Potential for Famine in the US

AIT Newsletter reports about famine.

(emphasis mine) [my comment]

Nobody Need Starve

How do famines relate to food supply? Some see the connection as almost definitional: famine is, in this view, synonymous with a country being short of food. When Mr Malone, the rich Irish-American in Shaw's Man and Superman, refers to the Irish famine of the 1840s, he refuses to describe it as one. He explains that
'when a country is full o food and exporting it, there can be no famine.' There is some distinctive use of language here. Malone mentions that his father 'died of starvation in the black 47'. Since more than a million other Irishmen did the same in the 1840s, it is hard not to see a 'famine' there, as the term is understood.

Malone's definitional point about famines really raises a different and extremely important causal question:
why did the Irish starve, given the fact that Ireland had food enough to export some to England? That question remains tragically relevant. No recorded famine has killed a higher proportion of the population than the Irish famine. This applies to the much publicized recent famines in Somalia, Ethiopia and Sudan, and even to the terrible starvation in China during 1958-61, where the absolute number killed was much larger (perhaps between twenty-three and thirty million), but where the fatality as a proportion of the total population was still smaller than in the privation that overwhelmed Ireland 150 years ago.

Recent empirical work has demolished the view that famines and starvation can occur only when food supply declines. Indeed, in different countries in the world, many large famines have taken place despite moderate-to-good food availability, and without any appreciable decline in food output or supply. And some-like the Bangladesh famine of 1974-have actually occurred in years of peak food availability. A famine develops when a sizeable number of people - who often belong to a particular occupation group - lose the economic means of acquiring food. This can result from unemployment, or from a sharp drop in earnings compared with food prices [ie: hyperinflation], even when there is no fall in food output or supply. And conversely, there have also been many cases of severe decline in food production and availability which have not resulted in a famine. Food can be purchased from abroad if the economic means exist, and also the available food supply, even when short, can be so distributed as to avoid extreme destitution. Giving a destitute person an income, perhaps through employment in a temporary public project, is a quick way of giving potential famine victims the ability to compete with others in buying food.

So
there is no fixed relation between food and famine. Famines can occur with or without substantial declines in food output. To recognize this does not require us to deny that some famines have happened along with-and to some extent been caused by - a sharp decline in food supply in a particular region. Indeed, the Irish famine, or 'the starvation' (as Mr Malone preferred to describe it to Violet, his English daughter-in-law), was actually accompanied by a large fall in Irish food production, related to a series of potato blights. Since the economies of Ireland and Britain were integrated, we could still say that there was no great decline in food production for the economy as a whole; the Irish, if they had the economic means, could buy food from England. They did not buy it - because they did not have the means.

The question that arises is this:
why was Ireland, with so little food, exporting food to England, which had so much? The answer lies in the way the market worked. Market-based movements of food are related to demand and purchasing power, and the English could offer higher prices than the economically devastated Irish consumer could manage [Once China breaks the dollar peg, Chinese will be able to afford much higher prices than the US consumer]. It was not surprising that ship after ship sailed down the Shannon bound for England laden with wheat, oats, cattle, pigs, eggs and butter. Such 'countermovements' of food out of famine-stricken areas have been observed in modern famines as well: for example, in the Ethiopian famine of 1973, food was moved out of the famine-affected province of Wollo to the more prosperous purchasers in Addis Ababa and elsewhere. Those who starve because they cannot afford to buy food have no means of keeping within their borders the food that is there.

Were the English rulers responsible for the famine? Was Malone right to think 'My father was starved dead'? The British government did not set out deliberately to starve the Irish. Britain did not blockade Ireland, or foment the potato blights, or undertake public policies aimed at weakening the Irish economy...
[It simply let the free market starve hundreds of thousands]

...
It is not surprising that in the gruesome history of famines there is hardly any case in which a famine has occurred in a country that is independent and democratic, regardless of whether it is rich or poor
[There are dozens of examples of democracies experiencing famine: Weimar Republic, Argentina during the 1980s and 90s, Zimbabwe, etc... In all these cases, famines coincided with hyperinflation.]. In India, famines continued to occur right up to independence: the last British Indian famine, the Bengal famine of 1943 in which between two and three million people died, happened only four years before the British withdrew. And then, with independence, famines abruptly stopped. With a democratic political system in a self-governed territory, a relatively free news media and active opposition parties that are eager to jump on the government for its failure to prevent starvation, the government is under extreme pressure to take quick and effective action whenever famines threaten.

...
In analysing what c auses famines, it is important to take into account
not just the rise and fall of food production, but the general prevalence of poverty in the country or region, and to examine its causes [general prevalence of poverty in the US is the highest in decades]. The economic roots of the Irish famines have to be sought in the general weakness of the Irish economy [The fundamental underlying the US economy are critically weak] - not just in the difficulties with food production. Groups that are not only very poor but also especially vulnerable to economic changes (to shifts in, for example, relative prices or employment) are of particular importance. It is the general defencelessness of the vulnerable poor, combined with additional misfortunes created by economic variation, that produces the victims of drastic starvation [1 out of 9 Americans on food stamps + hyperinflation = famine?]. Social divisions are central to famines, and the economic analyses of the causation of famines have to identify the factors that lead to the specific destitution of particular sections of the generally deprived.

While the economic progress of any country depends on its public policies, particularly on its ability to promote economic expansion and distributional equity,
the government has a special role in protecting the vulnerable when something goes wrong and a lot of people lose the means of commanding food in the market [In hyperinflation, the government becomes the CAUSE of people losing "the means of commanding food in the market"]. Whether the government works towards regenerating the lost purchasing power of the destitute depends on political incentives to intervene and help. This is where democracy and political independence come into their own [As Zimbabwe and the Weimar Republic demonstrate, democracies can cause famines when they destroy their currencies through the printing press.]. The ruling groups have to pay the price of their negligence when they can be forcefully criticized by opposition parties and the news media, and when they have to face elections on a systematic basis.

