Monday, 4 October 2010


Trade is seen as a Good Thing in our current monetary system, but this bears some analysis. Once a farmer (say) is able to produce a surplus of (say) wheat, he needs a way of distributing that excess wheat to those who want to eat it (as bread, say). Also, the farmer wants other goods and services for his survival and quality of life, which he can't practically pay for in wheat.

We quickly see the means of exchange function of money emerging - the value of every good and service is expressed as an amount of money. We couldn't, of course, actually work out the value of wheat by how much wheat exists, so the 'market' sets the price - what will someone pay for the wheat?

But the other function of the 'market' is a place where the farmer can take his wheat to meet people who want to buy it and while he is there he can buy some of the things he needs/wants with the money he gets from the wheat he sells. Thus originally the value of the wheat stayed with the wheat. (I'm over simplifying, but inly to make my point). The market was not only the place to buy and sell, but a distribution mechanism.

With current technology it is fairly easy to know where (say) food is wanted and where it is grown/raised. The function of our distribution system ought to be to get the food efficiently from where it is raised/grown to where it is needed for nutrition, but in fact it is following money around. Starving people do not have enough money to buy the food they need to survive and cannot take part in the trade that is supposed to make the market distribute goods and services.

Do we want to, and can we, fix this problem? The market doesn't seem to be fixing it and things like charity and fair trade, though well meant, are only scratching the surface of the problem.

The "do we want to fix this problem" question is essentially an ethical one. Is it OK that people starve to death every day? If our answer to this is "no" then we have to address whether the market and trade can ever put this right  but all the while having money enables you to get more money, there would seem to be technical flaw in the system.

If our answer is "yes", we seem to be so certain that the market/trade system is right that it becomes an end in itself, without any purpose other than perpetuating itself. Unless, that is, its purpose is more sinister - to choose who lives and who dies.

If we can (as I believe we can) abstract and solve the distribution element from trade and at a world level see where the food is and where it needs to be, we can start to apply solutions involving growing/raising the food nearer where it needs to be, and we can look at efficiency measured by how much food we can sustainably produce, rather than how much money can we make from selling it. The money that should have been the means for distributing resources has become the end - almost a resource in itself.

Growing/raising food more efficiently will mean using machines and technology, with the downside that people will be put out of work, not earn any money, and starve. So convinced are we that people's incentive to work is money, that we make it impossible for people to survive without working, and the economy creates things for people to do for wages. To a large extent we uphold the idea that it doesn't particularly matter what work people do - the point is they are working - that's what's important. But it doesn't make sense. If someone actively works in a way that wastes resources and brings inefficiency, why do we support that? It would be better to pay them NOT to do it.

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