The Memory Bank

Introduction: the problem of development

All the above authors assumed that development starts, if at all, in a rural world dominated by agriculture, that the economy becomes more differentiated with the growth of towns and that commerce activates exchange between the two. If that is what development is, why is it so difficult today to bring commerce and division of labour to feed the poor countries of our world? After all, half of humanity now lives in cities and, in the twentieth century, even the most backward regions experienced massive urban growth. What did Arthur Lewis mean when he said that, in order for poor countries to develop by the traditional method of domestic rural-urban exchange, it would take nothing less than a world revolution? I will approach this question first through an anecdote (Ottawa, 1982):

There are several characteristic features of this story. Inappropriate aid projects geared more to offloading surplus industrial products than to local needs. The idea of paddy rice cultivation as a step forward for Africa. State subsidies to western farmers, but not to their poor counterparts. The threat of the urban mob being stronger than that of the peasantry. Weak governments obliged to feed their cities at the lowest cost, that is with subsidized western food. The power of western farmers as a political lobby in their own countries. The ineffectiveness of aid bureaucracies. A skewed world market for food. And so on. The result is that farmers in places like Mali cannot compete with foreign suppliers of food and the development of rural-urban exchange there is thwarted. Commerce does not come to feed the inhabitants. How did all this come about and what is needed for it to be changed? Here I will take a long view of the problem in order to throw light on the pathologies of a world society growing more unequal even as humanity has potentially solved the question of food supplies for the first time.

We stand poised between agrarian civilization and the machine revolution (Hart 2001). Failure to use technology to make a decisive break with unequal society will ruin us all. We live by a rhetoric of modernity, where democracy and science hold sway. But in reality we are like the first primitive farmers using digging sticks on the way to inventing an agriculture whose potential they could not yet understand. For 5,000 years, the Eurasian land mass was dominated by urban elites ruling agricultural societies. In the last 200 years, the human population has increased six times and the rate of growth of energy production has been double that of the population. Many human beings work less hard, eat better and live longer today as a result. Whereas about 97% of the world’s people lived under rural conditions in 1800, half of humanity lives in cities today. This hectic disengagement from the soil as the chief object of work and source of life was made possible by machines, converters of inanimate energy for useful purposes. Before 1800 almost all the energy at our disposal came from animals, plants and human beings themselves. In the process, we have brought humanity together into a much more integrated social network.

World population doubled between 1960 and 2000 (from 3 bn to 6 bn). Countries like France, Japan and Italy were still half peasant in 1945, but by the millennium agriculture accounted for less than 10% of the workforce in all the rich countries. Most of the increase in the world’s urban population after 1945 took place in the poor countries. Food production was fully mechanized for the first time and the world now ate the produce of a few heavily subsidized western farmers. By the end of the century half of the 100 largest economic units on the planet were business corporations, 35 of whom had an annual turnover ($30-50 bn) greater than the GNP of all but eight countries. If the world became a single interactive network in this period, it was mainly as a network of markets on which everyone’s livelihood now depended in some degree.

Increased human connection has gone hand in hand with escalating inequality. According to the United Nations Human Development Report (UNDP 1998), the world’s 225 richest men then owned more than a trillion dollars, the equivalent of the annual income of the world’s 47% poorest people. The West spent $37 bn a year on pet food, perfumes and cosmetics, almost the additional cost of providing basic education, health, nutrition, water and sanitation for those deprived of them. The rate of car ownership in industrial countries was 400 per thousand, 16 in all developing countries. World consumption increased six times in 20 years; but the richest fifth accounted for 86% of it. Almost half the world’s people live on less than $2 a day.

Disparities of life experience on the planet are vast. The rich countries, the OECD club that includes North America, Western Europe and Japan, accounts for about 15% of the world’s population. The rest must reconcile their relative poverty with an unfinished history of racism, a hangover from the nineteenth century when westerners used their new machines to take over the globe. Over a third of humanity still works in the fields with their hands; a similar number have never made a phone call in their life. A remote elite of white, middle-aged, middle-class men, “the men in suits”, rules masses who are predominantly poor, dark, female and young. The rich countries, who can no longer reproduce themselves, frantically erect barriers to stem the inflow of migrants forced to seek economic improvement in their midst. In most respects our world resembles nothing so much as the old regime in France before the revolution (Hart 2002).

How could that be? The form of emergent world society is not yet disclosed to us, but the reason it is so unequal stems first from the role of agriculture in human evolution and from agrarian civilization in particular; then latterly from the social forms that emerged to control the machine revolution from the top — public and private sector bureaucracies linked by a culture of nationalism. Now there is an attempt to restore classical liberalism as the foundation of world economy; but this favours strong actors over the weak. An earlier mercantilist model of development (Vaggi and Groenewegen 2003) provides a more plausible framework for thinking about global economic realities today. Who provides for the losers in an unequal competition? We need a political economy of food that protects the interests of the weak for the general good. National solutions to economic disaster in mid-century, such as the New Deal and Keynesian macro-economics (Keynes 1936), should be adapted to the scale of world economic problems today. But the hybrid entity that still dominates our world, the nation-state, along with the giant corporations that have flourished under a regime of state capitalism, pose immense difficulties for the achievement of a more equal world society.