The Chinese government could keep its failed policies of the Great Leap Forward unchanged through the 1958-61 famine, while many millions died each year, because it had no opposition parties to face, and no criticism from the government-controlled media. When things are going well enough, the corrective power of democracy may not be badly missed, but when something goes seriously wrong (through design or bungling), democracy can deliver things that no other system can. Even in the famine-stricken continent of Africa,
the lack of famines in democratic Botswana and Zimbabwe [Zimbabwe has experienced hyperinflation and famine, proof that democracy is no safeguard against famine] contrasts with the persistent famine experience of Ethiopia, Sudan, Somalia, Mozambique and the Sahel countries. Of course, even a non-democratic country can be lucky and not experience the economic circumstances that lead to famine; and a sympathetic dictator may, should a famine occur, intervene just as effectively as a popularly elected government. But, in general, democracy guarantees protection in a way that no form of authoritarian rule can, whether it is an old-fashioned colonial administration, or a modern political or military dictatorship. [Corrupt democracies are perhaps more dangerous ]

Famines are, in fact, extremely easy to prevent. It is amazing that they actually take place, because they require a severe indifference on the part of the government
[Like the US selling off the last of its wheat reserves and manipulating commodities markets]. Here political asymmetry joins hands with social and cultural alienation. The sense of distance between the ruler and the ruled-between 'us' and 'them' - is a crucial feature of famines [Agreed. Do you think Goldman executives care that they have left the average American vulnerable to starvation? They are getting billions in compensation]. It is as true in Sudan and Somalia today as it was in Ireland and India in the last century.

Gormanfamilytree.com reports that The Great Irish Famine And Starvation.

WHY THEY LEFT IRELAND:
AN GORTA MOR: THE IRISH HOLOCAUST
THE GREAT IRISH FAMINE AND STARVATION: 1845-1849

[First off, I want to say I don't expect anything on the level of Irish famine to occur in the US. That being the case, some level of famine is likely.]

There were many bad harvests in Ireland before the Great Famine of 1845-1849, but the size of that Disaster dwarfed those that preceded it. A contemporary comment was that "God sent the blight, but the English made the famine": and to some extent this was true because the governments of both Sir Robert Peel (1788-1850) and Lord John Russell (1792-1878) did little to help the starving Irish population.

...
In 1800, some five million people lived in Ireland. Forty years later, on the eve of the 1845 Great Famine, the 1841 census recorded an Irish population of 8.2 million. Ten years later, the 1851 census reported that the population had been reduced to 6.5 million. Over two million people disappeared: one million starved to death or succumbed to disease and one million emigrated to Britain and North America. Many of them were wretchedly poor, eking out a precarious living on tiny plots of land, and dependent on each year's potato crop. As mentioned above, hunger was no novelty to peasant families, for there had been partial failures of the potato crop all during the early 1800s. However, these had always been of limited duration, and confined to a small number of counties. The Great Famine lasted from 1845 to 1849, and crop failure affected every county of Ireland.

These statistics give some indication of the scale of the disaster but since many of those affected by the famine lived in remote and inaccessible places, it is more than possible that far more people died that has ever been thought.

The cause of the famine was a fungus disease which made the potato plants to rot in the ground, giving off an appalling stench. The blight first destroyed crops on the eastern seaboard of America in 1842, then appeared in England in the summer of 1845. In September, the counties of Wexford and Waterford reported the disease. More than half the Irish potato crop failed in 1845. Sir Robert Peel, the British prime minister, appointed a commission to investigate the problem, but scientists were unable to explain the disease, let alone find a cure. In 1846, The potato crop was a total failure.

Peel eventually introduced relief measures. In November 1845, the government spent Ł100,000 on buying grain from America, in the hope of keeping food prices down in Ireland. He appointed a relief commission which set about forming local committees to raise money and to distribute food. At Westminster, in part prompted by Ireland's problems, Peel succeeded in repealing the protectionist corn laws in June 1846. This opened up the prospect of cheap imports from America.

A month later he was out of office, defeated over a bill to deal with the growing agrarian disturbances in Ireland. The new Whig government, led by Lord John Russell, believed in a free market and was content to leave the supply of food to private merchants. However, the Irish peasants were unused to a cash economy, for they had traditionally worked for a landlord in return for a plot of land on which to grow potatoes. The government hoped that Irish landlords would bear the major responsibility for their tenants' welfare, but many landlords already faced ruin. The most successful relief came from soup kitchens, originally set up by bodies such as the Society of Friends, the Quakers. Where public works continued, they were often delayed by bureaucratic procedures, and workers' health suffered from the inadequacy of wages to buy what food was available. Evictions were common.

Even the weather contributed to the distress, for the winter of 1846-47 was exceptionally cold and wet. To starvation was added typhus and relapsing fever, both commonly called "famine fever". Scurvy and dysentery flourished, and in 1849 an outbreak of cholera claimed many lives, particularly in the larger towns. Many sought to escape to America, only to drown at sea in over-crowded "coffin ships". Those who did reach the New World were often weakened beyond recovery.

Ironically, during the Great Famine, the major problem was not that there was no food in Ireland - there was plenty of wheat, meat and dairy produce, much of which was being exported to England - but that the Irish peasants had no money with which to buy the food. Here are the food exports from Irish ports for the month of July 1846:


Landandfreedom.org explains how a lack of purchasing power caused Irish famine.

