The sugar coated bullets of the "free market"
are killing our children. The act to kill is unpremeditated. It
is instrumented in a detached fashion through computer program trading
on the New York and Chicago mercantile exchanges, where the global
prices of rice, wheat and corn are decided upon.
Poverty is not solely the result of policy failures
at a national level. People in different countries are being impoverished
simultaneously as a result of a global market mechanism. A small
number of financial institutions and global corporations have the
ability to determine, through market manipulation, the standard
of living of millions of people around the World.
We are at the crossroads of the most serious
economic and social crisis in modern history. The process of global
impoverishment unleashed at the outset of the 1980s debt crisis
has reached a major turning point, leading to the simultaneous outbreak
of famines in all major regions of the developing World.
There are many complex features underlying the
global economic crisis pertaining to financial markets, the decline
in production, the collapse of State institutions and the rapid
development of a profit-driven war economy. What is rarely mentioned
in this analysis, is how this global economic restructuring forcibly
impinges on three fundamental necessities of life: food, water and
The provision of food, water and fuel is a precondition
of civilized society: they are necessary factors for the survival
of the human species. In recent years, the prices of these three
variables has increased dramatically at the global level, with devastating
economic and social consequences.
These three essential goods or commodities, which
in a real sense determine the reproduction of economic and social
life on planet earth, are under the control of a small number of
global corporations and financial institutions.
Both the State as well as the gamut of international
organizations - often referred to as the "international community"
- serve the unfettered interests of global capitalism. The main
intergovernmental bodies including the United Nations, the Bretton
Woods institutions and the World Trade Organizations (WTO) have
endorsed the New World Order on behalf of their corporate sponsors.
Governments in both developed and developing countries have abandoned
their historical role of regulating key economic variables as well
as ensuring a minimum livelihood for their people.
Protest movements directed against the hikes in
the prices of food and gasoline have erupted simultaneously in different
regions of the World.
he conditions are particularly critical in Haiti,
Nicaragua, Guatemala, India, Bangladesh. Spiraling food and fuel
prices in Somalia have precipitated the entire country into a situation
of mass starvation, coupled with severe water shortages. A similar
and equally serious situation prevails in Ethiopia.
Other countries affected by spiraling food prices
include Indonesia, the Philippines, Liberia, Egypt, Sudan, Mozambique,
Zimbabwe, Kenya, Eritrea, a long list of impoverished countries...,
not to mention those under foreign military occupation including
Iraq, Afghanistan and Palestine.
The provision of food, water and fuel are no longer
the object of governmental or intergovernmental regulation or intervention,
with a view to alleviating poverty or averting the outbreak of famines.
The fate of millions of human beings is managed
behind closed doors in the corporate boardrooms as part of a profit
And because these powerful economic actors operate
through a seemingly neutral and "invisible" market mechanism,
the devastating social impacts of engineered hikes in the prices
of food, fuel and water are casually dismissed as the result of
supply and demand considerations.
Nature of the Global Economic and Social
Largely obfuscated by official and media reports,
both the " food crisis" and the " oil crisis"
are the result of the speculative manipulation of market values
by powerful economic actors. We are not dealing with distinct and
separate food, fuel and water "crises" but with a global
process of economic and social restructuring.
The dramatic price hikes of these three essential
commodities is not haphazard. All three variables, including the
prices of basic food staples, water for production and consumption
and fuel are the object of a process of deliberate and simultaneous
At the heart of the food crisis is the rising
price of food staples coupled with a dramatic increase in the price
Concurrently, the price of water which is an essential
input into agricultural and industrial production, social infrastructure,
public sanitation and household consumption has increased abruptly
as a result of a Worldwide movement to privatize water resources.
We are dealing with a major economic and social
upheaval, an unprecedented global crisis, characterized by the triangular
relationship between water, food and fuel: three fundamental variables,
which together affect the very means of human survival.
In very concrete terms, these price hikes impoverish
and destroy peoples lives. Moreover, the Worldwide collapse in living
standards is occurring at a time of war. It is intimately related
to the military agenda. The war in the Middle East bears a direct
relationship to the control over oil and water reserves.
While water is not at present an internationally
trade commodity in the same way as oil and food staples, it is also
the object of market manipulation through the privatization of water.
