Business, Economics and Jobs

Eat the rich

As University of Chicago Professor Emeritus (and my old buddy) Marvin Zonis points out in a research paper today (not yet available online), Hosni Mubarak's political end was not brought about by hungry Egyptians.

Revolutions need more than empty bellies. In fact, Marvin argues, hunger generally leads to lethargy — not political protest. Sure, hunger is an important factor. But it's only part of the story. Here are some other necessary conditions that can lead to revolution.

Jot these ideas down, class:

1) Higher spending on food among the poor, particularly as a percentage of total income

2) A growing sense of injustice among the poor that they're getting a raw deal from their leaders, while others in society flourish

3) Opposition leaders who arise to point out these two facts

Unfortunately, these conditions are occurring in many places around the right now, and particularly in the Middle East. The biggest factor here is skyrocketing food prices, which according to the latest figures from the UN are about 2.5 times higher than they were overall just seven years ago.

The bad news is that food prices aren't likely to go down anytime soon. Here's why, Marvin says:

1) U.S. corn supplies this year may hit a 15-year low, even as corn diverted to ethanol takes up some 40 percent of that crop

2) China — the world's biggest wheat grower — is suffering through a major drought

3) Russia's wheat supplies have been hit by recent droughts, too

4) Nervous governments are on the market buying up these scarce supplies

5) Populations continue to rise around the world, while dietary changes in a richer Asia mean more Asians are consuming more meat (animals eat grain, too)

So — considering all these factors — what's the world going to look like in 2011, according to Marvin?

We could very well see higher food prices, more political tension, and more fuel for the protesting fires — particularly in an increasingly volatile Middle East.

Stay tuned.