[GegenStandpunkt Index]


Old Hunger — New Hunger

[Translated from GegenStandpunkt: Politische Vierteljahreszeitschrift 2-08, Gegenstandpunkt Verlag, Munich)

1.

The current flurry about the increasingly miserable food situation is kind of odd. After all, hunger has its permanent place in the modern world, is regularly brought into the headlines by humanitarian organizations on public holidays, is entrusted to private charity, and just as regularly taken off the agenda in favor of other topics. Nor has this particular conflict, which is centered on the price of food and arouses the current indignation, come into the world in the year 2008. Millions of people — redundant figures of the global market economy — have long since had trouble paying for their food. Statistical data exist aplenty, and are pulled out again in view of current events, as to how many millions of “households” in how many countries spend their “income” for the most part on food. Even the insight that “anyone who survives on less than a dollar can hardly feed himself, even in the face of smaller price increases” (Kofi Annan, Handelsblatt, Düsseldorf, April 29, 2008) could have been had earlier.

For a long time, the world has been accustomed to hunger catastrophes and the management of misery with emergency relief, both of them becoming firm components of international business life. The flurry of excitement of moral apostles and augurs of crisis who presently occupy public opinion is due to the exceptional extent to which this phenomenon is occurring: it is not only the sudden jump in the statistics of hunger that jolts humanitarian minds because they try to combat poverty in various ways all over the world. They have even realized that the newcomers to the camp of malnutrition are recruited from the poor masses that, in many countries, have up to now been able to buy themselves an edible minimum of existence. Their plight is therefore due to an unusual phenomenon in the world economy — the prices for food, the edible products of agriculture, which have been sinking until recently thanks to lasting efforts in this line of business, are all of a sudden rapidly rising.

2.

This is a challenge for journalists, in various respects.

First of all, they feel obligated to their humanitarian conscience, which is why they feel sorry about the suffering caused by market forces. In one program after the other on all TV channels, foreign correspondents do their duty by investigating the global prevalence of this phenomenon, by informing about the unhealthy consequences of malnutrition, about the pitiful food substitutes, about the emotional situation of parents who have to see their children hunger, and so on and so forth, i.e., by informing really thoroughly that hunger is a pity indeed, and so many people are affected by it.

Apart from that, however, they also know quite a different category of persons affected. They put themselves in the position of those who are in charge of the order of the world of states. For them, masses of starving people that can still walk on their feet are a risk. When they kick up a fuss, the “stability” of many a community goes down the tubes, and terrorism flourishes. These are worries of a different caliber: states are getting messed up; and in those hopeless cases, that assemblage of ‘failed states’ where a superior authority has to secure a minimum standard of order, their Blue Helmets are facing revolts. Moreover, UN representatives are complaining about their fine millennium goals of combating poverty being ruined; their program of keeping control over the needy in the world order, of controlling the ‘pockets of misery,’ is getting into financial trouble because of the price hikes.

So, thirdly, a diagnosis is due if the worst is to be avoided. Pointing to the increased costs of production — as a result of higher energy and fertilizer prices, for instance — is not deemed a sufficient explanation of the witnessed price explosions; instead, a variety of elements of supply and demand, all of them properly balanced, become the focus of attention. In all the discussions, one thing stands out: these traditionally operating market forces, which — according to the textbooks — are always supposed to get everything into a beneficial equilibrium, are now triggering off disturbances, and these have national addresses. In particular, Chinese purchasing power is said to have messed up all sorts of things. The question of who to blame is given yet another answer by pointing to the speculation trade, which by “betting” on higher prices brings precisely them about.

It is interesting to note that what is being blamed as culprits are the very factors that otherwise do their service as respectable market-economy mechanisms and make our economy so efficient and dynamic.

3.

