Re: Economics of commodities

[Jurriaan Bendien <bendien@xxxxxxxxxxxx>]

In his little book of 1974 called The Second Slump (later, expanded edition:
La Crise), Ernest Mandel already remarks that agricultural prices are not
formed in the same way as industrial prices, and refers to Marx's theory of
absolute and differential rents. A significant increase or decrease in
Russian harvests could have a significant effect on world market prices for
agricultural commodities. He also discusses the industrialisation of
agriculture in his Introduction to Marx's Capital (Pelican edition), I think
volume 3, and to some extent in his book Marxist Economic Theory.  I studied
agricultural prices for the case of New Zealand once, because of the problem
of declining terms of trade (for each imported tractor you had to export
more and more sheep meat, and so on) and I noticed there was a literature on
it (I was basically working from journals on agricultural economics). Some
Marxian authors deal with this, for example, Ben Fine (I think he did an
article on its in the journal Economy & Society). But, it is a complex
subject, because apart from production conditions and cost prices, you have
to deal with monopoly pricing and protectionism (see also Guglielmo
Carchedi, For Another Europe, chapter on agriculture). That is, the cost
structure and sale prices of agricultural goods is distorted by
protectionism and agribusiness monopolies. You can get both studies of
specific corporations, and industry studies, and studies of specific
commodities as well. Marketing boards often provide statistical information
(e.g. http://www.beveragemarketing.com ).

In his Speech on Free Trade (1848), Marx specifically refers to coffee: "You
believe perhaps, gentlemen, that the production of coffee and sugar is the
natural destiny of the West Indies. Two centuries ago, nature, which does
not trouble itself about commerce, had planted neither sugar-cane nor coffee
trees there. And it may be that in less than half a century you will find
there neither coffee nor sugar, for the East Indies, by means of cheaper
production, have already successfully broken down this so-called natural
destiny of the West Indies. And the West Indies, with their natural wealth,
are as heavy a burden for England as the weavers of Dacca, who also were
destined from the beginning of time to weave by hand. One other circumstance
must not be forgotten, namely that, just as everything has become a
monopoly, there are also nowadays some branches of industry which prevail
over all others, and secure to the nations which especially foster them the
command of the market of the world. Thus in the commerce of the world,
cotton alone has much greater commercial importance than all the other raw
materials used in the manufacture of clothing. It is truly ridiculous for
the Free Traders to refer to the few specialties in each branch of industry,
throwing them into the balance against the product used in everyday
consumption, and produced most cheaply in those countries in which
manufacture is most highly developed."

Regards

Jurriaan

----- Original Message -----
From: "Michael Pollak" <mpollak@xxxxxxxxx>
To: <PEN-L@xxxxxxxxxxxxxxxx>
Sent: Friday, October 10, 2003 11:59 AM
Subject: [PEN-L] Economics of commodities


> Is there an economic subspeciality that studies the dynamics of global
> raw commodity markets?  I'm especially interested in historical studies of
> agricultural commodities, like coffee & cocoa.
>
> Michael
>
>