Roughly 1.3bn tonnes of food is either lost or wasted globally due to inefficiencies throughout the food supply chain, says the report, based on research by the Swedish Institute for Food and Biotechnology (Sik). Amid rising global food prices, the study says that reducing food losses in developing countries could have an "immediate and significant" impact on livelihoods and food security in some of the world's poorest countries.
According to the report, industrialised and developing countries waste or lose roughly the same amount of food each year – 670m and 630m tonnes respectively. But while rich countries waste food primarily at the level of the consumer, the main issue for developing countries is food lost due to weak infrastructure – including poor storage, processing and packaging facilities that lack the capacity to keep produce fresh. Food losses mean lost income for small farmers and higher prices for poor consumers in developing countries, says the study.
The average European or North American consumer wastes 95kg-115kg of food a year, above all fruits and vegetables. In contrast, the average consumer in sub-Saharan Africa, south Asia or south-east Asia wastes only 6kg-11kg. The study notes that in developing countries poverty and limited incomes make it unacceptable to waste food, and that poor consumers in low-income countries generally buy smaller amounts of food at a time.
Food wasted by consumers in rich countries (222m tonnes) is roughly equal to the entire food production of sub-Saharan Africa (230m tonnes).
Looking for solutions, the report argues that reducing reliance on retailers such as big supermarkets could help cut food waste in the north, and suggests promoting the direct sale of farm produce to consumers. It also encourages retailers and charities to work together, to distribute unsold but perfectly edible food that would otherwise go to waste.
For developing countries, the study says the key lies in strengthening food supply chains, urging investment in infrastructure and transportation, along with increased attention to food storage, processing and packaging.
While world food prices fell slightly in March this year – after eight months of successive increases – the overall cost of food in April was 36% higher than it was last year. Prices of wheat, maize and soya reached levels last seen in 2008, when a global food crisis sparked food riots across the developing world. Last month, the World Bank said that rising food prices had pushed 44 million more people into extreme poverty, and the World Bank president, Robert Zoellick, added that an additional 10 million people could soon fall below the $1.25 a day extreme poverty line unless immediate action was taken to increase the supply of food.
But the FAO-backed report says: "Food production must clearly increase significantly to meet the future demands of an increasing and more affluent world population … In a world with limited natural resources (land, water, energy, fertiliser), and where cost-effective solutions are to be found to produce enough safe and nutritious food for all, reducing food losses should not be a forgotten priority."'
'From September 2011, Schumacher College, Dartington will be offer a new MA degree course in "The Economics for Transition: Achieving low carbon, high well-being, resilient economies". This pioneering postgraduate programme has been developed by nef, Schumacher College and the Transition Network, and is offered through the Business School at the University of Plymouth.
The programme is designed to support a new generation of leaders and activists to create an economy fit for the challenges of the 21st century. It will be attractive to people at different stages in their life seeking to make a positive contribution to the economics of transition through enhancing their knowledge; acquiring practical skills for sustainable living, working and ecological citizenship; and sharing experiences with people from all over the world.
Who is the programme for?
The programme is designed to support a new generation of leaders and activists to create an economy fit for the challenges of the 21st century. Schumacher College attracts people from all walks of life from across the globe – from business leaders and entrepreneurs to policy makers and social and environmental activists.
This programme will be attractive to people at different stages in their life seeking to make a positive contribution to the economics of transition through enhancing their knowledge; acquiring practical skills for sustainable living, working and ecological citizenship; and sharing experiences with people from all over the world.
Why a new masters in economics?
As the world struggles to recover from the most severe and synchronized downturn since the Great Depression, the reputation of economists has rarely been lower. For many, economics was a big part of the problem and so cannot be part of any solution.
Never has there been a more important time for a new approach to economics. Over the past two decades, key thinkers and practitioners have been developing alternative ways forward that once were dismissed as radical and marginal, but now are fast moving centre stage.
E.F. Schumacher was one of these foresighted pioneers who in 1973 laid out a new approach to economics that put values and compassion, people and planet at the centre of our economic system. To this day, Schumacher is known as the grandfather of new economics and his work has inspired a whole generation of leading thinkers, practising economists and environmental and social activists who have been growing the shoots of the new economy ever since. As we enter the decade of climate change, now is the time to make visible these achievements, learn from what works and in practice and co-create the great transition towards low carbon, high well-being, resilient economies
Challenges facing society that this Masters programme will address are:
• The triple crunch of climate change, financial crises and peak oil
• The crises in ecosystem health and social well-being across the globe
• The inter-connected nature of these crises and how they are systemically linked with the global economic model
• Growing disillusionment with current economic approaches and solutions
• How to transform these challenges into opportunities for change
Studying with leading thinkers, activists and practitioners
The MA in Economics for Transition is a collaboration between Schumacher College, the nef (the new economics foundation), the Transition Network and the Business School at the University of Plymouth. This provides a unique opportunity to study with leading thinkers, activists and practitioners in the new economy from a range of different perspectives.
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Teachers include faculty from Schumacher College (Julie Richardson, Stephan Harding, Satish Kumar, and Philip Frances); nef (the new economics foundation) (including Andrew Simms, David Boyle and nef staff and associates), the Transition Network (including Naresh Giogrande, Sophy Banks and Rob Hopkins) and the University of Plymouth (including David Wheeler, Derek Shepherd, Atul Mishra and Lynda Rodwell).
Visiting teachers will be drawn from Schumacher College associates. In recent years, this has included Tim Jackson, Gunter Pauli, Wolfgang Sachs, Jonathon Porritt, Ed Mayo, Nic Marks, Vandana Shiva, Catherine Cameron, Janine Benyus, Ken Webster, Richard Douthwaite, Bunker Roy and many other key thinkers and activists. We will also be inviting new influential teachers such as Eve Mitleton Kelly who is Head of the Complexity Programme at the London School of Economics.
Course programme
• Module One: The Ecological Paradigm (20 credits)
• Module Two: The Emergence of the New Economy (20 credits)
• Module Three: The New Economy in Practice (20 credits)
• Elective Courses (20 credits each)
The short course options for 2011/12 will be finalised in the summer of 2011. Indicative titles for short courses include:
Creating a Transition Initiative (20 credits)
Sustainable Models of Enterprise (20 credits)
Ecological Leadership and Facilitation (20 credits)
Dissertation (80 credits)'
How does a food web differ from a food chain?
Food webs reflect the complexity of all the relationships among organisms. The simple way to think about it is a bunch of food chains that are stuck together. You can take a typical food chain and interconnect it with another food chain, and another, and you end up getting a more complex network.
Why is it important to look at it this way?
Everyone learns about food chains in elementary school, and it usually doesn’t go any further than that. We all understand the idea of networks, and this is just an example of an ecological network. Looking at this helps us understand what happens when a species goes extinct or if there’s climate change or a change in the habitat. The food web gives us a more complex view.
Can you walk me through an example?