This is because this time, ‘the market’ has upset something which those in charge cannot simply ignore. With this new type of famine, “globalization” has put national economic questions of supply as well as of resources on the agenda in a peculiar roundabout way. It is no longer just the oil supply that causes concern — to which one has by now become accustomed — or the supply of other raw materials, but troubles have now come up in a sector where, in our latitudes, the annoying problem of over-production had until recently been attracting attention.

Agriculture is and will remain the basis of modern industry and other activities, because its products feed the people on whose efforts the capacity of the power ruling over them and the dimensions of its political exploits depend in turn. The system named ‘market economy’ has, however, revolutionized a lot concerning its basis.

History teaches us that everything, from the survival of a people to the cultural achievements of politics, depends on the harvest. When draughts, floods or wars prevent the tillage of the soil, the remains of civic life suffer too; in the wake of crop failures and famines, many a ruling power has disappeared from history. Even in the early days of capitalism, wheat failures and potato blights were still questions of life and death; the Irish famine depopulated the island; entire nations got into a mess when nature struck a blow. Ever present in the life of a state is the question as to how its people is going to survive.

A breakthrough occurred with the scientific discovery that the fertility of soil can be influenced and with the application of this technology to the agricultural production process. By replacing manual labor with machinery, by developing seeds and fertilizers, and by using these techniques on a large scale, agricultural yields were increased and stripped of their risks in various ways. Agriculture was industrialized — as a sector of capitalist production: the technology for increasing fertility and yields were — like any other means of production in the free market system — a question of capital investment. The use of science and technology as a means for bringing forth a profitable production veritably revolutionized productivity in agriculture as well, and this marked the beginning of further and further reductions in the one threatening element of this sphere of production: the risk, in this society, of unfavorable natural conditions.

The establishment of the world market surmounted the dependence on natural conditions in a rather different way. The program for liberalizing or — what amounts to the same thing — controlling world trade was part of a program for a new world order that America bestowed upon the free world after two world wars. America encouraged or compelled other states participating in world trade to “open up” their economic basis, inclusive of their agricultural production, to international capital and to face up to a capitalist competition as unfettered as possible so that the most successful and effective capital could prevail all over the world and make a useful contribution by growing accordingly. The initial idea was, not least, to extend the sphere of activity for the successful companies already operating from American soil; but since then its partners also have had a fair opportunity to use competition for their own purposes, provided they have the means to do so. Since then, nations with their different clout and different means of extortion have been disputing in the WTO, under this trade regime where compliance is required, as to which of them are allowed to implement national regulations, protective measures, and assistance aimed at supporting the commercial capacity of the national farming community to secure the national food supply. And in their competition over turning the world market into a means for their own purposes, over opening up world trade for the nation’s own agribusiness, and over forcing others to eliminate trade restrictions and determining the regulations trade blocs can impose, the nations have also created an agrarian world market. As far as the question of getting their people fed is concerned, they have increasingly found the idea of autarky to be obsolete. Instead, they have entrusted the national food supply to the world market. At the same time, they have made it their business to set generally accepted conditions, and they have expanded their range of control to include the world market.

Even in a sphere as nature-bound as agriculture, all countries have been converted into an opportunity for capital investment, and agricultural products have been turned into international business items. Even there, local production is revolutionized for the world market. International food corporations utilize the entire world as an opportunity for capital investment and as a market, and they scrutinize the different climates and natural conditions to increase yields and to continuously supply the markets with their perishable commodities. Agro-technological and bio-technological industries vie with one another in inventing techniques to control the growth of these kinds of raw materials regardless of weather and soil conditions, to better conserve plants and products, and to accelerate the turnover of capital through enhanced plant growth. With cut flowers from Africa, fresh vegetables the year round, and concoctions that cater to changing health and eco fashions, the agrarian sector worldwide is turned into the supplier for an exquisite ability-to-pay of the better-off economic bastions. The brokers on the international commodity exchanges determine profitable prices, attracting capital into the different sectors and thereby bringing forth a rapid expansion of business as well as a periodical over-production, with expansion of the various categories of agricultural raw materials alternating with contraction. And they know how to push deteriorating prices onto local producers, agricultural workers, and state budgets. Thanks to such business operations, producers and consumers now are internationally ‘linked up,’ the world is a ‘global village’ — or whatever imagery the phraseology of global integration invents for the fact that living conditions have been subsumed under the world market.

