Commenting on the credit crunch and its ramifications could be as risky as having money in the bank when the copy date is a few days in the future. The last few weeks have shown authoritative comments can become out of date overnight. Not that I’m an authority on financial matters, but as one newspaper headline screamed recently, “Another day, another bank bites the dust”.
The main preoccupations on both sides of the Atlantic have, of course, been securing savings, underwriting mortgages and rebuilding confidence in banks. It is not clear, at the time of writing, whether any of these has been achieved, but it’s been quite clear since the start of the crisis that the problems of the dollar and sterling were virtually the same. And now France, Germany, Ireland, Iceland and many other countries have also been dragged down by the failure of the financial superpowers.
Perhaps I’m being simplistic, but to me this means the Great White Hope of many nations, the WTO and economists in general, namely globalisation, has let us down. It means the pre-eminence of “the market” – the mechanism by which consumers of a whole range of goods and services have been encouraged to buy the cheapest goods available, wherever they come from and however they have been produced – has not worked.
The theory is that competition around the world leads to production efficiency and lowest possible prices for consumers. That, in turn, is supposed to hold down inflation and lead to stable economies. The fact that this persuades the manufacturers and buyers of a range of consumables to shift production facilities around the world to benefit from cheap labour, creating unemployment in their domestic economies, is conveniently ignored.
When such movements become as huge as they have in recent years and are overlaid by the greed of investors and their agents who are ready to exploit any situation or system they can find for obscene personal gain, you end up in the mess in which we now find ourselves.
Within the overall crisis, farming and food are, for the present, relatively minor in value terms. But it has been obvious for some time that they are heading in the same direction as mortgages and against the interests of the generality of consumers and market stability.
When the ultimate commercial power within the agricultural and food sectors falls into fewer and fewer multinational corporate hands, look out for trouble. It is fine while the economy is going well. But when you come to rely on acquiring increasing quantities of goods from abroad and then your currency devalues, costs on domestic markets rise and then questions are raised on price and food security.
That’s where we are now, whether or not the government has the time to recognise it between bailing out banks. And the scale of those bail-outs dwarfs anything ever provided in aid to farmers to ensure supplies of safe, secure, home-produced food. Farmers are, presumably, not as important to the nation as fat-cat bankers.
More from David online
- An article in the Daily Telegraph has highlighted a survey which claimed that pigeons have been “driven from the countryside by intensive farming” and attracted to urban gardens by bird feeders. If only. The probability is that the 16,500 people who contributed to the survey were sitting in urban gardens when they did their count. Few, if any, of them actually went beyond the city limits to see what was happening on farmers’ fields. They then concluded, erroneously, that the increased numbers of pigeons they were seeing in their gardens were refugees from farming systems.
- Read David Richardson’s blog