The economic and financial actors operating behind
closed doors, are:
- the major Wall Street banks and financial houses,
including the institutional speculators which play a direct role
in commodity markets including the oil and food markets
-The Anglo-American oil giants, including British Petroleum (BP),
ExxonMobil, Chevron-Texaco, Royal Dutch Shell
-The biotech-agribusiness conglomerates, which own the intellectual
property rights on seeds and farm inputs. The biotech companies
are also major actors on the NY and Chicago mercantile exchanges.
-The water giants including Suez, Veolia and Bechtel-United Utilities,
involved in the extensive privatization of the World's water resources.
-The Anglo-American military-industrial complex which includes the
big five US defense contractors (Lockheed Martin, Raytheon, Northrop
Grunman, Boeing and General Dynamics) in alliance with British Aerospace
Systems Corporation (BAES) constitutes a powerful overlapping force,
closely aligned with Wall Street, the oil giants and the agribusiness-biotech
The Oil Price Bubble
The movement in global prices on the New York
and Chicago mercantile exchanges bears no relationship to the costs
of producing oil. The spiraling price of crude oil is not the result
of a shortage of oil. It is estimated that the cost of a barrel
of oil in the Middle East does not exceed 15 dollars. The costs
of a barrel of oil extracted from the tar sands of Alberta, Canada,
is of the order of $30 (Antoine Ayoub, Radio Canada, May 2008).
The price of crude oil is currently in excess
of $120 a barrel. This market price is largely the result of the
speculative onslaught. Fuel enters into the production of virtually
all areas of manufacturing, agriculture and the services economy.
The hikes in fuel prices have contributed, in all major regions
of the World, to precipitating tens of thousands of small and medium
sized businesses into bankruptcy as well as undermining and potentially
paralyzing the channels of domestic and international trade. The
increased cost of gasoline at the retail level is leading to the
demise of local level economies, increased industrial concentration
and a massive centralization of economic power in the hands of a
small number of global corporations. In turn, the hikes in fuel
backlash on the urban transit system, schools and hospitals, the
trucking industry, intercontinental shipping, airline transportation,
tourism, recreation and most public services.
The rise in fuel prices unleashes a broader inflationary
process which results in a compression of real purchasing power
and a consequent Worldwide decline in consumer demand. All major
sectors of society, including the middle classes in the developed
countries are affected.
These price movements are dictated by the commodity
markets. They are the result of speculative trade in index funds,
futures and options on major commodity markets including the London
ICE, the New York and Chicago mercantile exchanges. The dramatic
price hikes are not the result of a shortage of fuel, food or water.
This upheaval in the global economy is deliberate.
The State's economic and financial policies are controlled by private
corporate interests. Speculative trade is not the object of regulatory
policies. The economic depression contributes to wealth formation,
to enhancing the power of a handful of global corporations.
According to William Engdahl;
"... At least 60% of the 128 per barrel price of crude oil
comes from unregulated futures speculation by hedge funds, banks
and financial groups using the London ICE Futures and New York NYMEX
futures exchanges and uncontrolled inter-bank or Over-The-Counter
trading to avoid scrutiny. US margin rules of the government's Commodity
Futures Trading Commission allow speculators to buy a crude oil
futures contract on the Nymex, by having to pay only 6% of the value
of the contract. At today's price of $128 per barrel, that means
a futures trader only has to put up about $8 for every barrel. He
borrows the other $120. This extreme 'leverage' of 16 to 1 helps
drive prices to wildly unrealistic levels and offset bank losses
in sub-prime and other disasters at the expense of the overall population.
(See More on the real reason behind high oil prices, Global Research,
May 2008)Among the main players in the speculative market for crude
oil are Goldman Sachs, Morgan Stanley, British Petroleum (BP), the
French banking conglomerate Société Générale,
Bank of America, the largest Bank in the US, and Switzerland's Mercuria.
(See Miguel Angel Blanco, La Clave, Madrid, June 2008)
British Petroleum controls the London based International
Petroleum Exchange (IPE), which is one of the world's largest energy
futures and options exchanges. Among IPE's major shareholders are
Goldman Sachs and Morgan Stanley. According to Der Spiegel, Morgan
Stanley is one of the main institutional actors in the London based
speculative oil market (IPE).
According to Le Monde, France's Société
Générale together with Bank of America and Deutsche
Bank have been involved in spreading rumors with a view to pushing
up the price of crude oil. (See Miguel Angel Blanco, La Clave, Madrid,
Spiraling Food Prices
The global food crisis, characterized by major
hikes in the prices of basic food staples, has spearheaded millions
of people around the World into starvation and chronic deprivation.