And such is the emancipation from the forces of nature of getting the people fed that the actors of the world market bring about: everything is made a question of ability to pay, of capital invested, and of states seeing to the transformation of agrarian production into sectors of export and import. And this is also what makes a difference between the states involved and their respective “development”: there are countries which have capital at their disposal, and countries without or with much too little capital. The former open up nothing but opportunities for their national capital; for them, the world market is an instrument. The latter do everything in their power to attract competitive capital to their territories and to persuade it into creating and building up an economic basis. For them, standing up to the test of the world market is a harsh necessity. The strongholds of capital are both producers of agrarian surpluses and starting points of a corresponding export industry: this was the case with America even prior to the two world wars; and meanwhile also with Europe, which has within a few decades — after producing milk lakes and butter mountains — developed into an exporter of food competing for the rest of the world market. These countries are at the same time the home of financially powerful profiteers and big importers of agrarian raw materials that mold the production in ‘less-developed’ areas entirely to fit the cycles of business and of consumer tastes in the developed markets.

Consequently, the question of getting the people fed has considerably changed, too, in the better-off nations that use their agrarian competitiveness along with their ability-to-pay to rule the world market: they have downgraded the reproduction of their people to being a by-product of an export industry as well as of profitable imports on the basis of sustainable ‘terms of trade.’

In other nations, the ones that compete for being utilized by capitalist companies, it is more that barriers have been torn down. In their struggle to attract ability-to-pay, they have no choice but to recast their national production in favor of products saleable on the world market, and their abundant nature is utilized for ‘cash crops’ — for proceeds in good money, the money of the financially powerful nations. They also grant the United Fruit companies of the world and agribusinesses the freedom of action they need to conduct experiments in applied chemistry and genetic engineering. This, then, also revolutionizes the eating habits in such countries, because the natural circumstances, exploited for world market production, are no longer at the disposal of, or suitable for, their inhabitants’ previous habits of subsistence. To the extent that a local production for the national market takes place, it has to prove whether it is able to compete with the products of the financially strong agro-industry. Hence the world market is meanwhile populated by many nations whose feeding of the people is based on imports. The question as to which, and how much, food, if any, their populations then have access to is a derivative of more important considerations. For instance, it depends on how much ability-to-pay the national balance of payments allows for it; or, of course, on the international movements of prices or currencies that define such a national ability-to-pay. Their access to food also depends on what importance the respective sovereign — or its foreign sponsors — attach to feeding the population even though this may be of no use to them. After all, by putting all countries into service for the world market, a worldwide overpopulation has also been brought about that is absolutely useless, or useful only to a small extent in terms of the market economy, and whose previous forms of subsistence have been ruined.

Hence there have always been large ‘pockets‘ within the progressive world market in which hunger is common; and this has become a familiar sight. Subsidies are appropriated and food relief is made available; a special organization of the UN attends to the problem; and at Christmas, celebrities raise funds for the needy.

At the same time, the agrarian market continues to expand. In the civilized parts of the world, every supermarket is a miniature world market, and the daily quotations for agrarian commodities reflect the dimensions of business that farming and livestock breeding have reached on a worldwide scale.

4.

And now this: this sphere is causing a disruption that brings entire nations into disarray. The food sector backpedals, which puts the problem of reproducing entire national economies on the agenda again and questions the durability of state powers — while (and even though) all the techniques that the prevailing system has to offer for overcoming the rigors of cultivating nature are available.