Let’s talk about wolves in Yellowstone. Before humans decided to hunt wolves to extinction, they preyed on a bunch of different species. But then they went extinct, and the things they preyed on – like deer and elk – their populations exploded. And that impacted all the vegetation they fed on. So you end up affecting the plant community in a variety of ways in terms of the plants that elk or deer would feed on. Those plant populations would go down, and the population of the competing plants would go up. So now, wolves are in the system and are feeding on elk and other things, and that affects the plants and animals like coyotes and bears who also feed on elk and deer.
So basically, one simple chain of links doesn’t really get you the full complexity when you reintroduce wolves in Yellowstone. Grizzlies now compete with wolves for at least some of what they eat — elk. And in some cases, the grizzlies are out-competed by wolves in foraging for elk. Again, you continue to get these ripple effects up and down the food web.
If you’re reintroducing a wolf, or reintroducing a species for pest control , you can quickly end up in a situation you didn’t expect because you had too simple a picture in your mind. We see that a lot — you think you’re going to introduce a predator of a bug we don’t like, but at the same time it’ll take out beneficial insects like pollinators.
So it’s important that conservation managers take a look at the bigger picture.
A lot of them have focused on tiny pieces of the system. In fishery systems, we have competition for the fish we like to eat, like seals or sea lions. So some fishery scientists in earlier years have called for killing or removing seals or sea lions, thinking that if we get rid of them there will be more of the fish we want to harvest. Network models show that about half the time the abundances would go up, but the other half, the abundances would go down. That’s because all these fish are not just linked to humans or sea lions. There are all these many different indirect paths and interactions throughout the network.
This is why a network approach in ecology provides a quantitative framework where we can begin to analyze and try to understand more systematically all the effects of us monkeying with the system, and we can avoid the bad unintended consequences.
From the time we were hunter-gatherers, what are some general trends in how humans are affecting the food web?
I’m involved in this study with the Sanak Aleut people in Alaska. It’s the first time that scientists have taken this ecological network approach and plugged humans into the complex ecosystem as predators. We’re talking about humans in the Aleutian Islands over the last 6,000 years , who lived closely tied to the ecosystem. One of the things we wanted to see is are humans just like other predators, or do they play special roles. It turns out humans do play special roles – they are more general eaters; they are eating more types of food than any other predator in the system. So humans are super-generalists and also super-omnivores.
They’re feeding on everything from algae all the way up to higher predators like sea otters, and everything in between — clams, fish, marine mammals. So when you do a quantitative analysis, they’re more strongly omnivorous than any other species is. They play special roles in how they fit into this network. Yet we know they were living on these islands continuously without crashing it. They don’t seem to have driven other species out of existence. So the humans lived as part of this ecosystem for thousands of years.
We use this model in order to understand the conditions by which a species could stabilize the system — either be part of the system without causing other species to go extinct, or destabilize the system. If a species that feeds on many different things enters the system, as long as it’s foraging for just a few of the species it eats, that’s very stabilizing.
What we know from previous modeling is that generalists fit into a system fine as long as they do this switching behavior. If they focus on just one species, its abundances will go down, and it will be harder for the predator to find and capture the species. So it will naturally switch to another prey because they can’t get their preferred thing anymore. So this is what generalist predators do — it’s good for the predators and releases pressure on the prey periodically. You get this cycling, with a predator feeding on something, switching to something else, and then the first prey item starts to recover. That’s very well documented. They’re constantly switching between habitats, between freshwater and terrestrial . This is what non-human generalist predators do.
So in our commercial food industry, are we messing up this natural cycle?
Here’s my take on commercial fisheries. Modern humans are homo-economicus, or humans in an economic system. Think about what happens in a blue fin tuna fishery: They’re becoming increasingly rare, because we are hunting them to extension.
We’re not talking about hunter-gatherers; we’re talking about people motivated by the global sushi industry. So even though they are harder and harder to catch, their value is increasing. With hunter-gatherers, as abundance goes down, the value decreases. In this case, the more rare they become, the more valuable they become. So instead of the system causing the predators to fish something else, it’s increasing the rate of the fishing because they’re trying to get those last few blue fin tuna. It’s obvious it’s bad for the tuna. But what people don’t really understand is that it could be destabilizing for the system – not just for the blue fin tuna but for those organisms that are indirectly connected to the tuna.
So instead of decreasing the rate on low abundance, you are increasing it and making it potentially unstable. We’re just modeling it now for the potential impact of these economically driven activities that introduce an unnatural dynamic to the system. If we fish blue fin tuna to extension, it could have a ripple effect.
A lot of fisheries around he world have failed because fishery managers have thought much too narrowly. There’s a new emphasis to do ecosystem management and to think about the whole system. People are pushing it very much in the context of fishery management. There’s many stakeholders — local fisherman, commercial fisherman, sport fishermen, scientists, managers, policy makers. Getting them all at the table and getting them to agree on a good way forward is difficult. I’m interested in how we can take things from basic science research and how to translate them to management practices.
Tell me about some of your other research areas.
One of the things I’m most excited about is working with paleo-biologists to try to understand food webs from ancient ecosystems — hundreds of millions of years ago, like a dinosaur food web. There’s a lot of evidence in the fossil records from these ecosystems to show what they ate, who ate them. The reason that’s important is that understanding ancient ecosystems gives us a context to understand current ecosystems. We can start to understand whether ancient systems were organized similarly to modern ecosystems. It gives us a baseline, so if we see a change in the fundamental organization of an ecosystem, that’s radical. It gives us a way to understand the severity of changes and to understand big macro-evolutionary patterns. Plus, working with the paleo-biologists is really fun.'
But even if, despite all the evidence, growth is still possible or likely, surely it makes sense for our economy to move on to defining prosperity not as more "stuff" and money but more wellbeing? If you disagree with that idea, you won't like what follows, but I hope you will read on.
Why do I talk about "beyond-growth" economics? Here in a short video I give a précis of what I normally take an hour to explain. We're trashing our one and only planet. On many measures like the LPI and Rockstrom, it is clear we are in overshoot and living off the capital as well as the interest. You wouldn't run a company that way would you?
And, despite all the rapid growth causing all that destruction, since the 1970s, wellbeing has flatlined in the developed world. We know that, at a level beyond which most in the developed world have long passed, extra income brings little or no more wellbeing.
So what's the growth for? And how come the new economic foundation's happy planet index shows us that "underdeveloped" countries such as Costa Rica are far more ecologically efficient at delivering long, happy lives than places like the UK? Professor Tim Jackson summarises our growth obession and affluenza in his TED talk, saying "We spend money we don't have, on things we don't need, to make impressions that don't last, on people we don't care about."
The increase in the scale of this consumerist economy is relentless. And this scale is just as important as the intensity of resource use. While some evidence can be found for relative decoupling, absolute decoupling remains fatally elusive.
The numbers are scary. If we want to reach the (far too high) 450 parts per million CO2 level by 2050, we need every global dollar of economic output to drop from its current 768gCO2/dollar to 6gCO2/dollar. That's an 11% per annum reduction every year on every global dollar output. The best we have done in the last 17 years is 0.7%.
