Rising inequality and food

Humanity is mostly better off than we were in the past. But go back far enough, and even the Americans did not produce enough food and suffered from malnutrition. Most Europeans in the middle ages barely made it out of their 30’s due to disease, famine and war. 

Only we don’t think to go back that far.

Instead, we think of it all being dandy, this miracle of capitalism. No matter that the resource depletion, externalities and wealth disparity that comes with it, is not confined to the countries that first embraced the brand of economics that mobilises capital to generate returns. 

Today this brand is universal. There are very few places that escape the effects. Not even New Zealand is far enough away.

Here is a comment on one of the consequences…

Inequality is unlikely to fall much in the future unless our attitudes turn unequivocally against it. Among other things, we will need to accept that how much people earn in the market is often not what they deserve, and that the tax they pay is not taking from what is rightfully theirs.

Johnathan Aldred Socialism for the rich: the evils of bad economics

Along with this spread of inequality that Johnathan Aldred laments where the highest-earning individuals claim an ever-larger proportion of the pie, the average wages remain stagnant. Poor wages growth is a core argument for the populist leader, disgruntled workers willing to vote for just about any alternative.

The disparity is real.

A while ago our sister site Alloporus|Ideas for healthy thinking wrote about the top earning Australian CEOs in 2017 and calculated that the CEO’s salary of Dominos pizza chain in Australia would pay for 631 workers at the bottom of the pizza bakers staff pyramid. Another post on the subject of CEO salaries followed a year later with similar numbers.

This is a ridiculous disparity. 

In purely human terms such multipliers make no sense at all. If every person has unique value how can one individual be worth 631 of his fellow employees?

Equality is impossible 

Equality is not possible either, it is not how the system works. 

If the CEO was paid the same as the delivery boy, then why would people with the skills and balls take responsibility and make hard decisions on behalf of the shareholders (the owners of the capital) front to take on all that risk for modest remuneration. 

Flat pay and management structures are hugely unstable when an organisation grows beyond the optimum size for human interactions, about 60 persons.

The problem is not disparity for that is a necessity for capitalism to work. The problem is the runaway disparity that is concentrating wealth into just a handful of people. Hence the suggestion that tax removes this unrealistic ‘earning’ and redistributes it as taxes are designed to do.

The argument that taxing of the extremes is moral because the money was not rightfully theirs is a deeper question. It would bring up rights of ownership and contract that only lawyers can nuance and that is an equally dangerous place.

But a solution to inequality is needed if the concentration of wealth continues on its merry way. The logical conclusion is through acquisition and merger the current few thousand most wealthy will people will coalesce into a handful of people with inordinate financial power. 

Anyone who has streamed ‘Billions’ on Stan will know what that does. It is a serious risk to global stability for, as any ecologist will tell you, there is resilience in diversity, and risks in simplification.

What does inequality mean for FED? 

We know that food production has to increase steadily at around 2% per annum for at least 30 years, our 2for30 grab.

Capitalists would argue that this increase should not be affected by inequality if the people in control of the money still see food production as a financial opportunity. No problem overall If money can be made by selling food or by keeping people well-fed so as they buy things in the larger marketplace.

This assumes that they are aware of the 2for30 requirement.

If they don’t know or care then inequality will expand to famine and malnutrition resulting in regional instabilities — not good for business. 

When wealth is concentrated controls on externalities are less likely. This will mean the ecology of the landscape will be pushed further than it already is. The solution, of course, is to make ecology pivotal to the overall wealth creation process wherever natural resources are involved, which is in all the food supply chains.

Concentrated wealth is likely to have the biggest effect on diets. As disparity increases the poor will resort to the cheaper food sources and they are becoming increasingly less nutritious. Scarcity will lead to malnutrition and in the mature economies poverty will lead to obesity. This trend is already here and is likely to get worse.

What sustainably FED suggests… 

Sustainably FED believes that the economic system as it stands will make feeding everyone a bigger challenge than it already is; but there is a caveat.

The mobilisation of capital is a powerful force. It can resolve any number of seemingly intractable problems so long as there is a profit mechanism. Profit is possible in the FED arena for there are ways to make sustainability of food fit into the capitalist system and ways to bend that system to reverse some of the inequality.

The search for these solutions is what this website and the eCourses that come with it are all about.