US exports misery and death: the failure of capitalism
The US has done more to create the current worldwide food crisis than any other nation. It is an outrage and one more reason why I find myself feeling ashamed of my country. This purported free market, the darling of right wingers everywhere, is supposed to save the world. But freedom is only free for the ultra rich and the biggest multinational corporations which line their pockets with government subsidies. The very, very few reap rich benefits from government policies and the actions of the IMF and the World Bank, while destroying entire cultures and indenturing the developing world. And now starving it. Profit over life. What a fucking shame.
In 1995, as a condition of providing a desperately needed loan, the International Monetary Fund required Haiti to cut its tariff on imported rice from 35% to 3%, the lowest in the Caribbean. The result was a massive influx of U.S. rice that sold for half the price of Haitian-grown rice. Thousands of rice farmers lost their lands and livelihoods, and today three-quarters of the rice eaten in Haiti comes from the U.S.[6]
U.S. rice didn’t take over the Haitian market because it tastes better, or because U.S. rice growers are more efficient. It won out because rice exports are heavily subsidized by the U.S. government. In 2003, U.S. rice growers received $1.7 billion in government subsidies, an average of $232 per hectare of rice grown.[7] That money, most of which went to a handful of very large landowners and agribusiness corporations, allowed U.S. exporters to sell rice at 30% to 50% below their real production costs.
In short, Haiti was forced to abandon government protection of domestic agriculture – and the U.S. then used its government protection schemes to take over the market.
There have been many variations on this theme, with rich countries of the north imposing “liberalization” policies on poor and debt-ridden southern countries and then taking advantage of that liberalization to capture the market. Government subsidies account for 30% of farm revenue in the world’s 30 richest countries, a total of US$280 billion a year,[8] an unbeatable advantage in a “free” market where the rich write the rules.
The global food trade game is rigged, and the poor have been left with reduced crops and no protections.
In addition, for several decades the World Bank and International Monetary Fund have refused to advance loans to poor countries unless they agree to “Structural Adjustment Programs” (SAP) that require the loan recipients to devalue their currencies, cut taxes, privatize utilities, and reduce or eliminate support programs for farmers.
All this was done with the promise that the market would produce economic growth and prosperity – instead, poverty increased and support for agriculture was eliminated.
The Food Crisis and the Failure of the Capitalist Model.
In 1995, as a condition of providing a desperately needed loan, the International Monetary Fund required Haiti to cut its tariff on imported rice from 35% to 3%, the lowest in the Caribbean. The result was a massive influx of U.S. rice that sold for half the price of Haitian-grown rice. Thousands of rice farmers lost their lands and livelihoods, and today three-quarters of the rice eaten in Haiti comes from the U.S.[6]
U.S. rice didn’t take over the Haitian market because it tastes better, or because U.S. rice growers are more efficient. It won out because rice exports are heavily subsidized by the U.S. government. In 2003, U.S. rice growers received $1.7 billion in government subsidies, an average of $232 per hectare of rice grown.[7] That money, most of which went to a handful of very large landowners and agribusiness corporations, allowed U.S. exporters to sell rice at 30% to 50% below their real production costs.
In short, Haiti was forced to abandon government protection of domestic agriculture – and the U.S. then used its government protection schemes to take over the market.
There have been many variations on this theme, with rich countries of the north imposing “liberalization” policies on poor and debt-ridden southern countries and then taking advantage of that liberalization to capture the market. Government subsidies account for 30% of farm revenue in the world’s 30 richest countries, a total of US$280 billion a year,[8] an unbeatable advantage in a “free” market where the rich write the rules.
The global food trade game is rigged, and the poor have been left with reduced crops and no protections.
In addition, for several decades the World Bank and International Monetary Fund have refused to advance loans to poor countries unless they agree to “Structural Adjustment Programs” (SAP) that require the loan recipients to devalue their currencies, cut taxes, privatize utilities, and reduce or eliminate support programs for farmers.
All this was done with the promise that the market would produce economic growth and prosperity – instead, poverty increased and support for agriculture was eliminated.
The Food Crisis and the Failure of the Capitalist Model.