So lets get real: either we discover the perpetual-motion machine or the myth of absolute decoupling is just dangerous denial. What's more, if the developing world is to have any chance of continuing to develop, a moral response to these facts would suggest the rich world needs to find a reverse gear very quickly.
That's why there is a rising debate about the need to move beyond growth, with numerous Nobel prizewinners, politicians and business leaders such as Adair Turner, Ian Cheshire, Bernie Bulkin and 77% of the members of Prince Charles's Cambridge programme for sustainability leadership agreeing on the need to question and dethrone growth.
And you don't have to be anti-growth to buy this. For many, including Heinberg and Gilding, it is clear that 2008 was in any case the end of growth at the macro level. You don't need to look too closely at the concatenation of peak – everything from oil, water, food and metals combined with snowballing environmental meltdown and a bust financial system – to see that growth is over once and for all. Yes there may be blips of growth going up, but only at the expense of other countries and sectors. Absolute growth may well be over.
But in any case, macro-economic modelling by people like Professor Tim Jackson and Professor Peter Victor shows that we can deliver everything we expect from a developing world: growth economy, fiscal balance, high employment, high levels of wellbeing and environmental sustainability, with zero growth.
My vision of flourishing enterprise is based on the kinds of changes Victor and Jackson build into these zero-growth models. And it's based on leadership from companies calling for radical changes in the way the market is set up, leadership in the necessary shift for a Citizen Renaissance from extrinsic to intrinsic values, and leadership in integrating wellbeing in business innovation and strategy.
A flourishing enterprise will be one that aims to maximise the wellbeing it delivers to society and minimises the units of planet it uses to deliver that wellbeing. It will shift its focus from seeing products as benefits to seeing production as a cost of maintenance of delivery to societal wellbeing-needs (not created "wants").
And don't just take my word for it. The (hot-bed of anti-capitalism) World Economic Forum looked forward in its 2010 Redesigning Business Value report to a rapid shift to business in which "we are no longer selling 'stuff'; we are enhancing people's wellbeing overall."
And there is support from politicians around the world. In the UK the prime minister acted on a recommendation from the Quality Of Life Commission by calling on the Office for National Statistics to measure and act on wellbeing measures. He has also said that his Every Business Commits initiative "calls for business to work on improving quality of life and wellbeing." As Ian Cheshire, chief executive of B&Q Kingfisher, has said "We need to radically redesign our business models with less emphasis on growth and more on wellbeing." Or as the International Union for the Conservation of Nature has put it "The relevant metric of sustainability is the production of human wellbeing per unit of extraction from or imposition upon nature" and the Stiglitz Commission, looking into way to stop a repeat of the last international financial collapse, has said "measures of wellbeing should be put in a context of sustainability".
In the necessary updating of capitalism that this will entail, business needs to get comfortable with the shift to more porous, collaborative and hybrid value forms. As Botsman and Rogers say in What's Mine Is Yours: "We believe collaborative consumption is part of an even bigger shift from a production-orientated measurement system that just gauges the amount we sell to a multi-dimensional notion of value that also takes into consideration the wellbeing of current and future generations. With the consideration of a more holistic understanding of wellbeing, we see this epoch as a time when we take a leap and recreate a sustainable system built to serve basic human needs for community, individual identity, recognition and meaningful activity."
As well as a radical updating of capitalism, this journey calls for a deep dive into the dynamics of wellbeing and flourishing. It calls for business to think about the real wellbeing-needs that sit behind products and services. And it calls for supporting not undermining "capabilities for flourishing".
These are not concepts that business is overly familiar with, but I'm excited by the interest I am getting from the corporate world in this new approach to business. In a series of blogs to follow, I will be examining what flourishing enterprise might mean for a selection of companies and sectors.
Above all, flourishing enterprise seems to be applealing to the companies I work with because its a 'yes we can' story. For too long sustainability and 'CSR' have been firmly a NO story about stopping doing things. Whats new here is that a focus on maximising the wellbeing of customers and society is a positive vision. That makes it very empowering for companies and more likely to succeed in helping to create the kinds of change we need.
Jules Peck is a partner at Abundancy Partners and chair of Edelman's Sustainability Group. He is also a trustee at the new economics foundation and a fellow of ResPublica'
“We are just starting a campaign calling for an ecological constitution,” said Turkey’s Green Party spokesperson Ümit Şahin, who is among 40 people including politicians, academics, and lawyers involved in the Initiative for an Ecological Constitution (IEC).
“As Turkey has been talking about making a new constitution, which is supposed to value the individual, then we should be talking about an ecological approach to it,” Şahin said, adding that their role models are Bolivia and Ecuador, which understand the value and rights of Mother Earth. The IEC believes in this approach of the Latin American states, he said, because neither the European states nor the United States have been able to fully address the issue even though there are some examples like France, which has a Green Charter, and some states in the US, which have been adopting ecologically sensitive laws.
He noted that Ecuador’s is the first constitution in the world to recognize legally enforceable Rights of Nature. Although a small country, Ecuador is home to the Galapagos Islands, Andean Mountains and Amazon rainforest as it is a geologically, ecologically and ethnically diverse country. Ecuador took a bold step in 2008 to add Rights for Nature to their new constitution providing a system of environmental protection based on rights. Şahin noted like many countries, Turkish laws treat ecosystems as articles of property that give land owners the right to destroy even fragile ecosystems, but that a lot of governments have started to enact environmental regulations to limit harm to ecosystems and impose fines for damage.
Additionally, a group of countries led by Bolivia have recently brought the issue to the agenda of the UN General Assembly as they ask for a UN treaty that would grant the same rights found in the Universal Declaration of Human Rights to Mother Nature so there will be legal systems to maintain balance between human rights and what they say are the rights of other members of the Earth, such as plants, animals and terrain.
Supporting the idea, Şahin said communities should be given more power to monitor and control industries and development to ensure harmony between humans and nature...'
Welcome to the new food economics of 2011: Prices are climbing, but the impact is not at all being felt equally. For Americans, who spend less than one-tenth of their income in the supermarket, the soaring food prices we've seen so far this year are an annoyance, not a calamity. But for the planet's poorest 2 billion people, who spend 50 to 70 percent of their income on food, these soaring prices may mean going from two meals a day to one. Those who are barely hanging on to the lower rungs of the global economic ladder risk losing their grip entirely. This can contribute -- and it has -- to revolutions and upheaval.
Already in 2011, the U.N. Food Price Index has eclipsed its previous all-time global high; as of March it had climbed for eight consecutive months. With this year's harvest predicted to fall short, with governments in the Middle East and Africa teetering as a result of the price spikes, and with anxious markets sustaining one shock after another, food has quickly become the hidden driver of world politics. And crises like these are going to become increasingly common. The new geopolitics of food looks a whole lot more volatile -- and a whole lot more contentious -- than it used to. Scarcity is the new norm.
