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Posts tagged ‘neoliberalism’

The Root of the Evil

Over the past few weeks I’ve been watching with barely-disguised glee, the evisceration of a recent Newsweek article by Niall Ferguson – pet historian of the American right – in which he provides a deeply flawed analysis of Barack Obama’s past four years in power. As Matthew O’Brien notes, before systematically working through Ferguson’s argument (or, indeed, ‘argument’), ‘He simply gets things wrong, again and again and again.’

I’m no fan of Ferguson’s. This has less to do with our political differences – in relation to him, I’m so left-wing I should be living in a Himalayan hippy commune practising an obscure form of yoga while teaching Capital to peasants – but because of the way he shapes his interpretations of the past to suit a particular neoliberal agenda.

Of course, no historian is capable of writing an absolutely objective history of anything – nor would we want to because it would be dreadfully boring – but Ferguson presents, and defends, his arguments on the grounds that they are absolute truth.

He was called out on this last year by Pankaj Mishra, in a fantastic review of Civilisation: The West and the Rest for the London Review of Books. In Civilisation, Ferguson argues that

civilisation is best measured by the ability to make ‘sustained improvement in the material quality of life’, and in this the West has ‘patently enjoyed a real and sustained edge over the Rest for most of the previous 500 years’. Ferguson names six ‘killer apps’ – property rights, competition, science, medicine, the consumer society and the work ethic – as the operating software of Western civilisation that, beginning around 1500, enabled a few small polities at the western end of the Eurasian landmass ‘to dominate the rest of the world’.

Leaving aside the strange question of why an historian writing in the twenty-first century thinks that it’s possible to divorce the ‘West’ (whatever we may mean by that) from the rest of the world – and even why an historian feels like writing a triumphalist history of Europe and North America (I thought we stopped doing that in the sixties?) – this is a history which largely ignores, or plays down, the implications of modern capitalism and globalisation for those people outside of the West.

As in his writing on the creation of European empires, Ferguson has a problem with accounting for the widespread resistance of Africans, Asians, and others to European conquest – and the violence and exploitation which followed colonisation. Mishra writes:

he thinks that two vaguely worded sentences 15 pages apart in a long paean to the superiority of Western civilisation are sufficient reckoning with the extermination of ten million people in the Congo.

Recently I’ve been thinking a great deal about a comment which Roger Casement made in a report for the British government about atrocities committed in the Congo Free State during the late nineteenth century. Writing in 1900, he concluded:

The root of the evil lies in the fact that the government of the Congo is above all a commercial trust, that everything else is orientated towards commercial gain….

The Congo Free State came into being at the 1884-1885 Berlin West Africa Conference, where the assembled representatives of European states acknowledged the Belgian king’s right to establish a colony in central Africa. Leopold II’s International Association – a front organisation for his own commercial interests – was allowed to operate in the region.

There were strings attached to the deal – Leopold had to encourage both humanitarianism and free trade, for instance – but with the sharp increase in international demand for rubber in the 1890s, after JB Dunlop’s invention of inflatable rubber tyres, Leopold’s interest in the Congo, which had only ever extended to exploiting the country for its natural resources, narrowed even further. Leopold operated his own monopoly on the rubber trade, leasing some land to other companies on the proviso that they pay him a third of their profits.

The ‘evil’ to which Casement referred was the transformation of the Congolese population into a mass of forced labourers compelled to contribute quotas of rubber to the various businesses operating in the Free State. Those who failed to do so, those who refused to do so, or those who were suspected of not doing so, faced brutal reprisals from the State’s Force Publique, including being killed, often along with their families; having their hands cut off; and seeing their villages and property burned and destroyed.

It’s estimated that ten to thirteen million Congolese died as a result of murder, starvation, exhaustion, and disease between 1885 and 1908, when international condemnation of Leopold’s regime forced the Belgian government to take control of the Free State.

Although other colonial regimes in Africa could be brutal, violent, and unjust, none of them – with the possible exception of Germany in (what is now) Namibia – managed to commit atrocities on the scale that Leopold did in the Congo. As Casement makes the point, ‘the root of the problem’ was that the Congo was run entirely for profit, and that the businesses which operated in the region were not regulated in any way. This was capitalism at its most vicious.

