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Waiting for the next speculative lack of food and other staple goods PDF Print E-mail
Food Crisis

Foods Market commonTaking as the starting point of our consideration the public debate that is often held on cheap and expensive oil and the role of speculators in the setting of its price,(1) as well as the forecasts for a new crisis of a lack of food, it would be worth noting the necessity of distinguishing two levels in the intersection of supply and demand:
a. direct real demand, with whichever chronological forecasts for an estimate of the fluctuation of actual demand, and, secondarily,
b. demand in financial contract-making and discounts, stock market petroleum titles, petroleum supply and demand.

The second level is completely unrelated to supply and demand and we are obliged to discuss – comprehensively this time – the subject of the operation of the market. This form of 'intersection' of supply and demand operates, of course, also in relation to the supply and demand of foods – and can thus lead whole peoples into starvation – as well as in relation to the demand for other natural resources.

In other words, we have a hypothetical financial intersection between supply and demand, which is completely unfounded and false and which ultimately devalues the rule itself of supply and demand in the economy and the real market, through the existence of an 'exotic' market. This, then, is something that we must regulate fully. The intersections of supply and demand in complex, complicated financial products, those financial derivatives and products, must be displaced from the regulations of the so-called free market. These are not true factors of a free market. They are the factors of its distortion. And all those who are 'exotically and toxically' greedy can shake their heads all they like.

Finance-imposed poverty is a crime against humanity
One first conclusion is that it should not be permitted for staple goods to be 'played' on the stock market. The demand and supply of staple goods, such as energy, food, water and others, should not be played on the stock market. Companies share are one thing while these particular products are something else. How can we allow speculation on the prices of staple goods when, at the same time, destitution is increasing throughout the planet? For how much longer will democracy tolerate the speculation that 'treads' upon destitution, starvation and famine? And, if the regular connection between supply and demand is cut then what is the point of the market? The market serves – supposedly – so as to connect demand and supply. Here, however, it alienates and expropriates demand.

In other words, it does not serve the purpose of the market. The practice of speculating on the stock market with staple goods (water, energy, etc.) is a crime against humanity and, as such, must be placed completely outside the law. It is a crime against humanity as it condemns many people to die of starvation or to live on the margins of starvation. There are many who rise up or who are forced to rise up, at the risk of perhaps being killed, with the goal of liberating themselves from the imposed wretched conditions in which they live. The imposition of poverty in certain countries for reasons related to financial speculation on food, water and energy is an open crime against humanity. It is the same as the invasion and occupation of a foreign country.

When – during the last food crisis – the European Union Commissioner proposed that barriers should not be placed on the products of countries in which there is a famine so that they could keep products in their markets, through actual demand, he ought to have previously considered that the financialisation of the trade in staple goods, food products at least, should have been abolished. Energy and water as well as food are included in this category of staple goods.

The unchecked private sector distorts public policy
We must, finally, approach this subject using the terms of an international approach. An initiative needs to be taken against this 'superclass power'. There is a predatory superclass power, which, through a deep democratic deficit, is legitimised by governments due to their weak will and a deep economic dogmatism.
The present economic crisis and its ramifications reveal, in the final analysis, the full extent of the 'malfunction' during the practical implementation of the genuine theory of supply and demand and liberal competition, which are central ingredients in the fertile theory of Adam Smith, as presented in his book The Wealth of Nations. Unfortunately, there was also a 'failing' in the application of the two points of this theory:
a. in the theory of the supply of demand, and
b. in the theory of competition.
There was also a failure in the elements that concern the role of and the legitimising and interventionist or otherwise relationship between the state and the private sector.
Today we see a –selectively– distorted Keynesianism, which is the choice not only of free market policies but is also the demand of private initiative! Unless they want to tell us directly that business demand can and must be politicised!

In amongst all this, we can see that public policy – and not the market – is distorted by the failures of the private sector. Public policy is distorted and entrapped both by the abolition of supply and demand, as we mentioned above, as well as by the abolition of free competition. The landscape does not change easily. The statements and reaction of President Obama to the organised opposition of the US banking system (the colossi with the hedge funds and the private equity funds) to the creation of an rudimentary regulatory 'network' to inspect their excessive 'risk' transactions still reverberate.(2) Public policy traps its funds in matters that do not come under its remit as a result of the negative consequences of the legitimisation of certain bad practices of the private sector. It becomes entrapped, that is, by not being able to invest in education, health, public goods and the environment, precisely because it has committed its resources, its available funds in order to cover the deficits of the private sector.

For the first time, we must now formulate the theory that outlines how the private sector distorts the public.(3) Why have we hidden this fact for so many decades? Within a new framework of approaching the market, enterprise, supply and demand, the role and the responsibility of individuals and agencies, we must also face the corporate cannibalism, the cannibalism of the corporations that we have seen flourishing throughout the entire duration of the global economic crisis.

(1) 'Anyone who believes that the international market for oil is a "free market" is seriously deluded.' Al Gore, Assault on Reason (Penguin, 2007, pp. 192-93).
(2) 'The American Bankers Association has commissioned one of the most powerful and specialised law firms to investigate the legal adequacy of both the recent and previous proposals of the American president. It's not by chance that Obama warned, "If these guys want war, then I'm ready for it". '
'Ok… A president in the footsteps of Franklin Roosevelt' (in Greek), by Zeza Zikou, Kathimerini newspaper, 24 January 2010.
(3) 'The Socialism of the stock markets. Obama: "All or Nothing"' (in Greek)

Ioannis Zisis, writer   

Photo by wikimedia

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