On the 25th of February, the World Food Programme (WFP), the United Nations
agency responsible for distributing aid from donations by governments around the
world, announced a $500 million budget shortfall due to soaring fuel and
particularly food prices. The prices of the staple food items distributed by the
WFP had risen by an average of 40% since June last year.
Since making that announcement, the WFP reported that food prices had risen by
another 20% in three weeks. The WFP had changed to buying food locally to cut
costs, so this massive further acceleration of food inflation is particularly
severe in the “third world” and probably reflects panic buying and the
hoarding of food by those worried about rising prices and/or shortages in the
shops. The only thing preventing food prices rising even more rapidly than they
are already is poor people around the world consuming less because they cannot
afford the higher prices or because of shortages.
The WFP only distributes aid to around 70 million people and obviously a huge
number of people now require aid who previously didn’t, to avoid starving to
death. Meanwhile, the WFP is warning that if it does not receive more government
funding by the 1st of May, it might cut “the rations for those who rely on the
world to stand by them during times of abject need”.
Food prices have risen sharply in the West too, albeit to a lesser extent due to
the huge profit margins in the supply chain (by 17% in the last year for “a
basket of staple food items” according to an article by Emma Lunn in the
Business & Money section of the 23rd of March Scotland on Sunday newspaper). A
Tory report has estimated that butter has risen 37%, a dozen eggs 34% and bread
28% in the nine months since Gordon Brown became prime minister.
The demand for food is massively outstripping supply, mainly due to a lot of
land being used for biofuels (to supposedly reduce global warming) and people in
some countries (such as China) consuming more meat and dairy products, both of
which require much more farmland (by a factor of eight for meat) than that
required for vegan diets. Additionally, there is a problem with a fungus
destroying wheat, and floods and droughts are affecting harvests.
There have already been demonstrations and riots in many countries as a result
of the food crisis. The challenge for political activists such as myself is to
channel the anger of ordinary people in a positive direction, and to provide
practical solutions. Abandoning biofuels may help a lot, but many will have to
switch to wholly or mainly vegetarian/vegan diets, either voluntarily (which
would probably only happen in a socialist society) or through compulsion by a
form of rationing.
I called for a worldwide general strike in the run-up to the 2005 G8 summit in
Gleneagles, Scotland, when the Make Poverty History campaign and Live 8 concerts
made “third world” poverty a big issue. There is massive scope for
coordinated strike action in many countries of the world this year, because food
and fuel price increases are hitting ordinary (particularly working class)
people in the West too.
Additionally, income tax has doubled for some low-paid people in the UK (with
the abolition of the 10% rate in Alistair Darling’s first Budget, hardly
mentioned in the media), and mortgage interest rates (for homes declining in
value) are rising.
The New Labour government is attempting to get public sector workers to accept
three-year pay deals at no more than 2.5% per year, not just because inflation
is already much higher than officially recognised but because inflation is
massively rising in these turbulent economic times.
We cannot wait until the time of the next G8 summit (in Toyako, Japan, from the
7th to the 9th of July); the crisis is getting exponentially worse and is
unsolvable without overthrowing capitalism. I have written two very important
songs mentioning the food crisis; recordings of both will soon be recorded by my
new band Red Day: “Radio Africa” (which may become a charity single) and
“Global Warming Bluff”. In the meantime, you can read the lyrics at
www.red-day.net.
The food crisis impacts the other major crisis of capitalism – the credit
crunch. The problem to date has largely been of “subprime” mortgages
(particularly but not just those in the USA), with flexible interest rates that
massively increase after starting low, sold to people with poor credit records.
However, some commentators have recognised that the collapse of the big US bank
Bear Stearns shows that there is a crisis with other mortgages (called
“prime”) as well!
A BBC TV programme on the credit crunch pointed out that people got caught out
with subprime mortgages largely because mortgages are usually a fixed rate for
their entire term, unlike in the UK where all mortgages have flexible interest
rates that can be changed by banks and building societies. With (real) inflation
going through the roof, many more financial institutions are bound to go to the
wall.
Rather than just a slowdown, recession or slump, we are heading towards a
massive possibly terminal crisis of unethical capitalism like in 1914. On that
occasion, stock markets around the world were closed for several months to avoid
a complete meltdown.
There will need to be a complete reorganisation of the world economic system to
resolve the situation. Maybe there could be a more ethical form of capitalism,
in which I would argue that rich people must pay their fair share of tax and
there must be a fair electoral system as well as there being ethical approaches
to farming, the environment, animals and poor people via fair trade. Maybe banks
and building societies would return to concentrating on savings and loans.
I would argue however that there should be genuine democratic socialist
societies, in particular countries if not throughout the world. What happens
will largely depend on what ordinary people striving to change society do, as
well as the effects of politicians, stock market investors and big
businesspeople. Economists can’t model the free will of individuals, so their
relatively optimistic economic forecasts are largely speculative and will be
proven false by events.

--
Steve Wallis (Glasgow, Scotland)
For important/urgent communications, please email: warcrysteve@...
Blogs: http://groups.yahoo.com/group/steve-wallis-socialist-blog,
http://blog.myspace.com/galaxiasteve
My socialist website: http://www.socialiststeve.me.uk
My socialist musical poetry: http://www.socialiststeve.me.uk/poetry.htm (and at
my MySpace and Multiply pages)
My pages at MySpace: http://www.myspace.com/galaxiasteve, Facebook:
http://www.facebook.com/profile.php?id=731729407 and Multiply:
http://socialiststeve.multiply.com
Founder, Good Intentions Network: http//www.goodintentionsnetwork.org
Funder, Ethical Capitalism Network: http://www.ethicalcapitalism.org
Founder, Foundation for PR-based Socialism: http://www.PRsocialism.org
Founder, Revolutionary Platform Network: http://www.revolutionaryplatform.net
My socialist band, Red Day: http://www.red-day.net
Author, "Revolution Destroyed? Have I ensured that a world socialist revolution
will never happen?": http://www.revolutiondestroyed.net
For discussion of the credit crunch, go to
http://www.revolutionaryplatform.net/forum/index.php?board=156

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