CasP Dialogue 2015.01: Baines' work on food price inflation

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CasP Dialogue 2015.01: Baines' work on food price inflation

Postby jmc » Mon Nov 23, 2015 7:02 pm

*** This post is part of a new initiative for ongoing dialogue in political economic research. We wish to engage in open, autonomous and creative communication whose purpose is to elucidate various viewpoints, find their similarities and differences, and hopefully make them the basis for higher forms of understanding and action. Please follow this website forum for updates and new posts ***


CasP Dialogue 2015.01: Baines' work on food price inflation as redistribution

The dialogue involves reading and discussion of the following work:
Baines, Joseph. Food Price Inflation as Redistribution: Towards a New Analysis of Corporate Power in the World Food System (Preprint) New Political Economy. April 2013. pp. 1-35.

Download PDF of preprint copy: http://bnarchives.yorku.ca/359/2/201304 ... on_aam.pdf


How to participate:
1. Register an account on the forum. If you are having difficulty doing this, please contact james.casp.forum at gmail

2. The thread will be unlocked two weeks after the paper is selected for dialogue. For Joseph's paper, this thread will be unlocked on December 7, 2015. This two-week gap between post and dialogue will give everyone time to read and think about the publication.

3. Make a contribution – be it a comment, question or critique. A dialogue develops, and we let it run its course. If the discussion is substantial enough, its main participants can edit it into a Working Paper on Capital as Power and post it on http://www.capitalaspower.com/category/working-papers/ (for an example of such edited dialogue, see “Imperialism and Financialism: An Exchange” http://bnarchives.yorku.ca/278/). The resulting paper can then be titled “(Original title): A Dialogue” and submitted to the journal where the publication originally appeared (NPE in this case), or to any other journal if the focus is a book.
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Re: CasP Dialogue 2015.01: Baines' work on food price inflat

Postby jmc » Mon Dec 07, 2015 9:08 am

This thread is now unlocked. If you have any questions, comments or critiques for Joseph Baines' paper, please post them here. Our goal is to produce a fruitful dialogue, which can then be replicated with other papers.
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Re: CasP Dialogue 2015.01: Baines' work on food price inflat

Postby sanha926 » Mon Dec 07, 2015 12:08 pm

This could be construed as an opening salvo. But "salvo" is too aggressive, indeed violent, a term to describe the complimentary things that I write here. Baines's New Political Economy article presents stunning and original research, centred on a rather devastating critique of, and convincing alternative to, the 'supermarket mastery' thesis that dominates the study of the world food system.

Having little expertise on the intricate details of the world food system, I'm not in a position to critique the finer points in the article. Instead, I offer some preliminary thoughts on what I think is a crucial but somewhat underdeveloped area within the capital as power (CasP) framework -- the theorization of business interests. When do elements of dominant capital conflict and cooperate and under what conditions? What can we say theoretically about intra-business patterns of conflict and cooperation and how do we research them empirically? At the heart of these questions is a more fundamental question that arguably underpins all social science: How do we aggregate -- and then disaggregate -- seemingly heterogeneous human beings into social groups?

What follows can be regarded, for lack of a better term, as a modest attempt to formalize a power-centred approach to business interests, one that I hope clarifies the focus of Baines's research and points the way to other areas where conflict over the world food system might be explored in the future.

Baines's article is focused on intra-business conflict in relation to the world food system. Specifically, he is interested in the conflicts that emerge between dominant (i.e. large) corporations. His research reveals to main findings: 1. Against conventional wisdom in highly fashionable 'global value chains' (GVC) analysis, Baines shows that supermarkets, rather than dominating the world food system against others, have seen their relative share of profits decline since 2000; 2. The "real" power within the world food system is wielded by an "Agro-Trader nexus" (an amalgam of inputs manufacturers and traders) relative to the food manufacturers and retailers. The alliance of interests within the Agro-Trader nexus coalesce around the biofuels boom, which has fuelled their differential earnings.