Now the media have delved into the causes and have already picked out a variety of factors as culprits responsible for the price explosion: the program for generating bio-gas launched by the United States and the European Union; the increased consumption in the emerging markets; the Indians and Chinese and their “buying power.” With their turning to “high-quality” food, these same nations are going to spoil the agrarian market even more because — as everybody has learned by now — modern livestock feeding requires x kilo of grain for one kilo of meat. The fact that the people of these nations, too, now get a little bit from the humane system of the market economy is, however, in no way taken as a reason to jubilate, neither by the philanthropic public nor by realists: at a time when increased demand presents gigantic business opportunities, when mass buying power consequently allows an expansion of business, the otherwise so idolized authority of market demand becomes an object of scrutiny.

Even as far as supply is concerned (the other component of this fundamental mechanism to which, according to common belief, the market economy owes its enormous efficiency) the public has all of a sudden become critical — complaining about the reduction of agrarian land usage in favor of industrial usage. What elsewhere passes as a sign of economic success, as a yardstick for a nation’s competitiveness, now serves as a reproach — lodged against China. Occasionally, a certain overexploitation of natural resources that makes entire belts of land unusable is mentioned, as well as the effects of climate change, which, depending on the standpoint, include the six-year drought in Australia, one of the most important suppliers of grain, so that its deliveries have stopped.

What is entirely out of the question for the analysts as a cause is the element that really connects all these factors and in a certain sense surfaces in the initial analysis of a general rise in prices — the market and its ways of calculating. As though they were external disruptors, bio-gas and Chinese consumption are held liable for the fact that “the market” treats them exactly as what they are in the market economy: as opportunities for zealous businessmen to use a generally expanded ability-to-pay to increase their profits. The same holds true for the competition over arable land: when agricultural land usage in China shrinks in favor of industrial usage, it is not due to a Chinese idiosyncrasy but because of the same logic by which areas of arable land in other nations are re-designated for generating bio-ethanol: due to the calculation in a market economy as to how more money is to be made. The higher profitability and heftier ability-to-pay determine the utilization of land. And when the various honorable and well-known calculations coincide, the ‘invisible hand’ or, more correctly, the anarchy of the markets brings about price increases. Based on the concentration of saleable commodities and the market demand for them, the activists of business ascertain the profits that can be made, now on a worldwide basis. The fact that the holders of limited ability-to-pay succumb to prices established in this way is not a malfunctioning of the system — despite official efforts to obfuscate commonplace events — but is instead inherent to it. After all, markets and commodity exchanges are not institutions for planning a worldwide food supply, but for achieving profits.

Even the uppermost echelon of business, finance capital, which turns the products of agriculture into a raw material for transactions on the futures market and for business with derivatives and funds based on those transactions, and which is usually considered a useful and reputable sphere of investment, has now come into the line of fire as a source of price explosions, as unreasonable and exorbitant speculation — as if it were not the fundamental purpose of this business to make food, like any other commodity, the object of a kind of business that is entirely emancipated from the point of view of supplying goods. After all, a drought in Australia, as much as Chinese gluttony, serves the speculation of this sector solely as indicators for profits calculated on expected price increases, which will eventually reach those who eat potatoes or consume rice. Finance capital compares all investment opportunities, “flees” from crisis-prone forms of investment, “goes into” certificates based on raw materials including agrarian commodities, speculates on further price increases as an opportunity to expand. And this procedure turns out to be a foolproof “bet” — especially when nations as well as institutions like the UN act as buyers, when news spreads that food-exporting nations are limiting their exports, when panic buying occurs right in the middle of America. In this case, the creators and buyers of “futures” bet on a growing need of nations — and in particular on a competing need — which manifests itself in the agricultural market and guarantees a dead-certain upward price hike, to which the financial experts themselves contribute their own momentum. In so doing, they act just like other speculators who — not inhumanely but in a businesslike manner — reward the announcement of massive lay-offs with increasing share prices because they reckon with growing profits.

