Global Food Crisis
There has been a lot of discussion in the news lately about the rising prices of staple "third-world" foods like rice and corn. The usual culprit trotted out are "biofuels", by which it is usually meant that the expanding market for biofuel is causing increased demand and hence a rise in prices. [e.g.]
What is glossed over or (more often) outright ignored is that this is merely the direct "messenger" of the real cause: markets. As all food is sold on an international market, people in, say, Botswana have to purchase their rice via the same methods (more or less) as we do. Since the bottom billion people need to survive on less than $1 per day, it is clear that even tiny fluctuations in prices will, in some cases, mean they can no longer buy food. (This is the case now).
The real, underlying horror of what we have set up is then apparent. Economists like to talk about supply and demand (and even like to think that increasing demand will increase supply). The reality is that, at least for agriculture, this means that some years farmers will make less from their crops than it cost them to produce (i.e. if there's "too much" of whatever they're producing). What we forget is that "markets" only exist as a (very shitty) way to answer the question: what and how much should we make?
Debt-based currency creation demands consumption
Due to our banking systems, the answer can never be that we should make only as much as we did this year (or, *gasp*, less than last year). We must always make and consume more and more, year after year. This is because all money is created via debt: in order to create a new Canadian dollar, someone must go into debt . This debt has interest, so next year that person owes greater than $1 back. In order to pay this debt, they must make money.
Money can be earned in a capitalist economy either by working (i.e. playing the role of "wage earner") or by "investing" in some way (i.e. playing the role of "capitalist"). The "capitalist" player can only make money by getting people to work for less than their work is worth (and keeping the difference); the wage-earner can only earn money my renting their labour-power out producing something. (Often, Canadians play both roles at once to varying percentages). In either case, the money that the person makes to pay back the more-than-$1 for the $1 they created must come from newly-created money -- which can only be made by someone else going into debt. As one can easily see, this is why bankers start shitting their pants if an economy isn't making more money each and every year (they call this a "recession") because it really means that some people will be unable to pay back their interst and/or debt.
Of course, the reality is that bankers don't really do anything for their interest: money is literally created out of thin air and the interest is mostly profit. When you borrow that $1, you are not "borrowing" from someone else's savings account (as many people wrongly believe) -- the bank simply makes an electronic entry and a fresh, new Canadian $1 is born. [1] This is how money is created [Bank of Canada]. (The physical stuff in your wallet is just one representation of this; you can only get the physical stuff if someone "has some money" in their bank account). This is why banks are so profitable -- they create nearly all the money in Canada.
[1] -- the central Bank of Canada exerts some amount of control over how much money is created in this manner since they set interest rates, and the Chartered Banks have to keep withing some degree of this -- up until now, they've usually changed their own prime rates to match.
As another example from further south, 100% of all U.S. income tax goes to the Federal Reserve (a private company) to pay the interest on the U.S. national debt [Grace Commission Report] since the U.S. government must borrow their money from the Federal Reserve.
This type of monetary supply was advanced after the Bretton Woods agreement [wikipedia] established the US Dollar as a "global standard" and, more importantly pegged it to the price of gold -- making it, effectively, a nearly-fixed-supply currency system (i.e. closely related to the supply of gold). When the US subsequently abolished the gold standard and the world moved to floating exchange rates, the U.S. kept their lock as a world "benchmark" currency, which is continuing to prop up its value despite the fact that the U.S. has been literally bankrupt for years. This is the major reason they oppose a Euro-based oil market (as opposed to the current U.S. Dollar-based one).
We absolutely need to return to fixed-supply (or very close) currencies -- all holders of the currency then determine its value, not a few bankers twiddling interest rates. Fixed supply currencies are also nearly guaranteed to increase in value if one stuffs them under their mattress, rather than the opposite with debt-based currencies -- which, incidentally, greatly encourages people to keep most of their money locked in the financial system. If you wish to learn more about this, a good U.S.-centric documentary called "America: Freedom to Fascism" [torrent] by Aaron Russo is a good start.
William Lion MacKenzie King
``Once a nation parts with the control of its credit, it matters not whomakes the laws....Usury once in control will wreck the nation.'' --[MackenzieKing]
Of course, there are other institutions demanding ever-increased consumption in our system, but I believe that interest-based debt-created currencies are the worst. Corporations, of course, are legally bound to create as much profit as possible so they further this effect and many other forces "encourage" us to consume more and more every second.