Long before the great famine devastated Ireland during the l840s, the Irish had been under the domination of the British. During earlier periods of subjection, English rulers -- Henry II, Elizabeth I, and Cromwell -- confiscated provinces in Ireland to reward their followers and pay off debts. Many Irish suddenly became landless. With the passage of the Penal Laws in 1695, Irish were not only reduced to second-class citizenship, but were forbidden to purchase any land. Large Catholic estates were broken up, reducing acreage to smaller and smaller lots. Deprived of their land, forced to live from hand to mouth in mud huts on small, often barren lots the Irish became dependent upon a crop which required little acreage and a minimum of good soil: the potato. The Irish peasantry's dependence on the potato set the stage for the famine which began in 1845.

Absentee land ownership was very common. Approximately 1200 non-Irish, mostly living in England, owned most of the land. Farms were usually leased from these owners, but, unlike today's leases, they could be revoked at the whim of the landlord. Farms were allowed to pass down from one generation to another -- but only if the landlord approved.
With no sense of ownership or pride in the land, little care was paid to conservation, and land was often overfarmed. In addition, all improvements, such as buildings, reverted to the landlord when the lease ended, thus discouraging any attempts to better the property.

The economist John Stuart Mill commented, "In Ireland, the whole agricultural population can be evicted by the mere will of the landlord, whether at the expiration of the lease, or, in the far more common case, of their having no lease."

...
The famine lasted several years.
One and a half million peasants died and another million emigrated to the United States and England. Attempts to aid the Irish, such as those by the United States, were of little avail. At the height of the catastrophe, the British withdrew all benefits to anyone who owned over one quarter of an acre -- which included most Irish. The exodus was on.

...
Had the Irish population been smaller, it was claimed, the famine would have been less severe. However,
even when the famine was at its worst, food was being shipped out of Ireland to England. The Irish did not lack food; they lacked buying power. Even during the famine, rent paid to an absentee landlord represented a substantial portion of a tenant's savings or crop. Past accumulations could have enabled the peasant to purchase food that was being exported, but the system of land ownership prevented this. The simple fact was that most of the Irish had no money to pay for food. To keep what land they had, they were forced to pay their landlords almost all the food they could grow.

Findarticles.com reports that the great irish famine.

The great Irish famine: a crime of free market economics
Monthly Review, April, 1996 by John Newsinger

[Again, I don't expect the US to experience famine as intense as Irish famine described below.]
...
Hunger

Potato blight (the fungus phytophthora infestans) first appeared in Ireland in 1845, destroying some 40 percent of the crop. It caused considerable hardship but, as yet, few fatalities. The following year the blight ruined the whole crop. The result was the terrible famine of the winter of 1846-47 that was to continue into the early 1850s. This was Western Europe's worst modern peacetime catastrophe with a million people dying of starvation, disease, and exposure and another million fleeing their homeland as refugees, seeking safety in England and the United States. The hardes t hit were inevitably the rural poor, the landless laborers, cottiers, and small farmers: the number of landless laborers was to fall by over a quarter and of small farmers by nearly half in the course of the Famine.

...
Evictions

Compounding the hunger and disease was the way that the Famine became the occasion for dramatic land clearances, for a concerted landlord offensive against the poor. The larger Catholic farmers joined in this assault and in fact emerged as important beneficiaries of the famine years. Exactly how many people were evicted during these grim years is unknown because the authorities only began keeping records in 1849. Nevertheless the figure certainly exceeds half a million people, an astonishing figure by any standard. This is one of the most terrible acts of class war in British history even without the accompanying hunger. How does the standard history, Modem Ireland by Roy Foster, the eminent Professor of Irish History at Oxford, deal with it? The whole Famine receives pretty minimalist treatment, but the clearances only merit one sentence,just one sentence, in 596 pages of text!(8)

In December 1849 the correspondent for the London Illustrated News reported from Moveen, a village in the Kilrush Poor Law district:

There is nothing but devastation . . . the ruthless destroyer, as if he delighted in seeing the monuments of his skill, has left the walls of the houses standing, while he has unroofed them and taken away all shelter from the people. They look like the tombs of a departed race, rather than the recent abodes of a yet living people, and I felt actually relieved at seeing one or two half-clad specters gliding about, as evidence that I was not in the land of the dead . . . The once frolicsome people--even the saucy beggars--have disappeared and given place to wan and haggard objects, who are so resigned to their doom, that they no longer expect relief. One beholds only shrunken frames scarcely covered with flesh--crawling skeletons, who appear to have risen from their graves. . . .

The report goes on to emphasize "the vast extent of the evictions at the present time."(9)

The spectacle of troops, police, and bailiffs evicting starving, sick men, women, and children, leveling their homes and leaving them to live in holes in the ground or die by the roadside even appalled some members of the British Government. Prime Minister Russell himself on one occasion complained that "the murders of poor cottier tenants are too horrible to bear" (my emphasis) and that "we ought to put down this lynch-law of a landlord.(10) Bear it he did, however. The majority of the cabinet insisted that the rights of property had to be upheld and indeed Lord Palmerston, himself an Irish landlord, argued that what Ireland required was "a long and systematic ejectment of smallholders and of squatting tenants."(11) Even more extreme were the sentiments the Viceroy, Lord Clarendon gave voice to in August 1848: "I would sweep Connacht clean and turn upon it new men and English money just as one would to Australia or any freshly discovered Colony." This, the forcible removal of some two million people, was the only solution he could see to "the Irish Problem."(12)

...
John Mitchel and the Famine

Looking back on the Famine in 1854, John Mitchel wrote that while now "I can set down these things calmly . . . to see them might have driven a wise man mad." He went on about how families, when all was eaten and no hope left, took their last look at the Sun, built up their cottage doors, that none might see them die nor hear their groans, and were found weeks afterwards skeletons on their hearth; how the law was vindicated all this while . . . and many examples made; how starving wretches were transported for stealing vegetables by night . . . and how every one of these years, '46, '47 and '48 Ireland was exporting to England, food to the value of fifteen million pounds sterling.

