Sharon Astyk blames the global financial mess on rising food prices and our desperate efforts to replace oil: Peeling the Onion: What's Behind the Financial Mess?

If you want a pat answer to what has caused the financial crisis that is reverberating around the world, and now threatening the derivatives market, we've got one. Nearly everyone - in the mainstream media and outside it, tells the same story - that the crisis was caused by the unravelling of the housing market, particularly the US housing market.  And if you ask what's behind that, well, we're told there was a bubble.  And if you ask what was behind the bursting of the bubble, well - it is turtles all the way down.

I'm going to suggest that if you peel off the layers of the financial crisis, we're going to find some pretty basic things.  And one of the basic things is, well, food.  It seems sort of anti-climactic, I think, if you are a pundit, to talk about the cost of rice and soybean oil as part of the root problem of such a massive financial crisis, but I suspect we'll find it there.  And underneath the food, I think we'll find oil.

Astyk asserts that, "the majority of farmers, builders and factory workers use some machinery, but the primary engine of production is human work." With some training, she continues, a subsistence farm worker can become an a very productive industrial worker. A great deal of education, however, is required to produce white collar workers. "The money is in the new workers." she writes, meaning that these converted subsistence workers are a real bargain for the companies that employ them, and ultimately a great source of wealth for the industrialized world.

But with the rising cost of food:

 The new workers, and the lubrication they provide in the global money system are being systematically impoverished, and what money they do spend goes to an increasingly narrow band of companies - instead of spreading the money around, money goes for very basic things - mostly food, and mostly basic foods.  And the farmers who make the basic foods mostly send that money back to a very small number of companies - the ones that produce oil and the ones that produce fertilizer - many of them located in the same countries and places.

... And what is the root cause of the high price of food?  Well, the single biggest factor, according to a number of studies, including the UN studies, has been the move to food based biofuels.  So if we peel back the onion one more layer, what we find is that one of the major factors slowing the economy has been, well, oil.  The rush to biofuels is a response to tightening oil supplies and rising costs, and the aggregate effect has been to push up food prices all over the world, while doing pretty much nothing to increase energy security, reduce greenhouse gasses or do much of anything else useful.

I'm no economist, and I don't pretend to be.  But I wonder, when we peel back the layers of the onion later, and look at the history of this Depression, I wonder if we'll see that in fact, what happened was that we squeezed out the lifeblood of the very thing we'd built our economy upon - new workers/consumers who could be counted on to grow the economy outwards and upwards.  We could have foreseen this - but we chose not to - we chose, as we struggled to keep our lifestyle intact on the backs of the world's poor, not to see that we stand on their backs, and it is people...all the way down.  In killing them, we killed ourselves. It may be that besides the tragedy of starving millions of poor people, we may also have brought down our own system, simply because we did not see, did not realize that the poor matter more to us than we like to admit.

"We have met the enemy and he is us" - Pogo