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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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