He accused the British government of deliberately starving the Irish people, of making use of the potato blight to "thin out these multitudinous Celts." While the potato crop might have failed, there was still more than enough grain, cereals, and livestock in the country to have fed double the population, but it was exported to England. He wrote of how "insane mothers began to eat their young children who died of famine before them; and still fleets of ships were sailing with every tide, carrying Irish cattle and corn to England." This was what "free trade did for Ireland in those days."(14)

...
Conclusion

The failure of the British government to feed the starving Irish and its involvement in mass evictions in the 1840s is without doubt the most terrible indictment that can be laid against British Imperialism in the nineteenth century. The Opium Wars, the incredibly brutal suppression of the great Indian Revolt of 1857, the conquest of Egypt and the Sudan, the invasion of Tibet--all of these crimes are eclipsed by the horrors of the Famine. Here we see hundreds of thousands of people dying or forced to flee for their lives so that Political Economy could prevail. It was a crime that should never be forgotten.

My reaction: The immanent collapse of the dollar leaves the US vulnerable to Famine.

1) There is no fixed relation between food and famine.

2) Many large famines have taken place despite moderate-to-good food availability

3) A famine develops when a sizeable number of people lose the economic means of acquiring food.

4) This can result from unemployment or from a sharp drop in earnings compared with food prices (ie: hyperinflation), even when there is no fall in food output or supply.

5) Market-based movements of food are related to demand and purchasing power.

6) The general prevalence of poverty and weakness of the economy in the country or region is an important pre-requisite for famine.

7) The sense of distance between the ruler and the ruled (between 'us' and 'them') is a crucial feature of famines.


Conclusion: Famine is caused by sudden loss of purchasing power by a portion of the population already living near poverty. If the dollar collapses and the food stamps one out of nine Americans depend on become worthless, the US would meet all the criteria for a potential famine.

Famine in Weimar Germany as an example

In January 1922, hyperinflation exploded in Germany. By December 1922, Germany was unable to feed its population or provide employment for even 60 per cent of the labor force. People began to die in the streets from starvation and hypothermia...

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30 Responses to Potential for Famine in the US

  1. A remarkable piece. Excellent work.

  2. PaxAmericana says:

    Eric,

    It could be argued that you are underplaying the political angle. Food is a weapon, and the oligarchs know it. Discussions about free market ideology might have appeared in English newspapers during the Irish famine, but it's doubtful that the rulers of the empire cared.

    If famine occurs in the US, a big reason will be that the power elite of the West want it. Even a bankrupt US has an amazing military power to force others to cough up whatever the US wants. For starters, the US Navy controls the waves, and, besides, the US black budget military presumably has weapons that make what we see seem like child's play.

  3. I can't believe how much faith the first article puts in democracy. Even the U.S. only has congressional elections every two years and only has presidential elections every four years. And as we should know, much can happen in two to four years.

  4. Numonic says:

    You know I'm reading this article and I think i see it saying something different from what Eric might understand it saying.

    Like for instance, in this part:

    "Had the Irish population been smaller, it was claimed, the famine would have been less severe. However, even when the famine was at its worst, food was being shipped out of Ireland to England. The Irish did not lack food; they lacked buying power. Even during the famine, rent paid to an absentee landlord represented a substantial portion of a tenant's savings or crop. Past accumulations could have enabled the peasant to purchase food that was being exported, but the system of land ownership prevented this. The simple fact was that most of the Irish had no money to pay for food. To keep what land they had, they were forced to pay their landlords almost all the food they could grow. "

    In this i relate it to what I've been saying about how a strong dollar = starvation. It seems Eric is saying that a weak dollar = starvation and I think the flaw and cause of the famine contrary to what it seems it's saying is that food prices did NOT go up. In this article it seems food prices did NOT go up while the cost of borrowing/producing did. What it seems happened was that borrowing costs(such as rent/ "the system of land ownership"[which was a form of borrowing]) rose and that the price of food did not rise along with it. Had the price of the food rose up enough to meet the price of rent(to keep the land they had), the people would be able to afford the food as they would not have to pay the landlord almost all the food they grew and the people would have some food left over for themselves. This would end the famine. It seems that the people chose to keep the price of food down instead of raising it to meet the rising cost of borrowing/producing. Or that the price of food did not rise fast enough to meet the rise in price of borrowing/producing.

    The solution to the famine problem would have been to raise the price of food high enough to meet the cost of renting/land ownership.

    I guess what caused the famine was that the people were slow in raising the price of food high enough to meet the cost of rent/borrowing.

    I almost can't understand how this happened, the price of rent/borrowing must have been moving up at blinding rates, so fast that even as the price of food was rising in nominal terms, it wasn't rising fast enough to meet the cost of borrowing.

    It's a weird situation. I can't understand how it can get that bad when all they had to do was raise the price of food to meet the price of rent/borrowing.

  5. Numonic says:

    Actually now that I think about it the relationship between England/Ireland in this situation is just like the relationship of US/China today. China exports all it's goods to US while it's country starves.

    Now I gotta think about the question as to why Ireland was in the situation that it was in where it was exporting even as people in Ireland were starving. Answering that question would also give the answer as to why China has been doing the same over the years.

