Deflation and the food crisis

Millions of people around the world, particularly in the industrial societies in the North, are being laid off and, consequently, loose income for a proper standard of life. Costs for essentials such as food, shelter, health become increasingly burdensome, particularly if unemployment insurance runs out.

Macro-economically this situation leads to a reduction in purchasing power which in turn leads to more layoffs in manufacturing and services, which in turn leads to deflation, the harbinger of a recession or even a depression.

It goes without saying that deflation will greatly increase the 854 million persons who suffer from hunger in the early years of the new century. Though food prices may come down in the near future on account of the deflation of economies in the global North and South, these hungry fellow citizens are still caught because their deepening poverty prevents access to these cheaper food staples.

It can be anticipated that more food riots will place, that more ecological damage will be done by people, particularly in the South, who try to survive.

This contextual sustainability blog has answers to address this completely unacceptable situation.

It has pointed out several times that a value-based overhaul has to take of the overall global economic system that enriches the few, impoverishes the many and endangers the planet. This overhaul has also to take place to counter the economic concentration in national, regional and local communities.

This overhaul or revamping of economic systems on all these interconnected levels is to start with the abandonment of the growth illusion where the creation of a larger pie is pursued without the consideration of its impact on the distribution of the pie. It is the challenge to balance growth and equity. Basically, the struggle between the two US presidential candidates which will be decided in two days by the American people is a struggle between “creation of the pie” and the “distribution of the pie”. Today, my spouse Anita Wenden and I will be driving to Philadelphia to knock on doors for Obama’s choice of equity over growth or equitable growth..