Posted by David D’Amato on May 13, 2011
Spotlighting China as an example, BBC News reports that “[t]he Food and Agriculture Organization’s food price index is at its highest level since being created in 1990. As food prices rise,” the story adds, “so does poverty.” In just the first few months of this year, some Asian markets have witnessed as much as a 10 percent increase in local food prices, a shift that could potentially plunge almost 65 million people into poverty, according to some estimates.
Though observers and commentators are quick to importune governments to act, making all the usual allegations of “market failure,” the worldwide food problem is a consequence of state intervention.
As law professor Siva Vaidhyanathan observed (regarding intellectual property laws), “Content industries have an interest in creating artificial scarcity by whatever legal and technological means they have at their disposal.” And the same is true of commodity providers whose interest it is to ensure that the nutrition we need to survive comes through them.
If a few giant, state-subsidized and -protected farms, wholesalers and retailers can unilaterally command supply, they can demand in payment whatever capricious price they determine. This propensity — ever more cartelized industry with ever fewer “competitors” — is endemic to state capitalism, but it is alien to genuine free markets.
Free markets divide and moderate market power by denying special protection and privilege and opening competition to a wide assortment of both entrants and methods. Only where potential threats to corporate monopolization are precluded by force of law — through, among other impediments, “safety” and “consumer protection” standards — can today’s “captains of industry” ascend to market dominance.
It is too often assumed that the behemoth conglomerates populating the landscape of corporate capitalism wince at regulations supposedly aimed at health and safety. These rules, however, routinely function to outlaw the farm stand down the street, the small, local producer who can’t afford to jump through the arbitrary and unjustified hoops put up by the political class.
Powerful elites lobby for and welcome new laws that further constrain consumers’ options, preventing you from “taking your business elsewhere.” Today, the price we pay for food is quite detached from the actual costs of producing it. Where the natural pressures of a legitimately free market would push prices downward to reflect a product’s true value, state capitalism’s restrictions on competition allow big business to squeeze out monopoly profits.
In still another departure from real market discipline, taxpayer subsidized transportation means that most people get their food from hundreds or thousands of miles, rather than hundreds or thousands of yards, away. When the price of oil rises, then, so too does the price of food. With so few alternatives to the mass-produced garbage of state-fortified big agribusiness, there’s no real reason to give the powerless consumer anything like a good product at a good price. So much for “consumer protection.”
In places like China and Southeast Asia, governments have dealt away to rich companies land that was cultivated by farmers for thousands of years, land that fed their families and their community. The state and its favorites have no justifiable claim to these lands under any well-founded standard of property, but the ethic of the state has never amounted to much more than might makes right.
The rising costs and shortages of food, a growing crisis all around the world, are a creation of the state, a phenomenon that exists completely apart from anything that could, with a straight face, be called “market forces.” Market anarchists would remove the constraints and coercion from food production and allow voluntary exchange to feed the world.
Rather than pining after some utopian paradise, market anarchists argue that, without state-created scarcities for rich rent-seekers, people around the world be able to provide good food for their families with a fraction of their labor today. We can look to elite members of the political class to “fix” a problem that they created, or we can allow cooperation and genuine free trade on a human scale to fulfill people’s needs.
We’ve seen the way that political solutions work. Now it’s time for society to get out from under the stranglehold of the state.
C4SS News Analyst David D’Amato is a market anarchist and a lawyer with an LL.M. in International Law and Business. His aversion to superstition and all permutations of political authority manifests itself at www.firsttruths.com