Our Fragile Era of Abundance -- for Some
At any given time the world produces more than enough food to feed every person on the planet a healthy diet. The problem is that the food is continually in the wrong place. The problems of food surplus can be as much of an issue as food shortage. When there’s a surplus food prices are forced lower, resulting in less profit for the farmer which can have the effect of either lowering the amount planted in following years or worse, lowering prices further as farmers plant more and more in an attempt to make a profit on an ever cheaper product.
As a result, one year a country will produce a bumper crop, driving prices down which leads to less planting the following year which will then drive prices up. Include in this the ever-worsening cycles of worldwide drought and a situation like the one we have today is created where rich countries can weather the storm of crop fluctuations but poor countries go hungry despite what has generally been a worldwide food surplus.
This is not an unsolvable problem. Immediately after the war an Englishman named John Boyd Orr envisioned a world market for wheat that, if implemented, would have not only eliminated the problems of starvation in times of plenty (think of every African famine story you’ve read erased from history) but also encouraged worldwide cooperation and trade. As result of this plan, Boyd Orr won the Nobel Peace Prize in 1949. The US, UK and Russia originally agreed to it and established the United Nations Food and Agriculture Organization (FAO). Tragically, the plan was scuttled due to the US’s and UK’s fear that they would lose their ability to import cheap food sources and Boyd Orr resigned from the FAO (he went on to make a fortune in the stock market). As the US settled into the Cold War with the Soviet Union, hope for worldwide cooperation on food production vanished.
It’s astounding to look back and realize that at one time there was a chance for worldwide cooperation in feeding the planet’s people. While the Second World War restructured Europe, US and Japan into separate systems of centralized government control of the economy, it did little to lift the rest of the world out of poverty. The choice of the US and UK’s post-war leadership to pursue the short-sighted strategy of advancing their own country’s wealth was ultimately tragic. The entire world was poised to be remade; instead the thread of peace passed quietly through civilization’s fingertips.
What is poorly understood is that capital has a tendency towards monopoly. What ultimately created a middle class in the US was the more even distribution of wealth created after the war. Not necessarily through taxation, though that was part of it (the highest tax bracket in 1950 was 91 percent), but through programs like the GI Bill, massive farm subsidies, and nationwide infrastructure investments. These helped the US not only grow but in the truest sense of the American Dream, opportunity began to equalize.
But those days are long gone. It costs a small fortune to attend college in the US nowadays and it’s only getting worse. The cost of going to a public university is a good indicator of the cost of living increases placed on the middle and lower classes. In inflation-adjusted dollars it cost $8,756 to attend a public four-year university (inclusive of room and board) in 1980, not necessarily considered halcyon days in the US. A student attending the same university in 2011 paid $15,605.
The reason for the price increases are simple: State and Federal government in the US no longer pay what they used to. The days which are looked back on as nostalgic in the US are eroding faster and faster because of a reluctance to look at their root cause: the wealthiest members of society paid more because as their wealth increased, they gained an ever increasing advantage. As the years go by and the wealthy pay less and less, there is a corresponding debasement as the institutions that made the US what it was after World War II are defunded.
Seemingly only through emergency can the US, and much of the western world, do anything to change the collective slide towards atavism. However, in the next 20-30 years we may have another opportunity to recreate that more balanced world. Just as Germany and Japan saw war as their only opportunity to economically and socially stabilize their nations, China will soon be faced with a similar dilemma. It might not come in the form of war, but a breaking point will be reached and if history is our guide, a preemptive, peaceful, and intelligent solution will not be reached. Things will have to get bad, first.
The evidence is clear: nothing has changed since 1939; whoever controls food is still king. China, as it sees per capita incomes rise, is importing more and more food and significantly affecting the agriculture market (India and Indonesia are as well, but to a lesser extent). This is due to an increased demand for meat in China, which takes a huge amount of plant-based calories to raise. To put this in perspective, in 1995 China produced and consumed 14 million tons of soybeans. In 2010, they produced 14 million tons but consumed 69 million tons. According to the Washington Post, this has fundamentally remade agriculture in the United States by transforming what was once a wheat producing country into a soy producing country. The rest of the world is following suit as well; Brazil and Argentina are quickly approaching soybean monocultures as China is now purchasing 60 percent of the world’s soybean market.
There is a certain spin that can be put on this news, and the ever-increasing demand for food coming from the East. China, a country where per capita income is still only $8,500US per year (121st in the world) is increasing its standard of living. What could be wrong with that? Unfortunately there are 2.5 billion people in the world who live on less than $2.50US a day. As food prices rise and developed country’s surpluses no longer make it into the poor’s stomachs, famine, as history has shown us, will be the inevitable outcome.
But won’t productivity rise as demand increases? It isn’t likely. Worldwide food production must increase 70 per cent by 2050 to keep pace with world population growth. That is the equivalent of another food productivity revolution which occurred as a result of World War II. With arable land in the western world approaching its maximum, fertilizer effectiveness dwindling, and the extreme depletion of once-rich soils, the outlook for productivity increase is nil. China itself is already producing at maximum capacity, and is seeing agricultural productivity continue to fall as environmental collapse, including desertification, takes its toll on crop production. Additionally, the stage may be being set for conflict as China is purchasing land in nearby countries on which to grow crops. What will happen when those countries can’t feed their own people?
During World War II the US consented to feed the world, and then taught much of it how to feed itself. We can only hope the next inevitable crisis affords us a similar opportunity.