But what does this all have to do with food? Well I was reminded of Casement’s comment when reading about Glencore’s response to the current droughts – chiefly in the US, but also elsewhere – which are partially responsible for global increases in food prices:

The head of Glencore’s food trading business has said the worst drought to hit the US since the 1930s will be ‘good for Glencore’ because it will lead to opportunities to exploit soaring prices.

Chris Mahoney, the trader’s director of agricultural products, who owns about £500m of Glencore shares, said the devastating US drought had created an opportunity for the company to make much more money.

‘In terms of the outlook for the balance of the year, the environment is a good one. High prices, lots of volatility, a lot of dislocation, tightness, a lot of arbitrage opportunities [the purchase and sale of an asset in order to profit from price differences in different markets],’ he said on a conference call.

This weekend, it was revealed that Barclays has made more than £500 million from food speculation:

The World Development Movement report estimates that Barclays made as much as £529m from its ‘food speculative activities’ in 2010 and 2011. Barclays made up to £340m from food speculation in 2010, as the prices of agricultural commodities such as corn, wheat and soya were rising. The following year, the bank made a smaller sum – of up to £189m – as prices fell, WDM said.

The revenues that Barclays and other banks make from trading in everything from wheat and corn to coffee and cocoa, are expected to increase this year, with prices once again on the rise. Corn prices have risen by 45 per cent since the start of June, with wheat jumping by 30 per cent.

What bothers me so much about these massive profits is partly the massive profits – the fact that these businesses are actually making money out of a food crisis – but mainly it’s that these monstrously wealthy businessmen are so unwilling to admit that what they’re doing is, even in the most charitable interpretation, morally dubious.

Barclays’s claim that its involvement in food speculation is simply a form of futures trading is disingenuous: futures trading is an entirely legitimate way for farmers to insure themselves against future bad harvests. What Barclays and other banks, as well as pension funds, do is to trade in agricultural commodities in the same way as they do other commodities – like oil or timber.

In 1991, Goldman Sachs came up with an investment product – the Goldman Sachs Commodity Index – which allowed for raw materials, including food, to be traded as easily as other products. When the US Commodities Futures Trading Commission deregulated futures markets eight years later, for the first time since the Great Depression, it became possible to trade in maize, wheat, rice, and other foodstuffs for profit.

The current food crisis has been caused by a range of factors – from the drought, to the excessive use of maize and other crops for biofuel – and exacerbated by climate change and pre-existing conflicts, corruption, inequalities, and problems with distribution. In Europe, unemployment and low wages will add to people’s inability to buy food – hence the rise in demand for food banks in Britain, for example.

Food speculation has not caused the crisis, but it does contribute to it by adding to food price volatility. I’m not – obviously – comparing Glencore or Barclays to Leopold II’s International Association, but the atrocities committed in the Congo Free State provide an excellent example of what happens when capitalism is allowed to run rampant. Let’s not make that mistake with our food supply.

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No Famine is Inevitable

Last week there was a flurry of excitement as commentators compared the R1 million pledged by the South African government to aid the victims of the famine in the Horn of Africa, and the potential billion rand loan which it is currently considering for Swaziland. Not only could Africa’s economic powerhouse donate considerably more than a million rand (about £90,000 or US$150,000) to Somalia, but granting a conditions-free loan to King Mswati III’s dysfunctional kingdom would serve only to prop up the continent’s last absolute monarch.

Although I was as outraged by my government’s apparent indifference to the plight of Somalis, I did begin to wonder if that money could be used more wisely. Of course, South Africa must – and can – contribute to the international effort to distribute food in Somalia. Given the scrutiny of aid agencies working in the region, as well as the awareness of how aid money has been channelled to elites over the past few decades, it’s likely that South Africa’s donation will go to those who need it. But giving money to alleviate the famine is a short-term fix.

Possibly because of the way it echoes Africa’s other best-known famine, the Live Aid-engendering Ethiopian famine of 1984-1985, the famine in the Horn of Africa has generated an enormous amount of coverage in the international press. More information and analysis can only ever be a good thing, but much of the discussion around the famine suggests that it’s a crisis which emerged suddenly and without any warning. As the Guardian’s John Vidal put it, ‘A massive drought, as if out of nowhere, has settled over the Horn of Africa’. Moreover, some commentators, like Vidal, have blamed the famine on only one or two factors, usually climate change or Western indifference to African suffering.