Until recently, sudden price surges just didn't matter as much, as they were quickly followed by a return to the relatively low food prices that helped shape the political stability of the late 20th century across much of the globe. But now both the causes and consequences are ominously different.
In many ways, this is a resumption of the 2007-2008 food crisis, which subsided not because the world somehow came together to solve its grain crunch once and for all, but because the Great Recession tempered growth in demand even as favorable weather helped farmers produce the largest grain harvest on record. Historically, price spikes tended to be almost exclusively driven by unusual weather -- a monsoon failure in India, a drought in the former Soviet Union, a heat wave in the U.S. Midwest. Such events were always disruptive, but thankfully infrequent. Unfortunately, today's price hikes are driven by trends that are both elevating demand and making it more difficult to increase production: among them, a rapidly expanding population, crop-withering temperature increases, and irrigation wells running dry. Each night, there are 219,000 additional people to feed at the global dinner table.
More alarming still, the world is losing its ability to soften the effect of shortages. In response to previous price surges, the United States, the world's largest grain producer, was effectively able to steer the world away from potential catastrophe. From the mid-20th century until 1995, the United States had either grain surpluses or idle cropland that could be planted to rescue countries in trouble. When the Indian monsoon failed in 1965, for example, President Lyndon Johnson's administration shipped one-fifth of the U.S. wheat crop to India, successfully staving off famine. We can't do that anymore; the safety cushion is gone.
That's why the food crisis of 2011 is for real, and why it may bring with it yet more bread riots cum political revolutions. What if the upheavals that greeted dictators Zine el-Abidine Ben Ali in Tunisia, Hosni Mubarak in Egypt, and Muammar al-Qaddafi in Libya (a country that imports 90 percent of its grain) are not the end of the story, but the beginning of it? Get ready, farmers and foreign ministers alike, for a new era in which world food scarcity increasingly shapes global politics.
THE DOUBLING OF WORLD grain prices since early 2007 has been driven primarily by two factors: accelerating growth in demand and the increasing difficulty of rapidly expanding production. The result is a world that looks strikingly different from the bountiful global grain economy of the last century. What will the geopolitics of food look like in a new era dominated by scarcity? Even at this early stage, we can see at least the broad outlines of the emerging food economy.
On the demand side, farmers now face clear sources of increasing pressure. The first is population growth. Each year the world's farmers must feed 80 million additional people, nearly all of them in developing countries. The world's population has nearly doubled since 1970 and is headed toward 9 billion by midcentury. Some 3 billion people, meanwhile, are also trying to move up the food chain, consuming more meat, milk, and eggs. As more families in China and elsewhere enter the middle class, they expect to eat better. But as global consumption of grain-intensive livestock products climbs, so does the demand for the extra corn and soybeans needed to feed all that livestock. (Grain consumption per person in the United States, for example, is four times that in India, where little grain is converted into animal protein. For now.)
At the same time, the United States, which once was able to act as a global buffer of sorts against poor harvests elsewhere, is now converting massive quantities of grain into fuel for cars, even as world grain consumption, which is already up to roughly 2.2 billion metric tons per year, is growing at an accelerating rate. A decade ago, the growth in consumption was 20 million tons per year. More recently it has risen by 40 million tons every year. But the rate at which the United States is converting grain into ethanol has grown even faster. In 2010, the United States harvested nearly 400 million tons of grain, of which 126 million tons went to ethanol fuel distilleries (up from 16 million tons in 2000). This massive capacity to convert grain into fuel means that the price of grain is now tied to the price of oil. So if oil goes to $150 per barrel or more, the price of grain will follow it upward as it becomes ever more profitable to convert grain into oil substitutes. And it's not just a U.S. phenomenon: Brazil, which distills ethanol from sugar cane, ranks second in production after the United States, while the European Union's goal of getting 10 percent of its transport energy from renewables, mostly biofuels, by 2020 is also diverting land from food crops.
This is not merely a story about the booming demand for food. Everything from falling water tables to eroding soils and the consequences of global warming means that the world's food supply is unlikely to keep up with our collectively growing appetites. Take climate change: The rule of thumb among crop ecologists is that for every 1 degree Celsius rise in temperature above the growing season optimum, farmers can expect a 10 percent decline in grain yields. This relationship was borne out all too dramatically during the 2010 heat wave in Russia, which reduced the country's grain harvest by nearly 40 percent.
While temperatures are rising, water tables are falling as farmers overpump for irrigation. This artificially inflates food production in the short run, creating a food bubble that bursts when aquifers are depleted and pumping is necessarily reduced to the rate of recharge. In arid Saudi Arabia, irrigation had surprisingly enabled the country to be self-sufficient in wheat for more than 20 years; now, wheat production is collapsing because the non-replenishable aquifer the country uses for irrigation is largely depleted. The Saudis soon will be importing all their grain.
Saudi Arabia is only one of some 18 countries with water-based food bubbles. All together, more than half the world's people live in countries where water tables are falling. The politically troubled Arab Middle East is the first geographic region where grain production has peaked and begun to decline because of water shortages, even as populations continue to grow. Grain production is already going down in Syria and Iraq and may soon decline in Yemen. But the largest food bubbles are in India and China. In India, where farmers have drilled some 20 million irrigation wells, water tables are falling and the wells are starting to go dry. The World Bank reports that 175 million Indians are being fed with grain produced by overpumping. In China, overpumping is concentrated in the North China Plain, which produces half of China's wheat and a third of its corn. An estimated 130 million Chinese are currently fed by overpumping. How will these countries make up for the inevitable shortfalls when the aquifers are depleted?
Even as we are running our wells dry, we are also mismanaging our soils, creating new deserts. Soil erosion as a result of overplowing and land mismanagement is undermining the productivity of one-third of the world's cropland. How severe is it? Look at satellite images showing two huge new dust bowls: one stretching across northern and western China and western Mongolia; the other across central Africa. Wang Tao, a leading Chinese desert scholar, reports that each year some 1,400 square miles of land in northern China turn to desert. In Mongolia and Lesotho, grain harvests have shrunk by half or more over the last few decades. North Korea and Haiti are also suffering from heavy soil losses; both countries face famine if they lose international food aid. Civilization can survive the loss of its oil reserves, but it cannot survive the loss of its soil reserves.
Beyond the changes in the environment that make it ever harder to meet human demand, there's an important intangible factor to consider: Over the last half-century or so, we have come to take agricultural progress for granted. Decade after decade, advancing technology underpinned steady gains in raising land productivity. Indeed, world grain yield per acre has tripled since 1950. But now that era is coming to an end in some of the more agriculturally advanced countries, where farmers are already using all available technologies to raise yields. In effect, the farmers have caught up with the scientists. After climbing for a century, rice yield per acre in Japan has not risen at all for 16 years. In China, yields may level off soon. Just those two countries alone account for one-third of the world's rice harvest. Meanwhile, wheat yields have plateaued in Britain, France, and Germany -- Western Europe's three largest wheat producers.