Agriculture in human evolution

In his Discourse on the Origins and Foundations of Inequality among Men (1754) Jean-Jacques Rousseau was concerned, not with individual variations in natural endowments, but with the artificial inequalities of wealth, honour and the capacity to command obedience that he derived from social convention. In order to construct a model of human equality, he imagined a pre-social state of nature, a sort of hominid phase of human evolution in which men were solitary, but healthy, happy and above all free. This freedom was metaphysical, anarchic and personal: original human beings had free will, they were not subject to rules of any kind and they had no superiors. At some point humanity made the transition to “nascent society”, a prolonged period whose economic base can best be summarized as hunter-gathering with huts. This second phase represents his ideal of life in society close to nature.

The rot set in with the invention of agriculture or, as Rousseau puts it, wheat and iron. Cultivation of the land led to property institutions whose culmination awaited the development of political society. The formation of a civil order (the state) was preceded by a Hobbesian war of all against all marked by the absence of law. He believed that this new social contract to abide by the law was probably arrived at by consensus, but it was a fraudulent one in that the rich thereby gained legal sanction for transmitting unequal property rights in perpetuity. From this inauspicious beginning, political society then usually moved, via a series of revolutions, through three stages.

This subversive parable ends with a ringing indictment of economic inequality which could well serve as a warning to our world.

Surely the stale odour of corruption that so revolted Rousseau is just as pervasive today.

The force propelling humanity to a new relationship with the natural world is the use of machines as converters of inanimate energy sources. From a modern perspective, human history seems to be divided into three periods — our own two centuries of mechanization, the ten millennia when agriculture dominated world production and the vast tracts of prehistory before we settled down on the land. Until very recently all economic activity rested on harnessing the energy stored in plants and animals, including the work of human beings themselves (energy fuelled by consuming plants and animals). Other inanimate energy sources — water, wind, fossil fuels — and machines driven by them made a negligible contribution. The significance of agriculture lies in the way it changed the balance of human to non-human sources of animate energy deployed in production. Before the invention of agriculture, human beings conserved their own efforts by letting plants and animals do most of the work involved in bringing products to the point of consumption. They moved to the locations where these sources grew naturally, leaving only the tasks of collection and processing to be performed by human labour. People who live this way today (“hunter-gatherers”) allow large spaces to accommodate small mobile bands and the food quest does not seem to absorb very much of their time. Marshall Sahlins (1972) has called them “the original affluent society”, rich in leisure because they limit their material wants.

Agriculture is perhaps best thought of as a system of food production in which the growth of plants and animals comes increasingly within the control of human beings. Human work is progressively substituted for natural processes of reproduction. By settling down in one place, human communities are obliged to protect animals and plants from threats to their well-being. The resulting pattern of irrigation, pest-scaring and weeding involves an intensification of labour inputs with diminishing returns. That is, people have to work harder for proportionately less reward. This logic of development through intensification of labour would not be freely chosen by producers themselves; and indeed society came to be polarized between the powerful beneficiaries of this system and those who did most of the work. This lent to agriculture a dynamic of inequality that eventually reduced the bulk of the population in most advanced centres to a life of coercion and servitude (slaves and peasants working under varying degrees of unfreedom). Thus the richest civilizations of the world in the late eighteenth century, Western Europe and China, rested on peasantries that could barely stay alive. Chinese peasants were once compared to people standing in a lake with the water fractionally below their noses: the merest ripple and they drown. This was also the time when Robert Malthus (1798) developed a theory of population for Europe in which life and death were regulated by short-term fluctuations in the food supply.

Because we are used to the neat hedgerows and paddy fields of “civilized” agriculture, it comes as something of a shock to learn that the untidy confusion of so-called “swidden” agriculture (shifting cultivation of plots often undertaken in semi-cleared forest by tribal peoples) conceals much higher levels of labour productivity, since so much of the work involved is left to natural regeneration and the amount of protection required is less (Conklin 1957). When peasants work for absentee landlords, the emphasis is on maximizing yields from the land area owned, regardless of the drudgery involved in its cultivation. It is a long way from the neolithic revolution (the expulsion from the Garden of Eden) to China’s half-drowned peasants. Yet the contrasts of pre-industrial civilization, with splendid urban enclaves erected on the backs of impoverished country-dwellers, are entailed in the origins of domestication. The social forces necessary to bring animals and plants within a sphere of human regulation were also deployed to compel some parts of the population to work harder than their own immediate reward would justify. It took time; but eventually what we take to be civilizations were built on the systematic neglect of the interests of large sections of the workforce.

This argument has obvious affinities with Rousseau’s. Like him, I locate the turning point of human history in agriculture as a mode of production. I also join Marx (1867) in supposing that the mechanization of production holds out some hope for humanity. For the machine revolution introduced the possibility of releasing us all from the drudgery of village life, even if, as Marx showed, its immediate consequence was to make matters even worse for many workers. Nevertheless, increased resort to mechanical converters of inanimate energy did reverse the direction of the agricultural regime. Now human beings were able to produce much more for less work; more abundant means have been generated with less back-breaking toil. It is hardly surprising that peasants worldwide have voted with their feet to join the life of greater freedom afforded by machine production in cities. At first, mechanization was almost exclusively an urban phenomenon and slow to penetrate agriculture. In fact people were initially displaced from farming in Britain by horses. Animals also dominated many sectors of transport throughout the nineteenth century, giving rise to the term “horsepower” as a measure of a machine’s strength. Only since 1945 have machines reorganized agriculture in some parts of the world. The pursuit of human freedom, the idea that society is set on a course of material improvement, the rise of modern personality and of subjectivity itself — all this is reinforced by the substitution of inanimate energy sources for human labour.

