Global Problems and the Culture of Capitalism

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VI  Readings on Poverty, Hunger, and Economic Development

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Approximately one-fifth of the world's population, over one billion people, earns less than $1.00 a day.  According to the 1998 UN World Development Report, the three richest people in the world own assets that exceed the combined Gross Domestic Products of the world's 48 poorest countries, and Forbes Magazine reports that 358 billionaires had a combined net worth equal to the combined income of the bottom 45 percent of the world's population.  Each day, over a billion people in the world lack basic food needs.  And each day 35,000 children under the age of five die of starvation or preventable infectious disease.  Furthermore the problems of growing inequality, poverty, and hunger are getting worse in spite of the huge surge of global economic growth over the past 50 years. In this section will will address the issues of the amount of food in the world, the role it plays in a capitalist economy, why people are poor, and what measures can be taken to eliminate poverty and hunger.


A. Hunger and the World Food Supply
We often hear about the world running out of enough food to feed our growing population.  For various reasons, however, that is not likely.  The overwhelming evidence is that people are not hungry because of a lack of food; they are hungry because they don't have the money to pay for it.  The following readings address the issue of the world food supply.
Exercise 1: The Global Hunger Quiz
See how much you know about global hunger with this quick quiz.


Reading 1: 12 Myths About Hunger
Check out some of the things you thought you knew about world hunger.


Reading 2: The Myths of Scarcity
A common view about hunger is that it is caused by a scarcity of food.  As this article from Food First reveals, scarcity is not the problem.  The article questions the idea that we are running out of land to farm, even in areas where hunger is most severe.


Reading 3. Food Supply Gap
This brief report and graphic from the Food and Agricultural Organization of the United Nations displays and discusses the availability of food from one part of the world to another.  It calculates the DES for each area,  an estimate of the average daily food energy available per person over a given period.  Note that this is not what is simply available in a given area or country; it is what people have the ability to pay for.  As they make clear, there is sufficient food for everyone (in spite of the fact that growers ostensibly grow what they believe can be paid for, not what is needed). As one UN official said, "If you look at the world as a whole, there is enough food produced to feed each person, each day.   But it isn't happening because it's access to food that's the real problem."  


Reading 4. Increase in the Number of Undernourished People in the World
This brief summary of the UN 1998 State of Food and Agriculture report provides you some basic information on the present-day food situation, as well as some of the future prospects.  You can also read the brief press release describing the main findings of the report. 


B. Food as a Commodity
To understand why people go hungry you must stop thinking about food as something farmers grow for others to eat, and begin thinking about it as something companies produce for other people to buy.  Food is a commodity.  Furthermore, agricultural producers choose to grow, not only what people will and can buy, but they grow things for which they will get the best price.  This has various implications.  For example, much of the best agricultural land in the world is used to grow commodities such as cotton, sisal, tea, tobacco, sugar cane, and cocoa, items which are non-food products or are maginally nutritious, but for which there is a large market.  Millions of acres of potentially productive farmland is used to pasture cattle, an extremely inefficient use of land, water and energy, but one for which there is a market in wealthy countries.  More than half the grain grown in the United States (requiring half the water used in the U.S.) is fed to livestock, grain that would feed far more people than would the livestock to which it is fed.  Furthermore, growers must be careful not to "overproduce"; that is they must not grow or raise more food than people can pay for.  In many countries agricultural producers are discouraged from producing; furthermore, as food producing corporations grow larger, they are able to control production to ensure they don't "overproduce."   The problem, of course, is that people who don't have enough money to buy food (and more than one billion people earn less than $1.00 a day), simply don't count in the food equation.  In other words, if you don't have the money to buy food, no one is going to grow it for you.  Put yet another way, you would not expect The Gap to manufacture clothes, Adidas to manufacture sneakers, or IBM to provide computers for those people earning $1.00 a day or less; likewise, you would not expect ADM ("Supermarket to the World") to produce food for them.  Aid programs or governments may take up some of the slack by purchasing food from producers, and distributing it; but, as we discuss in Global Problems and the Culture of Capitalism, this may do more harm than good. What this means is that ending hunger requires doing away with poverty, or, at the very least, ensuring that people have enough money or the means to acquire it, to buy, and hence create a market demand for food.
Exercise 2. Food Outlook
Each month Food Outlook produces a newsletter that reports on the international food situation.   It might report, for example, that grain production in certain countries is down because of flooding or hurricanes (as in Honduras after Hurricane Mitch), or that rice production is up, or that prices on one commodity or another have declined.  However, you have to remember that when there are reports of production declines, the decline is relative to how much of a given crop was planted, and the decision of how much to plant is a market decision; that is, the amount planted depends on what the grower believes the market demand for the product will be.  In other words, what and how much is planted does not depend on people's need for food; it depends on what they are able and willing to pay for it.    Browse the latest issue of Food Outlook.  Read the Highlight section, browse through the rest.  From your browsing through the report, what do you think determines what farmers (largely agribusiness) grow?  What determines how much of a given commodity they plant?  If they can get a larger return on one commodity over another which will they grow?


