Monday, October 17, 2016

Bill Mitchell — Ending food price speculation


Progressive policy proposal "to regulate food speculation out of existence."

Bill Mitchell – billy blog
Ending food price speculation – Part 1
Ending food price speculation – Part 2Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

5 comments:

Ryan Harris said...

Well Intentioned, a few years ago I would have agreed. But I think Mitchell needs to look out now over a longer time period and larger geographic regions with the advantage of hindsight to see the impacts on productivity, industrialization and positive effects on development and poverty in frontier countries and developing markets as well.

IMO, The world finally out grew Western Surpluses and made this period unique in recent history. I don't think the speculation caused the problems as much as the market caused the speculators to boost investment as consumption changed and billions were consuming more as they were lifted out of poverty due to globalization. Years of stagnation in agriculture came to an abrupt end.

Globalization and finance has been terrible for western working class people but has lifted far more people in the rest of the world out of poverty. The problem that needs solved is for working class people, not dismantling the system that delivered prosperity to billions.

Greg said...

@Ryan

I dont see how our modern food price speculation markets can be credited with delivering "prosperity to billions"

They can be credited with delivering billions $ in profits to people who make almost zero subsequent investments in the continued improvement of agricultural systems, but that is not something to laud.

I think that the original concept of futures markets was good and as long as all participants in the market are people who would be satisfied with actually physically holding the commodity it could continue to offer stability to producers/consumers. But speculators are simply siphoning off potential profits for producers, profits which could be invested in improving future production.

Matthew Franko said...

"IMO, The world finally out grew Western Surpluses"

You mean the ROW finally started to contribute to the surpluses too right?

So it was no longer just a Western Surplus but now a Global Surplus right?

Tom Hickey said...

Two points.

1. A lot of people "in poverty" were surviving just fine as they had for hundreds if not thousands of years. They only entered the definition of poverty when they fell under capitalism. I have visited some of those people and they were the happiest people I have ever encountered. they worked hard, where extremely friendly and hospitable, and had the benefits of some modern technology such as medicine although they might have to travel some distance. But comparing them to "poor people" in inner cities is a category error resulting from definition and aggregation. The former are or were self-sufficient although they didn't have access to all the "comforts of life," while the later are not self-sufficient and are either dependent, destitute, or driven to crime.

2. With financialization commodities became "asset markets" rather than chiefly part of the supply chain, and this altered the behavior of those markets away from supply to trading, not for the better regarding supply. Nothing was added and the shift in the purpose of the market affected the availability of real resources negatively in many cases. This was justified based on theory that disregarded actual outcomes.

Andrew Anderson said...

Of course there'd be far less need to regulate banks if their liabilities wrt to the general public were real and not largely a sham.

Otherwise, we're attempting to regulate systematic theft from the poor to the banks and the rich.