IN THIS ERA OF TIGHTENING world food supplies, the ability to grow food is fast becoming a new form of geopolitical leverage, and countries are scrambling to secure their own parochial interests at the expense of the common good.
The first signs of trouble came in 2007, when farmers began having difficulty keeping up with the growth in global demand for grain. Grain and soybean prices started to climb, tripling by mid-2008. In response, many exporting countries tried to control the rise of domestic food prices by restricting exports. Among them were Russia and Argentina, two leading wheat exporters. Vietnam, the No. 2 rice exporter, banned exports entirely for several months in early 2008. So did several other smaller exporters of grain.
With exporting countries restricting exports in 2007 and 2008, importing countries panicked. No longer able to rely on the market to supply the grain they needed, several countries took the novel step of trying to negotiate long-term grain-supply agreements with exporting countries. The Philippines, for instance, negotiated a three-year agreement with Vietnam for 1.5 million tons of rice per year. A delegation of Yemenis traveled to Australia with a similar goal in mind, but had no luck. In a seller's market, exporters were reluctant to make long-term commitments.
Fearing they might not be able to buy needed grain from the market, some of the more affluent countries, led by Saudi Arabia, South Korea, and China, took the unusual step in 2008 of buying or leasing land in other countries on which to grow grain for themselves. Most of these land acquisitions are in Africa, where some governments lease cropland for less than $1 per acre per year. Among the principal destinations were Ethiopia and Sudan, countries where millions of people are being sustained with food from the U.N. World Food Program. That the governments of these two countries are willing to sell land to foreign interests when their own people are hungry is a sad commentary on their leadership.
By the end of 2009, hundreds of land acquisition deals had been negotiated, some of them exceeding a million acres. A 2010 World Bank analysis of these "land grabs" reported that a total of nearly 140 million acres were involved -- an area that exceeds the cropland devoted to corn and wheat combined in the United States. Such acquisitions also typically involve water rights, meaning that land grabs potentially affect all downstream countries as well. Any water extracted from the upper Nile River basin to irrigate crops in Ethiopia or Sudan, for instance, will now not reach Egypt, upending the delicate water politics of the Nile by adding new countries with which Egypt must negotiate.
The potential for conflict -- and not just over water -- is high. Many of the land deals have been made in secret, and in most cases, the land involved was already in use by villagers when it was sold or leased. Often those already farming the land were neither consulted about nor even informed of the new arrangements. And because there typically are no formal land titles in many developing-country villages, the farmers who lost their land have had little backing to bring their cases to court. Reporter John Vidal, writing in Britain's Observer, quotes Nyikaw Ochalla from Ethiopia's Gambella region: "The foreign companies are arriving in large numbers, depriving people of land they have used for centuries. There is no consultation with the indigenous population. The deals are done secretly. The only thing the local people see is people coming with lots of tractors to invade their lands."
Local hostility toward such land grabs is the rule, not the exception. In 2007, as food prices were starting to rise, China signed an agreement with the Philippines to lease 2.5 million acres of land slated for food crops that would be shipped home. Once word leaked, the public outcry -- much of it from Filipino farmers -- forced Manila to suspend the agreement. A similar uproar rocked Madagascar, where a South Korean firm, Daewoo Logistics, had pursued rights to more than 3 million acres of land. Word of the deal helped stoke a political furor that toppled the government and forced cancellation of the agreement. Indeed, few things are more likely to fuel insurgencies than taking land from people. Agricultural equipment is easily sabotaged. If ripe fields of grain are torched, they burn quickly.
Not only are these deals risky, but foreign investors producing food in a country full of hungry people face another political question of how to get the grain out. Will villagers permit trucks laden with grain headed for port cities to proceed when they themselves may be on the verge of starvation? The potential for political instability in countries where villagers have lost their land and their livelihoods is high. Conflicts could easily develop between investor and host countries.
These acquisitions represent a potential investment in agriculture in developing countries of an estimated $50 billion. But it could take many years to realize any substantial production gains. The public infrastructure for modern market-oriented agriculture does not yet exist in most of Africa. In some countries it will take years just to build the roads and ports needed to bring in agricultural inputs such as fertilizer and to export farm products. Beyond that, modern agriculture requires its own infrastructure: machine sheds, grain-drying equipment, silos, fertilizer storage sheds, fuel storage facilities, equipment repair and maintenance services, well-drilling equipment, irrigation pumps, and energy to power the pumps. Overall, development of the land acquired to date appears to be moving very slowly.
So how much will all this expand world food output? We don't know, but the World Bank analysis indicates that only 37 percent of the projects will be devoted to food crops. Most of the land bought up so far will be used to produce biofuels and other industrial crops.
Even if some of these projects do eventually boost land productivity, who will benefit? If virtually all the inputs -- the farm equipment, the fertilizer, the pesticides, the seeds -- are brought in from abroad and if all the output is shipped out of the country, it will contribute little to the host country's economy. At best, locals may find work as farm laborers, but in highly mechanized operations, the jobs will be few. At worst, impoverished countries like Mozambique and Sudan will be left with less land and water with which to feed their already hungry populations. Thus far the land grabs have contributed more to stirring unrest than to expanding food production.
And this rich country-poor country divide could grow even more pronounced -- and soon. This January, a new stage in the scramble among importing countries to secure food began to unfold when South Korea, which imports 70 percent of its grain, announced that it was creating a new public-private entity that will be responsible for acquiring part of this grain. With an initial office in Chicago, the plan is to bypass the large international trading firms by buying grain directly from U.S. farmers. As the Koreans acquire their own grain elevators, they may well sign multiyear delivery contracts with farmers, agreeing to buy specified quantities of wheat, corn, or soybeans at a fixed price.
Other importers will not stand idly by as South Korea tries to tie up a portion of the U.S. grain harvest even before it gets to market. The enterprising Koreans may soon be joined by China, Japan, Saudi Arabia, and other leading importers. Although South Korea's initial focus is the United States, far and away the world's largest grain exporter, it may later consider brokering deals with Canada, Australia, Argentina, and other major exporters. This is happening just as China may be on the verge of entering the U.S. market as a potentially massive importer of grain. With China's 1.4 billion increasingly affluent consumers starting to compete with U.S. consumers for the U.S. grain harvest, cheap food, seen by many as an American birthright, may be coming to an end.
No one knows where this intensifying competition for food supplies will go, but the world seems to be moving away from the international cooperation that evolved over several decades following World War II to an every-country-for-itself philosophy. Food nationalism may help secure food supplies for individual affluent countries, but it does little to enhance world food security. Indeed, the low-income countries that host land grabs or import grain will likely see their food situation deteriorate.
AFTER THE CARNAGE of two world wars and the economic missteps that led to the Great Depression, countries joined together in 1945 to create the United Nations, finally realizing that in the modern world we cannot live in isolation, tempting though that might be. The International Monetary Fund was created to help manage the monetary system and promote economic stability and progress. Within the U.N. system, specialized agencies from the World Health Organization to the Food and Agriculture Organization (FAO) play major roles in the world today. All this has fostered international cooperation.
