Goldman Sachs, the global food crisis and faith in corporations

Last week, Harper’s magazine published an article by looking at the link between the unabashed greed of big financial firms and the 2007–2008 world food crisis. The crisis resulted in the starvation of thousands, hunger for millions and riots in some of the countries hit hardest. For a window into the pain of an individual family in Ethiopioa, see this article in the Independent.

Kaufman’s article includes an in depth look at the history of commodity markets and futures trading and detailed explanation of how recent “innovations” led to a dramatic rise in food prices. The bottom line of Kaufman’s allegation is: big financial corporations manipulated the food market for their own profit and millions of people went without food as a result.

It’s worth noting that Kaufman is not critiquing the over all system of wheat futures. He is specifically pointing to “innovations” by the financial industry that created a “food bubble.”

Goldman Sachs has written a short, defensive letter calling Kaufman’s article “unfounded conspiracy theories.” Its amazing how quickly these organizations will resort to name calling. You can read Kaufman’s response here.

What is your reaction to reading a story like this? Is this surprising to you? Are you skeptical? Stories like this provide a mirror into our relationship with mega-corporations.

This story seems to have created a blip in mainstream media, but little more. If this story was about an individual who was responsible for starvation and social disruption, would we treat it differently? Would there be calls for an investigation or a criminal trial? Yet corporations are vastly more powerful then any individual, relentlessly greedy by design and immortal. Where do they fit in our moral framework? Why don’t we hold these persons* accountable for their actions in the same way we do individuals? Do we believe they can be redeemed more easily then humans? Do we believe they are a necessary evil? Do we believe they are the way, the truth and the life?

*A legal status created through decisions of the United States Supreme court.

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