Sunday, November 11, 2012

One dollar, One vote

Henry Stern, the founder and president of New York civic writes on his website: "Elections are the best way to decide public issues in a democracy. The word 'democracy' means 'rule by the people' , which is a fair and determine which policies a government should follow, and who should be elected to lead that government. A basic principle is one man, one vote" which is meant to support the idea that each citizen's influence should be equal. In reality, some people's influence is greater than others, no matter what system of reckoning is used. The most obvious barometer of influence is money. A man who can give a million dollars to a candidate is much more likely to be listened to than a contributor of $1. It would be impossible to write a law under which every citizen’s views would receive equal attention and respect. But it remains a legitimate goal of reformers to minimize the disparity in resources between candidates.The major distinction between citizens and interest groups lies in their access to candidates. A substantial amount of public business is transacted at fund-raising events for the benefit of individual candidates. Clearly, these events provide contributors with an opportunity to meet with the candidates they support and to try to influence them".

In economics, 'dollar voting' means a process of capital allocation through consumer sovereignty. Ludwig von Mises wrote (in Socialism, an economic and social analysis (1922), tr. J Kahane (1931), p 428 ) : "The capitalist society is a democracy in which every penny represents a ballot paper. 

Obama has won the US elections with a moderate discourse. As the Economist points out, the American poor were hardly mentioned in his re-election campaign. In 2010, 15% of the American population live below the poverty line (around 44% of the median income), well above the OECD average of 6% (see chart below). 

Anti-poverty programmes have allievated the impact of the crisis for the poorest 20% and helped consumer spending. Redistribution is not popular in Almerica, especially among Republicans who want to cut food stamps in order to reduce federal spending. Who defend the poor? Well, they don't have many lobbysts unlike banks or other industries. 

The "one dollar, one vote" result provides an explanation for the increasing difference in the size of the welfare state in Europe and the US. The rise of the rich's income in the US has in fact allowed the rich to increase their political influence and get policy issues closer to their interests which is to limit redistribution to the poor and reduce the size of the welfare State. As a result , poverty has increased at a faster pace and redistribution lagged compared to Europe.

In the mid-50s, a plutocrat, H.L.Hunt had proposed a 'one dollar, one vote' system which would allocate votes based on the voter's wealth and 'contribution to society'. Nowadays, there are more sophisticated forms to increase political influence through money.  This contrasts sharply with equality of opportunity which was at the heart of the American identity. One dollar, one vote is the failure of democracy

Thursday, November 1, 2012

Hunger Mystification

According to the latest report of the  Food and Agriculture Organization (FAO), hunger has declined by some 132 million over the last decade. This is, apparently, good news, though the situation still remains problematic with almost a billion of human beings lacking food to survive. In his presentation, the director general, José Graziano, former minister under the first Lula government and author of the Fome Zero programme, he stressed that the goal to reduce global poverty by half could be achieved by the end of the decade.

We need to get the facts right. Poverty - as the main cause of hunger -has diminished in the developing world, especially China and Brazil as a result of appropriate policies. But this has not been the case in India, or to a much lesser extent while sub-Saharian Africa and South Asia remain  the most affected areas by hunger and malnutrition.In fact, no one really knows how many people suffer from hunger. The statistics produced by the UN organization refer to 'undernutrition'.  As the graph below shows, the number of hungry people has increased since 1995-97 due essentially to three factors:  1) neglect of agriculture relevant to very poor people by governments and international agencies; 2) the current global economic crisis, and 3) the significant increase of food prices in the last several years which has been devastating to those with only a few dollars a day to spend.  

                                          Source: FAO

The target set at the 1996 World Food Summit was to halve the number of undernourished people by 2015 from their number in 1990-92.   The (estimated) number of undernourished people in developing countries  was 824 million in 1990-92. In 2010, the number had climbed to 925 million people, i.e. one out of seven in the world population. Most visible victims of hunger are children, especially in Asia

Overall, there has not been progress in meeting the global goal, although there has been progress in Asia and Latin and Central America. Hunger is caused by poverty as well as conflicts and 'harmful economic systems' where typically military, political and economic power controls most resources and income. In rural areas of Africa and Asia, women are also discriminated in relation to under-nutrition.The uprising in Arab countries have deep and complex roots, but hunger, under-nutrition and insecurity in the face of rising food prices  have triggered the revolts.    

Despite the efforts of the UN organizations, hunger and poverty are likely to increase due to the world economic crisis. The World Bank announced in its 2009 annual report that the number of poor people  (living with less than 2 dollars a day) will increase by 120 million. These forecasts have been confirmed: these millions of victims have added to the victims of structural hunger. 

The world produces enough food to feed everyone. According to FAO estimates, the world agriculture produces 17 percent more calories per person today than it did 30 years ago, despite a 70 percent population increase. This is enough to provide everyone in the world with at least 2,720 kilocalories (kcal) per person per day.  The principal problem is that many people in the world do not have sufficient land to grow, or income to purchase, enough food. But this is not a fatality : the right to be nourished is denied to hundreds of millions of people, especially children. As explained in his latest book by Jean Ziegler, the UN rapporteur for the right to food,  food is a weapon of mass destruction in the hands of powerful agents and speculators in search of profits. The priority is to act immediately and to protect the rights of poor farmers to secure enough food for their subsistance. 

As F.Roosevelt said in a speech to the US Congress, just a few months before he died: "We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. Necessitous men are not free men. people who are hungry and out of a job are the stuff of which dictatorships are made. In our day these economic truths have become accepted as self evident. we have accepted (...) a second Bill of Rights under which a new basis of security and prosperity can be established for all - regardless of station, race or creed"

P.S: Here is one example how we can empower local comunities to make them sustainable by providing enough food for everyone .The article written by Carlo Petrini (in Italian), the promoter of the Slow Food movement, concludes: "Uganda made me know only a further minimal part of an extraordinary humanity, that scattered around the world, achieves little big things in their local communities. This deserves to be known beyond any consideration or view: in front of the children of Bunanimi or Mulono, I have seen the entire Mother Earth, and I have never felt so small"