But while the FAO collects and analyzes global agricultural data and provides technical assistance, there is no organized effort to ensure the adequacy of world food supplies. Indeed, most international negotiations on agricultural trade until recently focused on access to markets, with the United States, Canada, Australia, and Argentina persistently pressing Europe and Japan to open their highly protected agricultural markets. But in the first decade of this century, access to supplies has emerged as the overriding issue as the world transitions from an era of food surpluses to a new politics of food scarcity. At the same time, the U.S. food aid program that once worked to fend off famine wherever it threatened has largely been replaced by the U.N. World Food Program (WFP), where the United States is the leading donor. The WFP now has food-assistance operations in some 70 countries and an annual budget of $4 billion. There is little international coordination otherwise. French President Nicolas Sarkozy -- the reigning president of the G-20 -- is proposing to deal with rising food prices by curbing speculation in commodity markets. Useful though this may be, it treats the symptoms of growing food insecurity, not the causes, such as population growth and climate change. The world now needs to focus not only on agricultural policy, but on a structure that integrates it with energy, population, and water policies, each of which directly affects food security.
But that is not happening. Instead, as land and water become scarcer, as the Earth's temperature rises, and as world food security deteriorates, a dangerous geopolitics of food scarcity is emerging. Land grabbing, water grabbing, and buying grain directly from farmers in exporting countries are now integral parts of a global power struggle for food security.
With grain stocks low and climate volatility increasing, the risks are also increasing. We are now so close to the edge that a breakdown in the food system could come at any time. Consider, for example, what would have happened if the 2010 heat wave that was centered in Moscow had instead been centered in Chicago. In round numbers, the 40 percent drop in Russia's hoped-for harvest of roughly 100 million tons cost the world 40 million tons of grain, but a 40 percent drop in the far larger U.S. grain harvest of 400 million tons would have cost 160 million tons. The world's carryover stocks of grain (the amount in the bin when the new harvest begins) would have dropped to just 52 days of consumption. This level would have been not only the lowest on record, but also well below the 62-day carryover that set the stage for the 2007-2008 tripling of world grain prices.
Then what? There would have been chaos in world grain markets. Grain prices would have climbed off the charts. Some grain-exporting countries, trying to hold down domestic food prices, would have restricted or even banned exports, as they did in 2007 and 2008. The TV news would have been dominated not by the hundreds of fires in the Russian countryside, but by footage of food riots in low-income grain-importing countries and reports of governments falling as hunger spread out of control. Oil-exporting countries that import grain would have been trying to barter oil for grain, and low-income grain importers would have lost out. With governments toppling and confidence in the world grain market shattered, the global economy could have started to unravel.
We may not always be so lucky. At issue now is whether the world can go beyond focusing on the symptoms of the deteriorating food situation and instead attack the underlying causes. If we cannot produce higher crop yields with less water and conserve fertile soils, many agricultural areas will cease to be viable. And this goes far beyond farmers. If we cannot move at wartime speed to stabilize the climate, we may not be able to avoid runaway food prices. If we cannot accelerate the shift to smaller families and stabilize the world population sooner rather than later, the ranks of the hungry will almost certainly continue to expand. The time to act is now - before the food crisis of 2011 becomes the new normal.'
Actually, there is – a three-day weekend in spring.
Seventy-two precious hours of freedom. Finish that book on the bedside table. Stroll the park, scour the barbecue, plant the garden. Or, if you're really ambitious, tackle the clutter in the basement.
Canadians enjoy five or six of these brief furloughs a year. In fact, they savour them – tonics for the spirit – like bottles of vintage wine.
The regular weekend is like a speed bump. It slows you down, but doesn't last long enough to change your basic habits. Three days, on the other hand, is a legitimate rest. It allows you to reset the psychic thermostat.
So here's the real question du jour: Why aren't there more of them? What's so sacred about the five-day workweek, a regimen set in place in North America seven decades ago that has been virtually immoveable since (unlike in many European countries)? In an age of high-tech efficiency and higher productivity, why isn't the working world organized to provide us with more leisure time?
The benefits – social, economic, ecological – would be legion.
Certainly, we were promised it. For more than a century, a loud chorus of visionaries has lauded the fruits of science and technology, and the personal liberties they would confer.
It hasn't worked out that way. Indeed, as they embark on their annual Victoria Day weekend – National Patriots Day in Quebec – Canadians (tethered to BlackBerries, laptops and iPads) are more likely to be struck by a grimmer calculus. Our so-called work-life balance has lost its equilibrium. Increasingly, we are logging longer hours. Increasingly, we have less time for recreational pursuits.
The statistics confirm what, in our weary bones, we already know. According to one recent American study, the amount of leisure time per capita hasn't changed significantly in 105 years. To the extent that is has changed, it's for the worse. Although the time Canadians spent on leisure pursuits increased from 5.5 to 5.8 hours per day between 1986 and 1998, by 2005 it had reverted to the 1986 level, a decrease of 18 minutes per day.
In her 1993 book, The Overworked American: The Unexpected Decline of Leisure, Harvard professor Juliet Schor documents the steady annual rise of work hours after 1970. The uptick – about nine hours per year – applies to both men and woman, white- and blue-collar workers. The surprise factor derives from the productivity numbers, which doubled between 1948 and 1990. By then, Americans produced enough goods and services to have adopted a four-hour workday or a six-month work year. “Or,” writes Prof. Schor, “every U.S. worker could be taking every other year off from work – with pay.”
It never happened, of course. The productivity dividend was squandered. Leisure time became a casualty of prosperity.
Reclaiming the Utopians
None of this was expected. On the contrary, for more than a century, the West's reigning mythology of infinite progress promised a cornucopia of leisure.
In 1888, the third best-selling book in America – after Uncle Tom's Cabin and Ben-Hur – was Edward Bellamy's Looking Backward: 2000-1887. The central character in this utopian novel, Julian West, falls asleep in the 1880s and wakes up in the year 2000. The world he apprehends has been transformed into a kind of paradise. Working hours have been reduced dramatically. People retire at age 45, with full benefits. And, via technology, goods and services are delivered almost instantaneously.
In the 1920s, biologist Julian Huxley said a two-day workweek was inevitable, because “we can only consume so much.” If only he could see us now.
Endorsing Huxley, economist John Maynard Keynes observed in the 1930s that society would eventually face a pressing social issue: “The great problem of what to do with our leisure.”
Their fears were unfounded. Industrial society's ability to function with reduced work capacity was clearly demonstrated during the Second World War, when millions of men went off to the front. Had the same methodologies been preserved after 1945, argued philosopher Bertrand Russell, and “the workweek cut to four days, all would have been well. Instead, the old chaos was restored, those whose work was demanded were made to work long hours, and the rest were left to starve as unemployed.” For Dr. Russell, “the morality of work is the morality of slaves, and the modern world has no need of slavery.”
