Food, fuel and the escalating crisis in capitalist globalization

Over the last several months the world has experienced rapid increases in the price of both fuel and food. In the United States motorists are paying more than $4 per gallon for gasoline while they are spending larger percentages of their household incomes on food consumption as well as energy needs such as heating and electricity costs.

The response from the federal government has been to largely avoid any direct attention to these growing problems and to announce a so-called economic stimulus package which, through some form of wishful thinking, they have told working people that a check for several hundred declining U.S. dollars will have a noticeable positive impact on the nation’s ailing economy.

The current spike in fuel and food prices in the U.S., however, is taking place amid other important political and economic developments, including the largest rate of home foreclosures since the Great Depression, and the ever increasing annual military budgets to finance the ongoing occupations of Iraq and Afghanistan as well as other adventures in Somalia and Colombia. Other policies implemented by the Bush administration and the Congress have led to huge transfers of wealth from working-class and poor families to the rich through tax cuts and massive trimming in public and social programs in the country.

At the same time, further pressure is being placed on workers throughout broad sectors of the economy. In the auto industry, the crisis in overproduction and the declining spending power of individual households have brought about significant declines in salaries for production workers, salaried employees and more importantly, the downsizing of tens of thousands of employees.

A recent strike at American Axle, where UAW members attempted to halt a 50-percent reduction in their pay scales and the elimination of major elements of their benefit packages, resulted in a settlement that will further reduce living standards, not only of those who work for the auto industry but across the board.

It has already been announced that 19,000 workers will soon leave General Motors through buyouts and retirement plans. Despite this reduction in the workforce at GM, the company wants to eliminate even more workers in order to cut costs and create space to hire new workers at far lower salaries and benefits. Having workers perform the same tasks at lower wages benefits only the owners in their ever growing thirst for higher profit margins. These corporate policies, which have been in effect now for over two decades, further hamper the ability of working families to survive amid inflationary pressures and rising health care costs.

Mass worldwide responses to the crisis in fuel and food pricing

During the months of April and May, people in Africa, the Caribbean and Europe held mass demonstrations and strikes to protest the rising costs of fuel and food. The most militant of these actions in Europe have occurred in France, Portugal and Spain, where fishers and truck drivers have struck in response to the rising cost of fuel and the price stagnation in the fishing industry.

In France, with its pro-U.S. administration of President Nicolas Sarkozy, workers have been engaged in actions now for several weeks. Fishers from France, Spain and Italy have been meeting in Paris to map out long-term strategies for responding to the current crisis. The fishers are calling for direct assistance and subsidies to ease the impact of rising fuel prices and stagnant prices for their products. The European Commission has issued a statement saying that it will exercise some flexibility but has ruled out granting subsidies to the fishers.

Thousands of fishers marched in Madrid, Spain, to the Agricultural Ministry demanding governmental intervention. They handed out 20 tons of fish to demonstrate the plight of their industry. Fishers set off firecrackers and blew whistles to attract attention from the general public and government officials.

One banner held by the demonstrators stated that, “Soaring diesel plus cheap fish equals ruin for fishers.” Another chided Prime Minister José Luis Rodríguez Zapatero: “You are sending us to the cemetery.”

In Barcelona one union leader said the entire fishing industry was at a standstill. Union leaders said that they could follow the lead of French workers by blockading the ports, preventing all goods from coming into the country.

In France the government offered 100 million euros as an incentive for fishers to return to work. On May 29 French police broke through the workers’ blockade and cleared the Mediterranean oil depots of Fos-sur-Mer and Lavera and a Total refinery in the south at La Mede.

According to the BBC: “On the same day police clashed with fishermen who burned tires in the Atlantic port of Lorient, while hundreds protested in Quimper, Brittany. On Friday [May 30], protesters blockaded the Channel port of Le Havre.”

The BBC also reports: “Hundreds of farmers have also been blocking oil terminals near the cities of Dijon and Toulouse. In Italy, at least 5,000 fishermen are expected to strike, the main trade union Federcoopesca says. The government has already refused emergency aid to the industry.”

In the so-called developing regions of Africa and the Caribbean the problems of rising fuel and food prices have created growing political tensions. In April Haitians responded with rebellions to rising food prices.

In Somalia, which is living under a U.S.-backed Ethiopian occupation, resistance efforts intensified at the beginning of May when women and youth took to the streets to express their outrage at the worsening humanitarian situation created by Washington’s foreign policy imperatives in the region.

