Will the Free Market End Hunger? Food First Text extracted from World Hunger 12 Myths by Lappe,...

Will the Free Market End Hunger?

Food First

Text extracted from

World Hunger 12 Myths

by Lappe, Collins, and Rosset, 1998

Free Market

• Free Market responds to money not people

• As poor get poorer and are pushed from land– they have even less impact

on markets

• Their needs for food do not register

• The market responds to the needs of the wealthy – to produce luxury goods

http://www.havingaballdresshire.co.uk/toolkit/luxury-dress-rental.jpg

The Market• Is blind to social and

environmental costs• Example: U.S. Ag export boom

– Loss of small farmers, rural communities

– Soil erosion– Aquifer depletion– Ground water contamination– Fossil Fuel waste, global

warming

http://www.klaassenrealty.com/images/auctions/auction_today_sign.jpg

Concentration of Wealth

• The Market leads to a concentration of economic power

• Those with greater economic power gobble up those with less

• Food flows from the hungry to the well fed

http://www.geocities.com/srivathsajoshi/burgerking01.jpg

Inequity

Reward for Hard Work?• Theory:

– Market rewards hard work

• Reality:– Market requires hard work and

production

– Market rewards those who have wealth

– Wealthy can withstand market swings

– Wealthy have better access to credit• better risk

– Wealthy can invest in more land to offset low grain prices

Donald Trump

http://tv.popcrunch.com/wp-content/uploads/2007/11/donald-trump.jpg

Distribution of Purchasing Power

• “The more widely dispersed purchasing power is,

• the more the market will respond to actual human preferences and needs

• and the more power the market will have to end hunger”– Food First

Mexico

http://z.about.com/d/studenttravel/1/7/X/E/zihua_secret_merc_green_bowl_03.jpg

Structural Adjustment Loans• Loans given in 1980s-90s

– International Monetary Fund (IMF)– World Bank

• Condition of loans = Structural Adjustment Rules – imposed on governments

• Goal: make developing countries – Efficient– competitive

• Involved– deregulation, – privatization of state institutions – removal of trade barriers

IMF loans

http://jeffboulton.ca/BBB%204M1%20Map%20-%20IMF%20Use%20of%20Credit.gif

Effect of Structural Adjustment

• Benefits of institutions and resources transferred from public to private business

• Gap between rich and poor widened as economic power concentrated

• Poverty and hunger escalated• Free market increased import

of luxury goods• Cheap imported grain drove

local farmers out of business

http://ecx.images-amazon.com/images/I/41I1C0Lo5TL._SL500_PIsitb-dp-500-arrow,TopRight,45,-64_OU01_AA240_.jpg

http://www.antiwarcommittee.org/images/clipart/economics/SAP.jpg

Costa Rica• After a decade of

Structural Adjustment:– Trade deficit rose 100%

– 76,800 cars entered country in 3 years

– 42,000 farmers growing corn, beans and rice staples went out of business

Costa Rica Market

http://images.goabroad.com/images/listingphotos/standard/Costa%20Rica%20-%20Fruit%20Stand.jpg

Need Government and Market

• Government and Market must work together to end hunger

• Market by itself will lead to concentration of wealth– and increased hunger

• Government by itself without market leads to – inefficiency, – lack of motivation– low production

• Example: Soviet Russia

http://www.flykending.dk/tema/museer/nasm/capitol1.JPG

Role for Government

• Government policies can help to spread the wealth and means of wealth – so that the market can serve

more people

• Government can help insure that people have the means to support themselves – and thus eat

http://www.goldenbuckeye.com/connection/nov2007/2.gif