The United Nations’ Food and Agricultural Organization, through its Food Price Index, tells us that “the wholesale price of basic foods” jumped “to a record high in January.” Observing the effects of “increasing demand in emerging economies,” BBC News reports that World Bank president Robert Zoellick entreats “world leaders” to confront the food quandary.
Since, as the BBC story points out, political turbulence in Northern Africa and in the Middle East has been imputed largely to “the high price of food,” it would seem that on some level governments have an interest in mitigating prices. And while it’s certainly true that the pursuits of the state are the predominant influence on and root of the prices we actually contend with today, it is not for a paucity of state interferences that consumers are suffering.
Though it conflicts sharply with what the modest citizen is indoctrinated to believe about the state’s correspondence with economic activity, government “leaders” aren’tt scrupulously crunching the numbers to cushion the consumer from the harsh fickleness of the free market. Contrary to the myth that bureaucrats and politicians must intervene constantly just to stave off all-out economic calamity, they are, in reality, entirely responsible for the high prices they are entrusted to “correct.”
The state, the institution that Gustave de Molinari called the “monopoly [that] has engendered all other monopolies,” is the nerve center for elite interests. As such, its primary motivation, even without focused or streamlined premeditation, is to confine valuable resources like food commodities with the aim of creating occasions for completely unwarranted, extra profit. Quite the opposite of a glitch or complication that the supposedly commonsensical state is solicited to remedy, high prices are indeed the object of the game.
In explaining the monopolized economy, Murray Rothbard noted that cartels squander goods, engaging in economic “destruction” in order to manhandle price and stiff consumers. “The waste,” instructed Rothbard, “lies in the excessive production of [some state-anointed goods] at the expense of other goods that could have been produced” (emphasis in original). He warned of the economic volatility inherent in supplanting the “evenly rotating economy” of free and nonviolent exchange with the cartel practice of “restricting production” to serve elite interests.
The political class, by caching away everything of value without ever owning it in any legitimate way, is allowed to levy taxes that we never see, penalties embedded in the high prices we pay. Many of the scarcities that provide the basis of the high tolls exacted on us are not the result of any kind of market process, but are shortages created by the state. As Kevin Carson has frequently argued, our added costs — the spoils of state capitalism — result from “the State’s intervention to create market entry barriers.”
The inefficiencies and rents explained by Rothbard and Carson are not congenital features of freed markets; they are attributes instead of an economic system in which the state, rather than the unimpeded judgment of individuals, picks the winners through subsidies and a regulatory regime that flattens anything but the most ponderous economic arrangements. Among the central contentions of free market anarchism is that, in a true free market, labor is valuable enough to enable the common man to manage quite well without the kind of slogging required to line the elites’ pockets today.
In his dystopian classic Nineteen Eighty-Four, George Orwell wrote that “the economic … basis for a hierarchical society” is “to waste the surplus labor of the world.” And it’s that waste that the lucre of ruling class is built upon, that is reflected in, for instance, the U.S. government’s fortification of Big Agribusiness.
By forming an economy where neither price nor levels of production are tied to real, market needs, the state has created a needless struggle just to subsist. The way out is repudiation of the state’s arbitrary power to allow monopolists to divvy up our sustenance. Freed markets return that power to communities of individuals dealing with each other within voluntary agreements, the only legitimate way to allocate scarce resources.