Reading 5. Public Action to Remedy Hunger
Nobel Prize winning economist, Amartya Sen is one of the foremost spokespersons on global hunger and poverty. His book, written with Jean Dreze, Hunger and Public Action, is one of the most comprehensive studies of hunger yet written. In this address, Sen summarizes the major points of the book. There are, he says, two types of hunger: famine and endemic depravation-- the daily lack of sufficient food. Famine, while receiving the most attention, is less prevalent that the largely hidden endemic hunger from which some one billion people suffer. While the problem of hunger is widespread, Sen warns about being pessimistic. People are hungry, says Sen, because they lose their entitlement to food--they lack either the land to grow food, the money to buy it, or access to state programs of food or wage distribution. With the will, he says, no one needs to go hungry. Among the most important features necessary to prevent hunger, he says, is a democratic (and thereby accountable) government and a free press that publicizes the threat of hunger.


C. Why are People Poor?
If, as most researchers claim, people are hungry because they lack the money to buy food, then eliminating hunger requires eliminating poverty, or, at the very least, ensuring that people, particularly women and children, receive food entitlements.  But that requires understanding the reasons for global poverty.  The following readings address that issue.
Reading 6. Poverty and Globalization
This lecture by Vandana Shiva, founder Director of the Research Foundation for Science, Technology and Ecology in New Delhi comprised one of the BBC's Reith Lecture series.  She argues that, contrary to popular opinion, it is the small farmer that feeds the world. But, she says, the small farmer is being destroyed, driven into poverty by the spread of corporate agriculture and the introduction of genetically engineered crops. What is also being destroyed, she says, is an agricultural method that is sustainable and more efficient. She also points out that it is women who are at the center of this sustainable agriculture and who are being systematically driven into poverty.


Reading 7. Globalization: Threat or Opportunity
This report from the International Monetary Fund (IMF) addresses some of the criticisms of globalization and the role of multilateral institutions such as the World Bank and IMF.  It argues that, while there have been some setbacks, including an increase in poverty, globalization represents real opportunities for developing countries. The report concludes that  "The international community should endeavor—by strengthening the international financial system, through trade, and through aid—to help the poorest countries integrate into the world economy, grow more rapidly, and reduce poverty. That is the way to ensure all people in all countries have access to the benefits of globalization."


Reading 8. The Politics of Hunger
In this article from Le Monde Diplomatique, Ignacio Ramonet argues that world hunger is a political problem that arises from the uneven distribution of wealth.  Citing a UN report, Ramonet points out that "the whole of the world population's basic needs for food, drinking water, education and medical care could be covered by a levy of less than 4 % on the accumulated wealth of the 225 largest fortunes. To satisfy all the world's sanitation and food requirements would cost only $13 billion, hardly as much as the people of the United States and the European Union spend each year on perfume."


Reading 9. Global Poverty in the Late 20th Century
In this paper, economist Michel Chossudovsky presents a different perspective from that offered by the authors of Reading 7.  He proposes that increased poverty is a consequence of the global integration of the capitalist economy that we examined in the readings on The Capitalist.  He also explains how the "globalization of poverty" is affecting the former Soviet Union, as well as other Western countries.