Agrarian civilization and national capitalism

We think of agricultural societies who lack rulers as egalitarian. The majority of them are based on kinship and they only look equal because of the extremes typical of agrarian civilization. Usually age and gender stratify societies organized through kinship, so that older men control the labour and products of women, young men and children (Meillassoux 1981). About half way through agriculture’s dominance of the human economy, some 5,000 years ago in Mesopotamia, there occurred what Childe (1954) called ‘the urban revolution’. Small town-like settlements, such as Jericho and ‚atal Huyuk, appeared in the Middle East almost as soon as the invention of agriculture. But here, in the lands between the two great rivers, the Euphrates and the Tigris, genuine cities emerged and with them a complex of institutions that we think of as constituting ‘civilization’. The majority of people still produced food on the land, but in the new urban settlements and in great houses scattered through the countryside a wholly different lifestyle developed. This involved centralized government, the state and bureaucracy, writing, long-distance trade, markets using money, a complex division of labour, a priestly class and temple organization, landlordism, more elaborate buildings and art — all of it sustained by the transfer to the main centres of agricultural surpluses generated by more intensive technologies, notably the plough and irrigation. The inequality that separated luxurious urban elites from the drudgery of the rural masses became culturally formalized as class distinctions and reproduced through exclusive patterns of kinship and property transmission (Goody 1976).

The leading societies of Europe, the Mediterranean and Asia all grew out of this invention of agrarian civilization and took its original form. Africa South of the Sahara apparently missed out on these developments, even though the continent’s Northern fringe was one of the first areas to adopt the new institutional package. Childe got the basic framework for his urban revolution from L.H. Morgan’s Ancient Society (1877) which some have seen as the origin of modern anthropology. This was made more widely accessible by Engels as The Origin of the Family, Private Property and the State (1884). But the source of this ‘anthropology of unequal society’ is still Rousseau.

The history of agrarian civilization hinged on the changing balance of power between city and countryside, that is, on whether military control of the land or money gained from water-borne trade predominated. The struggle for political supremacy between warrior aristocracies and maritime merchants, between property in land and property in money, countryside and city, lasted a thousand years in the ancient Mediterranean ? from the Assyrians and Phoenicians, through the Persians and Greeks, the Peloponnesian war and Alexander’s conquests, until the Romans, in defeating Carthage, made their world safe for landlords for almost another two thousand years. In that period, all the main Eurasian civilizations ensured by various means that money and markets were kept at the margins of mainstream society (Polanyi 1944, M. Weber 1981). And this was particularly so in feudal Europe, where rural illiterates almost destroyed the cultural legacy of ancient civilization. Starting with the Italian Renaissance and the Northern Reformation, Europe’s urban middle classes began a sustained drive to replace this rural society with one reflecting more closely their own interest in commerce. This culminated in the political and intellectual revolutions of the seventeenth and eighteenth centuries. The new science of political economy, inaugurated by Adam Smith (1776), sought to demonstrate that the wealth of nations would grow if revenues were diverted from rents to profits, that is from the courts of aristocratic land-owners to democracies informally dominated by owners of money, capitalists.

This middle-class revolution looked poised for a decisive victory over agrarian civilization, when its nineteenth century offspring, industrial capitalism and the nation-state, combined to subvert its original liberal premises. Perhaps the last authentic expression of the liberal revolution was the free trade movement in Britain, culminating in the 1840s. A wide coalition of capitalists and popular interests, based on Manchester, successfully mobilized to change the corn laws that had hitherto protected British landlords. In the process the Tory Party was split and food prices fell in the face of cheap foreign imports. At this time workers’ wages were so closely tied to their food needs that the price of wheat was taken to be a good proxy for labour costs. But the concentration of machine production in a few large cities raised unprecedented problems of crowd control for the traditional rulers. And the capitalists themselves were made sharply aware of the threat posed by both disaffected workers and the “dangerous classes”, criminal gangs who lived in the city largely beyond the law (Asbury 1927).

In the mid-nineteenth century there was almost no intellectual support for the idea that the state could control commercial society. The restless energies of vast crowds, of cities, markets and machines, could hardly be directed from a fixed central point, in the way that small urban elites had extracted surpluses from the slaves and serfs of dispersed agricultural societies. Had not political economy shown that decentralized market economy was a force for development superior to the dirigisme of monarchs and their courts? Yet there was already an uneasy accommodation between capitalism and the traditional powers. And, faced with an ungovernable urban workforce, the middle classes thought again and committed to a more whole-hearted alliance with the representatives of agrarian civilization. It is hard to overstate the significance of this shift, a genuine counter-revolution against the principles of the liberal revolution, especially since the hegemonic ideology remained more or less the same.