Back to the point
So, our economies must always produce more "stuff" each and every second due to debt-based money supply systems. To answer the question "what should I produce" we have created "markets" -- these are a particularly poor way to do this especially for agriculture as the "market" is no longer a local neighbourhood but the entire world. (For example, it makes no [economic] sense for a farmer to sell his rice for $0.50 a sack to his starving neighbour if he can get $2 a sack by shipping it to the U.S.)
The way our markets answer the "what to make" question at the low level works like so: take a wheat farmer, for example. He has a farm and grows some wheat. At the end of the harvest season, he sells it. Ignoring all the various details, an economist will say that the price depends upon the supply and demand curves: if there's more supply than demand, the price will be low (in other words, the market is attempting to say "there's too much wheat!"). If there's really a lot too much wheat, then the farmer -- after working all summer -- is unable to sell his wheat for more than his cost of production. Without any sort of support (e.g. in Canada, taxpayers would immediately pay this farmer for his troubles, so that we would continue to have a wheat farmer in the future) this farmer will almost immediately be bankrupt.
Of course, this will reduce the supply of wheat next year to only those farmers who both didn't go bankrupt and choose to continue to produce wheat -- this is how the market "speaks" to farmers.
...and this is just what is happening in the "global food crisis" right now: when rice (or whatever) prices where down and other commodities were up, many farmers would have switched to growing some other crop. Now, demand has outstripped supply and the market is once again speaking: "there isn't enough rice," it's saying. However, the real price is being paid by people who are priced out of the rice market: they're starving to death.
This isn't a situation unique to rice nor to biofuels -- it just so happens that right at this particular moment, rice is one of the commodities which is expensive and the biofuel portion of the world market can afford to pay more for rice than those billion people who live on less than $1 per day. [2] The solution, then, isn't to not produce biofuels -- the real solution is to fix our markets.
[2] -- The 2007 Human Development Report from the UN also says that 40% of the Earth's population lives on less than $2/day -- this is measured with "purcasing parity", remember: that means the figures are meant to convey that it's like YOU living HERE on $2/day...not living in Thailand for US$2/day. (more here)
Localizing consumption and production is the best first step. Fixing our monetary systems is a longer-term goal, but must absolutely be realized in order to stop our institutionalization of always-increasing production and consumption.
Solutions?
Local is better: One thing that people can do to combat some of the badness inherent in our core institutions is to reject the centralization of power which they all embody by shopping locally. You may peruse my recommendations of good local things in Calgary. I wish I could recommend Calgary Dollars, but they switched some time ago from a Time-based currency (see also LETS) to one indexed to the Canadian dollar (one Calgary Dollar is the same as one Canadian dollar) -- which makes Calgary Dollars useless, except as an incentive to shop locally. However, one can (and should!) do this with "normal" money anyway. They have some good goals, but another debt-created currency isn't going to help anything.
Work-time is consumption: For most of us, all the money we make in our lives will be spent. Thus, in order to reduce our consumption footprint, one way is to work less. Since 2001, I have been working no more than 75% time -- giving me less pay in exchange for approximately 3 months of holidays a year. One of my former colleagues was doing this for the 10 years leading into retirement (except he worked 5-6 hours a day instead). My former manager at Ditech is now working a 75%-time job; Esther has negotiated a 1-month unpaid extra "leave of absence" a year; my brother runs his own business and takes 3-day weekends most of the year. In the past, it was predicted that our leisure time would drastically increase as our work-efficiency increased and therefore allowed less working time. Instead, we have re-invested our considerable efficiency gains into merely consuming more and we're working more hours per year now than at least the Middle Ages.
Robert Levine
It is one of the great ironies of modern times that, with all of our time-saving creations, people have less time to themselves than ever before. Life in the Middle Ages is usually portrayed as bleak and dreary, but one commodity people had more of than their successors was leisure time. Until the Industrial Revolution, in fact, most evidence suggests that people showed little inclination to work. In Europe through the Middle Ages, the average number of holidays per year was around 115 days. It is interesting to note that still today, poorer countries take more holidays, on the average, than richer ones.
On the average, studies show, women in less advanced economies work an average of 15 to 20 hours per week, and men put in about 15 hours. The shift to plow cultivation, which requires feeding and caring for draft animals, pushes the work week of men to 25 to 30 hours. It requires one day for a Dobe woman in Australia to gather enough food to feed her family for three days. The rest of the time is her own--to visit, entertain, work on her embroidery, or, as is often the case, to do nothing at all.'' — Robert Levine in A Geography of Time
By insisting on working less, you cut down your maximum consuming power and attempt to reclaim some of our lost leisure time.