Just over a year ago, complex systems theorists at the New England Complex Systems Institute warned us that if food prices continued to climb, so too would the likelihood that there would be riots across the globe. Sure enough, we're seeing them now. The paper's author, Yaneer Bar-Yam, charted the rise in the FAO food price index—a measure the UN uses to map the cost of food over time—and found that whenever it rose above 210, riots broke out worldwide. It happened in 2008 after the economic collapse, and again in 2011, when a Tunisian street vendor who could no longer feed his family set himself on fire in protest.Interesting. This ties in nicely to Peter Turchin's ideas of Cliodynamics - using mathematical models to understand history. In fact, this theory has been put forward before; several years back historian David Hackett Fischer wrote The Great Wave: Price Revolutions and the Rhythm of History. I've been meaning to pick up a copy at my local used bookstore, but in the interim, a review will have to suffice:
Bar-Yam built a model with the data, which then predicted that something like the Arab Spring would ensue just weeks before it did. Four days before Mohammed Bouazizi's self-immolation helped ignite the revolution that would spread across the region, NECSI submitted a government report that highlighted the risk that rising food prices posed to global stability. Now, the model has once again proven prescient—2013 saw the third-highest food prices on record, and that's when the seeds for the conflicts across the world were sewn.
Like Paul Kennedy's ''Rise and Fall of the Great Powers,'' ''The Great Wave'' puts the present day in a historical perspective encompassing many centuries. Mr. Fischer, however, is less concerned than Mr. Kennedy with the effects of economic change on competition among nations. His focus is on the internal changes that societies and political cultures have experienced as the result of what he calls ''price revolutions.''The High Cost of Living (NYT) Maybe Fischer was a bit too early (the book was published in 1997)
Combining vivid narrative with shrewd dissections of quantitative evidence, he examines four eras in which prices steadily rose -- culminating in culture-shaking crises that were followed by briefer eras of stability and social progress before the next wave in price escalation hit. Thus, a medieval price revolution began in 1180, imploded around 1350, during the Black Death, and was followed by what Mr. Fischer calls the ''equilibrium of the Renaissance.'' Another price wave began in 1470, concluded with the Thirty Years' War, which ended in 1648, and was followed by the Enlightenment equilibrium. A third price revolution began in 1730, culminated in the French Revolution and Napoleonic Wars, and was followed by the ''Victorian equilibrium.'' Mr. Fischer argues that the world is now in the late stages of a 20th-century price revolution that began in 1896.
He describes each price revolution as proceeding through four stages. Rapid population growth and rising expectations start the wave by creating a demand-driven inflation. Prices eventually break the limits within which they fluctuated during the preceding period of equilibrium, society accepts inflation as a natural condition and individual citizens and governments act to shelter their own short-term interests. The choices made -- raising prices, expanding money supply and large-scale borrowing -- aggravate inflation. Because the rich can better protect themselves, social inequality increases during the third stage and instability ensues. In the final stage, the wave crests and breaks, and the existing social order crumbles.
Is the world in the final phase of this century's price revolution? Mr. Fischer is unclear. He points to crime waves and crumbling families as evidence of the instability encountered before the ultimate crisis, but the argument has the vagueness of analogy. He presents the fall of Communism as a beneficial part of the disintegration of the old order associated with the final stage. But why should it not be considered evidence of an instability that may lead to a less welcome collapse of order?
I see Ran beat me to this one (February 21). He connects it to something we posted a while back from David Brin: that the new epoch really begins about a decade and a half after the turn of the century. Of course, in addition to food, all commodities including energy are coming under pressure. I believe The Limits to Growth model had a tipping point being reached by 2030 on the standard run (which we are apparently following). His comment about agriculture is essentially the Marxist interpretation--that money is used to produce commodities to sell for more money rather than money serving as merely a neutral medium for the exchange of commodities as in conventional economic theory. This post has much more:
Marx begins by contrasting two forms of circulation: simple commodity circulation (C-M-C) and the circuit of capital (M-C-M).As for that point about Ukraine and food: Ukraine: forgotten granary of Europe (The Guardian)
Susan sells a pie for $10. She then uses this $10 to buy a book. A commodity (C) has turned into money (M) and then this money has turned into another commodity (C). The same sum of value has changed forms twice: Commodity-Money-Capital, or, as Marx abbreviates, C-M-C. C-M-C, or simple-commodity-circulation, deals with the production of commodities and their exchange with money.
This is contrasted to the circuit of capital: M-C-M. Here a capitalist starts with a sum of money with which she buys commodities. She then sells these commodities for money. Obviously this process is only worth the investment if the capitalist ends up with more money at the end of the process. There must be a profit in sight at the end of M-C-M in order for the circuit to begin.
These two processes, C-M-C and M-C-M, are qualitatively and quantitatively different. C-M-C starts with a use-value and ends with a use-value. When Susan begins the circuit she has a final use-value as her aim even though her initial production is production for exchange. By contrast our capitalist begins with value in the abstract and ends with value in the abstract. The goal of capitalist investment is not the attainment of a specific use-value but rather the attainment of value in the abstract, unattached to any specific use-value.