The grounds for this new phase were already prepared by the rising tide of nationalism. Perhaps as a reaction against the speed of political and technological change induced by the French and industrial revolutions, European societies began to embrace a national logic. Nationalism was an escape from modern history, from the realities of urban commercial life, into the timeless rural past of the Volk, the people conceived of as a homogeneous peasantry, living in villages near to nature, unspoiled by social division, the very archetype of a community bound together by kinship. It reflected a dominant worldview that has the whole of humanity pigeonholed as separate tribes, each the owner (or would-be owner) of a hybrid entity, the nation-state. In the eighteenth century , before we began to think of ourselves as nations, western intellectuals compared their societies with the city-states of the ancient world (Thom 1995). Now they fabricated myths of their own illiterate ethnic origins in primeval forests. This cultural move prepared the way for a new class alignment in which the values and lifestyle of rural aristocracies gained new legitimacy alongside the modern movement to embrace money, markets and liberal democracy.

Capitalism always rested on an unequal contract between owners of large amounts of money and those who make or buy their products. This contract depends on an effective threat of punishment if workers withhold their labour or people fail to pay what they owe. The capitalists cannot make that threat alone: they need the support of governments, laws, prisons, police, even armies. Perhaps Karl Marx’s most vivid contribution to our understanding of the modern world was his characterization of capitalism as feudalism in drag, with the owners of the means of production still extracting surplus labour from workers under threat of coercion. By the mid-nineteenth century it became clear that the machine revolution was pulling unprecedented numbers of people into the cities, where they added a wholly new dimension to traditional problems of crowd control. Capitalists and the military landlord class now joined together to form states capable of managing industrial workforces, that is, to keep the new urban masses to an unequal labour contract.

This was a stark reversal of the opposition between capitalists and landowners that had fueled the liberal revolution in the 17^th and 18^th centuries. Through a series of linked political upheavals in the 1860s (of which the greatest was the American civil war) all the leading nations in the century to come acquired the institutional basis to control industrial capitalism from the top. Bureaucracies were formed to manage public life and private production. Mass production and consumption shaped new national societies. The majority of the middle classes abandoned their predilection for commerce in order to staff the professions. Out of this compromise between agrarian civilization and the machine revolution came renewed imperialism and the terrible destruction of the twentieth century’s wars. The world economy was still in its infancy: in 1870 the share of GNP attributable to international trade was not more than 1% for most countries (Lewis 1978).

I call the phase of world society inaugurated by the revolutions of the 1860s ‘national capitalism’, the attempt to manage markets and accumulation by means of central bureaucracies. Germany and Japan provided the clearest examples of this new pattern. It became general as a result of the first world war and it may or may not be decaying in the face of globalization today.

Despite a consistent barrage of propaganda telling us that we now live in a modern age of science and democracy, our dominant institutions are still those of agrarian civilization — territorial states, embattled cities, landed property, warfare, racism, bureaucratic administration, literacy, impersonal money, long-distance trade, work as a virtue, world religion and the nuclear family. This is because the rebellion of the western middle classes against the old regime that gave us the scientific revolution and the Enlightenment, as well as the English, American and French democratic revolutions, has been co-opted by state capitalism and, as a result, humanity’s progressive emancipation from unequal society has been reversed in the last century and a half. The myopia of nationalism prevents us from seeing how contemporary world society replicates the old regime from which the liberal revolutions were supposed to have emancipated humanity.

Africa is the most poignant symbol of this unequal world. Having entered the twentieth century with an extremely sparse population and next to no cities, Africans leave it having undergone a population explosion and an urban revolution of unprecedented speed and size. In 1950 Greater Europe (including Soviet Central Asia) had twice the numbers of Africa. Today Africa has a population 120 millions larger than Europe and Central Asia and is projected to be well on the way to double their size by 2010. Although the conventional image of Africa is of starving peasants ravaged by war and AIDS, the new social reality is burgeoning cities full of young people looking for something to do. It is the case that Africa largely missed out on the first and second stages of the machine revolution and is far behind in the present one associated with digitalization. Today development there as likely as not consists of irrigation and ox-plough agriculture. In other words, Subsaharan Africa, especially in the last half-century, has been going through Childe’s urban revolution, erecting state bureaucracies and class society on the basis of surpluses extracted from the countryside. This is not without contradiction, given the pretensions of modern governments, the rapidly expanding population and the widespread failure to mechanize production. (Hart 1982)

The USA and Britain recently invaded Iraq which is of course another name for Mesopotamia. The irony of state capitalism battling to control the original home of agrarian civilization was missed by most commentators. The struggle to displace agrarian civilization from world society is not yet won because state capitalism incorporated its main features into what had been until then the middle class revolution against the old regime. Consider what happened to all the wealth siphoned off as taxes by western states since the second world war, the largest concentrations of money in history. It went on subsidizing food supplies and armaments, the priorities of the bully through the ages, certainly not those of the urban consumers who paid the taxes. No, as Bruno Latour (1993) says, we have never been modern. We are just primitives who stumbled recently into a machine revolution and cannot yet think of what do with it, beyond repeating the inhumanity of a society built unequally on agriculture. This is why agriculture must lie at the core of any strategic attempt to bring about general economic development and world peace.

