Globalaffairs

Issue 20/April-June 2010
By Glen Ruffle

The erupting volcano in Iceland has disrupted not only air travel but the economics and free trade of the world. Maybe it is time to start building economies that are self-reliant rather than interdependent.

Life is unpredictable. Few would have foreseen that an unknown volcano in far-away Iceland would mildly erupt and suddenly close down nearly all of Europe’s air space and cause international travel chaos.

Yet that is precisely what has happened. The quiet glacier at the difficult-to-pronounce Eyjafjallajoekull in Iceland [1] was rudely interrupted by a volcanic explosion that blasted into the atmosphere thousands of tonnes of ash and debris, making it dangerous to fly aircraft through [2].

The small particles of dirt that have been pumped into the upper atmosphere may be tiny to our eyes, but aircraft that fly through the middle of them for long enough will find that the dirt and glass will collect in the engines and eventually cause them to shut down, which would result in disasters as planes drop out of the sky [3].

Food crisis

Rich Western economies are very used to flying in all the food and consumable products they need. Yet this sudden act of nature has disrupted food supplies and showed potentially how vulnerable some of the leading economies of the world actually are.

In airports across the developing world, piles of food destined for supermarkets in Europe have started to collect and rot, as they wait for the resumption of flights. Meanwhile, shops in the West have warned of low supplies in certain products and potential price rises, suggesting it could take up to two weeks for things to return to normal [4].

The farmers in Asia and Africa, dependent for income on trade with the West, are facing possible ruin, as their produce sits in warehouses instead of on supermarket shelves. After all of the effort and energy put into growing the food, it is now rotting in fields. This is a double blow, for the resources that went into the production of the crop were resources that could have been used elsewhere [5]. The amount of water, for instance, that is used in the growing and manufacturing of one cup of coffee is 140 litres, whilst one kilogram of imported steak represents the usage of 15,000 litres of water [6]. In a world where developing nations are using their water to feed Westerners, whilst their people are dying of thirst, this is serious.

Zimbabwe – Background. With her child close at hand, a woman tends to her family's land. She is a participant in a UN-supported irrigation project for small farmers. May 1991. UN Photo/Milton Grant

Comparative Advantage

We live in a world dominated by the liberal theory of comparative advantage, and the hegemony of free trade. The World Trade Organisation embodies this, trying to push down trade barriers and promote greater interdependency.

The theory developed from David Ricardo’s idea that States should specialise in doing what they do best [7]. Britain inherited a global financial network from the days of Empire, and has specialised in finance and business, with this sector accounting for over 70% of GDP for the entire UK economy. Yet it imports a massive amount of other products, only producing about 60% of food needs [8].

This is fine, until there is a crisis; until something unpredictable happens. Like a volcano going off. And when that happens, the value of being self-sufficient comes back home.

Looking after yourself

If a state produces its own food, everyone in that state is responsible for looking after the environment around them; polluting a field is effectively polluting your own food. Self sufficiency produces responsibility - it is your loved ones, your relative, who will be eating the produce of the land that you pollute.

Reducing dependence on other countries also reduces the amount of air travel and environmental pollution that results from this. As development agencies have shown, the only real long-term sustainable food production is in fact small-scale production for local needs [9].

And growing and producing for local needs reduces dependence on volatile international markets. One farmer in Uganda had to change from growing coffee because of low profitability as the market price fell, to grow cotton. But US subsidies stopped him selling it to America, so he changed to sugar, only to find US and EU policies barring his entry to those markets. Finally he ended up growing the only thing he could make a profit on, and sold it in Uganda, which simply added more to the Ugandan domestic alcohol abuse problem [10].

Whilst this shows the unfairness of trade rules, it also shows Africa and Asia are producing for the needs of Europe and America, and not for themselves. The states of the developing world are trying to feed us, whilst they starve.

It is true that stopping international trade and imports of food now would be harmful to the rest of the world, and do little to protect the environment. Most environmental problems come from air passengers, not air freight, and wasteful production in Europe can add more CO2 to the atmosphere than flying products in from Kenya (11). But Western states need to start moving towards more self-sufficiency if they want to be truly secure.

The benefits include an increase in community spirit and identity. Rural communities are sources of nationhood and connections with the past, things that counter the alienation and disillusionment produced by modern urban lifestyles. A return to a more agrarian society would reduce social unrest in the West.

The [12] Common Agricultural Policy (CAP) of the European Union does in fact help preserve a rural way of life in some member states. The countryside that many tourists so admire in France is actually in fact only possible because of the CAP, unless trade barriers and food prices would be raised to make the farming sustainable again.

It is also beneficial for the wider global environment that Africa, Asia and Europe should grow food native to the land. Crops are part of a wider eco-system. Many animals depend on them, and changing crops for the sake of market prices can have impacts much wider than just finance. If an animal has evolved to eat only one type of plant, then it cannot suddenly adapt to another.

There has also been a perception that if a problem arises with trade, then the market economy will flexibly adapt. If we cannot import potatoes, we will start to grow them here. The price signal will show producers what to make. Yet the economic recession has shown the real world to be a harder place. In America, industries that once made no profit suddenly became profitable again. Did they reopen and start working? No, because it was too late: the skills had gone; the machines had gone; the infrastructures were no longer there [13]. The same is true for food supplies: a farmer’s field turned over from farming to forestry or building is lost for a long time. A sudden movement in prices is not enough to make the field productive again.