D. How Can We Eliminate Hunger and Poverty?
There is widespread agreement across the political spectrum that poverty and hunger can and must be alleviated; The World Bank has even set the elimination of poverty as its major goal.  The problem is how do we do it?  In theory, it's easy; just increase taxes on the wealthy and redistribute the income.  But since the wealthy control most global institutions, that's not too likely to happen.  Once we eliminate that option, proposals to eliminate poverty range from accelerating economic growth in poor countries (although that doesn't do much for the poor in rich countries), to overhauling our way of living, to helping the poor create their own economic opportunities.  The following selections each address these ideas.
Reading 10. Economic Growth and Human Development
This report from the World Resources Institute describes the growing inequality of wealth in the world, and examines its implication.   The report concludes that  "In the longer term, reducing income inequality and ensuring adequate human development for all is likely to depend on greater commitment to the implementation of policies for broader-based economic growth and poverty reduction through increased investment in public education and health."


new.gif (1508 bytes)Reading 11. Global Economic Inequality: More or less equal?
Is global economic inequality increasing or decreasing?  This article from The Economist attempts to answer that question, concluding, generally, that there are worse things that the expansion of global capitalism. There is an alternative, and more nuanced view contained in the article, Global economic inequality and international trade by Ajit K. Ghose that makes a distinction between inter-country and intra-country inequality and the role of liberalized trade in inequality trends.


Reading 12.  What kind of growth
Theologian John B. Cobb questions the assumption made by most economists that the growth in a countries GNP or GDP is synonymous with "progress," and improvements in "standard of living."   He suggests that "economic policies designed to increase gross national product repeatedly work against human community." Cobb suggests that we must pay more attention to local communities, and that local communities must, if quality of life is to be improved, detach themselves to some extent from the global market. Most of his essay address life in the United States, but it applies globally.


new.gif (1508 bytes)Reading 13. Can Extreme Poverty Be Eliminated?
Economic growth is often cited as the major way to end poverty.  A major proponent of this view is Jeffery D. Sachs who has spent the last 15 to 20 years advising developing and emerging countries on economic policy.  Sachs begins his paper by claiming that for all the centuries prior to the industrial revolution human beings lived in wretched poverty, facing constant threats from disease and famine.  While this assumption is often contradicted by archeological and ethnographic evidence, Sachs takes off from this point to argue that economic growth has already lifted 5/6s of the world out of extreme poverty and that with modest economic reforms and help from wealthy nations, the rest may also escape destitution.  As a foremost proponent of economic growth has the solution to the world's ills, Sachs is worth reading and discussing.  This article from Scientific American summarizes the main points that he makes in his book, The End of Poverty.


Exercise 4.  Social Indicators of Development
As an alternative to measuring "progress" by the GNP or GDP (the quantity of goods and services produced) social scientists developed the Social Indicators of Development, that attempts to include various quality of life indicators in the measure of progress and standard of living.   This site contains the World Bank's most detailed data collection for assessing human welfare to provide a picture of the social effects of economic development. Data are presented for over 170 economies, omitting only those for which data are inadequate.  Find out how different countries stand in relation to each other.  After reading the text, go to the search interface.


Reading 14.  Ecology and Politics in the Age of Globalization: The World Bank and Corporations
One of the major institutions that seeks to promote economic development is the World Bank, and its subsidiaries collectively known as the Multilateral Development Banks (MDBs).  Yet in spite of lending billions of dollars to so-called developing countries, poverty in most has continually increased.  One of the reasons, suggest the authors of this article, is that most of the aid functions far more to promote corporate profit than it does to alleviate poverty.


Exercise 5. The Microcredit Movement
This is the PBS Web site that accompanied their two-part documentary on microcredit.  Microcredit represents an attempt to target particularly vulnerable portions of the population--largely women--and, through a small loan program, assist them to start small businesses.  In Global Problems and the Culture of Capitalism we discuss the best known of these programs, The Grameen Bank in Bangladesh.  Browse the site beginning with the brief summary, and then review some of the facts about the Grameen Bank, About Global Poverty and Microcredit. 


Additional Resources on Hunger, Poverty and Economic Development


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