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How the Soaring Price of Bread Will Shake the Foundations of the Global Economy

So much current conflict in the world is not the result of "resource conflicts" but can be more accurately described as bread-triggered upheavals.
 
 
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What can a humble loaf of bread tell us about the world?

The answer is: far more than you might imagine.  For one thing, that loaf can be “read” as if it were a core sample extracted from the heart of a grim global economy. Looked at another way, it reveals some of the crucial fault lines of world politics, including the origins of the Arab spring that has now become a summer of discontent.

Consider this: between June 2010 and June 2011, world grain prices  almost doubled. In many places on this planet, that proved an unmitigated catastrophe.  In those same months, several governments fell, rioting broke out in cities from Bishkek, Kyrgyzstan, to Nairobi, Kenya, and most disturbingly three new wars began in Libya, Yemen, and Syria. Even on Egypt’s Sinai Peninsula, Bedouin tribes are now in revolt against the country’s interim government and manning their own armed roadblocks.

And in each of these situations, the initial trouble was traceable, at least in part, to the price of that loaf of bread.  If these upheavals were not “resource conflicts” in the formal sense of the term, think of them at least as bread-triggered upheavals.

Growing Climate Change in a Wheat Field 

Bread has classically been known as the staff of life. In much of the world, you can’t get more basic, since that daily loaf often stands between the mass of humanity and starvation.  Still, to read present world politics from a loaf of bread, you first have to ask: of what exactly is that loaf made? Water, salt, and yeast, of course, but mainly wheat, which means when wheat prices increase globally, so does the price of that loaf -- and so does trouble.

To imagine that there’s nothing else in bread, however, is to misunderstand modern global agriculture.  Another key ingredient in our loaf -- call it a “factor of production” -- is petroleum.  Yes, crude oil, which appears in our bread as fertilizer and tractor fuel.  Without it, wheat wouldn’t be produced, processed, or moved across continents and oceans.

And don’t forget labor.  It’s an ingredient in our loaf, too, but not perhaps in the way you might imagine.  After all, mechanization has largely displaced workers from the field to the factory. Instead of untold thousands of peasants planting and harvesting wheat by hand, industrial workers now make tractors and threshers, produce fuel, chemical pesticides, and nitrogen fertilizer, all rendered from petroleum and all crucial to modern wheat growing.  If the labor power of those workers is transferred to the wheat field, it happens in the form of technology. Today, a single person driving a huge $400,000 combine, burning 200 gallons of fuel daily, guided by computers and GPS satellite navigation, can cover 20 acres an hour, and harvest 8,000 to 10,000 bushels of wheat in a single day.

Next, without financial capital -- money -- our loaf of bread wouldn’t exist. It’s necessary to purchase the oil, the fertilizer, that combine, and so on. But financial capital may indirectly affect the price of our loaf even more powerfully . When there is too much liquid capital moving through the global financial system, speculators start to bid-up the price of various assets, including all the ingredients in bread.  This sort of speculation naturally contributes to rising fuel and grain prices.

The final ingredients come from nature: sunlight, oxygen, water, and nutritious soil, all in just the correct amounts and at just the right time.  And there’s one more input that can’t be ignored, a different kind of contribution from nature: climate change, just now really kicking in, and increasingly the key destabilizing element in bringing that loaf of bread disastrously to market. 

 
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