The mercantilist model of development in a liberal world economy

Sir James Steuart was a Jacobite exile who brought the term ‘political economy’ from France into the English language. His book (1767) was published less than a decade before his countryman’s Wealth of Nations (Smith 1776) and was quickly overshadowed by it. But Steuart’s mercantilist model of economic development was more subtle than Smith’s and in many ways more realistic. He was convinced that the successful transformation of an agricultural society required a benevolent and effective state. Conditions in the poor countries today are closer to the economic structures of pre-industrial Europe than to modern western economies. For Steuart the problem was how to get some farmers off the land so that they could generate demand for commercial foodstuffs supplied by those who remained behind. This meant migration to the city. People complain, he said, about the urban riffraff in Edinburgh and Glasgow; but, as long as this riffraff can exist by any means (we might say, through the ‘informal economy’, Hart 1973), they provide a market for the country’s food farmers. With the money they earn from these sales, the farmers in turn generate demand for the manufactures and services produced in the towns. Rural-urban exchange based on division of labour is the motor of development. But getting there is not easy.

Steuart observed that economies of the sort he was familiar with prospered under a regime of high food prices. These stimulate the bulk of producers, the farmers, to realize a portion of their output as commodities. They need a market of local consumers, protected from cheap imports, and the money they earn will be spent on the products of local industries, provided that they too have some respite from foreign competition, so that they can afford the relatively high costs imposed by local food prices and by their own inexperience. This protected exchange of agricultural and industrial products was necessary in order to generate a dynamic commercial division of labour in a country whose economy was initially backward and stagnant. When the infant commodity-producing sectors grew stronger, they could be exposed to the downward spiral of prices and costs that Adam Smith made so much of, a spiral thought to accompany laisser faire conditions of international competition. Then the cry would legitimately be for low food prices, thereby reducing the cost of local wage labour and enhancing the competitiveness of some local firms in world markets. This transition is very hard to achieve; but it begins with high agricultural prices. A similar principle underwrote food policy in post-war Europe, but here vast tax surpluses were available to subsidize prices.

Classical liberalism downplayed the protectionist role of states in promoting a system of free trade that encouraged each country to specialize according to its comparative advantage (Ricardo 1817). But state capitalism led to a synthesis of these two positions, with the big powers competing under the umbrella of a gold standard imposed on world trade by Britain. For a century after the victory of the free trade movement, Europe — and especially Britain — was fed by the temperate lands of new settlement. But the second world war interrupted Atlantic sea lanes and devastated the granaries of the East. Starvation was commonplace during and after the war. It is sometimes forgotten that an organization like Save the Children was originally saving European children. The Marshall Plan restored food supplies to some extent; but, when the Western Europeans began to form an economic and political union, regional food security came first on the agenda. The Common Agricultural Policy has notoriously absorbed the bulk of the European budget ever since. The result of so much public money being thrown at farmers was predictable — the mountains of unsold butter and corn that are from time to time dumped at giveaway prices on the world market. These subsidized food surpluses were augmented by the coming at last of the machine revolution to agriculture — not just mechanization, but pesticides and genetic engineering, culminating in the notorious GMOs. What had still been largely a peasant activity in 1945 now became a hi-tech industry combining large amounts of capital with a dwindling, but highly productive labour force.

The farmers also revealed themselves to be a particularly effective political force, blocking ports with their equipment and lighting bonfires on motorways. They gained legitimacy as the embodiment of the countryside’s distinctive way of life on which national ideology drew so heavily (Gellner 1983). In consequence, despite the overwhelming demographic majority of urban consumers in the rich countries today, the farmers’ share of the public purse has been almost untouchable for the last half-century, distorting domestic political economy and, of course, world food markets. They were joined there by the Americans, the Canadians, the Australians and the other countries who fed Europe in the second half of the nineteenth century, but who now had to find other customers, given Europe’s new self-sufficiency in food. Here too the combination of public subsidy and mechanization, allied to the vast open spaces of the prairies, supported a revolution in production that translated into cheap food. Well-publicized famines in the Third World made it seem almost an act of charity to dump food there. Whether sold or donated, cheap food from the West has repeatedly frustrated the development of commercial agriculture in poor countries by pricing local farmers out of the market.

In the nineteenth century, the growth of cities closely followed industry (A. Weber 1899). But recent urbanization in much of the Third World has taken place without substantial industrialization. Instead the concentration of public expenditure in a few large centres of government has drawn massive crowds out of a depressed agriculture. Steuart’s urban riffraff can now be counted by the millions and they do sustain themselves in the city, largely by informal means. Here then is the opportunity for the commercial food producers of the hinterland. All that is needed is a temporary regime of high agricultural prices for a classical rural-urban exchange. But food is already available from overseas at giveaway prices. The governments are weak and dependent on foreign creditors, so they have no chance to play the benevolent far-sighted role envisaged by Sir James. They cannot protect their own farmers because Western farmers are so heavily protected. And that includes especially international trade negotiations, where conflict between the Europeans and Americans over food markets is endemic and the interests of the rest are largely neglected.