Labels: failure of capitalism, free market kool-aid, i hate my country, IMF, shameful things
posted by BigAssBelle at 5:44 AM
27 Comments:
First off happy belated birthday.You are right about the Third World,but some of the Third World is inthe good 'ole U.S.of A. I never in my life heard of food shortages in AMERICA. We're running out of rice, a cheap staple food for most people here. I really like your blog . I tell some of my friend about it,later.
kid, you're exactly right, and we could see this government's treatment of the american "third world" (read that as poor) in what happened in new orleans.
just as in the other country developing world, new orleans post-katrina was given the "help" of big business and politicians excited over the prospect of bulldozing what remained of the real new orleans and replacing it with a sanitized corporate version.
as with the other country developing world, fraud and profiteering has run rampant and we taxpayers have footed the bill not for rescuing our fellow americans, but for enriching bush cronies who fill their pockets without shame or conscience.
increasingly, i find myself infuriated by the every man for himself attitude in this country. i hear it from my people ~ white, middle class, comfortable ~ all of the time. "pull yourself up by your bootstraps," "work hard and get an education and you can make it," and "i did it, why can't you?"
too often, those platitudes fail to recognize the fact that some people have no boots, that some folks can work and work and work and never manage to get ahead, and that we all have different backgrounds and experiences and "making it" is sometimes more the result of what you're born with than what you do.
compassion. i want to live in a compassionate world and that is, i am finding more and more every day, not a capitalist, free market world. the idea that the free market is the solution is one more lie we're fed to keep us quiet while the very richest of the world rob and plunder.
Thanks for posting this kind of information. I think it's important that we understand why these things are happening.
I'm often appalled by how capitalistic some people are. Some people only care about money and what it can do for them.
Then there's blaming people for being poor. Yes, we're ultimately responsible for our actions, but no one can pay rent and afford groceries in my town, making $7 an hour. I have friends that work two jobs and still have no money.
I'm staying in the US (for a while anyway) because I'm hoping that I can work to make things better. Isn't that all we can do?
Amen. In the meanwhile, corporations like Monsanto poison the food supply with their genetically modified breeds of grain, all to line their coffers with cash, while wiping out the hearty natural varieties that is self sustaining. This country sucks on many levels, and the "greed is good" mentality, WILL be the destruction of our species. Sometimes I say the sooner the better. The universe doesn't need this parasite. Sometimes I am in the mood to fight back, but how? The voting booth? Seems very unlikely that change can occur that way, but I will always continue to vote, just in case. Short of revolution, I think there is too much change needed, and that for the most part, no one cares enough to roll up their sleeves and pitch in. I have no doubt that change will eventually come, but probably at the expense of most of the human population. Perhaps the survivors will learn from our mistakes...
Sorry, but capitalism, while not perfect and needs to be kept in check as with any system, has improved life for the world. Capitalism does not claim to create riches for everyone: that's impossible under any system. But it does, over time, improve quality of life for people. Haiti didn't have to accept the IMF's advice. That being said, I think subsidies are a bad thing, and go against the capitalist idea, and so what happened in Haiti should not have happened had true capitalism actually been used. But, guess what? If we got rid of subsidies in this country you'd be crying foul because then our workers would be out of jobs. You can't have it both ways. I highly suggest you read up on economics and how it works, because your posting here seems to indicate a pretty shallow perspective, and the fact is things can only get better if you actually take the time to read and understand what it is that you criticize.
Let me give you an example base don the scenario you provide in Haiti, assuming it's all accurate:
-Lower rice prices resulted, which meant consumers in Haiti were able to buy more food for their families, and save more money to buy other things
-Rice farmers in Haiti had a choice: they could reduce the price of their rice; they could petition their government for subsidies; or they could move into new areas of production. With additional disposable capital among the populace (from having saved on rice prices) it meant that there was opportunity for new products to enter the marketplace.
-It's always difficult when industries shift, but the alternative is that nothing changes and we remain static. That's fine, too, if that's what the people want, but then there has to be a realization that things like improvements in medical care and innovations in science and technology will slow or stall as a result, and those are all things that improve quality of life.
-Looking at it from a broad perspective, it actually seems more selfish to me to implement policies that stall innovation and technological advances that will improve quality of life than it is to promote those that do.