    I have a feeling it has something to do with the system of credit requiring that somewhere in the world there has to be some form of strict dictatorship forcing people to work for nothing in order to keep credit going, otherwise everyone would become consumers and the game of credit would end. If there are no producers, how can you consume. A system of credit can only get producers through force as credit encourages consumption and discourages production. I'm sure Ireland and China must have both been under this slave labor dictatorship. And instead of blaming this slave dictatorship the author left it out and is instead blaming the Free Market. The underlying cause is credit. With credit, consumption is encouraged and production has to be brought on by force. I've read about the slave labor going on in places like China. Had it not been for credit production would be rewarded. But credit is socialism and in socialism production is not rewarded. And thus production happening under a credit system is mostly by force. They are exporting against their will and not getting just pay for it. This is easy to get away with when the world is enticed by (credit)consumption but will soon come to an end when the mass consumption brings more poverty that happened because the world moved from producers to consumers and less and less producers were left in the world to feed the consumers and this poverty leads to revolt, now with a greater population that can make a change.

  6. Numonic said...
    In this i relate it to what I've been saying about how a strong dollar = starvation. It seems Eric is saying that a weak dollar = starvation and I think the flaw and cause of the famine contrary to what it seems it's saying is that food prices did NOT go up.

    Numonic, I think you are missing the point:

    A famine develops when a sizeable number of people lose the economic means of acquiring food.

    In both severe deflation and hyperinflation, a sizeable number of people lose the economic means of acquiring food. People starved during Weimar Germany's hyperinflation, and people starved in the US during the great depression's deflation.

    As I have written before the root cause of deflation and hyperinflation is the same, too much debt combined with a weak unstable economy. If the government prints money, you get hyperinflation, and, if it doesn't and allows defaults to occur, you get deflation. Similarly, famine in deflation and hyperinflation should be blamed on the horrible economic fundamentals rather than the monetary phenomenons themselves.

    The solution to the famine problem would have been to raise the price of food high enough to meet the cost of renting/land ownership.

    I guess what caused the famine was that the people were slow in raising the price of food high enough to meet the cost of rent/borrowing.

    I almost can't understand how this happened, the price of rent/borrowing must have been moving up at blinding rates, so fast that even as the price of food was rising in nominal terms, it wasn't rising fast enough to meet the cost of borrowing.

    It's a weird situation. I can't understand how it can get that bad when all they had to do was raise the price of food to meet the price of rent/borrowing.

    Numonic, the problem in Ireland wasn't the quantity or price of food: it was an income problem. A rotten inedible crop of potatos is always worth zero, which means Irish potato farmers were growing crops worth nothing and had no money to buy food or pay rent. Raising the price of potatos would not have helped.

    Actually now that I think about it the relationship between England/Ireland in this situation is just like the relationship of US/China today. China exports all it's goods to US while it's country starves.

    1) The market-based movements of food are related to demand and purchasing power. When China undervalues the yuan, it is artificially decreasing the purchasing power and demand of Chinese consumers, which means less food consumption in China.

    2) When China breaks the dollar peg, this situation will reverse itself. The purchasing power and demand of Chinese consumers will increase enormously compared to American consumers, which means less food consumption in the US. Another way to think about it is this: if China uses its 2.5 trillion foreign reserves to buy US wheat and soybeans to feed its population, there is no way the US consumer will be able to compete.

  7. Jimmy says:

    Eric,

    Excellent work, thanks!

    To prepare for a potential (or upcoming) dollar collapse, I have bought significant amounts of silver coins. I am also in the process to get a job in a more stable employer. Maybe I will try to do a better job with home gardening next year.

    I have a lot of money in DBA. I am afraid what could happen to DBA if the future market defaults? Would DBA go to zero? If so, we would stockpile a lot of food in basements.

    To keep Yuan pegged to USD, China prints a lot of Yuan. I am afraid that Yuan would depreciate when USD collapses. China pays Chinese workers Yuan and saves the export surplus in USD. A worthless USD would mean too much Yuan chasing too few goods. In this regard, I think of CAD a better alternative. Who knows, if CAD would be accepted in US stores in case of USD collapse because Canada is so close to US.
    Any oother suggestions as to what to do to get prepared for dollar collapse and starvation?

    Thanks!

  8. Bowtie says:

    "[It simply let the free market starve hundreds of thousands]" This statement is not correct. The free market produces enough for everyone. The free market is infallible.

  9. Because of the large number of agricultural futures contracts or “paper food”, food producers are given the impression that current food consumption is only a small part of the food that dollars can consume to the extent that paper food is seen as food. When food producers view that dollars are so valuable that they can consume such a large amount of food, they are willing to accept a relatively small amount of dollars in exchange for food. As long as food producers can continue to make available an amount of food that is equal to or greater than the amount that those who hold dollars currently want to consume, the illusion can be maintained. However, if even some types of food can’t be made available to those who currently want to consume that type of food in exchange for the dollars they hold, producers will start to sell their paper food to get the food to sell to consumers. When they see that they still can’t get the food that they want, they will sell more and more paper food and a collapse will occur. When this happens, producers will clearly see that dollars won’t buy nearly as much food as they thought that they would so they will raise prices sharply. The collapse will spread to gold as people who see the agricultural futures market collapse will begin to doubt that their paper gold will actually buy gold.

  10. stibot says:

    Why USDA can have intention on suppressing wheat price, if US are wheat exporter?

    To keep dollar strong? To make profit for investment banks? To cause famine? Makes not much sense for me.

    I was looking for open interests on options for wheat but was not successful (i found table without oi. on each option).

    Day ago i filed spreadsheet with all gold options for september and it looks $940 is most profitable price for investment banks. But no idea how many of those options are fakes.