Arthur Lewis (1978) makes a plausible case that the twentieth century world economy was constructed as an order of racial inequality in the decades leading up to the first world war. At this time, fifty million Europeans (“whites”) left home to settle the temperate zone, while a similar number of Indians and Chinese (“coolies”) were shipped to the tropical colonies as indentured labourers. These two streams of migrants had to be kept apart since, although their work was often similar, Europeans were paid nine shillings a day on average and Asians received an average of one shilling per day. In those areas where Asian workers were allowed to settle, the price of local wage-labour was driven down to the same one-shilling level. Lewis goes on to argue that the division of the world by western imperialism into countries of dear and cheap labour had profound consequences for their subsequent economic development. High-wage economies sustain higher levels of demand than their low-wage counterparts. World trade has been organized ever since in the interests of the better-paid, with tax-rich states subsidizing their farmers to dump cheap food overseas at the expense of local agriculture, while simultaneously preventing the poorer countries’ imported manufactures from undermining the wages of industrial workers at home. South Africa and the United States were two countries that allowed heavy immigration of working-class Europeans while seeking to retain a reserve of poorly-paid, mainly black labour. The resulting dualism is inscribed on their shared twentieth-century history of racist urbanization (Hart and Padayachee 2000).

Origins of the neo-liberal economic crisis

What is ‘new’ about neo-liberalism? It is a world economic order based on selective freedom, on the freedom of money to move where it will (but not people, machines, products or information) and on the freedom of strong states to impose their will on the weak. This describes our world well enough, but it could just as well be described as neo-mercantilism and is no newer than the invention of state capitalism a century and a half ago. Then the economic superpower setting the rules for hypocrisy was Britain, today it is the United States. It is hardly surprising that an international economy run by and for states would be unequal. For states were invented in order to supervise the unequal society of agrarian civilization and they were co-opted for their crowd control functions by owners of money who cloaked coercion and inequality in the old rhetoric of liberal democracy (Polanyi 1944). The state comes with a whole institutional package — a focus on landed property and territorial rule, on the organized use of force at home and abroad, on bread and circuses, on writing and bureaucracy, on control of the money supply and taxation of trade, on ethnic definitions of citizenship and natural symbols of identity. And this does not fit well with freedom of movement, as we all know too well.

Inequality is intrinsic to the functioning of the modern economy at all levels from the global to the local. The rich and poor are often separated physically, kept apart in areas that differ greatly in their standards of living. It is impossible to prevent movement between the two areas in any absolute sense, if only because the rich need the poor to perform certain tasks for them on the spot (especially personal services and dirty work of all kinds). But movement of this sort is severely restricted, by the use of formal administrative procedures (state law) or by a variety of informal institutions based on cultural prejudice. These rest on systems of classification of which racism is the prototype and still the single most important means of inclusion and exclusion. Apartheid is the general name for how we live in world society today (Hart and Padayachee 2000).

There is a great lie at the heart of modern politics. We live in self-proclaimed democracies where all are equally free; and we are committed to these principles on a universal basis. Yet we must justify granting some people inferior rights; otherwise functional economic inequalities would be threatened. This double-think is enshrined at the heart of the modern nation-state. Nationalism is racism without the pretension to being as systematic or global. So-called nations, themselves often the outcome of centuries of unequal struggle, link cultural difference to birth and define citizens’ rights in opposition to all-comers. The resulting national consciousness (Fanon 1959), built on territorial segmentation and regulation of movement across borders, justifies the unfair treatment of non-citizens and blinds people to humanity’s common interests. So, apart from the state as a social form, one problem to be overcome is its culture. The cultural content of nationalism was made up largely by urban intellectuals who based the idea of national unity on the presumed authenticity of the village (Gellner 1983). Traditional rural society was conceived of as being outside the social forces making the modern world, both in time and space. Rural imagery thus shaped the inner core of a nation aiming to resist the outside forces of modernity by slowing down the changes generated by urban industry and political revolution. Its slogan is “stop the world, I want to get off”. This is why western farmers, and agriculture more generally, carry a political weight far beyond their contemporary economic importance (Bryden and Hart 2003). And this too prevents a global solution to world food markets, with the West squabbling among themselves over who subsidizes agriculture the more outrageously. So the world’s two billion or more poor farmers continue to be locked out of world markets.

There have been two general crises for global capitalism in the last century and we may be entering a third now. They were the 1930s and the 1970s (Hardt and Negri 2000, Hart 2001). Each stimulated a major reconstruction of capitalism’s political economy and each has shaped the conditions we face now. In the Great Depression, Maynard Keynes (1936) offered a solution (deficit spending) to national elites overwhelmed by the mass of poor and unemployed. Roosevelt’s New Deal was the most practical programme at the time and the USA promoted welfare state economies among its industrial allies after 1945. This welfare state consensus underlay the long post-war boom. The rich minority are today similarly cast adrift in a sea of human misery that includes most people alive, but especially the inhabitants of Africa, India and China. Marx used to say that capitalist markets could not organize machine production for the benefit of society as a whole. Today the world market is supervised by the United Nations and the Bretton-Woods institutions (still dominated by the USA) which likewise inhibit the evolution of more appropriate economic forms. They also prevent the alleviation of world poverty by means of a Keynesian redistribution of purchasing power (Stiglitz 2002).

