Tag: manufacturing

He who doesn’t recognize he is in a race is bound to lose it.

Last week, this column warned of impending danger to the global food supply due to the benighted tandem of perverse technology and that stubborn perennial: greed. Global financial and agricultural combines now acquire vast tracts of land around the world, including Africa, displacing traditional farmers in their wake. Global companies claim this process will increase productivity and yields. It might increase corporate profit yields; the guaranty is bogus that overall food prices will diminish. For these companies to profit, the opposition effect on prices is more likely. Much of the world needs more food. However, slanted economics will reallocate that food and other agricultural outputs to countries already in surplus and away from the places and people most in need. The world bids fretful welcome to the 21st century face of that age-old scourge: starvation.

Ironically, haughty British PM David Cameron announced this week’s G-8 summit will devote a significant portion of its agenda to remedying world hunger. Taken in isolation, the announcement appears benign. Placed in full context, it looms as an act of aggression against weak, vulnerable people living in weak, vulnerable nations. Those of you who thought the high-brow Tory PM had located his heart might as well toss that fanciful notion into an abyss. The place where his heart should reside remains occupied by a lump of cold iron. The man is as estranged as ever from compassion.

His call to feed the foreign poor conflicts with his policy of snatching food from the poor at home. It is illogical to support the former yet seek the latter; thus Cameron’s foreign largesse is a contrivance. For him, charity should not exist at home and thus should not begin anywhere. His concern for feeding the alien masses is a front, the legerdemain of an insensitive manipulator skilled at doing the opposite of what he states. Instead of standing as the leading statesman of one of the world’s most influential nations, he acts as the pitch man for large business interests. In the hands of this man, the once-revered office of PM has been become the hired megaphone for business interests that slink about in the dark corners so as to avoid public glare yet control the backrooms where the important decisions are made in the today’s western democracies.

Cameron has no more interest in feeding the struggling African than he does in walking alone down the streets of Brixton. The key to Cameron’s ruse is his espousal of a “private sector” approach to the problem of hunger. What he means by private sector is not small- and medium-sized farms. A stampede of mammoth global firms is what he has in mind. At the G-8, Cameron will push for intensified foreign agro-business penetration of Africa. For him, this is a good thing. For the African, it is not good fare.

The large companies will control expanses of African land to sate the economic demands of western nations, all to the neglect of the needs of the people from whom the lands have been purloined.

Some African nations already cooperate in their own pillaging by implementing policies allowing the rapacious companies to seize vast portions of fertile land. Even more ominously, huge agro-businesses now do their best to nip inchoate African democracy and commercial agriculture in the bud just much the same as these large firms have atrophied democracy in western nations. They spend inordinate sums lobbying and enticing governments to enact laws inimical to the people they govern. At least one African nation, Mozambique, now considers a rather ominous twist of legislation giving preferred status to seeds produced by these large companies. This law will also prohibit the seeds most farmers traditionally have sown. If the issue were just seeds, it would be bad enough. The practical effect of the legislation far transcends the question of seeds. It mortgages the future of the small farmer.

Seeds produced by the large companies are not of the hardy variety that needs minimal care; they are not the stock on which small-scale farmers customarily rely because such seeds lower overhead costs and guarantee minimal yields. The seeds produced by these global firms demand payment of hidden costs because they usually require the use of relatively expensive inputs such as specialized fertilizers. In other words, the legislation will force low-end farmers to increase overhead expenses to purchase the fertilizers and other items required to bring these seeds to harvest.

This places farmers between the knife and claw, the tooth and nail. With their dilemma assured, their demise is preordained. Guided by the forlorn hope of having no other alternative, poor farmers first will borrow at exorbitant interest rates in order to pay for the seeds and related items. Descending into the swell of debt, many farmers will be forced to sell their land at distress prices to cover their financial obligations. If fortunate, they may satisfy the debt. But they will be farmers no more. They shall be landless and unemployed. Some will become indentured sharecroppers on the land they once owned. Others will wander — homeless, penniless, and unprepared — into the cities where they will merge into the rising dregs of the urban underclass. As this morbid process unfolds, farming and agriculture in Africa will be performed less by African farmers and will inure less to the benefit of the African public.

Africa is being larruped on two fronts. While the quiet, but effective, war against African agriculture walks relentlessly toward its mean objective, Africa’s future also is being compressed because it has not joined the global pursuit of manufacturing to which economically astute nations now adhere.

Manufacturing is to the city and the modern, dynamic economy what farming is to the countryside and traditional society. As a general rule, nations that manufacture the least are those that suffer the most. The 2008-09 global recession brought this lesson into clear focus. Sadly, Africa remains blind to the immutable fact standing before it.

A major objective of all G-8 nations has been to revive or expand their manufacturing bases to accommodate domestic consumption and export abroad. This is how they seek to maximize growth. They have relearned what past generations understood: Creating items of economic value is the key to sustained prosperity. The nation that exports finished goods, wins. The fewer finished products a nation exports, the more that nation knows the idleness of poverty and unemployment.

Thus, mature economies plot like mad schemers to devise ways of igniting their domestic manufacturing prowess. The austerity embarked upon by the EU and UK is not actually incorrect economic policy. It is the application of appropriate policy in pursuit of inappropriate, inhumane objectives. Conservative elites in Europe and UK have always detested the social welfare state. Now, they actively engineer its destruction. It affronts their sense of plutocratic entitlement to think that the struggling and poor should be entitled to a bit of assistance. The push to austerity also has a less visceral, yet equally misanthropic, secondary rationale. The EU was never meant to improve the lives of the bulk of the people. It was expressly fashioned to make the region a competitive trading bloc.

