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Commentary

More demand shaping global reality

Marketplace Staff Jun 11, 2008
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Commentary

More demand shaping global reality

Marketplace Staff Jun 11, 2008
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TEXT OF COMMENTARY

Scott Jagow: Gas and food prices are a stressful problem in this country. But elsewhere, things have turned pretty ugly. In Spain, truckers are on strike over fuel costs. And so gas stations and grocery stores and car repair shops can’t get their shipments. Commentator Robert Reich says this is the new reality.


Robert Reich: The cost of food and fuel are soaring, not just in the U.S. but all over the globe. The world’s poor are suffering the most — culminating in riots and starvation — but price hikes are eroding living standards in advanced nations as well.

Everyone, it seems, is looking for scapegoats — international conspiracies, speculators, hoarders. But the main reason food and fuel prices are skyrocketing is demand for both is rapidly exceeding supply.

You see, hundreds of millions of people in China and India and the former Soviet republics are ascending into the middle class at a rate never before seen in history. And the two items this huge, rapidly-growing middle class want most are cars and meat.

That’s the problem. Cars use enormous amounts of fuel. And meat uses up enormous amounts of agricultural land, because animals that provide it require lots of feed grains. And supplies of both are limited.

This means global prices for fuel and food will continue to increase in the foreseeable future. And these increases are likely to generate the biggest threats to global peace.

Political pressures will mount on governments to protect their own nation’s sources of energy and food for their own citizens. Conflict will intensify over whether land should be used for biofuels or food production. Farm subsidies in advanced nations will come under increasing attack from developing nations.

Meanwhile, superpowers China, Europe, and America will compete ever more intensely for access to global supplies. And as more cars are used and more forests are cleared for agriculture, greenhouse gases will further shrink arable land.

The answer to all this lies mainly in increasing the supply of food and fuels. And both will depend on two kinds of green research — into more productive and sustainable agriculture, and into more efficient and sustainable fuels.

in other words, we’re in a race between a new generation of biotechnology and non-carbon-based energy technology, on the one hand, and rising political and economic conflict on the other. And the global clock is ticking ominously fast.

Jagow: Robert Reich teaches public policy at the University of California Berkeley.

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