According to the FAO, the price of grain staples
has increased by 88% since March 2007. The price of wheat has increased
by 181% over a three year period.
The price of rice has increased by 50% over the
last three months (See Ian Angus, Food Crisis: "The greatest
demonstration of the historical failure of the capitalist model",
Global Research, April 2008): The price of rice has tripled over
a five year period, from approximately 600$ a ton in 2003 to more
than 1800$ a ton in May 2008. (see chart below)
"The most popular grade
of Thailand rice sold for $198 a ton, five years ago and $323 a
ton a year ago. In April 2008, the price hit $1,000. Increases are
even greater on local markets - in Haiti, the market price of a
50 kilo bag of rice doubled in one week at the end of March 2008.
These increases are catastrophic for the 2.6 billion people around
the world who live on less than US$2 a day and spend 60% to 80%
of their incomes on food. Hundreds of millions cannot afford to
The main actors in the grain market are Cargill
and Archer Daniels Midland (ADM). These two corporate giants control
a large share of the global grain market. They are also involved
in speculative transactions in futures and options on the NYMEX
and the Chicago Board of Trade (CBOT). In the US, "the world's
largest grower of GM crops, Cargill, ADM and competitor Zen Noh
between them control 81 per cent of all maize exports and 65 per
cent of all soyabean exports." ( Greg Muttitt, Control Freaks,
Cargill and ADM, The Ecologist, March, 2001)
Background of Agricultural Reform
Since the early 1980s coinciding with the onslaught
of the debt crisis, the gamut of neoliberal macroeconomic policy
reforms have largely contributed to undermining local agriculture.
Over the last 25 years, food farming in developing countries has
been destabilized and destroyed by the imposition of IMF-World Bank
Commodity dumping of grain surpluses from the
US, Canada and the European Union has led to the demise of food
self-sufficiency and the destruction of the local peasant economy.
In turn, this process has resulted in multibillion dollar profits
for Western agribusiness, resulting from import contracts by developing
countries, which are no longer able to produce their own food.
These preexisting historical conditions of mass
poverty have been exacerbated and aggravated by the recent surge
in grain prices, which have led in some cases to the doubling of
the retail price of food staples.
The price hikes has also been exacerbated by the
use of corn to produce ethanol. In 2007, global production of corn
was of the order of 12.32 billion bushels of which 3.2 billion were
used for ethanol production. Almost 40 percent of corn production
in the US will be channeled towards ethanol.
Genetically Modified Seeds
Coinciding with the establishment the World Trade
Organization (WTO) in 1995, another important historical change
has occurred in the structure of global agriculture.
Under the articles of agreement of the World Trade
Organization (WTO)), the food giants have been granted unrestricted
freedom to enter the seeds' markets of developing countries.
The acquisition of exclusive "intellectual
property rights" over plant varieties by international agro-industrial
interests, also favors the destruction of bio-diversity.
Acting on behalf of a handful of biotech conglomerates
GMO seeds have been imposed on farmers, often in the context of
"food aid programs". In Ethiopia, for instance, kits of
GMO seeds were handed out to impoverished farmers with a view to
rehabilitating agricultural production in the wake of a major drought.
The GMO seeds were planted, yielding a harvest.
But then the farmer came to realize that the GMO seeds could not
be replanted without paying royalties to Monsanto, Arch Daniel Midland
et al. Then, the farmers discovered that the seeds would harvest
only if they used the farm inputs including the fertilizer, insecticide
and herbicide, produced and distributed by the biotech agribusiness
companies. Entire peasant economies were locked into the grip of
the agribusiness conglomerates.
The main biotech giants in GMO include Monsanto,
Syngenta, Aventis, DuPont, Dow Chemical, Cargill and Arch Daniel
Breaking The Agricultural Cycle
With the widespread adoption of GMO seeds, a major
transition has occurred in the structure and history of settled
agriculture since its inception 10,000 years ago.
The reproduction of seeds at the village level
in local nurseries has been disrupted by the use of genetically
modified seeds. The agricultural cycle, which enables farmers to
store their organic seeds and plant them to reap the next harvest
has been broken. This destructive pattern - invariably resulting
in famine - is replicated in country after country leading to the
Worldwide demise of the peasant economy.