The causes of famines are complex, but they are never entirely unpredictable. Counterintuitively, they are not necessarily caused by a lack of food, but are, rather, the result of long-term systemic failure: in agriculture, trade, and, most importantly, in government. By suggesting that South Africa’s paltry million rand donation would be better spent, my point is that South Africa’s involvement in the Somali crisis should go beyond giving money for food. It needs to stop famines from happening in the first place, and that is not impossible.

We have managed largely to eradicate famine in the twentieth century. Before then, food shortages and famines were part of the rhythms of everyday life. In societies where food production was inefficient both in terms of labour and technology – and until the eighteenth century, eighty per cent of the population of Europe was engaged in agriculture – frequent crop failures meant that famine occurred often. But during the 1700s, an agricultural revolution allowed greater, more regular, and, crucially, more reliable yields to be produced by smaller numbers of people. International trade also meant that countries could buy food to supplement local shortfalls. For example, during the 1870s, the failure of the European grain crop boosted Canadian and American wheat exports, as these two countries fed Europe for almost a decade.

Although initially developed in the Netherlands and Britain (and there is a strong link between the development of capitalist economies and efficient food systems), the methods pioneered during this green revolution of the eighteenth and nineteenth centuries spread around the globe. By the early 1900s, famine was caused increasingly by people, rather than only by nature. That said, the Great Famine in Ireland (1845-1852) was certainly the product of the potato blight, but it also occurred at a time when Ireland was an exporter of wheat: there was enough food to go around, it was just that those who were starving couldn’t afford to buy bread. The Cattle Killing Movement in South Africa (1856-1857) caused widespread famine among the Xhosa. Around 40,000 people died of starvation, 33,000 moved away from the eastern Cape to seek work, and the authority of the Xhosa polity was fatally undermined. But this was caused by a decision to slaughter cattle and destroy crops on a mass scale.

Equally, some twentieth-century famines were caused partly by crop failure, but were also the product of bad governance and ineffective systems of food distribution. As Cormac Ó Gráda explains:

Wars, blockades, poor governance, and civil unrest can also lead to famines; panics about the food supply and poorly performing markets can exacerbate them. In such cases…factors other than crop shortfalls reduce the purchasing power or ‘entitlements’ of vulnerable sections of the population: the size of the loaf matters less than its distribution.

The Nobel Prize-winning economist Amartya Sen argued in Poverty and Famines (1981) that – contra Thomas Malthus who suggested that exponential population growth would result inevitably in famine – famines can occur in times of peak food production. Why? I think it’s worth quoting Sen in full:

In every society that exists, the amount of food that a person or a family can command is governed by one set of rules or another, combined with the contingent circumstances in which that person or that family happens to be placed vis-à-vis those rules. For example, in a private ownership market economy, how much food a person can command will depend on (1) what he owns, and (2) what he can get in exchange for what he owns either through trade, or through production, or some combination of the two. Obviously, in such an economy a person may suddenly face starvation either because his ownership bundle collapses (e.g., through alienation of land to the money lenders), or because the ‘exchange entitlement’ of his ownership (i.e., the command of what he owns) collapses (e.g., through his becoming unemployed and not being able to sell his labour power, or through a decline in his terms of trade vis-à-vis food).

In other words, people starve when they can’t buy food – either because they no longer have the money to exchange for food (as a result of unemployment, for example) or because food prices become prohibitively high. Peaks in food prices could be due to droughts and other ecological factors, conflict, and speculation.

The crisis in Somalia demonstrates particularly well how state intervention can prevent or cause famine. In 1960, British Somaliland and Italian Somalia became the independent Republic of Somalia. Nine years later, Major-General Mohamed Siad Barre seized power in a bloodless coup and ruled Somalia through a military dictatorship until the collapse of his government in 1991. Somalia’s experience of food shortages and famine must be understood in this context of Barre’s government (or lack thereof) and economic policies. In 1970, he announced the implementation of ‘scientific socialism’, introduced strict central planning, and viciously stamped out all forms of opposition. Peter T. Leeson writes:

The government slaughtered civilians who posed threats to the government’s plans or political power, used coercive intimidation to create artificial support for its activities, and forcibly relocated others to further the political or economic ends of Barre and his cronies. ‘Both the urban population and nomads living in the countryside [were] subjected to summary killings, arbitrary arrest, detention in squalid conditions, torture, rape, crippling constraints on freedom of movement and expression and a pattern of psychological intimidation’. The state ruthlessly suppressed free speech and controlled all forms of information reaching Somalis. Newspapers (only one was officially permitted by the government), radio, and television were fully censored and dissent in any form squelched with force. Under Somalia’s National Security Law No. 54, ‘gossip’ became a capital offense. Twenty other basic civil freedoms involving speech, association and organisation also carried the death penalty.