Speculation is, after all, also a product of globalization in this sector. Once agriculture is completely subjected to commerce, when the product is converted into a business item, then it is just as much an object of all the prevailing interests of competition, of all levels of the capitalist modes of calculation. Hence Egyptians are affected by what goes on at the grain exchange in Chicago; the starving wretches worldwide are confronted with the achievements of speculators; and rice-eaters are confronted with bio-fuel. With their eating habits, they all are appendages of calculations that rule the world market. The price push ensuing from these calculations cuts them off from their previously accustomed form of consumption. Their modest ability-to-pay is not up to the level of profitable prices the business community has leveraged up on the commodity markets, and therefore drops out of the game. The term ‘globalization,’ after all, does not mean liberty but instead a regime that determines a new degree of worldwide impoverishment.

5.

The capitalistic mode of agriculture has stripped this sector of its peculiarity as well as of the problems originating in it. The ‘scarcity’ of food for the people caused by the unpredictability of natural conditions is turned into a financially calculable matter by a combination of science and capital. Instead of the plights of yore, this sphere of agriculture is characterized by the generation of surpluses — identified as surpluses because they are unsalable and do not realize profitable prices, but not because there are not enough eaters in this world. But now the problems of the past are returning in a very new form: the modern, highly developed and effective world market has revived a blight that seemed to be overcome, and causes hunger with its increasing prices to an extent that seriously disrupts the course of things. The business sphere is rocked by speculators, and it undermines the basis of a series of states with a hefty worldwide rise in prices. And the organizers of the institution ‘world market,’ who have turned questions of supply into opportunities for profiteers, have to be reminded through the price of food of the special quality this use-value has: that a people still has to live from the products of agriculture.

Subsuming the supply of food under the world market has become a predicament for nations, and it endangers supply, thereby bringing about a major global policy issue. The agencies of the world market, the IMF and World Bank, as well as the UN bureaucracy dealing with combating poverty and food relief are ringing the alarm bell: rising prices lead to revolts that threaten the stability of a number of states; other states react by restricting the world market, i.e., by a new breed of protectionism. Banning exports and setting quotas, determining and controlling prices, as well as prohibiting business on the forward market are measures that do not serve national competitiveness on the world market but instead constitute a regime for securing a national food supply. And thirdly, in both these cases, the nations that proclaim their responsibility for the existing order in the world of states, this common good of a regulated balance of competing powers, see themselves affected.

World market business has opened up a new chapter in the competition of nations, which revolves around command of resources and reliable supply even in this sector; states make the provision of food their own concern which they secure against others. They promote food to the status of a strategic good, and ‘combating hunger’ is the title under which the leading powers now are concerned with nothing else but the question as to what to permit and to forbid in this area. After all, what the founders and biggest beneficiaries of the world market take for granted is that falling behind the current progress of their worldwide trade regime is out of the question; the standpoint of a national supply with food and resources must not, and cannot, play the role it used to play in the past. World market leaders explicitly advise all other world market participants that isolating their national markets would not only be a total mistake, that they would not only hurt themselves by taking “unilateral measures” but threaten a somehow common good. Such measures are, at any rate, held responsible for the misery in other nations: export restrictions “drive up prices, and hurt the poorest people around the world.” (World Bank Group President Robert B. Zoellick, Speech to Rome World Food Security Summit, June 6, 2008)

Food relief has now taken first priority for the nations dominating the world market — especially in the form of financial aid, so that states or agencies fighting poverty will be able to pay exploding world market prices; and as an emergency measure to save the world market, so that states do not take anti–world market measures out of need or self-interest. Compared to the sums spent for coping with the credit crisis, however, this is rather inexpensive; for the U.S., for instance, the affair is settled with a modest 770 million dollars. Furthermore, the world ordering powers, in the form of the G8 and in their other organizations, make it their concern as to whether East-Asian rice exporters should be permitted to open up an OPEC for rice; they scrutinize China’s and India’s trade policy as well as Argentinean export tariffs; and they urge the Ukraine to lift export quotas for cereals again. If an emergency has to be bridged, they permit exemptions to regulations concerning food exports and imports — as long as no harmed nation eludes the world market’s rules, i.e., the authority of the supervising powers. Within the framework of the WTO, forward-looking ideas are being contemplated as to whether states that resort to introducing export quotas because they have trouble meeting their own national supply should not be made familiar with an obligation to supply the world market.

