Interdoc-y2k: Food, Price Controls and an Emergency Maximum Wage

[cabeal@efn.org]

On the interdoc-y2k list, Bob Olsen writes (re: food):

> Is there any discussion of price controls?
>
>
> The way to prevent panic is to tell people in 1999 that the
> govt is prepared to ensure an adequate food supply and to control
> prices.

Greetings;

I will not be able to dialogue back and forth on this, but I offer it
for what it may be worth to some of you.

A bit of United States history might be useful here. Research the food
price controls of the post depression years, especially the farmer
riots as farmers were forced to sell their food below the cost of
production, and then lost their farms to mortgages and foreclosures
when the economy didn't recover as well as some hoped it would
(actually, we've never lost some of those crippling price controls, or
the cozy arrangements that grew up in their wake, continuing to
mitigate the food resilience of communities nationwide). Consider,
also, that many farmers are currently selling below the real costs of
production, and you really have a formula for dissension in your
proposal of these controls.

A quote from Studs Terkel's "Hard Times", pp249,

"You know, Hitler's men were awfully interested that I'd been through
a farm strike in northern Iowa. I was in Germany with my wife, as a
tourist in 1937 [says Harry Terrell]. I had been to Geneva for a
disarmament conference. I met Hitler's agricultural attache in Berlin.
They were just putting controls on their farmers. He wanted to know
how this violence was handled. He kept getting madder and madder. I
said "What do you do with these people?" He said: "They've got to come
to terms with the government or we'll just wipe them out."

The opinion of this self-interested, small-scale independent grocer
and farming person (me), and not someone who understands the
subtleties of great markets that feed large numbers of people
alienated from caring for themselves in even the most basic of ways,
is that price controls on food may not be the ideal way to prevent
panic.

I do find it curious that taking food from some people at below their
cost of production and distribution (farmers and storekeepers and
cooks and distributors) and giving it to other people at "controlled
prices" (people who didn't prepare by stocking up when prices were
good) is not called "stealing" but is, instead, considered
right-action needed to "prevent panic", with no indication of what it
is costing, or who is paying for it.

I especially find it interesting that this sort of tactic would be
advocated before a mandatory emergency levelling of all wages
throughout the country to some type of basics level (perhaps the one
currently provided for under our welfare system would be a good
reference point), and then intentionally and carefully redistributing
this wealth amongst the people to facilitate purchasing food at its
truest costs of production and storage.

I believe that there is a basic misunderstanding on the part of many
about what it actually takes to produce food, and that people who are
the food producers of technocratized nations (and especially the dense
urban areas that have sold off all means of their own food production)
are at great risk of becoming slaves in a crisis that will force them
to bend their backs even harder, against their will, for no money, to
feed people who demand to be fed because - having resisted preparation
for a winter, or even a known interruption - they threaten to riot and
rebel.

This is a potential and grossly unexamined hostage-taking of the
subtlest order, as citizens continue to demand these things of the
food producers - food at prices that they feel they can afford (not
even "can afford", but actually just "feel" they can afford, since
there is no criteria suggested for what someone should afford before
they receive a subsidy from the food producing sector) - and then use
their own threat of civil unrest to ensure that they be fed.

Unless, of course, enough people feel it is time to call an end to
privatized infrastructures altogether, including food, in which case a
re-creation of the Chinese model of Community Farming may be around
the corner, and large numbers of urban civilians might be re-located
to farming camps (or even re-populate the small towns of rural
America?) around the country to ensure that adequate amounts of food
can be produced for the urban populace. That relocation, if necessary,
should start soon - only one summer left...

Although an irony strikes me here, as I notice a number of folks
voluntarily relocating now, willing to learn to grow food, and likely
comprising the future farming population of the next decade.
Unfortunately, all of them (even those without guns) are being
castigated as "heading for the hills", though in my mind they (the
non-violent group - the heavy gun folk don't have the social skills
necessary to foster enduring trust-based trade relationships) are the
folk from whom US citizens are likely to buy more food from over the
next few years.

Before price controls are put into effect on basic essentials like the
infrastructures of fuel, power, food, etc. (potentially slated for
government emergency management due to badly managed Y2k mitigation
and preparations), I'd very much like to see an Act considered that
creates a temporary Federal Maximum Wage level, similar to a Federal
Minimum Wage, that is put into place during whatever official
emergency ensues.

I would suggest that if an Emergency Maximum Wage were to apply,
across the board, to all citizens - government and private and
corporate (as long as it has the rights of personhood) alike - then
work that would end the emergency would be accomplished in very short
order, and the redistributed wealth would find its way into the system
through the channels that need to be revitalized or stimulated most
rapidly.

If the Emergency Maximum Wage was the first emergency control put in
place, and the last to be removed, the other distributive laws of our
exchange system that reward efficiency, ingenuity, and foresight might
have more latitude to work in, without their gains being siphoned off
into personal profit too quickly by those sitting closest to the
streams of influence that wield the siphons.

I haven't thought through all the ramifications of such an emergency
procedure, but it seems to run less risk of creating resource or
capital "takings" litigation after the fact - and, any takings that
could be determined would be pre-quantified by the existing and
documented wage of the citizen when they appealed for compensation.

If price controls are put in place, but later years reveal that
citizens had actually had ample time and income to prepare but had
chosen to continue to fund the purchase of personal non-essential
items (as evidenced, perhaps, by subpoenaed records of credit card
purchases and sales records - but who decides? a jury of peers?
hmmmm...) or even enmasse by less-necessary governmental expenditures
in other public departments, then I suspect a case could be made by
farmers and food persons whose costs were exceeded by what was offered
for food under price controls, and that the Public had collectively
purchased the service of an emergency food supply without paying for
it and ought to compensate the producers accordingly.

