This wasn’t supposed to happen in modernity

A Tale of Two Spectors

A spector is begining to haunt the world: mass hunger.  Actually two spectors for the price of one, and I’ll get around to the second spector further on, but for the moment hunger is quite terrifying enough:  Tony Karon of TIME magazine reports on Monday, April 14th:

Haiti is in flames as food riots have turned into a violent challenge to the vulnerable government; Egypt’s authoritarian regime faces a mounting political threat over its inability to maintain a steady supply of heavily subsidized bread to its impoverished citizens; Cote’D’Ivire, Cameroon, Mozambique, Uzbekistan, Yemen and Indonesia are among the countries that have recently seen violent food riots or demonstrations.  World Bank president Robert Zoellick noted last week that world food prices had risen 80% over the past three years, and warned that at least 33 countries face social unrest as a result.

This wasn’t supposed to happen in modernity: global trade, laws of comparative advantage in agriculture, the “Green Revolution” using genetic engineering, and a gradual slowing of the world’s population growth were supposed to have eliminated, not exacerbated, hunger.  What happened?  The author quoted above does not disapoint us by giving a list of causes for this remarkable, and tragic, phenomenon.

The social theories of Karl Marx were long ago discarded as of little value, even to revolutionaries.  But he did warn that capitalism has a tendency to generate its own crises.  Indeed, the spread of capitalism, and its accelerated industrialization and wealth-creation, may have formented the food-inflation crisis–by dramaticly accelerating the competition for scarce resources.

Tony Karon is evidently turning our attention to the “paradigm lost” of revolutionary Marxism, although the reasons subsequently adduced to explain the contemporary rise of hunger, while cogent, are not particularly Marxist.  If I may interpret and simplify what Karon said these boil down to two basic dynamics operating in the global food market:

1) Consumers with more disposable income are bidding out lower income consumers for food resources.  A farmer can make more money devoting land and capital to raise cattle for consumption than staple grains.

2) In addition to the previous factor, which is perrenial, a novelty has been introduced with the substitution of biofuel crops for consuption crops.

As someone once said, “What is to be done?”

I have no intention of challenging the accuracy of the preceeding analysis (except to say that it is based on standard microeconomic analysis, not, as Karon implies, Marxist theory).  When people in Haiti are eating mud patties obviously have a nightmare on our hands.  (Keep in mind that Haiti is virtually a protectorate of the United States, although presently under the guise of a United Nations stabilization mission.)   At this point solutions are more important that analyses of causes.  For the ethically minded there are two solutions which seem implied by the kind of analysis which Karon presents in the TIME article.  The first I shall call the guilty liberal solution and the second is the revolutionary Marxist solution.

#1 the guilty liberal solution:  This involves a cutback in consumption among populations with wealth to dispose on food.  Put in economic terms, markets for high-quality or gourmet foods are elastic in comparason to markets for staple foods.  If people will shift their food preferences down to less expensive items they will reduce the bidding pressure on food in general, aleviating hunger.

Objections to solution #1.  There might be all sorts of beneficial effects if wealthy populations were to consume less red meat etc., both morally and healthwise, but it is unlikely that this in itself would avert the hunger crisis.  To begin with it is based on the illusion of consumer soveriengty, that, in a statistical sense quantities on the market are automatically based on autonomous changes in consumer preferences.  Marie Antoinette moved from her palace to a bungalo, but this change in lifestyle didn’t prevent the outbreak of the French Revolution a few years later.  The masses couln’t eat the “cake” that Marie had forgone, and likewise the pastry that I forgoe at Starbucks dosn’t automatically show up on the plate of a child in Indonesia.  Moreover, for every person, who for whatever reason, desires to cut back on consumption, there are several emerging into affluence in the developing world who will increase their consuption of high-end goods.  Obviously a consuption end solution, however edifying, is not likely to improve the outlook for world hunger.   Which brings us to the demand side and…

#2 the socialization of agriculture.  If the world market rations food unfairly then it might be proposed that a system of relief should be instituted to eliminate hunger.   This could be done through agricultural subsidies and the mass adoption of food credit programs throughout the Third World.  Prices would cease to operate in the agricultural sector and instead of a market a commessariat system would produce and ship food to those in need.

Objections to #2: Unfortunately this would involve the abolition of property rights and ultimately all civil rights in participating countries.

Is there an escape from the two spectors of Hunger and an ensuing Tyranny based on demand for staples?

Yes, there is a libertarian solution, but it involves a notion of property rights which is often rejected by libertarians themselves.   All taxes should be abolished except taxes on land, and the right of homesteading should be extended to all people.  In the ensuing legal and taxation environment, land monopolies and agribussinesses would divest themselves of lands which cost them more in taxes than they accrued in income, and homesteaders would move onto the divested lands.  In this case an equilibrium could be established in land rights, which would be quickly followed by an equillibrium in the consuption and production of staples world wide.  At this point the dynamic of increasing productivity for consumables would shift to producers in the Third World who had migrated out of urban centers into the now newly attractive rural sectors.

Many people will consider this, which might be considered a neo-Georgist solution, to be quaint or reactionary or otherwise unattractive, but it is the most likely solution that I can think of for averting the twin spectors of hunger and collectivist tyranny.  Personally, I’ll take Henry George over Karl Marx any day!