Can a self regulating market really regulate itself?

1 post / 0 new
IndiaMellonTrip's picture
Joined: 08/09/2011
Can a self regulating market really regulate itself?

            Farming used to be the main occupation of people hundreds of years ago all over the world including India. Most people were tied to the land through the British colonization of India starting with the East India Trading company, colonial British changed farming by asking people to give them some of what they produced, a tax. By doing this people now had to produce more food than they were used to to be able to have enough after some was given away.


            The book Paths to a Greener World: The Political Economy of the Global Environment by Jennifer Clapp and Peter Dauvergne is a book that highlights different ideologies people have on the subjects of Economy and Globalization and how, in turn, those ideologies have an effect on how individuals view the environment, environmentalism and environmental problems as well as their views on the best way to solve these environmental problems including, but not limited to, environmental degradation. The authors separated the different viewpoints into four main groups; this was to better explain the differences of opinion between different people. They admit that there are an infinite amount of ideologies but these four groups are a way to grasp the fundamental differences in ideologies that exist. The titles for these four groups are: market-liberals, institutionalists, bioenvironmentalists, and social greens.


            Vandana Shiva is what Clapp and Dauvergne would refer to as a social green, she is an Indian physicist and human rights activist. In her book, A Stolen Harvest she discusses the state of modern India’s agriculture in respects to India’s history as well as it’s economy and government. She points out the Bengal famine of 1946 as being the beginning of the struggle of the Indian people for food security (Stolen Harvest, Shiva, 5). During this time under the colonial system the Indian people gave two thirds of the food they grew to the British colonizers leading to a huge food shortages across India, most notably in what is now Bengal (Stolen Harvest, Shiva, 6). This was one of the incentives the people needed to throw off colonization (shiva, 7). The Indian people refused to give up their rice to the British and were then charged with stealing (Shiva, 7). Half a century later in modern day another system has been set up stealing rice from the peasants again (Shiva, 7). This theft is created by free-trade. Which is also stealing from nature (Shiva, 8). India gained its independence the next year, in 1947. But capitalism took over where colonization left off. In the modern day India is still experiencing much hunger and famine. Now the people beg the government to buy two thirds of their crops, so they can make money, leaving little food for them to eat themselves. Then this food in storage, not being allowed to be distributed to the people who are starving because they cannot pay for it (Shiva). When in Indian I was told that the government does have food programs for poor people. In Indian food is seen as a right, not a privilege. I was told about a program where grocery stores are given money so that when poor people come to buy food they can get it at a reduced price. Yet these poor people do not know that they have the right to food, they have not heard of these programs. So the money instead goes to the greedy person who was supposed to dole it out, a person who does not need the extra money, who is not starving. One could say that India’s view on aid for impoverished people is fragmented just as Anil Varughese, an intellectual who studies India, says their view on environmentalism is.


            At the point when the Indian government got their independence they were already delayed in entering into the international market which made them very short-sighted, they were highly motivated to create business and revenue in their country, wanting to catch up to the other players in the market game, not wanting to fall even further behind (Strange, 53). This short-sightedness means that they did not think of the long-term impact the market would have on their country. This long term impact includes environmental degradation and in regards to agriculture the affect of agribusiness on their country and people. As I have already said market liberals and institutionalists also believe that short-sightedness is to blame for environmental degradation, but they view the persecutors of this short-sighted behavior very differently, saying the poor are to blame.


            The market-liberals and institutionalists highlight their point that there is a strong correlation between poverty and environmental degradation by showing that the poorest countries are the ones with the most environmental degradation and that the richest countries are the countries with the least. They say that as citizens have more money they are more apt to call to their government to change environmental policy to make their land cleaner. Yet the problem is that much of this pollution from the richer countries does not disappear but is instead shipped to poorer countries. So this trend shows evidence that when a country is able to get more money they will also cure their environmental problems by shipping their waste and their pollution to another poorer country by transferring polluting industries like production and factories to poor countries like India. In addition to this the polluting industries are moved from an area where there are heavy regulations on industry, pollution, and the dumping of waste, rich countries, to places with little to know regulations on these things and people with little to no knowledge of what these things are doing and little power to stop them, poor countries like India. Taking production from the most educated countries who not only have the ability to continue making newer and better technology that is cleaner and more efficient but also a call for them to do so, to poor countries with less education and brain drain, where there most educated leave to richer countries, who have no motivation to create these technologies within and for their own countries. Then the products made in these new factories have to be shipped to the countries they are intended for which means more natural resources being used, which means even more drilling in the same impoverished countries to get that gasoline and thus more pollution and more movement of people off their lands. So with the movement of polluting industries comes more pollution. On top of this the people who are making the most money are the people in the corporate office in the rich county that outsourced the work, not the poor country that is now baring the brunt of the pollution and environmental degradation that goes along with the factories they exported there.


            I believe that the whole system is built on the fundamental idea that there will always be poorer countries for the burden of pollution to fall on. A market-liberal or institutionalist might argue that eventually all of the countries will no longer be poor and at that time the system will have to change, and a better system will invent itself. But is that true? I believe that poverty is a cycle that poor countries are not able to get out of easily. I believe that since according to our current system there always needs to be poor countries then the system will make sure that there always are poor countries, or at least poor people for these burdens to fall on. This is why social greens believe that a new system has to be put in place before anything can change. This is a view unlike the view of any of the other three groups, all the other groups believe that change can occur from reform of the current system. Market liberals believe in the purist form of the market. They believe that current problems have come about because the market is not able to function properly because of all the restrictions on it. They would say that if all restrictions were taken off the market then free trade would work properly and every problem would fix itself.



            Regulating an intentional self-regulating entity does not make sense. But I think what is important is to look at why the market was regulated in the first place and what events led to the implementation of these regulations. Polyani discusses the history around the creation of the market in his book The Great Transformation: The Political and Economic Origins of Our Time. Though I cannot even attempt to summarize the history of the market within this paper I will use his words to illustrate a point. Towards the end of his chapter entitled “Disruptive Strains” he discusses when major regulations to the market truly began and said, “Eventually, unadjusted price and cost structures prolonged depressions, unadjusted equipment retarded the liquidation of unprofitable investments, unadjusted price and income levels caused social tension. And whatever the market in question- labor, land, or money- the strain would transcend the economic zone and the balance would have to be restored by political means (Polyani, 227).” These political means he is referring to are the very same regulations that the market-liberals are referring to as the problem with the market. Yes a self-regulating market should be able to regulate itself but often the problem is how long it takes the market to do so and the unpredictability of that self-regulating process. And how this unpredictability can effect people’s lives, the economy of a nation and the world, and also state governments. The government has come in and implemented regulations for the betterment of the people and the state. The regulations ensure predictability. It is feasible that if the market were left to its own means then it would have ended the depressions it created just like it could potentially heal the environment that it has ruined. But how long will that take? And how much more damage will be done in the process?