Tuesday, July 8, 2008

Living in the Material World

The Christian Science Monitor reported in late March that the Egyptian Army had taken up baking bread to curb food riots.

The article states that the UN Food and Agriculture Organization "expects food prices to stay high for the next three to five years, presenting a challenge for governments trying to keep domestic food prices low in order to keep poor citizens properly fed and avoid mass protests and social unrest. "

Now, the predictions of Marxism may have turned out to be quasi-religious social fantasy rather than science, but surely market-based economies do rely on overseas and cross-border markets. What else is globalization about? Who is most affected by food and fuel prices? That would be people in whatever country who live from hand to mouth or from paycheck to paycheck (so to speak). In other words, that would be the vast majority of people that we look to to buy our goods and services, the demand upon which our globalized jobs depend ... unless businesses are just going to sell to other businesses.

This would not seem a good time for John McCain (or Barack Obama, either) to be listening too seriously to Supply Side advocates. It is not that the markets are not reacting as we expect them to; it is that, in the face of shortages, markets are acting just as we expect them to. Prices for essentials are going up. Wages are not going up nearly as fast, and why would they, given that people needing work are everywhere and given that actual labor is devalued in a world where production can be moved anywhere at anytime?

We can come up with alternatives to petroleum given a concentrated effort; coming up with alternatives to food is going to take more concentration than that.

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