The post-war decades yielded a harvest of new labour-saving devices. By 1970, American writer Alvin (Future Shock) Toffler envisaged an irreversible exodus from the workplace, precipitating a boom in leisure-time activities. These roseate forecasts achieved consensus as the computer era dawned and gathered pace, spurred by the development of the integrated circuit in 1958.
“From the ashes of the work ethic will rise the phoenix of leisure,” trumpeted electronic engineers Alan Burkitt and Elaine Williams, in 1980. “People will have the opportunity of using more free time to pursue their leisure interests, and more money to spend on them.” And computer scientist Christopher Evans maintained that the microprocessor would “at long last make the humanistic dream of universal affluence and freedom from drudgery a reality.”
The cult of hard labour
So what went wrong? Ben Hunnicutt thinks he knows. “The problem is that work has taken the place of religion in our lives,” says the American sociologist, who teaches at the University of Iowa.
“All the mythologies associated with work are the same ones associated with God. Except work is a false God. The notion that we can grow our economies forever, reach full employment – it's easier to believe in the resurrection of the body. ”
The research of Berkeley sociologist Arlie Hochschild verifies Prof. Hunnicutt's theory. For her 1997 book, The Time Bind, When Work becomes Home and Home Becomes Work, Prof. Hochschild interviewed employees for an American corporation that had put enlightened, family-friendly policies for work-sharing, flex-time, parental leave and sabbaticals in place. Yet the usage rate proved shockingly low – not because management subtly discouraged their adoption, or because employees were unaware of the programs, or because they could not afford them. Higher-paid workers were even less likely to use flex-time than lower-paid workers.
“What I realized,” says Prof. Hochschild, “is that the village well has gone to work. If you asked these people where they felt good about themselves, where they felt supported, where they felt safe – it was always work. One man said, ‘I've worked for the company 30 years. I get pink slips at home.'”
And for all its mega-pixelated marvels, technology itself now degrades the quality of our leisure. As French philosopher Jacques Ellul noted, our leisure time, “instead of ... representing a break with society, is literally stuffed with technical mechanisms of compensation and integration. ... Leisure time is mechanized time and is exploited by techniques which, although different from those of man's ordinary work, are as invasive, exacting, and leave man no more free time than labour itself.”
It's time for a change – time to move, incrementally, toward a four-day workweek.
Utah implemented exactly that plan – four, 10-hour days, with no cuts to pay or benefit, for its non-essential public employees – in 2008. Half a dozen other U.S. jurisdictions are said to be studying it. The European community has gone much further. In Scandinavia, working parents have the right to insist on a four-day week, without salary cuts. In the Netherlands, that right applies to all employees.
The 72-hour gospel
So, how rich are the potential dividends of a four-day week? Let us count the ways.
Fuel consumption and greenhouse-gas emissions: Let's assume there'd be about 20-per-cent fewer cars on the road for morning and afternoon rush hours. That would constitute a major reduction in crude oil usage. The same percentage decline would apply to chemical compounds spewed by cars and trucks – carbon monoxide and dioxide, sulphur dioxide, nitrogen oxides, hydrocarbons, ozone, lead and chloro-fluorocarbons. Global warming might even be reduced.
Disposable income: The 20-per-cent savings on gas, car maintenance and insurance would accrue to personal pocketbooks. The family sedan would last longer. Money otherwise allocated to these budget categories could be spent consuming other goods and services – so that overall levels of demand and consumption would not be affected.
Corporate incentives: Far from seeing the four-day week as a threat to productivity, the business world should welcome it. There would be significantly less absenteeism. With less stress on employees, companies would also be able to cut budgets for workplace stress-reduction and physiotherapy programs. Their own costs for heat, lights, security and building or office maintenance would also decline.
The well-being app: And finally, the three-day weekend's Killer App – call it the Well-Being App.
There'd be more time. Time for the family, a demonstrable, arguably urgent, need. And more time for the self. You could start that cottage industry you've been planning for years. Finish the screenplay. Take your kids on long hikes.
With more time, you would be able to cook more and eat out less (additional savings). You would watch less television. The habit is actually a reflex of exhaustion – European studies show that four-day workers are less inclined to park in front of the tube.
Instead of dropping your toddler at the day-care centre, you'd have one more day a week with him or her. Instead of missing the ballet class or the hockey game because of a corporate meeting, you would be there for it, video-camera in hand.
As a practical matter, “we need not adopt a one-size-fits-all template,” says John De Graaf, who runs the Seattle-based movement Take Back Your Time. “We have to recognize that people have different needs.”
But in dozens of ways, large and small, the three-day weekend would begin to repair the breach that has formed at the heart of Western culture – a breach in the quality of our lives.
Perhaps we need to become like Bartleby the scrivener in Herman Melville's short story. His boss repeatedly gives him assignments, to which the inscrutable legal assistant repeatedly says, “I'd prefer not to.”
If Facebook and Twitter postings can inspire a revolution that topples a dictator in Egypt, a campaign for a four-day workweek should be a piece of cake.
You have the next three days – at least – to think about it.'
The time is running out, the oil is today our lifeline, it is everywhere in the economy, if the prices go up or if there's a supply disruption this will be definitely very bad news. .. I think it would have been better if the governments have started to work on it at least ten years ago.'
'In this special Catalyst investigation, we travel from Paris, to London, to the outer space like world that is deep sea drilling to find out why so many industry insiders now say we'll soon look back on 2011 as the good old days when fuel was cheap.'
'Advertising is the vandalism of the Fortune 500.
Whence this new interest in the security of our food supply? There is no doubt that Australians share with others around the world a heightened awareness of the constraints facing world food production: limited resources of land, water, energy and nutrients; growing demand due to growing population and dietary changes; competition over production resources between food crops and agri-fuel crops, and looming over it all the challenges of maintaining production levels under a changing climate. While writers such as Australia's Julian Cribb have been sowing the seeds many years, it was the world food crisis of 2008, during which the prices of major food commodities trebled and "food riots" occurred in some thirty countries which appears to have fertilised the public conversation.
But what does food security mean in Australia? Presumably its about the food on our plates and on our supermarket shelves - it's is about having enough food. The definition adopted by the Food and Agriculture Organisation of the United Nations is "food security exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life." So why is food security being added to the agriculture portfolio? Wouldn't it be better added to public health – which is concerned with our nutrition, or industry and trade, or perhaps consumer affairs? In India, China or sub-Saharan Africa where upwards of half the population eat mostly the food they grow themselves food security is clearly very closely linked to the productivity achieved on farms. But in Australia?
According to the DAFF's Australian Food Statistics, currently around 80% of the food that Australians eat comes from Australian farms, but that's an artefact of history not current policy, and has declined from closer to 90% ten years ago. There's currently no policy at State or Federal level that links our food supply to domestic food production, in fact quite the opposite. Our policy since the mid-1970's is that agriculture, like other industries, should operate in a competitive global market where producers sell to the highest bidder wherever they are, and buyers are free to buy the cheapest produce, wherever it comes from. Farmers are to make production decisions on the basis not of food needs in Australia or anywhere else, but on the basis of price signals.