Theoretically, drawing on Nitzan and Bichler's work, Baines (2014: 86-87) argues that conflict and cooperation between dominant business groups hinges on the principle of exclusion. Conflict emerges when one dominant business group excludes another dominant business group from a given capitalized income stream. Cooperation emerges when a dominant business group is formed to exclude another dominant business group from a given capitalized income stream. At the core of conflict and cooperation is thus the redistributional struggle over profit. Methodologically, there are both quantitative and qualitative dimensions to business conflict. We quantitatively gauge patterns of conflict and cooperation by, first, mapping relative profits and relative prices, and second, examining qualitatively the "realignments of corporate control" that accompany changes in relative profits/prices (ibid.: 87). How do we check the robustness of our empirical categories? By constantly relating quantity and quality. Ultimately it is up to us, the reader, to decide if the story is compelling. What remains to be further fleshed out is how a distinct CasP approach to business interests intersects and with existing approaches (Marxist, sectoral, pluralist).

So to formalize in very basic terms:

1. Baines's article is focused on patterns of conflict and cooperation between one element of big business and another element of big business (what we might term the intra-dominant capital struggle within business).

2. Another facet of relates to the patterns of conflict and cooperation between big business versus small (David versus Goliath, as is implied when we measure the differential profit/capitalization of dominant capital versus the average).

3. Finally, even though CasP emphasizes the 'top down' aspects of power, there's also the conflict that pits big business (or elements of big business) against society as a whole (what Nitzan and Bichler refer to, following Castoriadis, as the "magma").

The point is that there is nothing a priori to read off the structure of accumulation in order to determine the pattern of business conflict and cooperation. Alliances within big business can shift. Though 'dominant capital' is a key construct within CasP, there's nothing to say, for example, that some elements of small business might align with some elements of big business against another element of big business. Also, we might assume small business and the magma to be natural allies (part and parcel of Veblen's "industry"). But big business might try to pit these two groups against each other, or one of them might align with big business against the other.

In what ways might this formalization point to further areas of research?

1. Baines's research uncovers a fault line of conflict between the Agro-Trader Nexus and the Food Core/Retail Core. It remains to be seen how, if at all, other elements of dominant capital fit into the story. For example, are big oil and big auto implicated in this redistributional struggle?

2. There's the question of how the Agro-Trader Nexus relates to the business community at large. Are there certain small and medium enterprises that resist the nexus? Is there a "power belt" (Nitzan and Bichler) that works to sustain the power of the nexus?

3. There's also the question of how the Agro-Trader Nexus relates to the magma. What is perhaps most stunning about Baines's research is that it directly correlates the fortunes of the nexus to the suffering of large swathes of humanity through hunger. How, if at all, does the Agro-Trader Nexus try to address this in PR terms (e.g. through philanthropy and 'corporate social responsibility)? How, if at all, is this correlation articulated within "civil society"? Does it resist or acquiesce? And most importantly, does the magma articulate any potential resistance in a way that transcends the power logic of capitalization?
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Re: CasP Dialogue 2015.01: Baines' work on food price inflat

Postby DT Cochrane » Mon Dec 07, 2015 2:32 pm

I have both a narrow and a broad matter to raise, although they arise from the same point: Joseph's inclusion of Walmart in the retail-core.

In the table detailing three longer-term members of each -core, Walmart's listed market value is over 3.5 times the combined value of the next two listed firms (Tesco & Carre). This would suggest that Walmart's dynamics likely overwhelm the rest of the components in the proxy. Indeed, Joseph's own work on Walmart shows a differential dynamic very similar to that of the retail-core [1]. And, we know from Joseph's analysis that Walmart has suffered a differential stagnation for over two decades. In fact, Walmart's expansion of its grocery retail has come in response to that stagnation meaning most of its growth, dominating the retail-core proxy, occurred before it was a food retailer. As such, is it appropriate to include Walmart in the proxy? What happens to the proxy if Walmart is removed? Are the dynamics markedly different? How might that change the story of power redistribution within the food arena?