The revolution is coming people- mark my words.
And what, pray tell, will the revolution create?
What will it tear down? It will certainly start with attacking those who hold the imbalance of privilege, resources, wealth, and power, as it always does. What will it create? Another opportunity for people to either learn to live more equitably, or as I fear would simply result in another mad dash of greed and power in the endless game of greed and selfishness us humans seem to relish. Who will probably be the first casualties? People who live smug lives of entitlement, without concern for the least amongst us, citing capitalism and free market principles in a "let them eat cake" vacuum of understanding. While in principle, these ideas can and do lead to progress, but in the current state of non-ethical and stacked deck economics guised as diplomacy, fails miserably. It has created masses of people without recourse, without hope.
labels like capitalism and socialism have so much baggage attached to them that people come out with their standard phrases and we all dance round in our circle with oft repeated steps. There is no longer anywhere to hide, the world is small and we need a new politics of caring and sharing. Why is the gap between the very rich and very poor getting bigger instead of smaller? Who is making laws in the democracies around the world that benefit the few at the cost of many? Whether you are capitalist or socialist, some animals seem to be more equal than others.
lily's mommy ~ folks who look down at people who work at wal-mart or as housekeepers or any other lower wage job have no fucking idea how hard people work at that level and how many barriers are put in place to ensure that they're never able to progress. low wage workers in this country are invisible, cut off from the view of those with more $$, and thus to be used and never acknowledged for the service they do. our society is so stratified, but the middle class and above are all kept afloat by an enormous sea of invisible folk at the bottom of the income scale.
anonymous, show me where pure capitalism, the absolute free market, has improved the world. where? and don't cite this country, because it ain't happening here, not as long as corporate "citizens" are sucking at the government trough in the great transfer of wealth from the working people to the richest among us.
an "innovation and technological advances," courtesy of the world bank and the free marketeers is what's done in haitian farmers. it's bullshit.
and this . . . damn, you're a great source of ridiculousness, anonymous, but this is absurd:
-It's always difficult when industries shift, but the alternative is that nothing changes and we remain static.
we're talking about food. life. the market should never ~ NEVER ~ interfere with an individual's right of survival.
Dora ~ I hope and pray that it's true.
and anonymous, a fucking revolution to shake up the status quo, to provide equity and justice for the millions ~ billions ~ who never have a chance.
well tater said it best, and far more eloquently than i could. i am too angry today to even think clearly. i know there have to be others as outraged as i am at what is happening in the world. yes?
Rosie ~ the world is small and we need a new politics of caring and sharing. Why is the gap between the very rich and very poor getting bigger instead of smaller? Who is making laws in the democracies around the world that benefit the few at the cost of many? Whether you are capitalist or socialist, some animals seem to be more equal than others.
exactly. and excellent questions, all of them. "more equal than others" is the motto of my country, it seems. we are more equal in the world and thus get to to consume far more of the world's resources. and within this society, the egalitarian american dream is becoming a myth.
Talk, that's all I hear. What are the solutions? A vague reference to "revolution" says nothing.
Do you seriously think that people who believe in the free market are simply greedy and don't care about others? That's absurd. There are greedy people in any community, but most advocates of the free market system do so because they believe it is what provides the most benefits for the most number of people. The western world seems to have proven that: Europeans and Americans live at much higher standards of living (and actually have a middle class) compared to otehr parts of the world where communism or fascism controlled the economies. The fact is, even the poorest classes live longer, healthier and more privileged lives than they did a generation ago.
You are expressing simple sentiments for a complex problem.
The people of Haiti obviously found a benefit to cheaper rice. It meant more people could afford more food. How is that a bad thing? In fact, in 1987 when foreign rice was allowed the country was very excited about it. Again, the people had the choice: keep buying Haitian rice, or buy foreign rice. No one forced them to buy the cheap rice. It has to be noted that the reason the foreign rice was allowed was because Haitian-grown rice was too expensive for much of the population to afford. No simple solution.
