In Defence of Marxism

While some people indulge in obscene displays of wealth, countless millions are condemned to starvation by the profit system. Josette Sheeran, the head of the UN's World Food Programme, the largest distributor of food aid recently told The Economist what this means for people: "For the middle classes," says Ms Sheeran, "it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking the children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. And for those on 50 cents a day, it means total disaster."

Usually, a food crisis is clear and localized. The harvest fails, often because of war or strife, and the burden in the affected region falls heavily on the poorest. This crisis is different. It is occurring in many countries simultaneously, the first time that has happened since the early 1970s. And it is affecting people not usually hit by famines. The poorest are selling their animals, tools, the tin roof over their heads-making recovery, when it comes, much harder.

In El Salvador the poor are eating only half as much food as they were a year ago. Afghans are now spending half their income on food, up from a tenth in 2006. On a conservative estimate, food-price rises may reduce the spending power of the urban poor and country people who buy their own food by 20% (in some regions, prices are rising by far more). Just over 1 billion people live on $1 a day, the benchmark of absolute poverty; 1.5 billion live on $1 to $2 a day. Bob Zoellick, the president of the World Bank, reckons that food inflation could push at least 100m people into poverty, wiping out all the gains the poorest billion have made during almost a decade of economic growth.

The bosses always make money out of something! Yesterday they were speculating on houses, now they are speculating on food. The price of food and agricultural land is soaring everywhere. Excellent news - for some. Food and agriculture are big business and the big food monopolies are making fortunes out of the rising price of food. Last year wheat prices rose 77% and rice 16% (see chart 1). These were some of the sharpest rises in food prices ever. But this year the speed of change has accelerated. Since January, rice prices have soared 141%; the price of one variety of wheat shot up 25% in a day. Some 40km outside Abidjan, Mariam Kone, who grows sweet potatoes, okra and maize but feeds her family on imported rice, laments: "Rice is very expensive, but we don't know why."

The ruling class is becoming alarmed. There have been food riots all across the equator. In Haiti a crowd of poor people stormed the government building chanting: "we are hungry" and the prime minister was forced to resign. 24 people were killed in riots in Cameroon; Egypt's president ordered the army to start baking bread; the Philippines made hoarding rice punishable by life imprisonment. "It's an explosive situation and threatens political stability," worries Jean-Louis Billon, president of Côte d'Ivoire's chamber of commerce.

What solution does The Economist propose to this vast human tragedy? Why, market forces, of course! Let us quote its own words: "Eventually, no doubt, farmers will respond to higher prices by growing more and a new equilibrium will be established. If all goes well, food will be affordable again without the subsidies, dumping and distortions of the earlier period. But at the moment, agriculture has been caught in limbo. The era of cheap food is over. The transition to a new equilibrium is proving costlier, more prolonged and much more painful than anyone had expected."

In the long run the market will, of course, solve everything. But as old Keynes once said: In the long run we are all dead.