10-Sep-10 News -- Venezuela moves toward food rationing - 10-Sep-2010 - Generational Dynamics

In Venezuela, our good friend President Hugo Chávez is introducing the "Good Life Card," according to the Miami Herald. "It's a card for you to purchase what you are going to take and they keep deducting," according to Chávez. "It's to buy what you need, not to promote communism, but to buy what just what you need."

An explanation by the pro-Chávez VenezuelAnalysis paints a very bizarre picture:

"Yesterday, President Hugo Chavez announced the creation of a new bank card that can be used to purchase food at affordable prices in new community run supermarkets called “Biceabastos,” and to maintain accounts in a new system of communal banks linked to state owned banks.

The announcement was the latest step forward in the government-sponsored formation of communes as an alternative form of community governance. In the process, communal councils, which are community decision-making bodies grouping together around 100 to 400 families, link together into a broader form of organisation that includes community production and consumer needs. ...

Chavez called the cards, “cards for living well” because they are for “necessary consumption, not consumerism.” The card will be supplied by the state owned Bank of Venezuela, which was nationalized in 2008.

According to the minister for commerce, Richard Canan, as of the start of August there were 21 biceabastos employing 4,345 workers. By comparison, there are 37,000 workers in the PDVALs, Mercals, and food houses. The government hopes to create 200 biceabastos by the end of the year.

The state run and community run food markets are part of the government’s “food sovereignty” strategy to guarantee basic food products to the population at affordable prices and to avoid the scarcity of certain items of food caused by profit-driven hoarding."

As I understand this, you get the card from the state-sponsored bank, and then you buy all your food from the state-run Biceabastos. The Biceabastos are controlled by state-sponsored community councils. If you do the arithmetic in the next-to-last paragraph, it appears that the Biceabastos are going to replace all the other food markets.

Apparently, the card appears to be like a food-rationing technique used by the Cubans. The card would restrict the types and amounts of food that Venezuelans could buy, and could be used to control the entire distribution and supply chain. Many consumer goods in Venezuela have become scarce because Chávez has nationalized many companies, and then operated them poorly. Chávez got away with this when times were good, but the rise in food prices is now causing unrest.

Food shortages in Russia

The recent jump in wheat prices was triggered mainly by the Russian once-in-a-century drought and wildfires that have been occurring for several months, causing Russia's wheat crop yield to fall significantly, and the government to ban wheat exports until the end of 2011.

Even Russia is experiencing food shortages, even though there should be enough wheat, since the country has banned wheat exports. Wheat cannot be found in store shelves in Russia, according to the NY Times, causing Russian officials to fear political instability. They're blaming the shortage on panic buying, hoarding, and speculators.

The growing food crisis

From the point of view of Generational Dynamics, this food crisis is entirely predictable, and will only grow worse.

I first started writing about rising food prices in 2004, with "Food: Green revolution v Malthus effect." In 2005, I wrote an article that showed that food prices had been falling for decades, but had started to rise much faster than inflation in the year 2000.

The "Malthus effect" is my name for the fact that the population grows faster than the food supply. In a book called An Essay on the Principle of Population published in England in 1798, Thomas Roberts Malthus reached exactly that conclusion.

Malthus made some math errors, but his conclusion is basically correct. Malthus also made some social errors. He said that the inevitable result of food shortages would be famines and deaths from starvation. That might be true for "dumb" animals, but societies of "intelligent" human beings do not simply starve to death. Instead, they have food riots, and eventually resort to war to exterminate their neighbors and get their resources, including farmland. That's built in to the human DNA.

Some politicians make the claim that Malthus' predictions have proven untrue, a claim that I consider bizarre when you consider that you can pick any day of any year and there are 10-40 wars going on in the world.

My own rough estimate is that food production grows by 0.96% per year, while population growth exceeds 1.72% per year (since 1950), and is 2-4% in some countries. (However, the United States population has been growing around 0.92% per year.)

To bring the amount of food per capita back to 1950 levels would require the elimination of some two billion people. That's why I've been using the figure two billion as the estimated number of deaths that will occur in the coming Clash of Civilizations world war. This result is mathematically unstoppable, despite the protestations of politicians and college professors who seek money, in the name of fighting starvation and poverty, for their committees, their pet projects, and their personal bank accounts.

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Violence has increased substantially in Russia's southern provinces in the north Caucasus region. On Thursday, a suicide car bomber killed 17 people in a crowded central market in Vladikavkaz, the captal of North Ossetia. Associated Press

Copper prices have been rising because of demand from China for two reasons: to sustain its rate of growth; and to spend its US dollar surplus on something useful. China has been stockpiling copper in recent months, but experts believe that demand will slack in the next few months, with a fall-off in prices that could affect stock prices. International Relations and Security Network (ISN)

The Organization for Economic Cooperation and Development (OECD) says that the "slowdown in the pace of recovery of the world economy ... is somewhat more pronounced than previously expected." It blames the cut back on stimulus, as governments look to cut record budget deficits. Bloomberg

On Wednesday, North Korea celebrated the 62n anniversary of the nation's establishment, but the day passed with no sign of naming of a successor to ailing president Kim Jong-il. A party congress was supposed to have begun by now, but the meeting has been delayed because of floods. Bloomberg

The political confrontation between Japan and China worsened on Thursday, as Japan threatened to prosecute the boat captain that they arrested a day earlier for fishing in waters claimed by Japan. (See yesterday's posting.) An official statement said, "A wave of indignation is brewing in Chinese society, which might snowball into a major public outcry if the Japanese authorities continue to take a hardline stance." This threatens a repeat of the anti-Japan violence that occurred in Beijing in 2005. Guardian

Several unexploded bombs were found on Wednesday to have been planted in Bangkok, Thailand, and in a neighboring province. Government officials accused the "red shirt" protestors, who had shut down Thailand's shopping district last spring, of having planted the bombs, and said that the discovery justified the continuation of the state of emergency that gives the government the power to arrest anyone at will. (However, it seems possible to me that the bombs were planted by the government to justify the continued state of emergency.) Reuters

Generational Dynamics Web Log for 10-Sep-2010
10-Sep-10 News -- Venezuela moves toward food rationing

Venezuela's 'Good Life Card' may be first step in food rationing

Food shortages in Russia

The growing food crisis

Additional links

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Generational Dynamics Web Log for 10-Sep-2010 10-Sep-10 News -- Venezuela moves toward food rationing

Venezuela's 'Good Life Card' may be first step in food rationing

Food shortages in Russia

The growing food crisis

Additional links

Web Log Pages

Generational Dynamics Web Log for 10-Sep-2010
10-Sep-10 News -- Venezuela moves toward food rationing