And you seem to forget a whole class of money: I work for a non-profit organization. We rely upon the generosity of people who have earned alot. And guess what? We get it. Because people are generous. And because they do believe in helping others, but they want to choose the cause, not have it dictated to them by the government. Government is not the answer to these problems you perceive. do not want the government telling me how to spend my money, that is for me to decide. The market should not interfere with a right to survive, but it does not. In fact, the market is very efficient at making sure that does not happen: far more efficient than centralized economies are. Centralized economies lead to fascism, plain and simple. And that is the greatest threat to one's survival.
Again, capitalism is not perfect in the way we want it obe, but no system is. Capitalism does allow us to reach for perfection, though, in ways other systems do not. It's up to the people, and their morals and culture, to do the rest.
"It's not perfect, but then what is, so why not"?
Actually anon, that's not all that persuasive an argument.
Who said I was trying to use it as a persuasive argument? It was just a statement of fact. I'm all for a better system, but thus far noone's explained to me what this better system is other than that it will a) come about from revolution and b) be more caring and sharing. It sounds wonderful (though better if it can be done without a revolution, of course), so I want to know more. What is this system that will allow everyone to live a better standard of living and make us all more caring and sharing than the free market. Where has it been tried and succeeded, if anywhere?
And, as an aside, let's do a case study: how would Rev. Wright be affected by this new system? You do know that he is building a multi-million dollar home in an gated (and mostly whit) white neighborhood in Chicago, don't you? Didn't know the church paid so well these days, guess I should've taken my mom's advice and gone into the priesthood when I told her I was gay. At any rate, would Wright be able to keep his million dollar home (much of it tax-exempt?) Would he have to pay taxes on it? Would he be required to stop saying divisive things since it would be a "Caring & sharing" world? I think he's a good examaple to start with on how to implement a better system.
anonymous. pure capitalism has proven to be a brutal system for the vast majority of people.
a mixed system somewhat like some european countries and what came out of the '30s with roosevelt, a little like what they're trying to do in venezuela.
that's all. it's not all touchy feely sweet and nice. it's just more equitable for more people.
Well, oure capitalism doesn't exist anywhere, nor do I think it ever has. Europe is a fine model, but it's pretty much as free market as America. Actually, moreso in some respects (lower corporate tax rates!)
Venezuela? Oh lord. Please don't use a dictatorship that suppresses freedom of speech and has created more poverty amongst its people as an example. Not to mention from an economic perspective the country:
a) Has no real budget
b) Has little outside investment beyond the oil industry (and has one of the highest capital flight rates in the world)
c) Has greater income equality distribution now than before Chavez took office
d) Has a higher rate of poverty now than when Chavez took office
Source: http://www.vcrisis.com/
What needs to be done is a WPA type program, but one that helps ALL people.If you go to Promentheus 6 site he has a book that the WPA programs of the 30's help mostly white people.It was basically "white welfare".give people a living wage (not a barely living wage and train them and we could be out of this bull in 6 months. If you have consumers you can restart the economy.
Look, here's the real deal. I'm a proud socialist but it's an idea that will only work when the human race reaches a state of evolution in which we believe we are our brother's keeper and are willing to guarantee at least a bearable standard of living for everyone. As long as the greed and violence genes overcome the altruistic genes, we're pretty much toast.
Anon - when the shit really hits the fan in this country (and you can see it coming now) you're contributions will dry up and then what? We WILL see real starvation in this country if the present trends continue. The warning signs all over the world are there. Now fertilizer prices are skyrocketing and fertilizer is now be rationed, YES, here in the USA. And without it, large scale farming is toast.
Capitalism, as practiced in this country, had a historically short golden age because we were drowning in oil and other sources of natural wealth. That era is ending - even Bush seems to admit it. And a large part of the reason it's ending in such a short historical time is that our capitalist system exploited those resources in a way in which they were used up before they were renewable - AND we built an empire based on the richest of all - fossil fuels. Capitalism sowed the seeds of it's own destruction a long time ago. Clinging to this exploitive system, as practiced now, will continue to pile drive the world into a grave.
The only system that will provide the least amount of pain for the most people in the coming decades is a mixed socialist economic model. I don't think, however, the masters of the universe will allow that to happen. I think they are planning to hold on to their empires by any kind of force and, anonymous, you will live to see what you defend crumble into blood and misery.
LOL. Marx said the same thing. That went reaaaal well.
