The Political Inquirer

Food riots in Haiti have caused the ouster of the sitting Prime Minister there, and if Somalia had a functioning government it, too, would be be in collapse. We are told it is the price of oil, the diversion of corn supplies from the food-chain into ethanol production, and restrictions on exports that are to blame for the world-wide shortage of rice. My favorite excuse is that prosperity itself has caused a breakdown in world food distribution. George Bush trotted that one out himself the other day, which makes me wonder if he believes capitalism works. But George has once again made a statement that hints at the reality of the situation, as he tries to parrot what his handlers have told him, only to mangle it in such a way as to give us all a peek at the man behind the curtain.

In a “zero sum” game, if one party is to rise, another must fall, but in theoretical capitalism, a rising tide floats all boats. In a world dominated by trade, we are told that comparative advantage between and among nations will bring prosperity to all. But I watched the so-called Law of Comparative Advantage manipulated when, in the 1990’s, the various sovergn states of America engaged in a race-to-the-bottom by offering tax incentives to captial investors, ruining the integrity of the former united states free market. Only the heroic Senator Pothole (R- NY), standing in the well of the senate singing “Deep in the Heart of Texas” during a failed filibuster, seemed to understand that the various states were engaged in economic warfare.

We had already begun to eat our own seed corn, starting down a road with no future when we allowed different standards of wages within our own national market with anti-union “right to work” laws, balkanizing our work force by pitting the well-paid and unionized north against the pauperized south. For the capital investor, economic “law” dictated he move south to reap the comparative advantage of lower labor costs.

The process was internationalized with NAFTA, as tarriffs and duties were altered to allow big steel and other capital-intensive manufacturing to abandon their Unites States factories for the greener pastures of Mexico. As the economy worsened for wage earners throughout the country, the stigma once attached to buying foreign products was abnegated in the cruel struggle to survive, and capital investment in manufacturing all but ceased inside the borders of the United States.

The comparative advantages that sent captital investment south, and ultimately off-shore entirely, were not “natural” advantages, but created by pitting governments against each other, first within these united states, and ultimately on the world stage.

Now, under the rubric of Globalisation, governments have been encouraged to abandon national subsistence programs that provided secure and affordable foodstuffs to their citizenry in order to exploit comparative advantages in crops that yield higher prices on the world market. These new crops, unimportant to domestic markets, would bring fresh capital into the country with which to purchase rice and wheat from foreign producers.

Why did this system fail? Oil prices, diversion of staple crops to energy production, and restrictions on exports from previously reliable trading partners. Or, what George Bush was trying to say, manipulation of markets by profit-seekers.

If you are in an airliner and the cabin loses pressure, a small oxygen mask descends from the ceiling. Passengers are instructed to first put the mask on your own face, and then turn to your travelling companions to assist them. Around the world, basic food-stuffs have been abandoned because they were readily available on the world market, and economic theories of free trade indicated that it would be more productive to allow those with a comparative advantage to produce these vital grains and cereals. This was the road to prosperity. This is globalisation.