In Britain, rising food prices — up over 15% a year — mean poorer households scrape and struggle. In many countries, they mean people starve. The most basic foods — wheat, rice, corn — have pretty much doubled. Families don’t have enough to eat. In Egypt, workers have struck and occupied factories. In other countries, there have been food riots.
The high prices are good news for the world’s giant agribusinesses. Monsanto’s net income for the three months up to the end of February 2008 was more than double the 2007 figure, up from $543m to $1.12bn.
Cargill’s net earnings soared by 86 per cent from $553m to $1.030bn over the same three months. Archer Daniels Midland, another giant US-based agribusiness, increased its net earnings by 42 per cent in the first three months of this year from $363m to $517m.
The Mosaic Company, one of the world’s largest fertiliser companies, saw its income for the three months ending 29 February rise more than 12-fold, from $42.2m to $520.8m
As well as profiting from high food prices, the agribusinesses are also making gains from the push to “bio-fuels” — growing crops not for food but to provide substitutes for oil.
The correlation of factors in rising world food prices is difficult to work out. Speculation, low interest rates, bio-fuel production, droughts, dearer oil raising fertiliser prices, increased urbanisation and meat-eating in Asia, are all implicated, or may be.
But the world still produces enough food for everyone. The poor could buy enough food if they weren’t so poor; and they wouldn’t be so poor if the rich weren’t so rich.
It would not be difficult to arrange for the food to get to the hungry. Public ownership of the stocks of basic foods, distribution under workers’ control at low prices, and increased wages would do it. But the governments are all more concerned to keep the banks sleek.
It is a typical capitalist crisis. As Marx and Engels put it in the Communist Manifesto: “It appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence... and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce...”
In the years leading up to the financial crisis that broke in August 2007, profits soared. Inequality widened. The luxury spending of the ultra-rich spiralled to the heights, while workers lagged further and further behind.
Now the financial swirl that led the boom for the ultra-rich has overreached itself and fallen into crisis – as capitalist booms, driven by the frantic urge to profiteer faster than the competitor, always do overreach themselves.
The banks are in trouble. But they get bailed out — with over £50 billion of easy credit for British banks from the British government, for example – because in a capitalist economy they are too important to fail.
A few top bosses lose their jobs, and get big pay-offs, $200 million for Merrill Lynch chief Stan O’Neal for example. Some expenses are cut. Deutsche Bank has told its executives that now they must pay themselves for porn channels on pay TV in their hotels on business trips, rather than putting them on company expenses, and can’t claim more than £50 for lunch unless they are schmoozing customers.
Lower-paid workers’ families, especially in poor countries, are, for capitalism, certainly not “too important to fail”. Even in boom times, capital seeks to make sure that at least a minority of lower-paid workers’ families do “fail”, to provide a whip of fear to apply to the rest.
In slumps, many are crushed. That is how the system works. That is how it enforces the reductions in costs which - unless workers take advantage of the crisis to overthrow capitalism and establish our own rule — will allow for the next wave of capitalist expansion.
107 years ago, the Russian Marxist movement which would grow to lead a workers’ revolution in 1917 first gained a wide hearing in the crisis caused by a famine in 1891.
The pioneer Marxist George Plekhanov outlined their tasks: “By means of spoken and printed propaganda they spread the correct view of the causes of the present famine through all strata of the population.
“Wherever the mass is not yet sufficiently advanced to understand their teaching, they give it, as it were, object lessons. They appear wherever it protests, they protest with it, they explain to it the meaning of its own movement and hence they increase its revolutionary preparedness...
“The whole success of the socialist movement is measured... in terms of the growth in the class consciousness of the proletariat. Everything that helps this growth [the socialists] see as useful to their cause: everything that slows it down as harmful...”