But I'm still confused: so, are you advocating taking people's wealth and property away from them? Are you going to go to Rev. Wright's 8 million dollar home and say get out, this now belongs to the state? I'm just confused as to how this all shakes down.
P.S. Economy grew this quarter.
PS: Not on Main street. And I'm a small business owner.
Anonymous you simply don't know what you're talking about and you put words in people's mouths. AND like most right wingers, you're an anonymous COWARD. Are you getting paid to troll this blog and spout this gibberish? No one here has any respect for you at all. You're wasting your time. Go back to Free Republic. You're becoming tiresome.
Why do you feel the need to be angry and dismissive instead of conversing? There is nothing bad about sharing ideas, even when they are different.
P.S. Sorry to hear your industry isn't doing so well. Have you evaluated why? I'd be interested in hearing what business you're in, why it's dropped off and what you think the solution is.
I'm sorry, but this needs to be pointed out, because you're attacking the wrong bogeyman. In what sense is attacking the rice-growing industry of America an indictment of free-market capitalism? The article you quoted in your post said it clearly--the rice growers, mostly corporate farmers, were being subsidized by a government. In a free market, there would be NO government subsidies.
Here's how the system should work. The U.S. government should not pay subsidies to farmers, especially corporate ones. If they didn't, the current business model for farmers would be unprofitable. (In essence, using made-up numbers to explain, what they can do now is grow crops for $100/acre, then get paid $50/acre by the government to sell their crops at $70/acre. So even though they sell the product for less than it cost them to make it, they make a $20/acre profit.)
Because you can't consistently turn a loss and stay in business, most farmers in America wouldn't be farming...they would have found other things to do. America would grow less food than it does, and food would cost more in this country--which might actually be a good thing, seeing as how the majority of us, across social class, are gorging ourselves to death in a manner the Romans never would have dreamed of. More to the point, all this cheap American food would have never gone overseas, so those countries would still have an agricultural community. Food would cost more there too, but there would also be more production, and so ultimately, more money.
Now here's how things actually work. Because we've stepped in to subsidize our own agricultural industry, they can sell food at artifically cheap prices. It becomes more cost-effective for countries to buy grain from us than to grow it themselves. Thus, we feed the world...and decimate one of their most basic industries as a direct consequence. That way, when we start using our grain to produce ethanol, they'll lose their cheap supply of food AND they won't have the infrastructure to grow more. This is what happens when market controls and government subsidies are allowed to override the free market for too long.
You want to know who to blame? Leave the free market alone for this one...you wouldn't put a person in chains and then complain because they're not as efficient a worker, would you? Why not tackle the administrations and the Departments of Agriculture who have pushed for these continuing price controls out of fear that if they didn't, it would be the death of the American farmer? There's a wide list, and it's pretty bipartisan--FDR, Ike, Johnson and his Great Society, Nixon, Clinton. Hell, this practice started becoming permanent when Harding was president.
But don't condemn the free market, because it hasn't been free. Blame the United States for the crisis--you're perfectly right to do so. But in particular, blame the protectionist rhetoric and policies of some American politicians (including two of our current Presidential candidates), who would like to make sure OUR jobs don't get exported overseas so we don't lose money, but have no problem with OUR federally-subsidized grain being the efficient cause of the destruction of Third-World economies. This isn't a failure of capitalism. It's a failure of government regulation. Any attempt to pin this on the invisible hand of Adam Smith is, therefore, prima facie ridiculous.
You hit the nail on the head. It is not free markets that are the problem: it is the lack of free markets and the excess of government regulation that is the problem.
Hallo Belle,
I have read your blog and postings and love all of them. Thanks for sharing your thoughts with us.
I think that the US aggressive way of doing business is not limited to the US. Greed is a world-wide phenomenon. For example, when there was that Tsunami in the Far East that affected Sri Lanka so much. Do you think that the disadvantaged received what had been intended for them via contributions? How about the mud slides in Pakistan not to mention the starving in Ethiopia. Think greed is a phenomenon everywhere, but it is GOOD to talk about it however as at least that reminds us of how wrong it is. Someone needs to keep our consciences sensitive and alive.
40% of whites vote for obama
4% of blacks vote for hillary
um... who's racist?
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