The Global Economy Has Become a Battlefield

"Soaring energy prices in Europe, an alleged attempt to detain a Fed official in China, efforts to diversify chip supply away from Taiwan Semiconductor: We are in a global financial war.

Financial wars date at least to the Crusades, but after more than 200 years of increasing globalization, financial conflict is now far more costly and unpredictable. People on both sides of these conflicts typically don't understand what is going on. They know only that their world is being turned upside down. So, for example, ordinary Europeans will be shocked as they struggle to pay for heat this winter. My Putin-supporting mother-in-law in Moscow was shocked to discover her preferred coffee shop, Starbucks, no longer operates in Russia. "What happened?" she asked me.

Anodyne words such as "globalization" obscure the gritty connections of cause and effect. Over the past two centuries we have learned how to produce food and build shelter efficiently, and we now feed and house eight billion people more easily than prior centuries did one billion.

The causes were industrialization, mechanization, electrification and automation, joined with the ability to finance such innovations. Global trade grew sharply, jumping higher after both the World War II and the collapse of the Soviet Union. When President Nixon visited China in 1972, the U.S. and China didn't have a trade relationship. Now China is one of America's top trading partners.

The sophistication of this system is also its vulnerability. Spending in any economy has two parts, income and borrowing, and financial warfare tries to undermine both. Income consists of trade, employment and corporate profits. Borrowing consists of spending what hasn't yet been earned. The cost of this borrowing is driven by the supply and demand for capital. These relations are interlinked: My spending is your earning.

U.S. sanctions against Russia fit neatly into the income-and-borrowing framework. Banning imports of Russian oil sought to impair Russia's income. Forbidding investors to purchase Russian bonds and freezing Russia's central-bank reserves were intended to increase the cost of credit.

But as Russia has demonstrated, in any war it's possible to counterattack. Lower prices on Russian crude found buyers in India and other countries. When Russia cut off natural-gas sales to Europe, it sought to destroy European income. Many European companies can't make a profit with such high costs.

America's energy industry isolated the nation from significant harm. But a war over Taiwan would wreak havoc on the global economy. Global trade with China is about $4.5 trillion; of which the U.S. is about $600 billion. No other country could easily replace China. The entrepreneurial infrastructure around Shenzhen is unique. In the event of war, the U.S. might try to freeze China's foreign-exchange reserves. Or, seeing the Russia example, China could move first and disrupt U.S. credit markets.

Over the same 200 years that produced huge increases in standards of living, there have been many disruptions to globalization. An expansion in global trade from the 1860s to World War I was followed by a retreat. After each interruption, the world gradually resumed its path of greater trade integration, and the same will likely happen this time for the simple reason that isolation impairs wealth.

The key assumption behind the post-Cold War order has been that economic self-interest would discourage conflict. I certainly believed that. My contacts in China and Russia experienced an increase in living standards. The most obvious indicator of increased wealth was their foreign travel, which rose to levels their parents couldn't imagine.

So far, my mother-in-law's enthusiasm for Mr. Putin outweighs her nostalgia for Starbucks. When offered a trip to Finland to see my wife and me, she declined, citing the need to stay and support the country.

---

Mr. Podolsky writes Things I Didn't Learn in School at Substack.com." [1]

1. The Global Economy Has Become a Battlefield
Podolsky, Paul. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 13 Sep 2022: A.15.

Didėjant maisto kainoms, Brazilijoje auga miestų ūkininkavimas

„RIO DE ŽANEIRAS – būdamas paauglys Manguinhos lūšnynų bendruomenėje Rio de Žaneiro šiaurėje, Leonardo Ferreira sakė, kad rytais praleisdavo, pakuodamas kokainą, kai nedalyvavo susišaudymuose su policija.

 

    Dabar jis rūpinasi savo salotomis didžiuliame favelos sode – viename iš tūkstančių miesto ūkių, kurie išdygo skurdžiausiose Brazilijos bendruomenėse, o gyventojai nuo močiučių iki narkotikų prekeivių imasi patys auginti maistą, kylant kainoms.

 

    "Žmonės yra beviltiški. Penktadieniais mugėje vietiniams pigiai parduodame daržoves – paprastai viskas praeina per 30 minučių", – sakė 26 metų ponas Ferreira, kuris, spaudžiamas žmonos, iškeitė automatinį šautuvą į sodo žarną. .

 

    Įspraustas tarp laikinų namų keturių futbolo aikščių dydžio žemės juostoje, Manguinhos sodas suteikia pakankamai daržovių net 800 šeimų, sako miesto pareigūnai, tvirtinantys, kad tai didžiausias Lotynų Amerikoje.

 

    Miestų žemės ūkis auga daugelyje pasaulio megapolių. Siaučianti infliacija ir tiekimo, pvz., trąšų, kliūtys, prasidėjusios per Covid-19 pandemiją ir dar labiau pablogėjusios dėl sankcijų Rusijai, verčia paprastus žmones užsiauginti daugiau maisto.

 

    Brazilijoje – 215 mln. gyventojų turinčioje šalyje, kurioje apie 85 % žmonių dabar gyvena miestuose – miestai, tokie kaip Rio de Žaneiras, pradeda įgyvendinti kai kuriuos ambicingiausius projektus.

