NORTH
COAST
T IM E S
P A G E 13
E A G L E , JABRUARY 2005
competition is only a still frame, a momentary snap-shot of a
fluid real life action. The outcome of competition is the
concentration of industry, and any contention to the contrary is
patently absurd
The perfect state of competition in the eyes of invest­
ment capital and Congress is one where volume multiplied by
price reaches its apogee, and that theoretically perfect states of
'competition' will result in the theoretic price close to the point
where maximum total profit is taken from a market. This is as
far as the language of the U.S. interstate commerce legislation
seeks to “free" trade from the “restriction" of monopoly. That
competition can continue without resulting in consolidation is
no more credible a contention than assurance a woman won't
get pregnant from sexual intercourse. You would have to find
it credible that: (1) there is free competition between a large
number of competitors; (2) there is complete separation of
ownership between all industrial enterprises, including consec-
cutive stages in processing rawmaterials into finished goods;
(3) there is no communication between these alleged many
small producers over price and production rates; and (4) these
producers provide for a market they do not have knowledge of.
These conditions exist only in the minds of faith-based econo­
mists who subscribe to neoliberal ideology independent of
evidence. The outcome will contradict the prediction: the
workers will not become owners of industry, the tools are
not becoming simpler, and prices are not decreasing in real
terms.
If you lower your prices, you lower your profits which
results in market consolidation, greater monopolization, and
inevitably higher prices. When a supplier’s market share nears
100% or s/he colludes with “competitors" to set prices and
production levels as in a cartel, they will tend to raise prices to
maximize profits higher than the total of maximum total profit.
The total profit declines, but the rate of profit (the annual return
upon money invested) continues to increase as fewer units are
made and cost less in material and labor. Capitalists recognize
the opportunity to obtain higher profits and recover part of their
capital through investing in monopoly. As the market is consoli­
dated, production declines and costs lower, liberating more
unnecessary money (‘free capital') to be invested elsewhere;
buying up land, for instance. The profitability of monopolization
or mergers and acquisitions, or vertical integration or whatever
you wish to call it, is irresistible. A market without any subsidies
and outside the protection of government regulation will fall as
easy prey before the lions of investment capital and succumb to
monopolization and subsequent inevitabilities of price.
Under monopoly control, the market price would tend to
be set at the apogee of profit rate and production would diminish
accordingly. Unregulated market systems, being outside the frail
influence of human morality, have a history filled with genocidal
ghettos in which discarded masses of humanity are liquidated
through monopoly absorption of land. Currently, about 1 billion
people are malnourished or starving in the food markets of
today despite subsidies. Under an unregulated market, where
pursuit of profit reigns unrestrained, 3.25 billion people or more
will likely starve, and the world economy will implode as billions
of others redirect most of their income to their immediate
nutritional survival. Imagine the shrill howls of “overpopulation”
by Malthusians as world finances convulse and nations plunge
into open warfare.
It does violence to the rational mind to imagine the price
of food advancing beyond the point of maximum profit, but it
can when production and transport has been destroyed by acts
of war, such as the ravaging of crops, roads and the lives of
farmers as in Vietnam with chemical defoliation and forced
removal from villages into so-called 'strategic hamlets'. As a
result, the price of agricultural commodities rises still further to
R. MATSON
the point where inadequate supply finds its market price as it
did in Ethiopia in the 1990s. As such, the outcome of violence
in human relations pushes the price of necessity beyond the
means of people into the wild universe of maximum cost that
absorbs all wealth as vital social bonds fail in frantic anarchy.
If all subsidies and government regulations are removed
and the production of food is left entirely to the market without
consideration for the need of humans to eat, then capital will be
irresistibly attracted to further monopolize trade in agricultural
commodities, and all significant means of production and distri­
bution of food will fall to the speculative ownership of capitalists,
as have other means of production succumbed to processes of
accumulation independent to which nations they are located in
and indifferent to the moral inclinations of the owners of capital.
Without safeguards, monopoly control of the trade in food is
only a matter of time and the amount of available investment;
the incentive to do so is irresistible.