The local currency in Somalia is virtually worthless, leaving people without the ability to purchase food and other essential goods for their households.

Demonstrations also took place in Burkina Faso and Senegal in West Africa. These two former French colonies have suffered under the impact of globalization and neoliberal policies. Their currencies are in decline and the rising debt-service ratios are hampering their ability to provide services to the population.

FAO report predicts prices to remain high

A recent report issued by the Organization for Economic Cooperation and Development (OECD) and the Food and Agricultural Organization (FAO), two United Nations agencies, has predicted that between 2008 and 2017 food prices will stabilize after increases in the short term. Yet this purported stabilization in food prices will be at a higher level.

The “OECD-FAO Agricultural Outlook 2008-2017” states: “World reference prices in nominal terms for almost all agricultural commodities covered in this report are at or above previous record levels. This will not last and prices will gradually come down because of the transitory nature of some of the factors that are behind the recent hikes.

“But there is strong reason to believe that there are now also permanent factors underpinning prices that will work to keep them both at higher average levels than in the past and reduce the long-term decline in real terms. Whether transitory or permanent, appropriate policy action for agricultural development and for addressing the needs of the hungry and the poor needs to take account of both these characteristics.”

The report takes into consideration some of the changing characteristics in the global economy and their impact on rising food prices and growing food insecurity in the developing world. This food insecurity has also become more acute in the U.S. with the deepening economic crisis, illustrated through the rise in unemployment and underemployment, downsizing, rising fuel and energy prices and the decline in the real value of the U.S. dollar.

The OECD-FAO Outlook report “has been prepared in an environment characterized by increased instability in financial markets, higher food price inflation, signs of weakening global economic growth and food-security concerns. Although projections for agricultural commodity markets have always been subject to a number of uncertainties, these have taken on more importance in this year’s edition.”

FAO convened an international conference in Rome on June 3 to discuss the growing international crisis in food security. According to a BBC report on the conference: “The hosts of the Rome conference—the UN’s Food and Agriculture Organization (FAO)—has warned the industrialized countries that unless they increase yields, eliminate barriers and move food to where it is needed most, a global catastrophe could result.”

Can it happen here? Implications for the U.S.

In the U.S. there has been a significant rise in not only the price of food and other essential goods and services, but the impact of these increases has had detrimental effects on working families and the poor. This is clearly related to the crisis facing truckers and other transport workers and networks due to the sharp rise in diesel fuel prices.

Truckers in the U.S. have complained and have staged limited protests against the rising price of fuel. Yet the price of fuel continues to rise without any relief being proposed or offered to the general public aimed at lowering gasoline prices. It is obvious that the Bush administration is not interested in placing any restrictions on the actions of the multinational oil companies, which have, amid a growing economic downturn, reaped record profits over the last year. The only solution proposed by the pro-oil-company policymakers is to open larger sections of the country to drilling.

These oil profits are not rechanneled into the state sector to offset the negative impact the price hikes are having on the working class and the poor. Consequently, unless the people intervene, there will be more of same in the near future.

Activists and organizers in the United States need to give greater attention to the impact of rising fuel and consequent food prices. With the growing problems facing truckers in particular, it could seriously impact the ability of these drivers to get food into stores across the country. Prices could soar and the crisis could even lead to food shortages.

How could activists organize around such a crisis? It is appropriate to proclaim that people have a right to energy and food, and to devise a program of demands to assist the people in fighting for these rights.

However, in the long term this problem can only be solved with the nationalization of the oil industry in the United States under a socialist economic system. Through nationalization under socialism, the price of petroleum products would be controlled for domestic usage and consumption. The use of petroleum products in the areas of agricultural, commodities manufacturing and transportation would be carried out more efficiently and the surplus from the sales of these products and services could be re-invested in alternative, environmentally friendly sources of energy.

In addition, a serious national program aimed at developing a comprehensive public transportation system would not only conserve oil but also save significant amounts of money for individual households and at the same time take tremendous pressure off of the environmental degradations that are the result of outmoded means of energy production and usage.

These issues and demands must be raised by popular organizations since the current administration, and even most people in the U.S. Congress, as well as state and local governments, are beholden to the oil and energy interests. The fact that people could raise these demands would heighten the level of contradictions between the multinational corporations and various levels of government on the one hand and the interests of the people on the other and consequently intensify the class struggle inside the U.S.

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