The FAO- World Bank Consensus
At the June 2008 FAO Rome Summit on the food crisis,
politicians and economic analysts alike embraced the free market
consensus: the outbreak of famines was presented as a result of
the usual supply, demand and climatic considerations, beyond the
control of policy-makers. "The solution": channel emergency
relief to affected areas under the auspices of the World Food Program
(WFP). Do not intervene with the interplay of market forces.
Ironically, these " expert opinions"
are refuted by the data on global grain production: the FAO forecasts
for world cereal production point to a record output in 2008.
Contradicting their own textbook explanations,
World prices are, according to the World Bank, expected to remain
high, despite the forcasted increased supply of food staples.
State regulation of the prices of food staples
and gasoline is not considered an option in the corridors of the
FAO and the World Bank. And of course that is what is taught in
the economics departments of America's most prestigious universities.
Meanwhile, local level farmgate prices barely
cover production costs, spearheading the peasant economy into bankruptcy.
The Privatization of Water
According to UN sources, which vastly underestimate
the seriousness of the water crisis, one billion people worldwide
(15% of the World population) have no access to clean water "and
6,000 children die every day because of infections linked to unclean
water" (BBC News, 24 March 2004) A handful of global corporations
including Suez, Veolia, Bechtel-United Utilities, Thames Water and
Germany's RWE-AG are acquiring control and ownership over public
water utilities and waste management. Suez and Veolia hold about
70 percent of the privatized water systems Worldwide.
The privatization of water under World Bank auspices
feeds on the collapse of the system of public distribution of safe
tap drinking water:
"The World Bank serves the interests of water
companies both through its regular loan programs to governments,
which often come with conditions that explicitly require the privatization
of water provision..." (Maude Barlow and Tony Clarke, Water
Privatization: The World Bank's Latest Market Fantasy, Polaris Institute,
Ottawa, 2004)) "The modus operandi [in India] is clear - neglect
development of water resources [under World Bank budget austerity
measures], claim a "resource crunch" and allow existing
systems to deteriorate." (Ann Ninan, Private Water, Public
Misery, India Resource Center April 16, 2003)
Meanwhile, the markets for bottled water have
been appropriated by a handful of corporations including Coca-Cola,
Danone, Nestlé and PepsiCo. These companies not only work
hand in glove with the water utility companies, they are linked
up to the agribusiness-biotech companies involved in the food industry.
Tap water is purchased by Coca-Cola from a municipal water facility
and then resold on a retail basis. It is estimated that in the US,
40 percent of bottled water is tap water. (See, Jared Blumenfeld,
Susan Leal The real cost of bottled water, San Francisco Chronicle,
February 18, 2007)
In India, Coca-Cola has contributed to the depletion
of ground water to the detriment of local communities:
"Communities across India living around Coca-Cola's
bottling plants are experiencing severe water shortages, directly
as a result of Coca-Cola's massive extraction of water from the
common groundwater resource. The wells have run dry and the hand
water pumps do not work any more. Studies, including one by the
Central Ground Water Board in India, have confirmed the significant
depletion of the water table.
When the water is extracted from the common groundwater
resource by digging deeper, the water smells and tastes strange.
Coca-Cola has been indiscriminately discharging its waste water
into the fields around its plant and sometimes into rivers, including
the Ganges, in the area. The result has been that the groundwater
has been polluted as well as the soil. Public health authorities
have posted signs around wells and hand pumps advising the community
that the water is unfit for human consumption.
Tests conducted by a variety of agencies, including
the government of India, confirmed that Coca-Cola products contained
high levels of pesticides, and as a result, the Parliament of India
has banned the sale of Coca-Cola in its cafeteria. However, Coca-Cola
not only continues to sell drinks laced with poisons in India (that
could never be sold in the US and EU), it is also introducing new
products in the Indian market. And as if selling drinks with DDT
and other pesticides to Indians was not enough, one of Coca-Cola's
latest bottling facilities to open in India, in Ballia, is located
in an area with a severe contamination of arsenic in its groundwater.(India
Resource Center, Coca-Cola Crisis in India, undated)
In developing countries, the hikes in fuel prices
have increased the costs of boiling tap water by households, which
in turn favors the privatization of water resources.
In the more advanced phase of water privatization,
the actual ownership of lakes and rivers by private corporations
is contemplated. Mesopotamia was not only invaded for its extensive
oil resources, the Valley of the two rivers (Tigris and Euphrates)
has extensive water reserves.
