Of capitalism and Food Shortage

James C.W. Ahiakpor, Ph.D.
Department of Economics
California State University, Hayward
Hayward, CA 94542

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Raymond Lotta, a self-proclaimed Maoist political economist concludes his piece on Niger thus: "The market and 'free market' policies are literally starving people to death in Niger. A rational economic system would operate very differently. It would ensure that production was geared to meeting social need. It would regulate prices so that they were in line with these social priorities. That's what socialism makes possible. But capitalism does not and cannot do that. Why? Because 'the market respects demand, not need'."

I had to pinch myself to be sure that I'm alive and reading this in the 21st century. How is it that Raymond could be thinking like this after the Chinese have thrown off the repressive yoke of Maoist economic organization with Deng Xiaoping's policy reversals in 1976 and the broad mass of the Chinese people have enjoyed much economic prosperity since? How could he be thinking his thoughts when comparing "capitalist" South Korea with the collectivist North Korea easily shows where people are more prone to starvation? Doesn't Raymond Lotta know about Julius Nyerere's Ujama socialist experiment in Tanzania and its colossal failure to improve the lives of people in the 1970s and 1980s? He probably does not know about the collectivist experiment in Ghana following the 31 December 1981 coup when markets were blown up, prices were forced down by government decree and enforced brutally by the police, and how the experiment made people much worse off, producing what was termed Rawlings's chain around people's necks -- reference to the protruding collar bones of most people at the point of starvation?

It is true that "the market respects demand, not need." But what is the "market" other than the institutional arrangement by which people voluntarily exchange their produced goods and services? With that understanding, the comment made in the Economist should not be surprising. Few people take the trouble to produce anything they themselves do not intend to consume without expecting something else to take in return for them. Thus, the cattle herder undertakes raising the flock to exchange for millet, clothing, shoes, or any of the numerous things s/he does not produce, but needs. Of course, the exchange process may employ the intermediary of money. That is, the cattle seller takes money in the marketplace and spends the proceeds to purchase those things s/he has need for or wants. Otherwise the exchange takes the form of barter.

When one parts with one's wares without taking any goods or services in return, one is said to have given a gift. The market process is not one of gift giving. It should not be shocking to anyone who takes the time and trouble to think about it that "the market respects demand": demand is need backed by the ability to give something in exchange -- that is, pay for. Such it is that those who starve are those who have not produced anything or enough to exchange for the food they need. To explain the incidence of starvation otherwise is to misunderstand reality.

In fact, starvations more frequently have occurred in socialist forms of economic organization than under free market systems. Just look back on these socialist experiments during the 20th century, from the Soviet Union, China, North Korea, India, and Ethiopia. This partly because total production is much lower under the socialist organization. The system gives the wrong incentives for production and also reduces the speed with which available supplies get distributed. Of course, natural disasters can threaten the occurrence of starvation in non-socialist or capitalist countries. But with greater market freedom, the remedies are much more quickly undertaken in market economies than in collectivist or socialist types.
I concluded my documentation of the failed experiment at collectivism in Ghana between 1981 and 1983 with an appeal to people like Raymond Lotta to spend some more time thinking seriously about their advocacy of socialism. I argued that the (time) costs involved in thinking about or studying the consequences of their policy recommendations are minuscule compared with the human suffering imposed on the people who live under such systems; see "The Success and Failure of Dependency Theory: The Experience of Ghana," International Organization, Summer 1985. The article includes the confessions of some of the initiators of that experiment about how little they understood the consequences of their actions. I repeat that appeal here.

Let's try to understand the causes of the embarrassing episodes of mass starvation that continue to occur in some African countries. But, for goodness sake, leave capitalism out of the account. The world has seen enough of the failure of socialistic economic organizations to deliver their promise of prosperity for all. People are literally dying to escape the poverty, not to talk about the repression of civil liberties, created in such countries. And where do they head? To the capitalist or market economies. They don't do this because they are stupid. They know better than what some socialist academic might conceive of in the mind, where human beings do not pursue their own interests when choosing to produce goods and services.