Additionally, when Walmart gets included in the proxy it is the company's total net-income rather than its earnings from food. Unfortunately, it does not appear that Walmart makes available data on relative sales or profits from its grocery and non-grocery segments. A 2010 article from the Wall Street Journal suggested that the year prior, grocery sales accounted for 51% of Walmart's U.S. revenue. It seems reasonable to assume that grew steadily since Walmart first introduced groceries as it has expanded the number of Supercenters that contain the grocery sections. However, we don't know the relative margins between its grocery and non-grocery operations nor how that may have changed with the increase in its grocery operations. Therefore, we don't know if the share of profit has also grown as much or as steady.

This leads to the more general matter, which Sandy (sanha) has already raised: the distribution of competition and cooperation within and between sectors. The WSJ article linked describes the effort of smaller grocery chains to prevent Walmart from opening stores. In fact, there is a consulting company that specializes in blocking, stalling and halting Walmart's expansion. The company has been hired by Supervalu and Safeway, which are likely in Joseph's retail-core proxy. This highlights the level of struggle within the food retail segment.

Such intra-segment strife may serve as further evidence for general stagnation within the segment. If the segment were growing, then there is less need to put time and effort into fighting each other. But, if the pie seems to be as big as it is going to get, then you begin to fight to expand the size of your piece at the expense of your sectoral compatriots.

For the purposes of Joseph's article, he considered the shared interests within each sector. However, I think part of the power of the CasP approach is that it doesn't require us to ossify such distinctions and divisions. Instead, we can recognize them as dependent on the struggle under consideration. In this case, Joseph looked at the distribution of power among the various sectors linked via the food pipeline. And, he did an excellent job of pairing his quantitative analysis up with qualitative details that supported his sectoral categories. But, we ought not to consider these groupings definitive. Instead, what we need are more mappings of how interests are continually circulating, connecting, overlapping, pulling apart and conflicting.

[1]Baines, Joseph. 2015. 'Encumbered behemoth: Wal-Mart, differential accumulation and international retail restructuring.' In van der Pijl, Kees. Handbook of the International Political Economy of Production. Cheltenham, UK: Edward Elgar Publishing. See Figure 9.1.
Last edited by DT Cochrane on Tue Dec 08, 2015 5:31 pm, edited 1 time in total.
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Re: CasP Dialogue 2015.01: Baines' work on food price inflat

Postby shai » Tue Dec 08, 2015 2:09 am

First, I wish to thank Joseph for the brilliant and illuminating paper and to thank the organizers of the forum for initiating this vital dialogue session.

Two issues I wish to refer to:

1. In Figure 9 a staggering strong positive relation is demonstrated between the differential profits of the Agro-Trader nexus, and the number of undernourished people in the world. The source for the latter series indicates that data is available from 2001, and yet we only see data from 2003 onwards in the figure. The UN's Food and Agriculture Organization's undernourishment data seems to stretch back as far as 1992. (a) What type of relation do the two series present prior to the turn of the millennium? (b) What do comparisons of the number of undernourished people in the world to differential profitability measures of other blocs show? Is it not the case that the differential profitability measures of many dominant firms, related or not to the global food chain, demonstrate very similar patterns during the same years? If so, this of course does not invalidate the connection a-priori, it may even perhaps strengthen it in unexpected ways (depending on which other dominant capitals seems to gain from hunger), but the question remains valid, I think.

2. And somewhat more broadly: in Capital as Power, Nitzan and Bichler suggest the terms 'Breadth' and 'Depth' as characterizations of often alternating 'regimes of differential accumulation' of dominant capital at large. Indeed, the wave of corporate mergers and formation of the Agro-Trader nexus during the 90s described in pp. 21-2 of the paper seems to fit well into the pattern of internal breadth, whereas the inflationary gains from the turn of the millennium onwards suggest an external depth regime.

