It has been widely reported in
media that US President George W. Bush has blamed the ‘wealthy’ lifestyle of
India’s huge middle class for the spiraling global food prices. This statement
has invited more of political than economic comment.
The term middle class, sometimes, carries contradictory connotations, depending
on different factors, which define it. Its size depends on its definition. In
general sense, it comprises people with a degree of economic independence, but
not a great deal of social influence or power.
The West once advocated expansion of middle class to create a buffer, sufficient
enough to separate lower from upper classes, in economic terms, in order to
avert their direct clash. National bourgeoisie was admired. Some people,
however, describe bourgeoisie as the "middle class from a Marxist point of
view.” It was an intermediate social class between the nobility and the
peasantry of Europe. While the nobility owned the countryside, and the peasantry
worked there, a new mercantile bourgeoisie emerged in cities. In France, the
middle class helped the French Revolution. This term came to be used in the U K
during the Industrial Revolution to describe the professional and business
class, as distinct from both the titled nobility and the landed gentry on the
one hand and the laborers on the other.
In early industrial capitalism, middle class was identified primarily as
white-collar, compared to blue-collar workers. Then, number of pink-collar
workers increased, even if they were making far less money than a unionized
blue-collar worker. In US by the end of 20th century, more people were
identified as middle class than as lower or working class. Whereas, Marxism
defines social classes according to their relationship with means of production.
In some societies, between the rulers and the ruled, a group of people, is some
time called a middle class.
Although US continues the
rhetoric of clash of civilizations, Mr. Bush has chosen, apparently not without
political considerations, to divert attention from consequences of the war in
all spheres of world economy, to class differentiations.
For political reasons it is important to keep attention away from real causes of
increasing numbers falling below the poverty line, chronic poverty penetrating
deeper layers, and becoming more biased against women, children, immigrants and
those already down trodden, It is increasingly becoming inter-generational,
without a simple solution.
Poverty line, in Pakistan defined in terms of 2250 calories, can not improve
without improvement in food intake. If middle class numbers do not improve, it
means the numbers just above or below the poverty line are not improving.
“There are 350 million people in India who are classified as middle class.
That’s bigger than America. Their middle class is larger than our entire
population,” observed Mr. Bush. In other words, looking at American GDP, Per
Capita, and consumption indicators, American higher wealthier consumptive class
is almost about the total size of middle class of India, or about 700m people in
India constitute a lower class which is more than twice the total American
population.
Mr. Bush further observed: ‘‘And when you start getting wealth, you start
demanding better nutrition and better food. And so demand is high, and that
causes the price to go up.” This was immediately rebuked by India as “completely
erroneous.” Anyway, this observation completely ignores wasteful consumption of
wealthy nations.
Daniel C. Maguire, professor of Ethics at Marquette University, in his famous
book ‘Sacred Choices – Right to Contraception’ (pp.7,17-18) observes: “The 2.9 m
people of Chicago consume more than 100m plus people in Bangladesh…The UN
reported in 1992 that the richest 5th of the human race gets 82.7% of the
world’s income…the poorest 5th receive 1.4%...Most nations live beyond their
means. To consume the way they (people of Holland) consume takes the equivalent
of 14 Holland's!... It imports from the rest of the world.”
It is important to note that in recent statements from higher echelons in US,
increasing food prices are highlighted, and not shortages due to failures of new
world order imposed with highly explosive and expensive arsenal, straining
production and supply side of world economy. Earlier, Condoleezza Rice also
expressed similar views, that improving incomes and prosperity in India and
China were responsible for rising food prices. Other American officials also
indicated that people in these two countries were eating too much and a better
quality food, which has forced world food prices to go up, forgetting that
besides colossal wastage, major reason for obesity in the West is over eating.
There is a big gap in quality and quantity of food intake of the poor and the
rich. Daniel observes “”If the Chinese ate fish at the same rate the Japanese
do, it would take all the fish in the world to satisfy them.”
Talking of increasing food prices, rather than shortages, entangles
intelligentsia in debates over increasing costs of inputs, farming, market
mechanism, management, etc., etc., taking the heat off the core issue of real
causes of shortages, which can put some governments into great trouble.
Faith D'Aluisio and Peter Menzel in their article, ‘Food Crisis: A Full Plate
Today, Uncertainty Tomorrow,’ pursuing the same political path, say: “People in
the developing world are rioting over food prices, leaving dozens dead in some
cities, because there’s simply little or no cushion in a poor family’s finances
to afford even a minor increase in the cost of its food… Large swaths of
humanity can no longer be assured that the foods they’re eating today will be
available tomorrow at prices they can afford - or available at all. This is not,
in fact, as silent a tsunami as a World Food Programmed official suggested…”
Indian Congress party spokesman, Manish Tewari, however, blames that “diversion
of arable land in the developed world for ethanol production and changes in the
climate pattern led to the crisis.”
Food prices are directly affected by energy and transportation costs. Oil price
has already crossed $130 a barrel, soaring wheat, rice and soya bean prices.
Furthermore, the relationship between the oil price and the exchange rate of
dollar and euro also plays its part in this petro-euro-dollar drama, in which US
identifies Iran in villain’s role for swapping with euro.
There is very strong correlation between commodity prices and dollar exchange
rate. According to Nick Parsons, every time dollar has weakened, hedge funds
have bought commodities, because commodities are priced in dollar; when it is
falling, producers outside America raise prices to compensate.” In fact, Mahatir
Muhammad has since some time been warning against dollar vulnerability and
consequences for world economy.
When economic conditions are tough, commodity prices normally fall, but as the
financial crisis has deepened, they have been rising. For this strange
phenomenon, Larry Elliott, in ‘Rising Food Prices,’ points out that “short-term
effects of a looming recession are being outweighed by longer-term threats to
supply… Similarly, turning land used for food over to crops for biofuels may
have something to do with the 120 per cent increase in the cost of wheat and the
75 per cent rise in the price of rice over the past year.”
Larry, further, opines: “American policymakers seem quite content to let the
dollar fall, since a depreciating currency makes exports cheaper and the
European Central Bank sees a rising euro as a bulwark against the inflationary
pressures caused by higher commodity prices, since a stronger currency makes
imports cheaper.” He goes on to conclude ”… there needs to be a leap of faith.
Until we get it, the headwinds facing the developed world will grow stronger.
And the poor will get hungrier - and angrier.”