In the face of the hunger catastrophe, the world powers promptly remember all those questions of power that they have to settle among themselves; for instance, as to whether the calamity of other afflicted states can be exploited by expanding the reach of one’s own authority. The French government is already offering a European program for Africa’s future “self-sufficiency.&rdquo Japan blames the European program for bio-fuel for the price explosion and demands corrections; and so on and so forth. The United States and Japan are once again asking for a revision of the European agrarian market.

While the leading powers, in their competition, bicker about whom to blame, they also consider the crisis scenario as a gigantic opportunity: the United States and Europe put their farmers into gear for re-cultivating their previously fallow farmland in order to take advantage of the high prices. And new opportunities for completing the WTO’s Doha Development Round of negotiations to lower trade barriers, for advancing the world market rules, are expected. The food crisis is seen as a “strong incentive” for bringing the stalling negotiations to a success. Such, too, is the struggle against the new hunger: it is an enormous challenge for the world economic powers to organize their world market and its order, to translate their urgent need for new regulations into action, to bring about decisions on the rights and duties of other states, and, more generally, to raise the question anew as to who is calling the shots.

6.

Quite in this sense, experts feel themselves called upon to indulge in intellectual debates on the new world hunger. With their intricate proposals, they speak out as the better managers of the agrarian world market who claim to know better than the politicians in charge how to provide the world population with affordable food. Starting from the affirmative assumption that world trade had actually been invented for this purpose, they unfailingly arrive at the misdiagnosis that there must be a failing or malfunctioning of world trade if feeding people fails due to food prices on the world market. Following that logic, they come up with all sorts of proposals that, though a bit out of touch with reality, are at any rate meant constructively, proposals as to how world market business and the provision of food can be aligned by adjusting the right screws:

“But the crisis should also be a wake-up call to improve agricultural policy for the long term. Decades of protectionism have prevented the development of broad international food markets. The industrialized countries have failed to give the farmers of emerging markets the opportunity to sell their products at good prices. They have thus weakened the agricultural basis worldwide and slowed down progress, thus contributing to the fact that the population has migrated into the cities where they are now running out of money for food.” (Handelsblatt, Düsseldorf, April 17, 2008)

Nothing is easier than imagining, for instance, the world market as an institution for facilitating a growth in Africa that hasn‘t materialized so far only because the metropolises have pursued such a poor agricultural policy. Instead of letting the peasants in emerging markets get up and conquer the world market, the opposite has been done, and they have been excluded from doing business. How unreasonable and short-sighted are European export subsidies if they are to strengthen the agricultural basis in Africa! A long-term and truly sustainable agricultural policy that fosters self-sufficiency in states suffering starvation would have to promote the development of broad international food markets, where good prices can be secured.

Other intellectuals of a more philosophical nature and concerned with moral lessons take world hunger as an opportunity to have their moral worldview confirmed. As always and everywhere, they put, at the center of all events, the human being, who, with his reproductive drive and his greed vis-à-vis the CO2 balance, now even messes up the balance of grains. While the basic needs of masses of people with little or no income go unfulfilled thanks to the prices that the world market presents to its customers, these moralists remind us of the world’s finiteness. In the 21st century, after mankind has long since developed more and more ingenious techniques for increasing agrarian production and emancipating it from natural conditions, there is an unearthing of the old Reverend Malthus’ doctrine of the ‘natural law’ he claimed to have discovered, according to which population has the fatal tendency to grow faster than the means for feeding it, and the invocation of the unreasonableness of the human being who simply won‘t comprehend that scarcity is the fundamental condition of his existence.