To stress, the terms breadth and depth try to characterize the modus operandi of a somewhat obscure 'dominant capital' in its widest sense. My question is then is how useful still are the concepts of 'breadth' and 'depth' are to our understanding of a larger picture? Does not the story of the struggles between specific blocs of corporations suffice to provide the essential story of capitalism? Some win, some lose, alliances form and break, etc. and good research, as superbly exemplified in Joseph's paper, should map those shifts using the quantitative/qualitative framework of differential accumulation and sabotage. On the other hand, on risk of ossification, I'm constantly struggling with questions of the possible usefulness of more formal (read: mathematical/probabilistic/statistical) models which, it seems to me, necessitate levels of abstraction akin to that of terms like 'breadth' and 'depth'. Bluntly (and I hope not inappropriately or out of context), is this a direction worth pursuing? What, if at all, may such models be able to tell us? The answer is not so much in the technical details of such models, but in the conceptual framing of the questions that underlie them, questions that I hope may arise in here our dialogue on excellent detailed research as the one we are currently discussing.
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Postby sanjay » Tue Dec 08, 2015 9:15 am

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Last edited by sanjay on Wed Jan 13, 2016 11:28 pm, edited 2 times in total.
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Re: CasP Dialogue 2015.01: Baines' work on food price inflat

Postby blairfix » Tue Dec 08, 2015 11:13 am

Many interesting points have been made so far. In my work I almost always gravitate towards the big picture, so I`ll do so here as well.

Firstly. the link between the differential profits of the agro-trader nexus and world hunger are fascinating, but should be placed in context with global distribution of income. Food price inflation can only cause deprivation if one`s income is sufficiently small (in relation to the price of food) that an increase in the price of food makes it unaffordable. So we have two distribution struggles going on here: 1) the inter-capitalist struggle to increase profits within the food sector; 2) the broader global distribution struggle.

Global GDP per capita is about $13 000. If income were distributed equally, changes in the price of food would not lead to deprivation. However, actually distribution is highly unequal. I`ve estimated the global GINI index to be about 0.7 (where 0 is perfectly equal, 1 perfectly unequal). Thus, the global average income is highly misleading. Some individuals earn billions, while many subsist on a few dollars a day.

So to put Joseph`s work in context, we really need a theory of how global distribution occurs.
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Re: CasP Dialogue 2015.01: Baines' work on food price inflat

Postby JoelRoberts » Tue Dec 08, 2015 2:33 pm

Building on recommendations for future research, I wonder if it could be useful to analyze government or the ‘public sphere’ as a unique qualitative dimension in the restructuring of the world food system. By applying quantitative methods developed in the CasP approach, Baines brings into focus a power shift that had eluded other researchers. He also notes that without quantitative methods, “researchers will find it hard to know how much weight they should give to various qualitative transformations” (Baines, p. 7 ). But while quantitative methods may help us to assess the weight of qualitative transformations, the CasP approach does not always offer clear categories of analysis for sorting through the complex social dynamics behind these transformations. In particular, it is not at all clear how government - as a key institution in the 'public sphere' - shapes the central dynamics of a capitalist mode of power and its attendant forms of business conflict and cooperation.

Despite a loose framing of government in the theory, Baines’s research suggests that government policy has been central to the political economy of food. Indeed, it was only with a shift in government policy in the 2000s that American biofuels could function effectively as a form of ‘institutionalized waste’. But why did this shift occur? Is it simply a matter of corporate lobbying? And what does lobbying entail? Baines mentions revolving doors as a critical point of connection, but he alludes to another feature of the lobbying effort that is equally as significant: the articulation of corporate interests as the public interest. The food retailers have lobbied against biofuels by highlighting the market distortions of government interventions, while the Agro-Trader nexus have promoted biofuels as a pathway to ‘energy security’ in the context of the ‘War on Terror’ and oil price inflation.