There is a watershed in post-war history and its moment is the mid-1970s (Hart 2001, chapter 4). Cracks were already beginning to show in the West’s postwar boom when the Vietnam war introduced financial instability to world markets. The oil price rise of 1973 then threw the world economy into a depression from which it has never recovered. If this was bad for the industrial countries, it was a full-scale disaster for the non-oil producing Third World countries. These had been encouraged by the World Bank and other donors to concentrate on exporting a few primary products. The resulting oversupply kept prices down, while rapid urbanization there raised demand for industrial manufactures. As a result the terms of trade between the two blocs were worsening from the perspective of the poor agricultural economies. The oil shock depressed demand in the rich countries for Third World exports; yet when the latter were faced with increased energy bills, all they could do was try to sell more of their traditional exports, thereby driving prices even further downwards.

Into this desperate situation came the western banks looking for ways of lending on the oil surplus. They found takers, of course, usually corrupt leaders of bankrupt governments. The money went into private Swiss bank accounts or the projects failed, as most “development” projects did at the time (Hart 1982). By the end of the 1970s there was a huge banking crisis, since Third World debtors were in no position to pay off the loans. The dollar was undermined and the Federal Reserve responded by raising interest rates to near 20%. From around 1980 massive transfers of money drained the means of development from the poor countries to the rich at an unprecedented rate (George 1990). At the same time, the International Monetary Fund and World Bank imposed draconian measures known as “structural adjustment”, designed to open up capital movements and to reduce each government’s powers of economic intervention. The threat to the western banking system was averted by a combination of rescheduling agreements (which only increased Third World liabilities) and covert support to the most vulnerable banks. The governments of poor countries had long ago exchanged representing their own people’s interests for dependency on their foreign creditors.

This catastrophe is the specific context for the impoverishment of most of Africa, Asia and Latin America today. The international agencies meanwhile quietly dropped the idea of “development”, being concerned only for the survival of governments whose task is to supervise the flow of money into the coffers of western banks and corporations. Aid levels have been much reduced since the 1960s; indeed non-governmental organizations of a bewildering variety have stepped in to perform functions that neither Third World states nor their international sponsors are prepared to undertake any more. The obscene transfer of wealth from the poor to the rich in the last two decades, honouring debts contracted under dubious circumstances, reveals how far world society has degenerated from the high ideals of mid-century following the defeat of fascism and colonial empire.

Food in a new economic order

I divide these conclusions into general reflections and specific recommendations concerning markets, machines, states and capitalists, small farmers and organic food.

General reflections

If we are serious about tackling global economic inequality, it would be reasonable to start with the shortcomings of the institutions and powers that currently govern our world, focusing on the USA, the EU, the multilateral agencies and the transnational corporations (Bello 2002). But I have chosen here to take a longer view. For decades nation-states have been losing some of their monopolistic controls over subject populations as a consequence of ‘globalization’, so that humanity is now somewhat stranded between weakened national societies and a world society that is still embryonic. Although we often portray ourselves as moderns emancipated from a rural past, we have not resolved the tension between the legacy of agrarian civilization and a machine revolution that has so far failed to support genuinely democratic societies. Capitalism is itself divided, some parts siding with the old governing interests, others pushing beyond the political institutions of unequal society towards a global framework for trade.

The question is, if capitalism is out of control today, what political units and strategies are adequate to making it more democratically accountable, at least on the scale achieved in the Great Depression and after? There are three main places to stand: to put our faith in strengthened global institutions and networks; to seek to reinforce the powers of the nation-state against globalization; and to develop regional federations, such as the EU and ASEAN. The problem is that each of these options makes bedfellows of interests that have been traditionally opposed as right and left. Thus a global strategy juxtaposes the strongest states, the big corporations and the Bretton-Woods institutions with democratic associations representing popular interests everywhere, such as the World Social Forum. Nationalism throws together greens, the unions and racist anti-immigration groups. In regional federations the voices of popular interest groups are drowned by those of the member-states and big money. ‘Civil society’ is thus split between all three levels, thereby adding to the general political confusion.

Which interests are likely to push for a new world economic order? Surely not the existing nation-states. How about the transnational corporations? Are they moving to a stage of capitalism beyond the nation-state? Before we admit such a possibility, the old question of capitalism’s unequal contract has to be answered. Who will enforce contracts on threat of punishment, if not the established governments? The balance may be shifting, but an alliance between states and capitalists is still functional. Perhaps radical global change will be driven by the same impulses that led to the formation of welfare states in the general crisis of the 1930s and after. These are basically the fear of the rich and powerful that they will lose everything if they make no concessions to the poor. Only a major deflationary crisis could induce such a development.

Food is important in all this, mainly because over a third of humanity still work in the fields with their hands and drawing them into the circuit of commodity exchange would go a long way towards ending the stagnation of world economy that began in the 1970s. But also because world society is still in the throes of disengaging itself from the institutional logic of agrarian civilization. The world wars of the last century almost brought victory to extreme variants of unequal society, just as the Romans put the lights out on the bourgeois revolution begun by the Phoenicians, Athenians and Carthaginians. We still have a long way to go before commerce can be said to have truly displaced the forces of war. So, what is to be done?

