Aug 2006

Bloody markets

The problem, as is so often the case, is free markets. You see, they are maybe possibly perhaps a half-decent way of handling the distribution of new computer games. For instance. But they’re an awful way of dealing with essential non-renewable resources. Seriously awful. In fact, if you had to design a system with the express purpose of bungling resource management you’d probably arrive at something a lot like free market economics.

We’ve arrived at a system which provides as motivation for the production and supply of essential non-renewable resources; the generation of profit. And it bestows the right to choose how the resource should be consumed onto those wealthy enough to purchase it.

I see it as being somewhat akin to a national blood bank / transfusion service being run exclusively for the profit of those who own the system. And to make matters worse, there’s a cabal of millionaires who get their kicks buying blood to bathe in. I mean, let’s be honest, there’s no reason at all for a defender of the free-market principle to object to that.

Certainly if millionaires are buying blood to bathe in, it’ll raise the price and – presumably – generate a greater supply. But this is a finite resource we’re talking about. Over 10% of the population has “needle phobia”. Another 10 – 15% are barred from giving blood because of various contamination issues. And health and safety recommends that nobody should donate blood more than once a month (restricted to 4 times a year in many countries). It’s a finite resource and increased demand will not generate an increased supply beyond the limits imposed by nature.

So first our hypothetical cabal raises the price beyond the capability of the NHS to pay for transfusions, then it raises it beyond the capability of most private patients to pay. Do proponents of the free market believe this is an acceptable situation? Is it OK for rich people to deliberately waste a resource vital to sustain the lives of those with less purchasing power? Is it still OK when it’s your ten-year-old daughter dying in hospital because Peter Stringfellow, Andrew Lloyd-Webber and Richard Branson want to sit in a bath of blood?

Of course, nobody bathes in blood. Leastways nobody you’d invite round for dinner. But I was drawing an analogy, not suggesting that Richard Branson actually has a blood fetish (though you do have to wonder about Lloyd-Webber… nothing would surprise me about him). And it’s an analogy that can be applied more directly than perhaps you’d imagine.

There are rather worrying reports emerging from some of the poorer African nations; Zimbabwe in particular. These reports are unconfirmed and I’ve only read them (thus far) on peak oil mailing lists (so I’m not using them as “evidence”; merely illustrative examples of how market forces will affect essential resource distribution… i.e. if this is not happening now, then it will be soon). As the recent rises in oil price kicked in, the poorest nations have been forced to cut back on the quantity they imported. This is what free markets are all about, after all.

However, in Zimbabwe this is resulting in a major curtailing of the – already decrepit – ambulance service*. People are dying right now because western consumers are willing to pay more for petrol to drive their SUVs to the hypermarket than the Zimbabwean health service can afford to pay to keep their vehicles on the road.

Bloody markets, eh?

* Yes, yes, I’m aware that the unique political disaster occurring in Zimbabwe is a major factor in the collapse of the health service (and just about everything else). However I trust you’re smart enough to realise that merely explains why Zimbabweans can’t afford to fuel their ambulances. Saying “Oh! Oh! Mugabe is a Bad Man!” loudly while sticking your fingers in your ears doesn’t actually redress the basic injustice that people are dying for want of a global resource while others are frivolously squandering it.

Posted in: Opinion