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I keep reading reports of the rising risk of food riots as food prices soar around the world and vulnerable nations and communities are faced with increased food insecurity, which is a technical term that international agencies use, that actually means risk of starvation. At the same time, governments allow hedge funds to take speculative positions on food as a traded commodity which has been shown to not only increase food prices but also divert supply into storage (long positions) while the ‘investors’ create artificial supply shortages and market instability – while people are being denied their staple food products (for example, corn speculation). There are many things that governments must do in this regard – including investing in sustainable agricultural systems to create local
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I keep reading reports of the rising risk of food riots as food prices soar around the world and vulnerable nations and communities are faced with increased food insecurity, which is a technical term that international agencies use, that actually means risk of starvation. At the same time, governments allow hedge funds to take speculative positions on food as a traded commodity which has been shown to not only increase food prices but also divert supply into storage (long positions) while the ‘investors’ create artificial supply shortages and market instability – while people are being denied their staple food products (for example, corn speculation). There are many things that governments must do in this regard – including investing in sustainable agricultural systems to create local
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
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I keep reading reports of the rising risk of food riots as food prices soar around the world and vulnerable nations and communities are faced with increased food insecurity, which is a technical term that international agencies use, that actually means risk of starvation. At the same time, governments allow hedge funds to take speculative positions on food as a traded commodity which has been shown to not only increase food prices but also divert supply into storage (long positions) while the ‘investors’ create artificial supply shortages and market instability – while people are being denied their staple food products (for example, corn speculation). There are many things that governments must do in this regard – including investing in sustainable agricultural systems to create local supply certainty, improving the quality of diets (banning high sugar and salt levels), and more. But one of the most significant things that governments could do to keep food prices down and increase food security for vulnerable nations is to cooperate on a global scale to outlaw any food speculation by hedge funds and the big investment banks. It is not only economically destructive to have large proportions of populations living with the constant threat of starvation. It is also unethical....The fundamental problem, as Marx and Engels pointed out, is capitalism, which is based not only on the sanctity of private property, especially financial property, but also on class structure, which leads to asymmetrical distribution of power and wealth in a society based on economic liberalism, which is what capitalism is. The driving force of capitalistic production is "accumulation of capital." Capitalists argue that they is beneficial for society because accumulation of productive capital equates to growth. However, the motivation is through accumulation of financial value, working through "money," that is, prices, costs, and so forth, which are valued financially in the unit of account or, historically, other chiefly financial resources like gold and silver as a financial basis of trade, where they served as a vehicle for saving.
Under capitalism, "money" operates through markets. The basic idea of laissez-faire is to prevent government interference in markets other than as needed to police behavior and prevent cheating. The upshot of this arrangement is that under capitalism an economy that is assumed to be the physical life-support system of a society is dominated not so much by production as by markets that are "free" from government intrusion, which, the assumption goes, are therefore nearly perfect, that is, symmetrical. This makes it very difficult to justify government intrusion in markets to adjust outcomes in favor of more equitable distribution and even more difficult to introduce price controls or rationing outside of emergencies like war.
Generally, governments only take such action to address the potential for social unrest, e.g., food riots. This may be impending. Food riots are already occurring in some places in the world. Supply is insufficient to provide for demand with respect to food as a vital resource. The same threatens with respect to energy.
Bill Mitchell – billy blog
Helping ease food insecurity and starvation requires governments to ban bankers speculating on food prices
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia