barriomulas.com - The Oil and Food Crisis

This whole gas crisis thing is quite frustrating. I'm not necessary upset about the high gasoline prices for I feel as if gas was too cheap in the first place. Its price did not include the hidden subsidies of road sprawl, deforestation, and air contamination. Though it still doesn't, its high price acts as a sort of gas tax that promotes alternate forms of transportation.

(I've always driven a tiny car, so it doesn't hit me as much as someone who drives around a Hummer.) What is upsetting is how everything else in our world - especially electricity, food, and consumer products - is dependent on it.

This "crisis" has continued for quite a few years now and we have yet to see any alternative presented by our leaders. Their solutions are drilling into wildlife reservations, offshore oil reserves, and pressuring oil producers to raise their output.

Many people point their fingers at crisis in Iraq, an unfriendly Iran, an anti-American Venezuela, and other short-term political conflict as the source of rising gas prices. While the above might disrupt market security the truth is that the problem lies with demand and not supply. As developing nations like India and China aggressively plow themselves through industrialism demand for energy, food, and consumer products is sky rocketing as oil supply remains the same. According to the natural laws of economics, this imbalance of supply and demand results in higher prices. But hey; that's what you get when the entire world begins to adopt the same lifestyle as the developed West. I recall a quote from a Fidel Castro speech in Angola:

What would the world be like if the capitalist model and capitalist consumer habits were to be spread throughout the world? If every individual were to have a car and aspire to all the luxuries of capitalist society? These luxuries that a minority has under capitalism, those luxuries that the most industrialized countries have. At what cost? At the cost of the rest of humanity starving to death?

In this age of globalism, nobody makes their own food. Everybody prefers to ship in their produce from thousands of miles away, a process that not only makes their consumption insecure, but depends on oil for its transportation. Quite possibly this crisis could promote consumption of locally produced goods and the fomenting of local food cultures. Sadly, though, few have proposed this.

This process also demonstrates that the neo-liberal economic growth obtained in recent years was quite unreliable and insecure. A slight rise in gas prices over a few months, for example, could set back decades of economic growth obtained by budget cuts, privatizations, and foreign investment. (The Economist covered this subject in its April 19th issue.) Many leaders seek economic growth without taking note of the different types of growth.

One positive side-effect of the economic turmoil is the ousting of unpopular regimes. Popular discomfort has lead many governments to implement necessary reforms. Haitian protesters forced the prime minister to resign, Egypt's President ordered the army to start baking bread, and the Philippines made hoarding rice punishable by life imprisonment.

I don't think things will get better any time soon. Let's see what happens.