Government policies should focus on preserving strategic industries. The UK car industry once was protectionist, and if a company wanted to sell cars in the UK, the best way was to open a factory there and manufacture them there. Thus the policy worked to attract investment and industry [14], and if a problem occurred, the UK had the resources ready and available to respond. Now, the manufacturing base is being stripped away, and the voters of the UK are being left vulnerable to the supplies of foreign partners.

And are foreign partners reliable? Whilst the European Union is committed to “ever closer union” [15], British intelligence services have named both France and Germany, fellow EU members, as states actively trying to steal British secrets [16]. And because of EU competition law, member states would be unable to help preserve strategic industries anyway [17]. The fact is, governments cannot trust each other, and are foolish to allow industries to slip away in the belief that the future will hold no surprises.

Conclusion

Trade is good, but governments must know that they are elected to serve the people that elected them. This means securing the state against critical problems. Becoming dependent on the rest of the world for food, whilst maybe making economic sense, is foolishness in a world where unpredictability rules. Our friends spy on us. Volcanoes erupt. Banks collapse. Earthquakes strike. Storms come and go. We cannot predict the future, and as the smoke billows out of the volcano under Eyjafjallajoekull, so maybe policy makers across the world can rethink the idea of depending on food from the other side of the world to feed the people who elected them.

Glen Ruffle
Worked in British politics and achieved a Masters degree from the University of Southampton.

Sources/Bibliography
[1] BBC News (2010) ‘Volcano erupts in south Iceland’, 21/03/2010, at http://news.bbc.co.uk/1/hi/world/europe/8578576.stm

[2] BBC News (2010) ‘Q&A: How long will volcanic ash cloud last?’, 17/04/2010, at: http://news.bbc.co.uk/1/hi/uk/8627253.stm

[3] Boeing (2010) ‘Volcanic Ash Avoidance’, at: http://www.boeing.com/commercial/aeromagazine/aero_09/volcanic_story.html

And
Press Association (2010) ‘Volcanic ash may damage jet engines’, 15/04/2010, at: http://uk.news.yahoo.com/21/20100415/tsc-volcanic-ash-may-damage-jet-engines-4b158bc.html

[4] Patrick Sawer and Robert Mendick (2010) ‘Volcano chaos could continue for months’, 18/04/2010, The Daily Telegraph, at: http://www.telegraph.co.uk/travel/travelnews/7601701/Volcano-chaos-could-continue-for-months.html

And
Freight Transport Association (2010) ‘Business on-hold as ash cloud casts its shadow’, 16/04/2010, at: http://www.fta.co.uk/news/item/business-on-hold-as-ash-cloud-casts-its-shadow

[5] The Independent (2010) ‘UK’s ‘virtual water’ reliance worsens global shortages’, The Independent, 19/04/2010, at: http://www.independent.co.uk/news/uk/home-news/uks-virtual-water-reliance-worsens-global-shortages-1948367.html

[6] Richard Black (2010) ‘UK water use ‘worsening global crisis”, BBC News, 19/04/2010, at: http://news.bbc.co.uk/1/hi/sci/tech/8628832.stm

[7] Charles W. Kegley Jr. and Eugene R. Wittkopf (1999) ‘World Politics: Trend and Transformation’, 7th Edition, Worth Publishers Inc.

[8]Economy Watch (2010) ‘UK Economic Structure’, at: http://www.economywatch.com/world_economy/united-kingdom/structure-of-economy.html

[9] Christian Aid (2005) ‘Trade Justice: Turning words into action’, publication number F1158.

[10] Giles Bolton (2008) ‘Trade secrets’, pages 4-7 of ‘Developments’, Issue 41, 2008. Department for International Development.

[11] Karen Ellis and Michael Warner (2008) ‘Design a label’, page 37 of ‘Developments’, Issue 40, 2008. Department for International Development.

[12] Daniel Hannan MEP (2010) ‘Scrap the CAP’, 07/12/2008, at: ‘http://blogs.telegraph.co.uk/news/danielhannan/5916307/Scrap_the_CAP/

[13] The Economist (2010) ‘Export or die’, pages 8-9 of Special Report on America’s Economy, April 3rd 2010, in The Economist, Volume 395, No. 8676, and at: http://www.economist.com/specialreports/displaystory.cfm?story_id=15793128

[14] Garel Rhys CBE, Emeritus Professor and Director of the Centre for Automative Research at the Business School of Cardiff University (2007) ‘21st Century Motor Industry Economics’, page 4 of Jim Bourlet (Ed.) ‘Britain and Overseas’, Autumn 2007, Volume 37, No. 3. Published by the Economics Research Council.

[15] Preamble of the Consolidated Version of the Treaty of Lisbon, at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2008:115:0013:0045:EN:PDF

[16] Sean Rayment (2010) ‘Britain under attack from 20 foreign spy agencies including France and Germany’, in The Daily Telegraph, 07/02/2010, at: http://www.telegraph.co.uk/news/newstopics/politics/defence/4548753/Britain-under-attack-from-20-foreign-spy-agencies-including-France-and-Germany.html

[17] Larry Elliott and Dan Atkinson (2007) ‘Fantasy Island’, Constable books.

The views and opinions of contributors expressed herein do not necessarily state or reflect those of Global Affairs

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