The casual observer will recognize the urban population
of Earth, having no capacity to grown their own, is reduced to
GOING HUNGRY IN AMERICA
BY ANURADHA MITTAL
Today the United States faces a hidden epidemic. It is
striking Americans of every age group and ethnicity, whether
they live in cities or rural areas. And despite the diversity of
targets, those suffering in this silent epidemic have two things
in common: they are poor or low-income, and they are increas­
ingly going without enough food.
Although politicians talk about “poverty in America,"
decision-makers avoid specifically mentioning the growing, and
often deadly problem of hunger.George McGovern said in 1972,
“To admit the existence of hunger in America is to confess that
we have failed in meeting the most sensitive and painful of
human needs. To admit the existence of widespread hunger
is to cast doubt on the efficacy of our whole system.”
Three decades later, evidence indicates that the existing
system is failing a vast number of Americans.
A look at the United States reveals a wide gap between
the goal of universal access to adequate nutrition and the reality
of hunger that plagues millions in this country alone.The number
of hungry people in the United States is greater now than it was
when international leaders set hunger-cutting goals at the 1996
World Food Summit. The pledges by United States government
leaders to cut the number of Americans living in hunger — from
30.4 million to 15.2 million by 2010 — are lagging behind. An
estimated 35 million Americans are food insecure with food
insecurity and the necessity of foodstamps being experienced
by at least 4 in 10 Americans between the ages of 20 and 65.
That’s 50% of the population.
Meanwhile, the already burdened food safety-net prog­
ram, which was designed to alleviate hunger and food insecurity,
is under attack by the threat of reduction of funding and ease
of enrollment by policy makers. With food expenses being the
most elastic part of a family’s budget, as limited funds usually
get allocated to fixed payments first, such as rent and utilities,
food purchasing has become the most compromised portion of
the average family's budget. So far in 2005, 35% of Americans
have to choose between food and rent, while 28% must choose
between medical care and food. Others, forced to stretch their
budgets ever further, are buying less expensive but often less
nutritious food.
The problem is worse in low-income neighborhoods
and inner-city areas that face food red-lining. The majority of
low-income/minority neighborhoods do not have enough super­
markets to serve the entire community effectively. Therefore,
these communities generally meet their food needs at smaller,
more expensive corner stores —especially at liquor/convenience
marts that tend to provide less nutritious foods and little if any
fresh produce.
While three companies control 57% of the huge food
retail market in California, the community of West Oakland, with
32,000 residents and a 60% unemployment rate, has only one
supermarket — with 40 liquor and convenience stores. The price
of food in these small stores is almost 30% to 100% higher than
the price in a grocery store.
The most vulnerable — children, immigrants and rural
families — are hit hardest by this epidemic. Despite evidence
that hunger causes chronic disease development and impaired
psychological and cognitive functioning in children, an estimated
13 million children are living in households that are forced to
skip meals or eat less due to economic conditions.
The worst off are the children of 6 million of America’s
undocumented immigrants: they go without necessities such as
milk and meat on a daily basis.
Tulare County in California, the number-two county in
the nation for agricultural production, is one of the hungriest and
poorest areas of California. Many of the county’s towns (Wood­
ville, Plainview, Alpaugh, Earlimart, etc.) host mainly Hispanic
farm-laborer families who came to the United States hoping for
a better life, only to find that their jobs — putting cheap produce
on U.S. and the world’s tables — have left them starving amidst
the bounty. These families suffer from appalling economic and
social injustices. They live in lean-tos made of cardboard or
plastic, dilapidated trailers, wood shacks, parking lots and even
caves; yet are surrounded by vineyards and fruit tree orchards.
This kind of hunger rarely makes the evening news.
Millions starve while Bush signs a $400 billion spending bill in
August 2004 that will go largely to military efforts in Iraq and
Afghanistan. The Bush Administration has already spent $150
billion on the war in Iraq — three times the original estimate.
The United States accounts for nearly half of the world’s military
spending. This means that the U.S. spends on defense' nearly
as much as the rest of the world combined.
The Universal Declaration of Human Rights, signed 56
years ago, committed our government to provide a standard
of living adequate for the health and well-being of every person.