The "takings" aspect of the situation might be compounded by the
duress food producers would be put under when forced to sell below
cost (lost farms, exorbitant interest for operating loans, etc.), and
may also result in additional penalties that would need to be borne by
the taxpayers.

In an emergency, if distributed stores are to be released to anyone in
need, demonstration of need should become an issue, especially if
resources are in short supply and a semblance of parity is to remain.
Perhaps the stored foods will be offered on a sliding scale, based on
official "ability to pay", with those who have jobs or savings or an
equity or credit-line asked to pay more for the food than those
without jobs, etc. Or, might we expect that all persons would be
"billed" electronically for the food that they eventually need to
consume, even if they can't pay at the time, with government-backed
food loans similar to student loans? If citizens who didn't store food
paid as close to the market price for it as they could afford to
during the emergency, this would minimize the amount of y2k related
burden unfairly forced onto the backs of the actual food producers and
purveyors.

Of course, all of this messy post-crisis reparation could be prevented
by having the governments contract now, in advance, to purchase
emergency foods and supplies from farmers for prices appropriate to
the market. Any time a large consumer (such as a government) moves
into the marketplace, however, prices of everything related to that
market are impacted. Since food costs to the average consumer would be
likely to rise more quickly should the Public stockpile food for the
Public's general consumption in an emergency, for distribution to
those in need, these purchases should be as small as possible to avoid
choking the system and creating runaway inflation.

In almost any case, it seems to me that the best way to influence the
current market to safely and equitably increase food production as
quickly as possible would be a set of well-distributed purchases of
foods in advance, as small as possible, and within the means of
citizens' current budgets (no new taxes). If done well, this would
avoid undue demand-clumping at any particular stage of the supply
chain (especially ones at which inappropriate advantage could occur,
now,  without a current, actual and declared emergency) like that of
an official lump-government procurement contract for essential foods
that can easily disrupt existing and working supply-chains and current
consumer prices.

The widest distribution of food purchasing that will keep prices most
in line with costs across the board and avoid unduly penalizing small
producers (vital for local food resilience) now, therefore, seems to
be accomplished by large numbers of individuals who use their
discretionary income to buy food in advance of need, suitable for
their own dietary practices, when prices are lowest, stimulating
production pre-1999 harvest, at the broadest scale while also pulling
themselves out of the demand queue for Public service if a crisis
occurs.

Surprisingly, the most efficient, decentralized, currently-in-place,
and stream-lined process of this proposal looks a lot like what many
inexperienced urban householders are so quick to call "hoarding" -
stocking up on food. Even so, it will be done in private over the
course of the next year.

Rising food prices may then be blamed on individuals doing what will,
in the final analysis and given the nature of this crisis, probably
pencil out as the most appropriate, altruistic and civic-minded
behavior possible within the United States' present market system.

Government will be unlikely to clarify this confusion quickly, in part
because it gains a satisfying validation when its paternalism is
appealed to and it is asked to flex its power and take control of
something on behalf of the Public. In an atmosphere of rising tension
between the Urban and the Rural over the prices and availability of
food resources, I doubt governments will be able to resist playing
Mediator.

If this happens, I anticipate that Corporate food producers will offer
their demonstrated expertise at  providing fast foods for the masses,
on contract (probably being negotiated now), in a guaranteed supply
stream with nutritional RDAs assured in advance, and all this in
exchange for first access to the limited distribution tools - planes,
trains, ships, fuel, electricity, and capital supplies - of a
partially crippled infrastructure in repair mode.

The average business will then need to compete for the remaining
infrastructure crumbs available to the general marketplace in the
immediate aftermath of Y2k. Some of us will hopefully have prepared
the means to bow out gracefully, without bankruptcy or total
decimation of our skill and resource sets.

Recovery, even prior to 2000/01/01, will thus be an issue for a number
of us, and hopelessly out of reach for some - perhaps many. The
maintenance of day-to-day business-as-usual will be the Y2k windfall
of the global, corporate and well-connected few, and it will be our
most unprepared citizens who call loudest for their help. The only way
out of this dead end, IMO, is to support the present actions of all
who advocate self-reliance to the degree to which everyone is able.

Ignorance, or a refusal to take steps, does not constitute a
justifiable preparation-infirmity, just as lack of emotional
fulfillment does not obviate the need for working for one's living,
and those who neglect doing their part should be billed for their
avoidance, much like a risk-taking mountain-climber who fails to heed
a hazard warning is billed for the rescue if they need one, and
admired if they don't.

I am, BTW, storing food for myself and my family. I am making it
possible for my staff to store food. I am storing inventory for my
store. I am helping my customers be proactive in their ability to
refrain from becoming burdens to their neighbors. I support the growth
of a sustainable farming system by limiting my procurement efforts to
organically produced foods that are less dependent upon chemical
farming inputs, whose price and availability will be challenged by
Y2k.

Be careful of what you ask for, please, and think through the
ramifications of your requests for government assistance. We have
already lost so much (class I soil, clean water, means of production,
tools, skills, initiative), and we're about to find out just how much
is gone. Please refrain from throwing the rest of what you do not
understand so far away that none of us can find it again. Some of us
still value what you do not care for, more than you may ever know.


Thank you for your thoughts and your interest.

In Community,

Cynthia Beal

**********
Cynthia Beal
cabeal@efn.org
Red Barn Natural Grocery
Eugene, Oregon
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