Funds were diverted from public works, education, healthcare, and infrastructure to the military, on whose support and ability to terrify and brutalise the Somali population Barre depended. The nationalisation of land and industry in 1975 was, predictably, a disaster. The abandonment of socialism at the end of the 1970s in order to attract assistance from the International Monetary Fund made very little difference either. Somalia was heavily dependent on international food aid during the 1970s and 1980s. The Horn of Africa is prone to drought, but it’s worth noting that despite catastrophic droughts in the mid-1970s and mid-1980s, Somalia managed to avoid famine – unlike its war-torn neighbour, Ethiopia, whose government ignored the plight of its population.

As Abdi Ismail Samatar notes,

Somalia’s last major famine was in 1992 and was not caused by drought. Nearly 300,000 innocent people starved to death because of sectarian politics. The epicentre of that famine was in Bay, one of the country’s most productive agricultural regions, and starvation was induced by warlords who used food as a weapon against farmers and pastoralists.

Barre’s government collapsed in 1991, plunging Somalia into civil war and a chaos from which it has yet to emerge. It’s telling that a country which had managed to avoid famine for over half a century, despite drought, food shortages, and incredible food insecurity, saw widespread famine only after food supplies were disrupted by war.

So why famine now? Over the course of sixteen years, Somalia has been the subject of fourteen reconciliation conferences, none of which managed to produce a stable government. In 2004, the Transitional Federal Government (TFG), an anti-Islamist, pro-Ethiopian political grouping, was put into power in Somalia under the leadership of Abdullahi Yusuf and with the support of the United Nations. However, the TGF was neither popular nor effective as a government. In the absence of effective leadership, a number of attempts were made by Islamic groups, war lords, civil society organisations, and others to create some sort of order in Somalia, and particularly in Mogadishu. One of these, the Alliance for the Restoration of Peace and Counter-Terrorism, was formed by a group of war lords in February 2006. They were backed by the United States who saw them as allies against Islamic groups in the region.

Armed clashes between the Alliance and Islamist groups soon broke out and developed into a war which the Islamists won decisively. By the middle of 2006, they had taken control of Mogadishu as well as central and southern Somalia. Not only was this an embarrassment to the United States and its ally Ethiopia, but for the first time it seemed that Somalia was offered the possibility of a relatively popular and effective government in the hands of the Islamists, who quickly organised themselves into the Council of Islamic Courts (CIC). However, an invasion by Ethiopia at the end of 2006 caused the collapse of the CIC, the reinstallment of the almost entirely ineffective TFG, and the beginning of a new civil war between the Government and opposition groups. The most successful of these was Al-Shabab. Originally the CIC’s youth wing and affiliated with al-Qaeda, Al-Shabab is an Islamist group which now controls most of southern Somalia.

Years of political uncertainty, conflict, and chaos (best exemplified by the way piracy has flourished along the Somali coast) have left Somalis particularly vulnerable to drought and the less predictable effects of climate change. A combination of a US- and UN-backed blockade of the parts of Somalia controlled by Al-Shabab, as well as this organisation’s unwillingness to allow the World Food Programme to deliver food to southern Somalis has caused the famine. Samatar explains:

Normally, societies have three lines of defence against mass starvation: local capacity, national government and the international community. When a disaster hits a region, the first help comes from local administrations and the communities themselves. If events overwhelm the first responders, then the national government takes charge of operations; and when the crisis exceeds the wherewithal of the nation, international actors come to the rescue.