Markets

The main drift of my analysis has been that world markets for food constitute the main obstacle to the development of poor countries. The farmers of these countries need some measure of protection so that a regime of higher producer prices might be established, without substantially increasing costs to consumers and non-agricultural producers. Local commerce would then be stimulated by the rural-urban division of labour. At present, in the name of free trade, the rich countries dump cheap food on the rest, while raising barriers to their exports. Clearly world markets have to be radically reorganized in the interests of the poor. The lesson of my initial Canadian anecdote is that ideally the existing subsidies made to western farmers by tax-rich states should be diverted to the governments of poor countries for similar purposes. Why ever would the world’s powers do that? Perhaps if the fear of violence and mass emigration from underdeveloped areas persuaded them that something drastic had to be done to improve their domestic economies. A powerful inducement to that end would be to make international movement a human right, so that citizens of rich countries could no longer rely on the power of their states to keep the others out. In return, the beneficiary governments would have to accept certain political obligations, not only to their own citizens, but to the rest of the world.

Machines

The last half-century saw a radical improvement in the global food supply. This was largely a result of the mechanization of agriculture, not just the use of machinery, but also of pesticides and high-yield varieties. Machines are converters of inanimate energy, which today means oil. The Green Revolution came out of Rockefeller-funded research institutes in Mexico and the Philippines as a way of making Third World agriculture dependent on petrochemicals as fertilizer (Lipton and Longhurst 1989). Now GMOs are being patented by large chemicals corporations in order to tie farmers to their brand of pesticide and seeds. The ecological threat of a hi-tech agriculture driven by financial considerations has been well-advertised. Beyond that, the aggressive privatization strategies of the leading bio-chemical corporations undermine one of the key planks of the cultural commons — our right to borrow the means of growing food from each other. The fact that many still go hungry, despite the increased supply of food, is a function of distribution mechanisms, not of the machine revolution in agriculture as such. Somehow the benefits of mechanization have to be diffused without the abuses.

States and capitalists

Humanity’s inability to redress these abuses is partly due to a state capitalist synthesis that divides us into so many competing tribes. This synthesis is now being eroded by globalization. I think that, if the terms can be meaningfully separated, states are more dangerous than capitalism. Territorial states will persist as building blocks of world society; but their powers ought to flow upwards into global and regional federations and downwards to local and more diffuse associations. Nor is it good enough to denigrate capitalism as such. The production of cheap commodities by profit-making firms is intrinsic to economic progress. The markets, transport and communication systems on which we depend cannot function without them. The classical liberal revolutions against the old regime were fueled by the bourgeoisie and some capitalists will play a similar role in future. It is a question of their relationship to the status quo. We need to be more discriminating about the forms of capital. Thus Red Hat Linux has been lobbying for the adoption of its software in India’s schools on the grounds that it is cheap, flexible and robust. Microsoft has been campaigning there on its track record in helping governments to regulate access to the internet. Hewlett-Packard has targeted the four billion poorest people as a market. If all those excluded from the digital revolution are to join, existing firms will be needed to develop the required infrastructure. This is why putting money into the hands of the poor benefits the rich too.

Small farmers

The French make a great deal of terroir (soil), the specifics of local environment, in asserting local identity against the corrosion of globalization. Commercial agriculture there covers a wide range of scales, but the farmers still refer to themselves as ‘peasants’. The German Marxist leader, Karl Kautsky (1899) found that Europe’s small farmers were far from being wiped out by capitalism. Certain commodities benefited from the natural protection of local conditions and markets: viticulture, dairy products, market gardening. But also peasant producers have often proven to be more efficient and durable than larger-scale specialized operations. Now, following an ancient pattern of pluriactivity (see the Lenin quote above), rural areas have diversified away from agriculture into services such as tourism (Bryden and Hart 2003). The gap in lifestyle between city and countryside has been much narrowed. The world’s poor need more than agriculture as a way of participating in the world economy. The growing market is for cultural commodities in fields like entertainment, information services and education. Most of these will be produced in cities, not villages; but here too small producers should be able to compete effectively with the giant corporations.

Organic food

Faced with what often seems a runaway world (Leach 1967), where remote forces threaten to overwhelm our fragile claims to identity, the idea that natural things are good for us finds fertile ground, especially when it comes to food. Of course, after 10,000 years of domestication, the idea of something being natural is highly relative (or organic, if you prefer Greek to Latin). The appeal to nature was already incorporated into nationalism as a sort of reaction to the speed of modern change. The current wave of resistance to GMOs has echoes of this Luddite rejection of machine civilization. Nevertheless, several themes in this chapter find echoes in the movement to promote organic agriculture. It can provide a measure of local protection from global producers; it is often small-scale and more compatible with existing peasant practice; it avoids the excesses and risks of hi-tech production; and, as the existence of an international association shows, [2] it may support a grassroots democratic politics. If the western middle classes embrace natural food with the enthusiasm that they have returned to natural fibres for their clothing (Schneider 1994), organic farmers will gain an important global ally in their struggle for economic equality.

I began with Lewis’s observation that a new international economic order is needed if the development prospects of the poor countries are to be substantially improved. Would-be revolutionaries first have to decide which is the greater enemy of human progress, the persisting legacy of agrarian civilization or a capitalism built on machines. State capitalism is a hybrid of both. To target one element while turning a blind eye to the other is a recipe for political failure in the long run. State socialism in the twentieth century tried to outlaw markets, with ruinous consequences. Now the neo-liberals, in the name of universal private property and free trade, promote the interests of the strong over the weak by emasculating their states. If we want a more democratic and equal world, we need a more comprehensive view of the problems facing humanity as a whole.

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