Now they\’ve a letter from 450 \”economists\” insisting that there must be position limits, a set percentage of commodity markets, above which no more financial speculators can be let in.
Because, you see, financial sepculation both increases volatility and increases prices:
\”Excessive financial speculation is contributing to increasing volatility and record high food prices, exacerbating global hunger and poverty.\”
Which is pretty cute really, making prices both go up and down and only making them go up. It\’s difficult to think of any economic action which would have both effects. Not that the WDM does think of course.
As to the volatility argument we have, of course, their own evidence from their own report. Wheat and maize have deep and liquid futures and options markets, allowing lotsn\’lots of speculation. Rice doesn\’t so much. So, in the 2006/8 balloon in prices, which was more volatile? Yup, rice. Showing that deep and liquid futures and options markets reduce price volatility.
And as Paul Krugman has pointed out, to increase spot prices you need to see evidence of hoarding in physical markets, something we didn\’t see, so it wasn\’t financial speculation driving up prices either.
Deborah Doane, director of the World Development Movement, said that \”excessive\” lobbying from the finance sector seemed to be delaying political action, both in the UK and elsewhere.
\”This is despite the obvious suffering caused by speculation on this most basic human need, and despite the growing number of voices calling for action,\” she said.
\”Instead of propping up cynical financial gambling by speculators, the G20 finance ministers must act to ensure that strict rules are put in place to limit the hold of bankers over the world\’s food markets.\”
Strangely, I\’ve not seen any lobbying at all against the proposals. Sure, we\’ve seen reports from various people, OCED, IMF and so on, all pointing out that the case for speculation increasing price volatility is, at best, unproven. It\’s a set of assumptions about herd behaviour which no one has offered conclusive evidence for: and the behanviour of markets seems to offer pretty good evidence against.
In fact, the only people I can see lobbying on this issue are the WDM.
But our list of \”economists\”.
Dr Funda Rana Adacay, Associate Professor in Economics, Anadolu Univeristy, Eskisehir, TURKEY
Hmm, Anadolu is the equivalent of the Open University. High and mighty economists there then, an associate prof (what we would call a lecturer) at the OU.
Rania Antonopoulos, Senior Scholar and Director of Gender Equality and the Economy Program, Levy Economics Institute, USA
Expert in gender equality at small upstate New York liberal arts college. Pulling out the big guns here.
Dr Ozlem Arpac Arconian, Department of Economics, School of Oriental and African Studies, University of London, UK
Don\’t think that anyone at SOAS has ever met a market they like, have they?
Dean Baker is a good economist, even if somewhat partisan. In fact, he\’s so good they\’ve counted him twice.
Prof Radhika Balakrishnan, Professor of Women\’s and Gender Studies Rutgers, The State University of New Jersey, former Professor of Economics and International Studies at Marymount Manhattan College, USA
Prof Drucilla K. Barker, Director Women’s & Gender Studies, Phd in Economics, University of South Carolina, Columbia, USA
Dr John Barnshaw, Department of Sociology, University of South Florida, USA
Gender studies and sociology (to the extent that they differ): so useful in determining the effects of financial markets.
Dr Stephanie Blankenburg, Department of Economics and CISD, School of Oriental and African Studies, UK
SOAS again: they have all kinds of economics there, both Trots and Marxists.
Dr Ha-Joon Chang, Reader, Faculty of Economics, University of Cambridge, UK
John Christensen, Economic Adviser and Director, Tax Justice Network, London, UK
Double Surprise! Really didn\’t expect to see him there, did we?
Kimberly Christensen, Visiting Faculty Member in Economics and Public Policy, Sarah Lawrence College in Bronxville, New York, USA
Sarah Lawrence College was established by real-estate mogul William Van Duzer Lawrence on the grounds of his estate in Westchester County and was named in honor of his wife, Sarah. The College was originally intended to provide instruction in the arts and humanities for women. A major component of the College\’s early curriculum was \”productive leisure,\” wherein students were required to work for eight hours weekly in such fields as modeling, shorthand, typewriting, applying makeup, and gardening.
We\’re certainly hitting the high spots of the academic universe here, aren\’t we? BTW, \”visiting faculty member\” often means \”gives a couple of public lectures per semester\”.
Prof Christopher Cramer, Professor of the Political Economy of Development, SOAS, UK
Trot or Marxist wing of SOAS?
Couldn\’t face going through the entire list but yes:
Richard Murphy, Director, Tax Research UK
A retired accountant from Wandsworth is included in their list of 449 (Double Dean, recall?) economists who know about financial markets.
Not a list we need to pay all that much attention to.