A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.

It is imperative that we break from fruitless ideological oppositions

By Paul-Florent Montfort,
Analyst, momagri

A new state of mine for Economic performance?

Ever since the 18th century birth of economics and the emergence of the first mercantilistic ideas, various theories, dogmas and ideologies have kept following one another. Mercantilists, physiocrats, classical and then neoclassical economists, socialists, Marxists, libertarians, Keynesians and neo-Keynesians, monetarists, neo-liberals, pro-regulation economists etc… All these trends strove to implement a system of thoughts that rationalizes economic performance and the best means to guide it. But all political attempts that were anchored in a specific school of thoughts were, at one time or another, disapproved and replaced by dissimilar trends. Political tactics led to the segmentation of theories and schools of thoughts, so much so that today economic theory is still taught as a succession of distinct theories in universities. Yet, such oppositions are not as straightforward, and the international community would greatly benefit from uniting them to understand the system in which we live… The most striking example is probably the current opposition that is made between neo-liberal ideology and all other forms of economic thinking.

Neo-liberal limitations

The past few years have seen the emergence and the hegemonic consecration of the neo-liberal thinking, which advocates the principle of unfettered free trade based on the assumption of the self-regulating capability of markets. The dramatic financial and food crises recently proved the limitations of such assumption. Yet, some opinion leaders––such as Pascal Lamy, the WTO Director-General––continue, through thick and thin, to campaign for the implementation of neo-liberal principles in market operations, in particular through the conclusion of the Doha Round that aims to liberalize them even more.

Since its creation, momagri emphasizes the perils of the Doha Round conclusion for international agricultural markets and global food security. At a time when more than a sixth of the world’s population still suffers from hunger and when experts agree that the planet produces enough food for everybody, we can no longer take the risk to undermine global food security by playing in the hands of the markets.

For that reason, it is imperative to break from the current school of thoughts, whose hold weakens any sound and balanced decision-making. The international community’s repeated commitments, during the G-8 or G-20 summits, to jettison protectionism and conclude the Doha Round are rooted in the neo-liberal ideology that attempts to validate the power of the laissez-faire theory and the failures of protectionism. However, all is not as clear-cut, and whoever says refusal of liberalism does not say protectionism. There is an extensive range of possibilities between these two extremes, and regulation is one of them.

In fact, whatever the legitimacy and authenticity of the decision making process regarding economic thinking trends, schools of thoughts or ideologies, one single certainty remains: The world is multifaceted and we may never completely explain it through a system of thought, no matter how interesting. The excessive number of variables in the world, and the basic uncertainty that tarnishes it, mean that unknown factors will always remain. In light of these facts, it is most important to be aware of the limitations of the applied theories by keeping in mind that they only represent political tools. In this regard, it is crucial to progress cautiously––what some call the “precautionary principle”––by knowing to make decisions when necessary and providing them with safeguards. In economics, these safeguards are called “regulation”.

It turns out that liberalism remains the best possible method to organize markets. But what must we do when confronted to the various crises (2000, 2008…) that exposed the structural failures of markets left to fend for themselves? Must we discard the liberalization rationale by favoring a return to protectionism, whose drawbacks are well known? Or improve market operations by making them smoother through suitable regulation?

Indeed, liberalism and regulation are not opposed, as recently highlighted by Maurice Allais, France’s 1988 Economic Nobelist, in a “Letter to the French” published in the weekly Marianne. “In my mind, the two concepts are inseparable since I feel opposing them seems false and contrived. The socialist ideal principally focuses on a fair redistribution of wealth, while liberals concentrate on an effective production of such wealth. These are, in my view, two complementary sides of a same doctrine. And it is precisely in my capacity as free trader that I am taking the liberty to condemn the recurring positions of key international authorities in favor of blindly implemented free trade.” For Maurice Allais, whose thinking largely guided momagri’s philosophy, it is indispensable to restore the legitimate protection that can solely lead to effective and just liberalization. “Trade must not be considered by a goal in itself but, contrary to Pascal Lamy’s opinion, it only represents a way,” appropriately adds the economist. Thus came the idea to reconstruct more homogenous regional groupings that unite several countries with similar revenues and social conditions. Each “regional organization” would be entitled to reasonably protect itself against production cost gaps that give undue edge to some competing nations, while at the same time maintaining the internal conditions for a healthy and genuine competition between allied members within each zone. This precisely stands for what momagri wants to implement at the global level to guarantee food security for all: Only such a system will enable developing countries, as well as industrialized nations, to guarantee food security for their people by regulating their agricultural production through adequate policies, whose key guidelines would be established at the global level.

Faced with a systemic crisis unprecedented since the 1929 Crash, now is the time for the international community to overcome the neo-liberal ideology and realize that liberalism and regulation complement each other. The 1929 Crash allowed John Maynard Keynes to impose a new economic vision that enriched the previous one with new market and crisis management tools. Let us hope that, because of its scope, the current crisis will serve as the electroshock that will let political decision-makers and the international community take heed of the urgency to change our frame of reference. Not by substituting another ideology to the current neo-liberal thinking, but by fully acknowledging the existing synergies between liberalism and regulation. That is to say this ingenious balance that generates food security for all.
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Paris, 11 December 2018