The Shadow Boxing column by Korn Chatikavanij in the Bangkok Post of 8 April contains the statement that ‘the best way of ensuring there will be no shortage [of rice] is to trust in the market mechanism’.

Such steadfast ideological faith in free market capitalism would be admirable in a religion.  Unfortunately the belief that problems of food supply and distribution can be solved by the magic of the invisible hand flies in the face of the facts – facts which include the deaths of millions.

Consider 3 famous famines.

During the Great Hunger, or Irish potato famine, of the middle of the 19^th century, the population of Ireland shrank by 20-25% due to death and emigration.  Yet during the period of the most widespread hunger, Ireland continued to export food.  It is believed the exports of some food products actually grew during the famine.

The reasons why a starving country could not eat the food it was producing are easy to see.  The owners of the land producing the food (overwhelmingly absentee landlords who controlled Irish representation at Westminster) were responding to market signals.  The destitute poor of Ireland could not afford to buy this food.  The export markets could.  The food went to the highest bidder, the landlords extracted maximum profit (as good capitalists should) and the poor starved to death. 

An earlier famine in 1782-3 had been mitigated by a ban on exports, resulting in an immediate fall in food prices.  The free marketeers of 1845 would countenance no such artificial government restriction on trade.  Record-keeping was rudimentary at the time, but best estimates are that three-quarters of a million died of starvation and disease.

The great Bengal famine of 1943 resulted in between 1.5 and 3 million deaths.  Although the rice harvest of that year was lower than 1942, it was still better than 1941, when there had been no famine.  Nobel Economics Laureate Amartya Sen argues that the famine was caused by the fact poor rice consumers had insufficient money to buy and that producers could earn more by exports, which again were not halted by any market-distorting government fiat.

The famine in northern Ethiopia in 1984-5 (made famous through the Band Aid concerts) occurred after Ethiopia was persuaded by USAID to liberalize trade in food, and rely on international markets for food security.  During the famine, Ethiopia was trying to play this game by exporting high-value crops like green beans to affluent European consumers.  This situation cost an estimated 1 million lives.

Now in all these examples, there were confounding factors.  Ireland suffered an appalling mal-distribution of land, a soaring birth-rate and a generally hostile government in London.  Bengal in 1943 was part of an empire at war, with military stockpiles and disruptions to normal trade.  Ethiopia also suffered conflict and a government that blatantly manipulated agricultural information for its own ends.  It can be argued that no case was a perfect example of free market economics.  But where market mechanisms were allowed free rein, the situation worsened, and the deaths multiplied.

But neither has the rice trade in Thailand been an exercise in completely free markets.  Prices on the world market are grossly distorted by US subsidies to its growers in Texas and Louisiana, most of whose production is for export.  That has a knock-back effect on Thai domestic prices, pushing them down.  The Thai government is happy with this since it has had an abiding interest in keeping domestic prices low.  This may beggar farmers but it allows urban employers (and the government is the biggest) to push wages low and helps keep Thai labour ‘competitive’ in the world market.

Khun Korn argues that the Democrats, if in power, ‘would not send signals that there could be a shortage’.  That and a refusal to consider other government ‘interference in the market’, he says, will prevent hoarding. 

But the people best placed to know if there is a shortage are the same people with every market incentive and opportunity to hoard.  No rice trader in his right mind will change market strategy just because the government, Democrat or otherwise, claims there is no shortage when his own information tells him there is.  Or could be.  ‘Hoarding’, which can undoubtedly exacerbate hardship, is a perfectly rational market reaction to anticipated shortage. 

It may shock investment bankers and others whose understanding of economics is dominated by a capitalist perspective, but an economic system based on ‘free markets’ is not the way most of the world has been run for most of its existence and there is strong evidence that it is not the way most of its inhabitants want it to be run, especially when it comes to the essentials of life.

The most popular Thai government policy by far in the past 30 years must be the 30-baht health insurance scheme.  This effectively took a large slice of health care out of the market economy.  Instead of being allocated on the basis of ability to pay, basic health care goes to those who need it.  The medical staff, hospitals, drugs and equipment still need to be paid for, but access to these is no longer by market mechanisms.

People the world over, including the vast majority of the US, believe this is the way health care should be provided.  Many of society’s other needs should, in the opinion of the majority, not be sold on the market – from education and religious services to street lighting and national defence.

And perhaps the largest mass organization in the world, Via Campesina, with an estimated 150 million members, has consistently argued against liberalization of the trade on food.

Perhaps the time has come to recognize that basic food is a right, not a commodity, and that ensuring the right to sufficient food to maintain life is not something that should be bought and sold to the highest bidder.