Why are our supermarkets full of Chinese garlic (and why since 2007 have we been importing a greater value of fruit and vegetables then we have been exporting)?. Why does Australian farmland get converted into suburbs or mines, or sold to overseas investors? Why during the recent drought was irrigation water in northern Victoria sold by dairy farmers to wine and almond growers? Because the market has been working its magic, directing resources to the most economically efficient and profitable uses, delivering cheaper food for consumers along the way.
Our policy position is clear – we look to the market, and not to Australian farmers, for our food security. It's a policy that has much to commend it. If we get a greater economic return on labour from mining than from picking apples, and if China can grow apples at lower cost than what we can, then it's a good deal. We sell them our coal and buy their apples and everyone (except our orchardists) is better off. As long as we are cashed up (as a nation and as individuals), and as long as there is food to buy, our supermarket shelves and our plates will be full. It's bitter fruit for some farmers and their communities who find themselves competed out of a livelihood, but that's life in the global marketplace.
But what if there isn't food to buy? Remember the global food crisis of 2008, which was more or less repeated in 2010-11. The first response to rocketing food prices by some food exporting countries was to ban food exports – World Trade Organisation rules be damned. If we look at the world food situation there is real cause for concern. Food production is critically dependent on fossil fuel energy and non-renewable phosphate rock – supply of both of which is close to or at its peak. Water resources are in decline in many of the world's food bowls (including our own Murray-Darling Basin), and investment in, and productivity dividends from, agricultural technology R&D are also in decline. Markets are good at many things – but foreseeing major surprises down the track is not one of them.
Facing such an array of destabilising influences I wonder if it is wise to put all our trust in global markets. If I was Minister for Food Security I'd be thinking about a more diversified policy portfolio that hedges risks. Let's think about local food systems as well as global ones. Let's think about production systems that are less dependent on diminishing input supplies, and let's think about the value of maintaining a critical mass of skilled farmers who feel valued for producing high-quality food for Australians as well as for export income.'
Now comes a report this week from the High Pay Commission, set up by the Labour pressure group Compass. It reveals that FTSE 100 chief executives are on average paid £4.2m annually, or 145 times the median wage – and on current trends will be paid £8m, or 214 times the median, by 2020. In the financial sector, even the CEO can seem modestly rewarded: this year, the top-paid banker at Barclays will get £14m, nearly four times the chief executive's earnings and 1,128 times more than the lowest-paid employee receives.
Meanwhile, once inflation is taken into account, most people's incomes are set to fall, after 15 years of virtual stagnation. Between 1996-7 and 2007-8, the earnings of someone in the middle of the income distribution rose (1997 prices) from £16,000 to £17,100 – barely £100, or less than 0.7% a year. Even the increase for those quite near the top of the income scale, better off than 90% of their fellow citizens, was unspectacular. Their inflation-discounted pay crept up from £36,700 to £41,500, or less than £450 (1.2%) a year. The top 0.1% scooped the jackpot. They got a £19,000 pay rise every year, taking their incomes to £538,600, a gain of 67% over 11 years. The commission gives no figures for the top 0.01%, but we can be confident they did even better and dramatically so.
That is the most important point about what has happened to incomes in Britain and America during the neoliberal era: the very rich are soaring ahead, leaving behind not only manual workers – now a diminishing minority – but also the middle-class masses, including doctors, teachers, academics, solicitors, architects, Whitehall civil servants and, indeed, many CEOs who don't run FTSE 100 companies, to say nothing of the marketing, purchasing, personnel, sales and production executives below them. That is why, over the past decade, some of the most anguished cries about high incomes and inequality have appeared in the Telegraph and Mail.
The commission describes levels of top pay as an instance of "market failure" because most arguments used to defend it just don't stack up. For example, despite claims that pay levels are dictated by global competition, the majority of FTSE 100 CEOs are British, promoted from within their companies. Only one CEO has been poached in the past five years – by a British rival. But top pay also suggests political failure, particularly on the left. To put it crudely, why can't leftwing parties harness middle-class anger against the super-rich? Surveys show a substantial majority of the electorate agree that differences in income are too large and that ordinary people don't get a fair share. Only one in eight disagree. Why is this so difficult to translate into a political programme that could command mass support?
One reason why the working classes so often disappointed the left was that, having little daily contact with the rich and little knowledge of how they lived, they simply didn't think about inequality much, or regard the wealthy as direct competitors for resources. As the sociologist Garry Runciman observed: "Envy is a difficult emotion to sustain across a broad social distance." Nearly 50 years ago he found manual workers were less likely than non-manual workers to think other people were "noticeably better off". Even now most Britons underestimate the rewards of bankers and executives. Top pay has reached such levels that, rather like interstellar distances, what the figures mean is hard to grasp.
But the gap between the richest 1% or 2% and everybody else in the top 20% or 30% is now so great and growing so rapidly that, one might reasonably think, it should change the terms of political trade. The income distance may be huge but the social distance is not. Those in the top 2% and the next 28% have often been to the same schools and universities. More important, they compete for scarce resources: places in fee-charging schools, houses in the best areas, high-end personal services. The super-rich have provoked raging inflation in the prices of these goods. Many of the not-so-rich were born into the professional classes and high expectations. Now, to their surprise, they find themselves struggling. In income distribution, their interests are closer to those of the mass of the population than to people they once saw as their peers.
They are not, however, imminently likely to join a crusade for equality. This generation of the middle classes has internalised the values of individualist aspiration, as zealously propagated by Tony Blair as by Margaret Thatcher. It does not look to the application of social justice to improve its lot. It expects to rely on its own efforts to get ahead and, crucially, to maintain its position.
As psychologists will tell you, fear of loss is more powerful than the prospect of gain. The struggling middle classes look down more anxiously than they look up, particularly in recession and sluggish recovery. Polls show they dislike high income inequalities but are lukewarm about redistribution. They worry that they are unlikely to benefit and may even lose from it; and worse still, those below them will be pulled up sufficiently to threaten their status. This is exactly the mindset in the US, where individualist values are more deeply embedded. Americans accepted tax cuts for the rich with equanimity. Better to let the rich keep their money, they calculated, than to have it benefit economic and social inferiors.
As Runciman observed, "most people's lives are governed more by the resentment of narrow inequalities, the cultivation of modest ambitions and the preservation of small differentials" than by the larger picture of social justice. That applies as much to the professional as to the working classes.
But as the super-rich stretch further ahead, appropriating, with the assistance of a Conservative-led government, ever increasing proportions of national resources, Ed Miliband and Labour have the opportunity to build a new cross-class consensus for a more equal society. "The squeezed middle" may be a concept that lacks both precision and passion, but at least it shows Miliband is thinking along the right lines.'