  11. John Haskell says:

    Here is a picture of Michelle Obama in a recent appearance feeding homeless in DC.

    http://latimesblogs.latimes.com/washington/2009/03/michelle-obama.html

    Here is also a picture of a homeless guy taking a picture of the First Lady with his Blackberry Curve.

    Before we have a famine in the US, poor people will have to run out of money to pay for Blackberries and associated monthly billing.

    I'm just saying.

  12. Bagbalm says:

    I would have you examine famines and tell me what famine ever swept through a well armed population. In the last 3 months of 2008 the US bought enough rifles to outfit the two largest armies in the world - China and India. In Dec of 2008 they bought in excess of One and a half BILLION rounds of ammunition. These were for private use and in my estimate a form of insurance. I don't think these folks will quietly bar the door and starve while their food is sold to someone else.

  13. Bagbalm:
    Your point about guns owned by the public is very interesting.
    However, you did not really explain, and I do not understand, how you are making the link between famine prevention and guns. In my mind, what you basically said was, "The American people have bought a lot of guns. If there is a risk of starvation, they will take action [but you didn't explain what]."
    Again, your point is fascinating and I would like to get a clearer picture. Thanks.

  14. Anonymous says:

    @BlasterMillennia

    Since I'm one of those people he's talking about, I can give you my plan: guns used for hunting.

    It's a common thing the US, even in urban cities in the south, to hunt for food.

  15. Numonic says:

    Eric said...

    "Numonic, the problem in Ireland wasn't the quantity or price of food: it was an income problem. A rotten inedible crop of potatos is always worth zero, which means Irish potato farmers were growing crops worth nothing and had no money to buy food or pay rent. Raising the price of potatos would not have helped."

    Eric, I think you are missing my point. In this article it constantly says that Ireland had more than enough food to feed on but most of it was being exported to England and all Ireland had to survive on was this potato crop that got damaged. My point is why were they exporting all of their food? The article makes the point of acknowledging the strangeness of a starving nation to be exporting it's food and I'm building on that point and trying to understand why. Why were the people starving instead of surviving on the crops that they were exporting to England? This is where my idea of that this exporting must have been forced through the govt. Because in a free market, the solution to the starvation problem would have been to stop exporting and to start living off the food you were exporting.

    And also if they were exporting what became of the money that they got from exporting all their food? Did it pile up in their banks the same way China's Yuan was piled up in their banks due to strict restrictions on lending(which has recently been relaxed by the way)? And regaurdless if credit was tight or not, shouldn't the exporters have made enough money to be able to afford to eat since it was selling it's crops to England at a higher price?

    This article says:

    "While the potato crop might have failed, there was still more than enough grain, cereals, and livestock in the country to have fed double the population, but it was exported to England."

    Then it goes on to say:

    "He wrote of how "insane mothers began to eat their young children who died of famine before them; and still fleets of ships were sailing with every tide, carrying Irish cattle and corn to England." This was what "free trade did for Ireland in those days."

    I disagree that this was the fault of free trade. If the trade were truly free I'm sure people would not choose to starve when they had food to eat.

    These articles continue to blame free market and free trade but it's obvious both of these were absent at this time.

    It says this is how it all started:

    "Long before the great famine devastated Ireland during the l840s, the Irish had been under the domination of the British. During earlier periods of subjection, English rulers -- Henry II, Elizabeth I, and Cromwell -- confiscated provinces in Ireland to reward their followers and pay off debts. Many Irish suddenly became landless. With the passage of the Penal Laws in 1695, Irish were not only reduced to second-class citizenship, but were forbidden to purchase any land. Large Catholic estates were broken up, reducing acreage to smaller and smaller lots. Deprived of their land, forced to live from hand to mouth in mud huts on small, often barren lots the Irish became dependent upon a crop which required little acreage and a minimum of good soil: the potato. The Irish peasantry's dependence on the potato set the stage for the famine which began in 1845."

    It concludes saying:

    "The failure of the British government to feed the starving Irish and its involvement in mass evictions in the 1840s is without doubt the most terrible indictment that can be laid against British Imperialism in the nineteenth century."

    Imperialism. This is not free market or free trade, this is imperialism. The English stole the land. This is what caused the starvation. The potato blight is only part of it simply because they had other food but it was being exported(and I believe by force) to England.

  16. Numonic says:

    Raising prices is a mechanism we use to survive. When too much money is chasing too little goods, we raise the price on those goods so as to prevent those goods from depleting as fast and so as to make profit to survive. It doesn't make sense that starvation and rising prices happen together. If prices are rising then less people should be starving as rising prices would slow the depletion of the food, create profit and create/save jobs.

    Hyperinflation isn't what causes starvation. What causes starvation is price fixing and absense of the free market/free trade. If so much money is chasing so little goods, in a free market people would raise the price of their goods so as to prevent the depletion of their goods. What causes the starvation is the price fixing as this mechanism of raising prices is barred. The price fixing can either be through influence with such things as subsidies or through force such as imperialism. Subsidies wouldn't necesarilly cause starvation as those whom are asked to keep he price of certain things down are compensated with the subsidy. It's pure imperialism that causes starvation. I'm sorry Eric but this is a poor article to try to support the connection of hyperinflation and famine/starvation. This article seems to have nothing to do with hyperinflation/monetary policy and everything to do with Imperialism.

    It's clear as day that this was imperialism that caused the starvation and not the monetary policy. In these articles it mentions nothing about Irelands monetary policy and mentions many times of England's stronghold on Ireland.

  17. Daniel says:

    @Numonic,
    If this thing can happaned to Ireland, perhaps it can also happened to China.

