By the Green European Journal
When headlines report shocks, whether war- or climate-related, this provides a context for price hikes on everyday goods. What is often overlooked, is the role financial speculation plays in dictating what consumers pay. These decisions, which escape legal and public scrutiny, can be impulsive, and fuel a sense of scarcity for the sake of profit-making. In this conversation, Price Wars author Rupert Russell explains the outsized role of financial markets in our current crises and why politics cannot afford to let them run wild.
Green European Journal: Looking around the world today, we see many signs of scarcity: wars and sanctions, energy shortages, heatwaves causing crops to fail… Is this scarcity at the root of the current cost of living crisis?
Rupert Russell: Amartya Sen famously said that all famines are human made. He points to a genuine shortage of food as the cause of certain famines in history that killed people on a horrific scale. But he also explains how, since the formation of modern markets and the global economy, local shortages no longer matter that much because almost all the world, except for some isolated regions, is plugged into global markets.
Sen’s point is worth keeping in mind when we see headlines around shortages and the cost of living crisis. In the US state of Mississippi between 2017 and 2019, 15 per cent of the population suffered from food insecurity. That means that they could not always afford to eat an adequate meal. Was this hunger caused by an absolute shortage of food? The answer is no. Price is the central prism through which we have to see modern poverty. The reason for food and energy poverty is simply that people cannot afford what they need.
Read the full interview with Rupert in the Green European Journal here.