In a dramatic, late-night hearing on Tuesday, four outraged Democrats on the Joint Finance Committee confronted...
Monday is World Hunger Day, and we must address rising food prices all over the planet.
Food prices rose 8 percent from December to March, the World Bank reports. But the escalating cost of food does not affect everyone in the same way. A typical American family spends no more than 10 percent of its budget on food, whereas the world’s poorest 2 billion spend between 50 percent and 70 percent of their meager income on food.
There has been no shortage of explanations for the bump in food prices: weather disasters linked to global warming, the biofuels boom, skyrocketing oil prices and the prosperous Indian and Chinese middle classes’ newly found taste for hamburgers.
But most commentators tend to keep pretty quiet about another very important factor that endangers food security: financial speculation in agricultural commodities.
Speculators deal in commodities that they neither produce nor consume. Their profits come from futures contracts, which are essentially bets that the price of a given commodity will rise or fall. These contracts are themselves commodities, traded among financial institutions.
The speculator does not work in the real world economy, in which goods and services are sold to real people, but works instead in the finance economy, where you can get rich by buying and selling stock without contributing anything to society. Just think of the comedy film “Trading Places” or the anti-hero Gordon Gekko in the Oliver Stone classic “Wall Street.”
There has always been speculation, as far back as ancient Greece. But today it’s a whole different game. As a result of the financial deregulation of recent years, speculation has rapidly grown to an alarming degree. Between 2003 and 2008, investment in indexes linked to commodities multiplied twentyfold, ballooning from $13 billion to $260 billion.
Olivier de Schutter, U.N. rapporteur on the right to food, has spoken up more than once about the dangerous link between uncontrolled speculation and hunger. And so have an increasing number of organizations, including Friends of the Earth and the Institute for Agriculture and Trade Policy.
So when it comes to taking action against world hunger, rather than joining the aid bandwagon of Bono and Jeffrey Sachs, or embracing the biotech crops of Monsanto and the Gates Foundation, we would be better advised to rethink the faulty economics of so-called free markets.
None other than Nobel laureate economist Joseph Stiglitz has repeatedly made warnings to this effect: “Neoliberal market fundamentalism was always a political doctrine serving certain interests. It was never supported by economic theory. Nor, it should now be clear, is it supported by historical experience.”
The interests that this free market fundamentalism serves are not those of the world’s hungry. They should not have to pay such a dreadful price for it — or for their food.
Carmelo Ruiz-Marrero is a Puerto Rican author, journalist and environmental educator. He can be reached at email@example.com.
You can read more pieces from The Progressive Media Project by clicking here.