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Sunday, October 7

Civilization is now based on market valuations of food products. What's next?

The End

End Times prophecies "have increasingly become part of mainstream convictions throughout the greater Middle East," Yossef Bodansky writes in his report for Defense & Foreign Affairs"Historical Fatalism, Water and Food Shortages, and Jihadism Conspire to Set the Stage for a Major Conflict Escalation Based on 'Greater Syria'," published July 23.(1)  Greater Syria refers to "modern Syria and adjacent areas in southern modern Turkey, Lebanon, and the northern half of Palestine; that is, Israel, the Palestinian Authority, and Jordan."

Yossef Bodansky's complete report is behind a subscription paywall but on July 27 -- the date of a Blood Moon eclipse, which figures in End Times prophecies -- John Batchelor spoke with Gregory Copley, chief of the Defense & Foreign Affairs group of publications, discussed the report. Here's the link to the 10 minute podcast of their talk, which is titled "Drought in the Ummah Under the Blood Red Moon."

The report reviews water shortages and related crises that have sparked recent anti-government mass protests/riots in the Middle East and details how these are playing out across the region. Bodansky goes on to observe: 
What began as indigenous fear over the plight of daily life has quickly evolved into communal protests against higher authorities and the ruling states.
A myriad of grassroots heritage grievances is coming to the surface. Significantly, in all the countries, more segments of the grassroots populace are participating in the ongoing protests and riots than at the height of the original intifadas [Arab Spring uprisings] of 2011-12.
He describes the more politically significant of the "heritage" (ethnic, religious, tribal) grievances then notes:  
By now, local governments throughout the greater Middle East had no inkling how to cope with the catastrophes: with the shortages of water, the marked decline in food production, the massive internal migration and dislocation from rural areas which overwhelmed the already-collapsing urban slums filled with refugees from fighting and carnage, and, most importantly, the intensifying radicalization of the grassroots which challenged the governments’ own legitimacy.
I will return to Bodanksy's report in a later post but for now I want to discuss the most striking aspect of the above passage. In that one sentence he tells the story of countless mass calamities all around the world in the modern era.

Yet by what strange alchemy are vastly different societies creating the same disastrous circumstances? 

To understand the alchemical formula you need to keep five points in mind:

1. There are basically two types of farming: commercial, which is simply the raising of produce for sale, and subsistence, whereby the farmer raises enough produce to sustain himself and his family and sells or barters any surplus. 

There is also what could be called the quasi farming method, whereby the farmer raises some produce for personal consumption and also raises a 'cash crop' for sale, but this is really commercial farming with a nod to subsistence farming. 

2. Most of the world's guesstimated 570+ million farms, both large and small, are today commercial farms.

3. By the 1950s commercial farming had virtually eclipsed subsistence farming in Europe and the United States, a trend that spread across the rest of the world during the closing decades of the last century. While subsistence farming still exists here and there, mostly in the poorest regions of the world, all the modernizing innovations in farming during the past century were plugged into commercial farming. The principal reason was that societies in which currency was replacing barter and near-money, the subsistence farm, which doesn't generate any income to speak of, came to be seen as a relic of humanity's past.

4. Most of the world's farms are small-scale. 

5. All the above means that the majority of the billion or so people who farm are actually businesspeople. Keep that in mind the next time you see a report about starving people fleeing to the cities from their failed farms. For the most part those starving people are actually fleeing their failed small businesses.

The Formula



The first great wave of modern commercial farming was mechanized farming. Machines cost money. No paying for the machines with bales of hay. So, as the mass-produced motorized tractor and its add-on equipment catapulted farming into the industrial era in 1917, the system for financing mechanized commercial farming was grabbed 'off the shelf' from the financing of mechanized factories. 

The system was misapplied to small-scale commercial farming from the beginning.

That's the alchemy. Everything else is knock-on effects. 

Patches

The misapplied system of financing hung on because of 'patches' that Western governments started devising in the 1930s, during the Great Depression. This was when the first red flags went up about the advisability of millions of small-scale farmers jumping into capital-intensive commercial farming by taking on debt. This was how a great many Americans lost their farms during the depression.  

In the United States the patches ranged from welfare and 'social safety net' programs to farm subsidies and buy-back schemes. As small-scale commercial farming spread to other parts of the world, some of the Western patches were used by governments in the 'developing' nations but without the fail-safes that the wealthiest Western governments had, beyond ones provided by foreign aid -- and by the IMF, whose radical financial surgery on gasping governments amounted to the old joke that the operation was a success but the patient died.

Then the patches began wearing out. This happened under the competitive onslaught unleashed by the modern era in globalized trade, which got fully underway in the early 1980s with the launch of standardized modular containerized shipping.

The Absent-Minded Economists

Adding to the woes of small-scale farmers, economists didn't think to tell them that as soon as you make farming into a business, this means you're ruled by something called 'market valuations' of your products. This adds a layer of risks on top of the risks, such as vagaries in the weather, that have always been a farmer's lot. 

The economists also didn't think to mention that once your farm is a for-profit business and your product can bring a decent price, there is stiff competition to deal with. 

All this means that small-scale commercial farmers are subject to market forces that can take down even the big boys.  

Economists also neglected to mention that when governments make it part of economic policy to use exports of their nations' commercial farm produce to scare up foreign exchange, this is getting into the shark-infested waters of international trade in food commodities. 

And when governments assume they can import their way around any shortfalls in national food production, they might as well dunk their nation in a tank of piranhas.

To be fair to economists, even if they'd mentioned these harsh realities the government officials would've said, 'So what are you proposing as the alternative? Everybody return to the Seventeenth Century?'

Frankly by the time governments finish applying patches to the worn-out patches, the Seventeenth Century will look like the cutting edge in modernity. 

The Big Picture
   
In summary, once civilization replaces its foundation of food production with market valuations of farm produce, the negative consequences keep forming the same pattern of events that Yossef Bodansky described, no matter how different the details of climate, geography, heritages, and political systems. 

Indeed, I think Middle Easterners would be stunned if they knew the future of their region as it is today was foretold in the 1930s on America's Great Plains. 

The same problem keeps recycling. 

Is there any way I've come across that could break the cycle?

The Key

On paper there is a way. The key is for the farmer to understand that it's not necessary to burden himself with debt in order to make a go of a commercial farm. This is what sets him apart from, say, the industrialist who wants to start an assembly-line factory. 

It's a matter of timing. There is a time for taking on debt, which is when the small-scale farmer doesn't need the loan in order to survive. As to how to accomplish that feat, Thailand's King Bhumibol Adulyadej figured it all out. He created a farming system and an economic system to support the small-scale farm that checked all the boxes and passed all the field tests.

The problem was that Thailand's major rice exporters and  members of the International Financial Community nearly had an aneurysm when King Bhumibol finally got around to outlining the economic system for the public.

"Archaic," snarled the Wall Street Journal.

Well, it's not if his majesty was trying to crash global trade.   

To be continued.

1) Yossef Bodansky, who is among other things a senior editor at D&FA, has written reports on the same theme in two earlier years, which are available to the public in pdf. The reports include a short bio on him.

Heretical Musings on the Coming End-of-time Battle; ISPSW Strategy Series, June 2015

More Heretical Musings on the Coming End-of-time Battle; ISPSW Strategy Series, January 2016

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