Other contributions use the hunger problem as an opportunity for offering solutions that a political party or editorial staff always have on tap. Conservative party and media circles in Germany, for instance, from the Christian Democrats or the Frankfurter Allgemeine Zeitung (FAZ), simply presume that wind and bio-energy are merely misguided alternatives to the only clean solution, nuclear power, and immediately rehash the issue in this sense. In their eyes, bio-fuel is the cause of all evil. Thus, they firstly garner the popular indignation about misusing food as fuel; and secondly, they launch their favored energy policy alternative as their grand solution to a problem of the human race, as they just recently did on the issue of climate change. Hunger — a first-class reason for nuclear energy, since it will certainly not take the butter from any black African’s bread. In addition, this points to green anti-progressiveness as the main culprit for the misery in all those countries. These critics are annoyed that a nation as economically powerful as Germany should have to restrain itself in matters of this all-important energy, and to accept competitive disadvantages in energy security; they can now provide a firm rationale of the highest moral quality for expanding nuclear energy.

The advocates of progress in the field of genetic engineering weigh in with their own argument along the same lines: whoever condemns genetic engineering is also condemning mankind to hunger! How can Germany still afford the luxury of doubts in this respect? Hunger used as a moral cudgel will dispel all objections against this controversial business sector. Out of sheer compassion, Germany must insist on taking all the necessary liberties as far as this premium means of competition is concerned so that its international companies can assert themselves against America’s Monsanto. In all the reports about dubious experiments in India, it is, after all, perfectly clear that it is American multinationals that are to blame for their disastrous effects.

And then there is a final concern ventilated in the debate. An enraged public rails against basic elements of economic life, like prices and financial capital, and denounces them as causes of a worldwide crisis, so that gurus of national economics feel called upon to put an end to such unqualified talk. They preach against the temptation to master poverty through “artificial price controls” and against shortsighted policies regulating supply in certain countries; instead, everybody should heed the “old pearls of merchant wisdom” that “the best remedy for high prices are high prices.” After all, one should not forget the doctrine that it is always price that brings supply and demand into equilibrium, that brings about the allocation of resources and capital necessary for equilibrium; and so on and so forth. Insistent voices warn against meddling with high prices. According to these economic experts, high prices are a blessing; they are bound to show their textbook effects and, for instance, flow directly into the pockets of African peasants, forming capital there that can be invested so that Africa can finally achieve self-reliance…

The same work has to be done to save the reputation of credit, once the food crisis has lead everywhere to a vilification of speculation and the most respectable banks of all are accused of cynicism only because, in the midst of the crisis, they offer financial products such as commodity funds and certificates with which their customers, too, can profit from the price rally.

“The recent price increases on agricultural commodity markets have provided an opportunity for ideologists, interest groups, and the ignorant to assail ‘speculation’ and brand it as the despicable cause of the rise in prices.” (FAZ, May 2, 2008)

The lesson here is that it is the speculator who helps in this case, too, when “the farmer and the baker” cannot agree on the price. The speculator fills the gap and “bears the risk,” creating “certainty about future prices” — for a small commitment fee. And even when he, admittedly, has a small part in pushing prices up, he is only serving as a signal, as a transmitter of the message that prices will remain high for quite some time. Besides, the financial jugglers only steer capital to where it is urgently needed — that is their other indispensable accomplishment. This also needs to be repeated once again; here the economic experts get down to the essentials and elucidate the basic dogmas as clearly as in an introductory university seminar. After all, the drivel and the negative opinions about the foundations of the market economy must not become epidemic, for they might harm the good reputation of its champions or eventually even business itself.

So, in the end, the rising prices are honored as signs of the beginning of a new wonderful boom, which turns the initial diagnosis of a worldwide catastrophe on its head. The good news is: high prices stimulate production; speculation attracts investments into this sphere, and all that occurs to the benefit of the consumer. Hopefully, those in the famine-stricken regions will also get to hear about it.