There Goes the Washington Consensus

The International Monetary Fund warns that spiraling food inflation threatens the survival of 100 million people; the World Bank warns that it could bring down some 33 governments. As I wrote on TIME.com last week,

The sociology of the food riot is pretty straightforward: The usually impoverished majority of citizens may acquiesce to the rule of detested corrupt and repressive regimes when they are preoccupied with the daily struggle to feed their children and themselves, but when circumstances render it impossible to feed their hungry children, normally passive citizens can very quickly become militants with nothing to lose. That’s especially true when the source of their hunger is not the absence of food supplies but their inability to afford to buy the available food supplies. And that’s precisely what we’re seeing in the current wave of global food-price inflation. As Josette Sheeran of the U.N. World Food Program put it last month, “We are seeing food on the shelves but people being unable to afford it.”

When all that stands between hungry people and a warehouse full of rice and beans is a couple of padlocks and a riot policeman (who may be the neighbor of those who’re trying to get past him, and whose own family may be hungry too), the invisible barricade of private-property laws can be easily ignored. Doing whatever it takes to feed oneself and a hungry child, after all, is a primal human instinct. So, with prices of basic foods skyrocketing to the point that even the global aid agencies — whose function is to provide emergency food supplies to those in need — are unable, for financial reasons, to sustain their current commitments to the growing army of the hungry, brittle regimes around the world have plenty of reason for anxiety.

The reason for this food crisis is the current structure of global inequality (as someone noted recently, the rich demand fuel for their SUVs, turning farmland to biofuel production at the expense of food needed by the poor) combined with the basic Malthusian reality of scarcity: The very spread of capitalism in previously closed economies such as India and China has spurred rapacious demand for oil and natural gas (whose price rises have an inflationary effect on food prices), and the emergence of a middle class pretty much the same size as America’s, who are not only seeking cars and appliances, but are also eating more meat — and producing a single calorie of meat protein takes seven to 12 calories of grain, which has dramatically increased inflationary pressure on grain prices.

The interesting thing, though, is that solving this particular crisis will require that the World Bank and IMF abandon the economic orthodoxy that they imposed globally during the 1990s — the “Washington consensus,” that frowns on things like government spending on feeding the poor.