Will the Free Market End Hunger? Food First Text extracted from World Hunger 12 Myths by Lappe, Collins, and Rosset, 1998

Free Market Free Market responds to money not people As poor get poorer and are pushed from land –they have even less impact on markets Their needs for food do not register The market responds to the needs of the wealthy –to produce luxury goods

The Market Is blind to social and environmental costs Example: U.S. Ag export boom –Loss of small farmers, rural communities –Soil erosion –Aquifer depletion –Ground water contamination –Fossil Fuel waste, global warming

Concentration of Wealth The Market leads to a concentration of economic power Those with greater economic power gobble up those with less Food flows from the hungry to the well fed

Inequity

Reward for Hard Work? Theory: – Market rewards hard work Reality: – Market requires hard work and production – Market rewards those who have wealth – Wealthy can withstand market swings –Wealthy have better access to credit better risk – Wealthy can invest in more land to offset low grain prices Donald Trump

Distribution of Purchasing Power “The more widely dispersed purchasing power is, the more the market will respond to actual human preferences and needs and the more power the market will have to end hunger” –Food First Mexico

Structural Adjustment Loans Loans given in 1980s-90s –International Monetary Fund (IMF) –World Bank Condition of loans = Structural Adjustment Rules –imposed on governments Goal: make developing countries –Efficient –competitive Involved –deregulation, –privatization of state institutions –removal of trade barriers IMF loans

Effect of Structural Adjustment Benefits of institutions and resources transferred from public to private business Gap between rich and poor widened as economic power concentrated Poverty and hunger escalated Free market increased import of luxury goods Cheap imported grain drove local farmers out of business dp-500-arrow,TopRight,45,-64_OU01_AA240_.jpg

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Costa Rica After a decade of Structural Adjustment: –Trade deficit rose 100% –76,800 cars entered country in 3 years –42,000 farmers growing corn, beans and rice staples went out of business Costa Rica Market

Need Government and Market Government and Market must work together to end hunger Market by itself will lead to concentration of wealth –and increased hunger Government by itself without market leads to –inefficiency, –lack of motivation –low production Example: Soviet Russia

Role for Government Government policies can help to spread the wealth and means of wealth –so that the market can serve more people Government can help insure that people have the means to support themselves –and thus eat