According to the International Monetary Fund’s authoritative
World Economic Outlook the world is facing “the largest financial shock since
the Great Depression.” House prices are heading south, the house price bubble
has well and truly burst and the whole housing market is freezing over. House
building has virtually come to a stop. This is going to hit people in the
advanced capitalist countries hard.
Robert Zoellick, head of the World Bank, puts our problems
into perspective. “While many are worrying about filling their gas tanks, many
others around the world are struggling to fill their stomachs.” We are
confronted with actual starvation. He warns that the present food crisis will
give us “seven lost years.” It means “lost learning potential for
children…stunted intellectual and physical growth.” His colleague at the IMF,
Dominique Strauss Kahn, concurs. He foresees that “hundreds of thousands of
people will be starving.”
These people are strong on prediction but weak on prevention.
There is a reason for this. They are the enforcers of world capitalism.
Capitalism is ruled by strong, rich imperialist countries who strive to keep
the rest ‘in their place.’ Free trade and free market capitalism has proved an
excellent mechanism for keeping the many poor. Free markets have failed, so the
enforcers demand more of the same.
Now capitalism is falling apart at the seams. Wheat, rice
and cooking oil have virtually doubled in price in less than twelve months. It
is madness that astronomic sums of money, enormous wealth, circle the globe and
not enough finds its way to grow food for the poor. There’s a palm oil
shortage. It takes 8 years to grow the trees to maturity, so soaring cooking
oil prices are not just a hiccup. A socialist planned economy could have
anticipated the increase in demand, but capitalist farmers just respond to
price signals. By then it’s too late.
The Observer (April 13th) interviewed Kamla Devi
from India. She has decided that, because of the food price rises, her family
can no longer eat twice a day. Now they just have a midday meal of roti (flat
bread) and vegetables. “When I go to the market and see how little I can get
for my money, it makes me want to hit the shopkeepers and thrash the
government…The rich are becoming richer. They go to the shopping malls and
they don’t need to worry. The problem with prices only matters for the poor
people like me.” There are hundreds of millions like Kamla, in households where
more than half their income goes on food. For them, capitalism has proved a
Understandably there have been food riots in Egypt,
Indonesia, Ivory Coast, Mauretania, Mozambique, Senegal and Cameroon – so far.
The poor world is in flames over the issue. Jacques Diouf of the Food and
Agricultural Organisation warns, “There is a risk that this unrest will spread
in countries where 50-60% of income goes to food.” It’s not a risk, it’s a
certainty. Yet the FAO is devoting peanuts to alleviating starvation. It’s just
not a priority for world capitalism.
Darling blew more than £50bn of our money on Northern Rock. Now the Bank of
England is dishing out another £50bn to the poor old banks. Bernanke and the
Fed gave JP Morgan Chase a guarantee of $30bn in order to take over bankrupt
Bear Stearns. They’re worried about the financial crisis and the ‘plight’ of
the banks. What a pity capitalism’s
priority is the bankers, not the poor!