The question to my mind is how ‘energy security’ - as an object of governance that made possible the restructuring of the world food system - came into being. In his post above, Sanha writes that “It remains to be seen how, if at all, other elements of dominant capital fit into the story. For example, are big oil and big auto implicated in this redistribution struggle?” Upon reading this, my first reaction was that big oil - especially in fracking, offshore drilling, and Alberta’s tar sands - are potentially implicated in the redistribution struggle because they too are promoting ‘energy security’ as a key matter of public concern. If this is in fact the case, then it may be possible to link Baines’s research on the political economy of food to broader dynamics of differential accumulation. In other words, corporate clusters from different arenas may be cooperating through the construction of a common public policy.
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Re: CasP Dialogue 2015.01: Baines' work on food price inflat

Postby stanr » Wed Dec 09, 2015 3:51 am

Great job. Fascinating material, and a good mix of identifying weaknesses and gaps in the existing literature, and showing were CasP can step in and shed some light. A research article is hard. Critiquing is much easier. And this isn't just an article, it's a map to a research agenda.

I'm going to pencil in a few other potential landmarks for your consideration. This will look very truncated, informal, and unacademic compared to the other responses.

First, thinking institutionally, are there very basic norms and heuristics being used by the AT Nexus? Further, can you theorize a basic strategy that shifts when food prices are high versus low? If each of us were playing this "game," how would we do it?

It might look something like this:
Rising prices:
- Increase production.
Declining prices:
- Encourage the use of cheap grain as a factor input in a new process, or a substitutable input in an existing process (e.g. first valley, meat; second valley, corn syrup, processed foods; third valley, biofuels), to help increase price.

Very simple. But where does the industry reinvest the profits?

That leads me to consider some other related questions about strategies and tactics, some within the paper's scope, and some beyond:
1. When prices begin to decline, has the AT nexus lobbied for free trade in protected domestic markets? (Perhaps they're just always doing this.)
2. When prices decline, do they acquire or merge with businesses? (Looks to be generally yes.)
3. When did/does food dumping tend to happen?
4. Food aid has been considered another type of dumping. Was the shift to using food aid a workaround directed by the AT Nexus in response to increasing anti-dumping measures by countries and trade orgs?
5. Are countries with domestic food production disproportionately targeted by food aid or dumping by the AT Nexus?
6. After dumping and successful market penetration has put domestic producers out of business, is the AT Nexus connected with companies acquiring useful agricultural land or resources for cheap from devastated domestic markets?
7. Any other industrial use for grain that is significant and results in cross-industry synergy or alliances? Xanthan gum production for fracking, as an alternative for guar gum? Is this part of the "energy security" show?

We can see here there might be more tactics in a sophisticated strategy:
- Lobbying to open markets
- Food dumping / Food aid to break and capture markets
- Patents to secure monopoly
- Reinvesting profits into R&D new or alternative agro-industrial products
- Reinvesting profits into cheap fertile land to increase production and block domestic production (including global land theft)

You can see where these would plug in. I don't know the answers to these questions, or the proportion of spending. Some of them may be trivial. For the most part, I suspect the answers will strengthen support for your claims. Far from suggesting this paper should have covered them, I only suggest them as potentially important elements in the larger roadmap of food system domination.

I offer these in lieu of a more extensive exploration of the paper itself, with constructive criticisms, compliments, and questions. It's really quite fascinating. You've definitely used CasP well to address some gaps and weaknesses in the existing literature. Great new view on the global food system.
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Re: CasP Dialogue 2015.01: Baines' work on food price inflat

Postby jmc » Wed Dec 09, 2015 2:23 pm

Wow, off to a great start!

I am preparing to add my comments, and I hope others continue to do so. However, since this is our first dialogue of this nature, I want to solicit opinions regarding the trajectory of dialogue. Does Joseph or the other participants want to explore anything that has already been raised? Can one thread contain all of the potential paths of dialogue, or should some topics, for the sake or organization, break off into sub-threads?

I'm certainly not trying to moderate this discussion, but the aggregate of questions and comments might grow to a point where a second wave of discussion can't find its focus. We are all familiar with the comments sections of articles and blogs. Joseph, do you have any thoughts?
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