comes together, there will be another Manifesto, and blood in the streets. The market has failed. The political system has failed. Our will has failed.

Now we need to restore the will, restore the political system and build a global security system so that our bakers can provide bread for us all, not out of charity, but by selling for profit in a world, where the resources are more equally distributed.

For more about the current food crisis,
More Hungry Mouths To Feed.

Hans Sandberg

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