I’ve attended a lecture by Walden Bello, author of the book “Food Wars”, and it made me have some doubts about the free market. His main thesis was that many third world countries that were net exporters of agricultural products(e.g. Philippines, Mexico, Haiti, parts of Africa) are now net importers of agricultural products because Structural Adjustment by the IMF forces third world countries to “liberalize” while US factory farms are heavily subsidized(40% of income from the state). The peasant farmers in the third world, he says, are driven off the land due to the unfair competition and ‘dumping’. I’ve already read “Economics in One Lesson” and know about how employment is just allocated to other sectors of the economy so I can refute his argument theoretically; but he issue he addresses at the start is the price hike in food that occured in 2006-2008 which he blames on Philippine dependency on food imports. I’d like to think that the Philippine economy as a whole is better off because of free trade but I can’t find any empirical evidence supporting this. It seems that the 3rd world countries which were victimized by agri ‘dumping’ by the US through structural adjustment are worse off than they were when they were protectionist. A lot of excuses come to my mind such as the Philippine legislature is sold to the foreigners and so local farmers are restrained from market reentry should the foreing factory farms raise their price again; or that the foreign controlled factory farms in Haiti are state protected and therefore can pay the lowest wages possible. Again, this is purely speculation. The facts do not coincide with economic theory. For example, factory farms in Haiti overwhelm peasant farming, my understanding of economics would suggest that the unemployed peasants just work for the factory farms(receiving higher wages) yet that’s hard to believe. I might be missing other government intervention at work here but only vague unspecified regulations that favor foreign corporations come to mind(not very convincing). My country(Philippines) has lost much arable soil because of industrial conversion and nothing good happened. Thailand, on the other hand has double our per capital GDP because government developed their agriculture.International political economy is really hard to understand for me right now and the biggest blow to my free market ideals. Maybe the free market just doesn’t work. What do you think?
The problem with this kind of propaganda that you recieved is that it is a lie. When I started looking into the IMF I checked the case of India, and this is what I found.
The IMF went to India and asked the goverment to “liberalize” their agricultural system in order to get the loans they needed. But in IMF language to “liberalize” meaned to put regulations in place!!! [:O] So the IMF forced laws that benefited Monsanto seeds over the traditional seeds that the farmers where using. This Monsanto seeds produced more food but they requiered a lot more water. So, because of the regulations, the farmers were consuming the water of the territory and they were forced to dig lower and lower into the land to find a water source. Also, they had to buy more powerfull water pumps to be able to get the water from so low, and they had to go into debt to do so. At the end they are bankrupt and Monsanto had earned a lot of money.
So they key here is that the IMF (funded by Keynes btw) SAYS that they are for a free-market, but then go there and implement a INTERVENTIONIST system. So this liers use the word free-market because that is what the IMF uses and it fits their propaganda. But they know the IMF does not implement free-market policies, but interventionist ones and that is what makes this people suffer. But blaming an un-exisiting free-market fits their agenda, so they prefer to ignore the facts. And the fact is that the IMF implements interventionist systems.
Dont get caught in a definition war, allways look for the facts. If the IMF proves something is that interventionist does not work.