The elites love austerity because it produces unemployment in addition to cutting the benefits of the unemployed. This turns many into urban serfs so desperate for work or to keep work that they will accept even the lowest wage. Lowering wages is a key objective of the moneyed elites. By suppressing wages, they hope to make the EU the competitive international trade bloc of their dreams. They have made the conscious decision to tilt their region toward this international trade objective instead of making it a region more reliant on internal growth, demand and consumption that benefits all economic classes within the EU. To make the EU more competitive with China, the EU now lowers the living standards of the common people to make their lives more like the harsh lives of Chinese workers.

Meanwhile, China has embarked on a two-pronged policy aimed at maintaining its competitive edge. Domestically, it suppresses wages. One way it achieves this is through the westward expansion of manufacturing. Heretofore, development has been along the Pacific coast, concentrated in the massive cities in this region. Now, the government pushes economic activity inland where the bulk of the people reside. There are roughly a billion people still relatively untouched by the growth the nation has experienced the past two decades. China is now bringing the people of the hinterland into the mix. Tapping into this vast pool of rural labor, the nation will calibrate labor costs and wages in a manner allowing it to maintain its competitive trade advantage. Additionally, China will consciously keep its currency devalued, making its exports cheaper and thus more attractive to other nations.

Also, America has embarked on a sustained program of currency devaluation, making its products cheaper and more competitive in the world markets. America’s central bank, the Federal Reserve, has engaged in a policy called quantitative easing whereby it purchases bonds and other securities, thus putting greater amounts of currency into economic play. The principle objective of this policy is to boost asset prices in the United States. However, another conscious objective is a dollar devaluation making American manufactured products more competitive in the global marketplace. Also American businesses have been manic in squeezing labor costs and milking every ounce of productivity from the American worker without a commensurate increase in wage benefits. Again, a high unemployment rate is a boon to the elite. Again, the model used is an unbalanced model whereby the gains in manufacturing go to moneyed elite and these gains are achieved by undermining the economic lot of everyone else.

Africa stands idly watching this dynamic unfold. African nations are not making the timely adjustment to events and policies of these other nations. The EU canvasses African nations seek bilateral agreements that, in reality, will open Africa to European manufactured goods while maintaining Africa’s peonage as a source of cheap raw materials to further fuel western industry. Many nations have signed these agreements. They have consigned themselves to perpetual underdevelopment for a small stack of Euros that will rapidly disappear as the nations pay for the costly imports from Europe.

The fate of the continent’s economies, particularly its urban denizens, tilts in great jeopardy because of the lack of verve in government policy to establish manufacturing as the fulcrum of urban growth. Already our cities teem with the poor, the unemployed and with the social afflictions these conditions wrought. To understand the bleak future that looms should this dismal course persists, all Africa need do is to look at its brethren in urban America. America is the land of plenty but the black community is in the land but not really of it.

The black community is a place of higher want, depravation and the strife that such things bring. Fifty years ago, although poor, the black ghetto was not as unregenerate as it now is. Then, numbers of young black men gained employment in the bustling factories of their times. This introduced them into the labor force, taking them off the streets. It also introduced them to the hope of joining middle-class America. Over the intervening decades, through no fault of these people, the factories disappeared. With that, so did the economic hopes of many urban blacks. The ghettoes they inhabit have become super-ghettoes, a more virulently underdeveloped, decaying form of their prior selves. With the major chance of employment fading, cityscapes have transformed into urban tundra of joblessness, poverty and frustrated idleness that beget all forms of human mischief.

Living in isolated wastelands amidst a sea of plenty, the people of the super-ghettoes lack the requisite political cohesion and social accord to unite to dig them from the pit. Perpetual lack renders them mutually suspicious. It has them clawing against each other for the meager crumbs that fall their way. While a new era of industry and manufacturing may come to America, it will not visit these cities to revitalize them. Unless government launches a radical program of urban economic transformation, these people will become permanently invisible. Many black people will come to live forgotten, broken lives. They will survive in the urban equivalent of the destitute rural backlands known as the Indian reservation.

This is the plight of urban blacks in the land of plenty. Given the lowly overall state of Africa’s economic development, the fate of most African city dwellers will be even worse. It will be a turbid one of heavy penury unless we change course and do so quickly.

We must begin to understand the importance of manufacturing. First, it provides the jobs and related business needed to employ a large percentage of the people. This is not just about the creation of jobs. We must come to understand that true wealth lies in the creative process of using human ingenuity to forge a valuable item out of various ingredients so that the end-product is a greater thing than the sum of all its parts, if considered separately. Also, manufacturing creates a positive worldview. It helps people believe the political economy can expand and overcome its limitations. As such, the political economy ceases to be a zero-sum environment where one player always views another person’s gain as his loss. This change will engender greater cooperation, growth and, hopefully, democratic good governance.

In the end, mainstream talk of Africa experiencing an economic surge is the stuff a mountebank says when he is trying to fleece you. It is not so much that Africa is experiencing a great economic awakening but that foreign exploiters are experiencing a boom in Africa, at the expense of Africa. Agro-business now pinches the African farmer. Global finance and big business want Africa to eschew manufacturing so that it remains a supply depot of raw materials. If this is the best economic revival the world can offer the continent, then Africa should demand a refund for all the labor expended and misery endured at the wrong end of an unjust global political economy. The people deserve better.

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