    Rising price might or might not happened, dolar collapse can just be another illusion, can it?

  18. Numonic says:

    Daniel, I'm sure credit enables imperialism but absent of credit, imperialism is pretty hard to pull off. I think the collapse of the US credit market will effect the credit markets all over the globe because the US is the world reserve currency. There are allot of people that don't know of Zimbabwe or Weimer Republic but when the US currency collapses being that it is the world reserve currency, it will not be able to be ignored. The collapse of the world reserve currency will effect all credit/fiat currencies across the globe no matter how liquid that countries currency is(such as China which has no debt holding it's credit expansion back) but the collapse of the world reserve currency will even effect China's credit market. And we will see the world abandon credit and become hoarders.

  19. Natasa says:

    Numonic,

    Your explanation looks quite logical.

    It really seems that only Imperialism (hegemony) can break the low of free market and cause famine.

    Anyway, Daniels question looks quite logical too.

    Since we are today clearly in US world Imperialism (i.e. US is the Empire of the World) - it could be possible that under pressure of US Empire - the "dependent" raising new Empire China (as well as other nations) helping US for a while.

    Simply said - the China will continue to support US$ and not allowed it to collapse, since they will be targeted with US$ collapse as well (as in Numonic explanation)...

    It means that US$ despite of all logical and economical reasons to collapse - will not do it.
    At least not in the near future.

    In this case - in the near future is to expect - famine...
    Not only in the US but perhaps even more in China and other pert of the World.
    Since we are talking here about Non-existing (credit) 1 quadrillion US$ on the planet - the paper US$ are scarce.
    Because of it - the World facing famine and starvation... Similar as Ireland at that time.
    (Deflationists like to say - "deflation", but i am not sure in it...)

    Numonic, I think you once explained it quite good.

    The questions are:
    1. How long other nations (in particular China) can keep feeding US debt - and starve in same time?
    2. "Strong $" = Starvation. I agreed, but what "weak $" means - NOT for people (because it does not count!), but for the Emperor (Wall street) in particular US 0.001% very rich elite?
    3. What "strong/weak" US$ mean for the other elites on the Planet - in especially for the Chinas communist party elite?

    It would be interesting to find - what happened really in Ireland - AFTER that "famine time", i.e. how they went out of this?
    AND hoe long it lasted?

    It perhaps could be a model of the future events development on the bigger scale.

    LG
    Natasa

  20. stibot says:

    I would not be surprised, if China government let their people starve.

    They did it in past. We/they are not better people today. There are only fake elections in China and so called communist elite has total power, famine can happen again.

    Why not? People are not more than ants for such government, so why to care? Also, famine can be instrument for the ruling elite, if they know how to use it.

  21. Robert says:

    The reason Ireland exported it's food is simple - The Irish couldn't pay the farmers for it.

    A lot of replies seem to be misunderstanding what happened/could happen again and actually that's exactly why it could happen again.

    Farms are getting pretty large in the US and have obligations to maximize shareholder return. If they can make more money exporting their products they will find ways to do so. Not everyone is likely to see this as a bad thing - even in America. The farm companies will obviously be lobbying for it and it may end up being one of the only sources of hard currency once the ability to print it runs out.

    In a few of Eric's articles about Argentina it was mentioned that Argentine farmers have stopped growing some crops because export controls prevent them from exporting those crops and the local population was not able to pay enough for them. This is exactly the way this sort of thing gets started.

    Depending on how it plays out you will also see smuggling and bribery added to the list of tools to get around export controls.

    The citizenry may be well armed but stealing food from farmers will likely still be viewed as illegal which means you'll be fighting well armed private and state security structures protecting the farms from would be looters.

  22. Oz says:

    hi Eric,
    I love your blog but you're way off the ball in this one.
    It was not a lack of purchasing power by the irish as the primary cause of the famine, but we HAD to grow grain etc for the ENGLISH,...
    we were not allowed to keep the crop for ourselves.Our staple was potatoes,
    only because we were not allowed to keep anything else ourselves.
    We were serfs in our occupied country.
    JFYI , they also destroyed all our forests to build their navy so's they didn't have to chop down their own.
    kinda reminds one of the usa,iraq and oil,eh ? ;)
    so in one sentence;
    the irish famine occured because we were occupied by the english.
    Were we not so, we would have had a variety of crop staples to eat and hence survived the blight.
    there you have it,the facts straight from history classes growing up in Ireland.
    cheers
    Oz

  23. Oz says:

    here ye are,
    found this on this website further to my own input above:
    https://www.blogger.com/comment.g?blogID=502356674750161309&postID;=4465442773545521232

    "The English took control of Ireland, claimed its land, then forced the majority of the Irish to live under conditions of brutality, hunger, extreme poverty and deprivation. Laws were passed to prevent the Irish Catholics from ever having the opportunity to improve their own lives.

    England used military and police power to control Ireland, including its politics and its economy. The people of Ireland were kept poor by the economic conditions imposed by England. The people of Ireland did not have capital or access to capital, and England made sure that remained true. They also did not have access to equipment that might have made their lives better. Therefore, they were forced (much like third world countries today) to depend almost solely on agriculture. The English stole the land, the Irish did all the work, the English stole all the crops, and paid the Irish poverty wages. Further, THE IRISH WERE FORCED TO GROW SPECIALITY CROPS WHICH COULD BE EXPORTED to the more well-off English as the only way they could earn any money. The majority of the people did not own land, and at most could rent a piece of land and hope for a good enough crop to pay the landlord. In years when there were crop failures, the people were thrown off the land which meant they had no work, no food, and no place to live.