We are dealing with a complex and centralized
constellation of economic power in which the instruments of market
manipulation have a direct bearing on the lives of millions of people.
The prices of food, water, fuel are determined
at the global level, beyond the reach of national government policy.
The price hikes of these three essential commodities constitute
an instrument of "economic warfare", carried out through
the "free market" on the futures and options exchanges.
These hikes in the prices of food, water and fuel
are contributing in a very real sense to "eliminating the poor"
through "starvation deaths". The sugar coated bullets
of the "free market" kill our children. The act to kill
is instrumented in a detached fashion through computer program trading
on the commodity exchanges, where the global prices of rice, wheat
and corn are decided upon.
'The Commission on Population Growth
and the American Future'
But we are not dealing solely with market concepts.
The outbreak of famines in different parts of the World, resulting
from spiraling food and fuel prices have broad strategic and geopolitical
President Richard Nixon at the outset of his term
in office in 1969 asserted "his belief that overpopulation
gravely threatens world peace and stability." Henry Kissinger,
who at the time was Nixon's National Security adviser, directed
various agencies of government to jointly undertake "a study
of the impact of world population growth on U.S. security and overseas
In March 1970, the U.S. Congress set up a Commission
on Population Growth and the American Future. (See Center for Research
on Population and Security).
The Commission was no ordinary Task Force. It
integrated representatives from USAID, the State Department and
the Department of Agriculture with CIA and Pentagon officials. Its
objective was not to assist developing countries but rather to curb
World population with a view to serving US strategic and national
security interests. The Commission also viewed population control
as a means to ensuring a stable and secure environment for US investors
as well as gaining control over developing countries' mineral and
This Commission completed its work in December
1974 and circulated a classified document entitled National Security
Study Memorandum 200: Implications of Worldwide Population Growth
for U.S. Security and Overseas Interests" to "designated
Secretaries and Agency heads for their review and comments."
In November 1975, the report and its recommendations were endorsed
by President Gerald Ford.
Kissinger had indeed intimated in the context
of the National Security Study Memorandum 200 (NSSSM 200) that the
recurrence of famines, disease and war could constitute a de facto
instrument of population control.
Although the NSSM 200 report did not assign, for
obvious reasons, an explicit policy role to famine formation, it
nonetheless intimated that the occurrence of famines could, under
certain circumstances, provide a de facto solution to overpopulation:
"Accordingly, those countries where large-scale
hunger and malnutrition are already present face the bleak prospect
of little, if any, improvement in the food intake in the years ahead
barring a major foreign financial food aid program, more rapid expansion
of domestic food production, reduced population growth or some combination
of all three. Worse yet, a series of crop disasters could transform
some of them into classic Malthusian cases with famines involving
millions of people.
While foreign assistance probably will continue
to be forthcoming to meet short-term emergency situations like the
threat of mass starvation, it is more questionable whether aid donor
countries will be prepared to provide the sort of massive food aid
called for by the import projections on a long-term continuing basis.
Reduced population growth rates clearly could
bring significant relief over the longer term.....
In the extreme cases where population pressures
lead to endemic famine, food riots, and breakdown of social order,
those conditions are scarcely conducive to systematic exploration
for mineral deposits or the long-term investments required for their
exploitation. Short of famine, unless some minimum of popular aspirations
for material improvement can be satisfied, and unless the terms
of access and exploitation persuade governments and peoples that
this aspect of the international economic order has "something
in it for them," concessions to foreign companies are likely
to be expropriated or subjected to arbitrary intervention. Whether
through government action, labor conflicts, sabotage, or civil disturbance,
the smooth flow of needed materials will be jeopardized. Although
population pressure is obviously not the only factor involved, these
types of frustrations are much less likely under conditions of slow
or zero population growth."
(1974 National Security Study Memorandum 200:
Implications of Worldwide Population Growth for U.S. Security and
Overseas Interests". (emphasis added)
The report concludes with a couple of key questions
pertaining to the role of food as "an instrument of national
power", which could be used in the pursuit of US strategic
- "On what basis should such food resources
then be provided? Would food be considered an instrument of national
power? Will we be forced to make choices as to whom we can reasonably
assist, and if so, should population efforts be a criterion for
- Is the U.S. prepared to accept food rationing
to help people who can't/won't control their population growth?"
(Ibid, emphasis added)
In the words of Henry Kissinger: "Control
oil and you control nations; control food and you control the people."