It is clear that all three levels of livelihood protections have failed in Somalia. Al-Shabab has prohibited the local population from organising their municipal governments and charities to fend off the disaster. Similarly, Somalia’s national government, which is beholden to sectarian leadership and international patrons, has been oblivious to the emerging calamity, and has thwarted the international community from coming to its aid

This was a famine which could have been avoided had order been established in Somalia. Here, Somali politicians and war lords are as much to blame as the international community, East Africa’s Intergovernmental Authority on Development, the UN, and, crucially in my view, the African Union. This famine is not the result solely of dastardly foreign countries plundering Africa, nor can blame be laid entirely on Somalis themselves. But after the effort to feed Somalis has ended, reconstruction needs to begin. And it’s here where South Africa must – and I think is obliged to – take a leading role.

Somalia also demonstrates the extent to which food security is linked to strong, functioning governments. Countries which are badly run, have weak economies, and, most importantly, are authoritarian, are the most strongly disposed towards famine. Last year’s narrowly-avoided famine in West Africa was due largely to the incompetence of Niger and Chad’s malfunctioning, undemocratic political dispensations. Only the spread of democratic and open government, with, crucially, a free flow of information, will prevent famines from happening in Africa. As Sen remarked, ‘There is, indeed, no such thing as an apolitical food problem.’

Note: I try to use sources which are easily available, but for this post I’ve relied on articles from academic journals. Unfortunately, these are securely behind paywalls. If you’d like copies of them, let me know.

Further Reading

Texts cited here:

Joyce Appleby, The Relentless Revolution: A History of Capitalism (New York and London: W.W. Norton, [2010] 2011).

Cormac Ó Gráda, ‘Making Famine History,’ Journal of Economic Literature, vol. 45, no. 1 (Mar., 2007), pp. 5-38.

Peter T. Leeson, ‘Better off stateless: Somalia before and after government collapse,’ Journal of Comparative Economics, vol. 35 (2007), pp. 689-710.

Ken Menkhaus, ‘The Crisis in Somalia: Tragedy in Five Acts,’ African Affairs, vol. 106/204 (2007), pp. 357-390.

Amartya Sen, ‘The Food Problem: Theory and Policy,’ Third World Quarterly, vol. 4, no. 3 (Jul., 1982), pp. 447-459.

Other sources:

L.A. Clarkson and E. Margaret Crawford, Feast and Famine: Food and Nutrition in Ireland 1500-1920 (Oxford: Oxford University Press, 2001).

Jean Drèze and Amartya Sen (eds.), The Political Economy of Hunger, 3 vols. (Oxford: Clarendon Press, 1990).

Cormac Ó Gráda, Black ’47 and Beyond: the Great Irish Famine in History, Economy and Memory (Princeton: Princeton University Press, 1999).

Cormac Ó Gráda, Famine: A Short History (Princeton: Princeton University Press, 2009).

Cormac Ó Gráda, ‘Revisiting the Bengal Famine of 1943-4,’ History Ireland, vol. 18, no. 4, The Elephant and Partition: Ireland and India (July/August 2010), pp. 36-39.

Cormac Ó Gráda, ‘The Ripple that Drowns? Twentieth-Century Famines in China and India as Economic History,’ Economic History Review, vol. 61, (2008), pp. 5-37.

C.P. Melville, ‘The Persian Famine of 1870-72: Prices and Politics,’ in Food, Diet, and Economic Change Past and Present (Leicester: Leicester University Press, 1993), pp. 133-150.

Amartya Sen, ‘Famines as Failures of Exchange Entitlements,’ Economic and Political Weekly, vol. 11, no. 31/33, Special Number: Population and Poverty (Aug., 1976), pp. 1273-1280.

Amartya Sen, Poverty and Famines: An Essay on Entitlement and Deprivation (Oxford: Clarendon Press, 1981).

Anne M. Thompson, ‘Somalia: Food Aid in a Long-Term Emergency,’ Food Policy (Aug. 1983), pp. 209-219.

C. Paul Vincent, The Politics of Hunger: The Allied Blockade of Germany, 1915-1919 (Athens: Ohio University Press, 1985).

Christian Webersik, ‘Mogadishu: An Economy without a State,’ Third World Quarterly, vol. 27, no. 8 (2006), pp. 1463-1480.

S.G. Wheatcroft, ‘Famine and Food Consumption Records in Early Soviet History, 1917-25,’ in Food, Diet, and Economic Change Past and Present (Leicester: Leicester University Press, 1993), pp. 151-174.

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