Blowing Bubbles

Two weeks ago, I attended the Food Justice Conference in Eugene, Oregon. Fred Kirschenmann gave the opening address on Saturday evening, and Dr. Vandana Shiva wrapped it all up on Monday, speaking about the food desert of industrial agriculture and the dangers of including food in the global casino of financial speculation. This is a theme that appeared repeatedly throughout the conference, with many of the speakers making references to a Harpers article entitled “The Food Bubble” by Frederick Kaufman. This article came out last year, and describes in detail how Goldman Sachs brought food into the futures trading world in 1991, artificially drove up the price of wheat in the course of creating returns for investors, and caused millions of people to go hungry worldwide while silos in the Midwest stood full of over 600 million bushels of unused grain.

In the article, Kaufman asks the CEO of the Minneapolis Grain Exchange, which used to keep the price of grain low, if this could happen again; if wheat prices could soar like in 2008. The response is, well, yes. Not only is it possible, it is probable, and as the New York Times reported last week in the article In Price of Farmland, Echoes of Another Boom, “Just a few years ago, farmers marveled as land prices began to rise in response to demand for corn to make ethanol. More recently, soaring prices for wheat, corn, soybeans and other crops have driven the increase”.  The bubble machine is hard at work, cranking out the next big one.

Goldman Sachs

At the end, Kaufman asks Minneapolis Grain Exchange executives if it was not the responsibility of the grain exchange to “ensure a stable valuation of our daily bread”, and is informed that, “I view what we’re working with as Widgets…I think being an employee at an exchange is different from adding value to the food system”.   This is food reduced to mathematical equations, separated from the story of its production and consumption, separated from its real value as human nourishment, separated even from the physical food itself, and used as a speculative tool to leverage money into pockets.

As Dr. Shiva said in her closing address in Eugene, “If you get your ethics right, your economics will flow out naturally”; here we have an absence of ethics, and an economy spiraling unnaturally out of control.

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