    (emphasis in CAPITALS mine)\Oz

  24. Oz says:

    ohhhh,
    and I just had to post this poem from that blog which gives you your answer beautifully;

    FAMINE AND EXPORTATION (by John O'Hagan)

    Take it from us, every grain,
    We were made for you to drain;
    Black starvation let us feel,
    England must not want a meal!

    When our rotting roots shall fail,
    When the hunger pangs assail,
    Ye'll have of Irish corn your fill --
    We'll have grass and nettles still!

    We are poor, and ye are rich;
    Mind it not, were every ditch
    Strewn in spring with famished corpses,
    Take our oats to feed your horses!

    We but asked in deadly need:
    Ye that rule us! Let us feed
    On the food that's ours' ~ behold!
    Adder deaf and icy cold.

    Were we Russians, thralls from birth,
    In a time of winter dearth
    Would a Russian despot see
    From his land its produce flee?

    Were we black Virginian slaves,
    Bound and bruised with thongs and staves,
    Avarice and selfish dread
    Would not let us die unfed.

    Were we, Saints of Heaven! were we
    How we burn to think it -- FREE!
    Not a grain should leave our shore,
    Not for England's golden store.

    They who hunger where it grew --
    They whom Heaven had sent it to --
    They who reared with sweat of brow --
    They or none should have it now.
    ....

    Forced to see them, day by day,
    Snatch our sole resource away;
    If returned a pittance be --
    Alms, 'tis named, and beggars, we.

    Lord! thy guiding wisdom grant,
    Fearful counselor is WANT;
    Burning thoughts will rise within,
    Keep us pure from stain of sin!

    But, at least, like trumpet blast,
    Let it rouse us all at last;
    Ye who cling to England's side!
    Here and now, you see her tried.

  25. Anonymous says:

    I think to associate the modern credit system to imperialism is wrong.

    Imperialism is about colonizing (normally through brutal force), extraction of resources of the colonized (again normally through brutal force) and the enslavement of the colonized (yet again, normally through brutal force).

    The modern credit system on the other hand is a system where individuals decide to enter in though their own free will (unless your from a third world nation-state).

    Their not the same, even if one could compare the two and find similarities - their still not the same.

    For example, if one defaults, in the modern credit system, one does not suffer death...

    I think its important what when we try to understand things that we don't confound two separate things as one...

    Doing so compounds the confusion of others, while diluting one's argument...

    However, it's interesting that you guys can talk about imperialism at this level and yet disagree with the the idea that America is still in charge...

  26. Numonic says:

    Anonymous, Natasa, Stibot and Robert. You have to understand how important credit is to Imperialism. Without credit people will not have the trust to follow the King in imperialising a nation.

    In the article it says:

    "Long before the great famine devastated Ireland during the l840s, the Irish had been under the domination of the British. During earlier periods of subjection, English rulers -- Henry II, Elizabeth I, and Cromwell -- confiscated provinces in Ireland to reward their followers and pay off debts. "

    You see England had followers and debt. Without credit they wouldn't have this and they wouldn't have the followers(army) to do this imperialism.

    Stibot when you say: I would not be surprised, if China government let their people starve.

    You must be unaware that that starvation has in fact been going on and this pseudo "free trade" we have wouldn't be going on if China weren't starving and forcing it's people to work for nothing. We would not be able to buy such things from China for so cheap had this starvation and forced slave labor not been going on.

    What enables this slave labor to continue is trust, the credit system.

    You must also realize that when the credit system collapses, it won't be through some voluntary awakening of the people but of unstoppable natural forces that will collapse the credit system. Like for instance, the inability to print fast enough to stop defaults. Default is death to the system of credit. Default is a broken promise and if one breaks a promise, trust is lost and credit is trust. If people don't trust that following this King in to Imperialism will bring them wealth, they will not follow that King. If the King looses the trust of it's army, it looses it's army. The army will not continue to follow the King if the Army looses trust in the King. Collapsing credit will collapse imperialism and end the starvation.

    Even though i don't know how the story ended as Natasa would like to find out, I'm sure it had to do with the King failing to meet the promises he made to his followers(his army). Obviously the debt that needed to be paid was more than he could get from imperialising Ireland. This is the obvious and inherent end to all debt as the debt always grows more than can be obtained. And promises always end up being broken.

    When the world reserve currency collapses(and it will even as the world is doing everything in it's power to try to prevent it from collapsing) this starvation and forced labor in China and around the world will end.

    So Anonymous credit is very much tied to Imperialism as without credit/trust there would be no army to follow the King in to Imperialism.

    Credit also doesn't always have to take the form of monetary wealth, one can be convinced to follow a King to imperialism without knowing it's imperialism, thinking he was doing good or protecting his nation. When so called actions fail to meet the intended goal, trust is broken and that Army will no longer follow that King as his trust that what he was doing was the right thing will be lost.

    So I say celebrate the collapse of credit, it will do allot of good for the world and end starvation and imperialism.

  27. Anonymous says:

    stibot said...
    I would not be surprised, if China government let their people starve.

    Will things be different in the US with a "left" Yeltsin in the white house looting treasury for the finance capitalists like Gollem Sach?
    Yeltsin only handed opver the national recources like oil and gas at a cheap price to pay for the national deficits on borrowed foreign capital. In the Ponzimaddof USA they loot the future tax revenues of the government too.

    As for any potential future problems of food distribution ,possible famines and how the supposedly more civilised US ruling class state might manage things , the role of police, guns, property protecting vigilantes, locking down populations , Tanks , class, race etc .
    One only need to consider one word on how such a situation might evolve in the real world .
    To see the future think:
    Katrina
    Writ large to cover the country.

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