This included commitments to respect, protect, facilitate and
fulfill the right to food, clothing, housing, medical care and
necessary social services in the event of unemployment, sick­
ness, disability or old age. A widely supported statement at the
time, the promises of the Declaration seem outrageous to many
in today's age of “personal responsibility."
It might be useful to ask: What's more outrageous?
A broad and sturdy safety net and living wage jobs for all
members of our society? Or I out of 4 children going hungry
and poor in the richest country on earth
buying their food. Historically, this situation is recent. Prior to
the Great Depression, a majority of people lived rurally and had
access to land to grow a good portion of the dietary needs. The
economic conditions that mandated the political compromise of
subsidized market support in agriculture have not disappeared
by magic since then. I would argue they exist to a greater, more
extensive degree today than ever before. The monopolization
of agriculture in the U.S., in which about 7 million family farms
were foreclosed upon in the past decade, may in fact be so
advanced that the primary effect and motive for persistent agri­
cultural subsidies is to prevent Americans and Europeans from
being starved into political radicalization.
This is in fact the obscured fundamental action taking
place; the structural inability of an unregulated market to provide
basic nutrition to the urbanized populations of industrialized and
post-industrialized civilization has been and remains strategic­
ally offset by the permanent institution of agricultural subsidies
that for the past 70 years have been responsible for paying the
portion of price equal to or greater than the 'profit' generated
from “agribusiness.” Without subsidies, food insecurity would
explode into widespread starvation and political insecurity.
Food subsidies are in truth, the hidden proof of the failure of
the economic ideology of neoliberalism and globalization. This
is not a mystery lost to history or obscured by other events —
it is the central truth of the nature of the system that is denied,
lied about and obfuscated with malice aforethought.
The truth is the we can feed the population we have
with the land and other resources that we have now. We can
maintain our ability to eat at least for the near future and not
reduce the population.
By tampering with the support for the global capitalist
state, the G-21 nations risk setting off a chain of events far
greater than the stated goals of their counter-proposal. My fear
is that, given the current atmosphere of globalization, the G-21
counter-proposal may fall upon too fertile ground as indebted
governments nearing bankruptcy desperately grasp at any
means to stay in power, and that the U.S. administration would
probably favor a dramatic increase in the cost of grain to offset
their current trade imbalances. The end of subsidies is the Holy
Grail of neoliberals and proponents of globalization who subor­
dinate human welfare to private profit and avarice. The last
reform of the New Deal to fall after all this time, and fall I fear
it will — and along with it, all hope of stability in the world.
If the testament of history is to hold any guiding truth for
us today, it must be conceded that the conflagration and political
anarchy of the world Depression of the 1930s and subsequent
world war was materially unnecessary. Unlike a natural disaster,
its cause was the failure of human institutions over the trade
of humanity’s goods. Populations cannot endure the failure of
experiments with the world economy. With the very real threat
of thermonuclear weapons, we cannot allow the recidivation
of fascism. World civilization cannot afford to degenerate into
conflict as a means to resolve this situation. If we sit on our
hands and remain silent at this critical point in history, we
will not have another opportunity to act together with such
an economy of effort. To imagine that economic depression
or war are legitimate techniques to address, amend or correct
the inequities of an economic system is insane.
Three questions I am compelled to ask are these:
~ Have the G-21 nations commissioned a mathematical
model to estimate the outcome of events that would likely occur
from the removal of agricultural subsidies should their counter­
proposal succeed in some form at Doha or at a later date?
- Are the G-21 nations seeking repudiation of the
ideology of neoliberalism and globalism through demonstrative
action, and if so, what safeguards against economic depression
and war can be assured if their proposal is acted upon; what
alternative economic system are they prepared to advocate and
implement in the vacuum left by neoliberalism’s likely collapse?
~Would the G-21 nations financially support an investi­
gation into drafting a proposal that more clearly manifests a
consideration of the economic reality of the current state of
world financial and material trade that seeks to ameliorate each
nation's situation without generating crisis?
These questions will inevitably have to be answered.
Anuradha Mittal writes for AlterNet/lndependent Media Institute
Theodore Thomas lives on a boat in Astoria, which he
eventually plans to sail across the Pacific Ocean.