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 Donald Trump http://tv.popcrunch.com/wp-content/uploads/2007/11/donald-trump.jpg – Wealthy can invest in more land to offset low grain prices 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 IMF loans http://jeffboulton.ca/BBB%204M1%20Map%20-%20IMF%20Use%20of%20Credit.gif • Involved – deregulation, – privatization of state institutions – removal of trade barriers 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_PIsitbdp-500-arrow,TopRight,45,-64_OU01_AA240_.jpg http://www.antiwarcommittee.org/imag 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