 

    Už 20 minučių kelio automobiliu į vakarus, Madureiros kaimynystėje, miestas stato, anot jo, didžiausią daržą pasaulyje iki 2024 m. žemės sklype, kuris buvo apleistas po 2016 m. olimpinių žaidynių. Pasak Rio de Žaneiro vyriausybės, 27 akrų sklypas galės išmaitinti apie 50 000 šeimų.

 

    „Idėja yra sukurti derlingą miestą, miestą, kuris ne tik vartoja maistą, bet ir jį gamina“, – sakė vyriausybės agronomas Julio Cesar Barros, vadovaujantis miesto Carioca sodų programai Rio de Žaneire. J. Barrosas skaičiuoja, kad dabar Rio de Žaneire yra net 400 bendruomenės sodų, iš kurių 60 yra programoje.

 

    Brazilija, žemės ūkio supervalstybė, pagamina apie 10% pasaulio maisto – nuo ​​jautienos iki sojų pupelių, apelsinų sulčių iki kukurūzų. Tačiau maisto pirkimas skurdžiausioms šeimoms tampa vis vis brangesnis. Brazilijos tyrimų grupės „Penssan“ duomenimis, Brazilijoje badauja apie 33 mln. žmonių, palyginti su maždaug 19 mln. žmonių 2020 m. pabaigoje.

 

    Rio de Žaneiro miesto rotušė vietos gyventojams parūpina sėklas, įrankius ir 100 dolerių mėnesinę stipendiją lūšnynų bendruomenių žemės ūkiams, reikalaudama parduoti pusę produkcijos pigiomis kainomis, o likusią dalį paaukoti. Daržovių pardavimas šalia jų auginimo vietos sumažina transportavimo išlaidas, o dėl vyriausybės paramos su nedidelėmis išlaidomis „Manguinhos“ salotas ir kitus produktus gali parduoti vos penktadaliu parduotuvių kainų.

 

    „Pandemijos atėjimas, darbo vietų trūkumas ir sunkumai, perkant maistą, tik paskatino šiuos projektus“, – sakė Brazilijos valstybinės žemės ūkio agentūros „Embrapa“ tyrėja Mariella Uzeda.

 

    Kai 2006 m. J. Barrosas parengė Carioca sodų programą, pagrindinis Rio tikslas buvo neleisti šeimoms statyti lūšnų nenaudojamoje žemėje. Sodai greitai tapo prieglobsčiu vietiniams gyventojams, trokštantiems pabėgti nuo gaujų ir policijos, gaujų, kurios dominuoja daugumoje daugiau, nei 1000 Rio de Žaneiro favelų.

 

    Šiomis dienomis gaujos nariai didžiąja dalimi džiaugiasi naujais sodais. Tačiau dažnai kyla įtampa. Karo policija kas kelias savaites auštant šturmuoja Manguinhos, kovodama su vietiniais gaujos nariais, kurie atsimuša kulkų ir retkarčiais granatos tirada. Tais rytais augalai nelaistomi.

 

    Sodai paskatino žmones valgyti įvairesnių daržovių, tačiau daugelis favelos gyventojų negalėjo rūpintis, ar daržovės yra ekologiškos ar ypač maistingos. Jie sako, kad nori tik pakankamai valgyti“ [1]

1. World News: Urban Farming Grows in Brazil as Food Prices Jump
Pearson, Samantha. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 13 Sep 2022: A.16.

Urban Farming Grows in Brazil as Food Prices Jump

"RIO DE JANEIRO -- As a teenager in the Manguinhos slum community in northern Rio de Janeiro, Leonardo Ferreira said he used to spend his mornings packaging cocaine when he wasn't taking part in shootouts with the police.

Now, he tends to his lettuce in the favela's vast vegetable garden, one of thousands of urban farms that have sprung up across Brazil's poorest communities, as residents from grandmothers to drug traffickers resort to growing their own food amid soaring prices.

"People are desperate. We sell the vegetables cheap to the locals at a fair on Fridays -- it's normally all gone within 30 minutes," said Mr. Ferreira, 26, who swapped his assault rifle for a garden hose under pressure from his wife.

Wedged between makeshift homes on a strip of land the size of four soccer fields, the Manguinhos garden provides enough vegetables for as many as 800 families, say city officials, who assert it is the biggest in Latin America.

Urban agriculture is growing across many of the world's megacities. Rampant inflation and bottlenecks of supplies like fertilizer, which began during the Covid-19 pandemic and were made worse by sanctions on Russia, are leading ordinary people to grow more of their own food.

In Brazil -- a country of 215 million where about 85% of people now live in urban areas -- cities such as Rio are embarking on some of the most ambitious projects.

A 20-minute drive west, in the Madureira neighborhood, the city is building what it says will be the largest vegetable garden in the world by 2024 in a plot of land abandoned after the 2016 Olympics Games. The 27-acre lot will be capable of feeding some 50,000 families, according to the Rio government.

"The idea is to create a fertile city, a city that not only consumes food but produces it," said Julio Cesar Barros, a government agronomist who runs the city's Carioca Gardens program in Rio. Mr. Barros estimates that Rio is now home to as many as 400 community gardens, including 60 in the program.

Brazil, an agricultural superpower, produces about 10% of the world's food, from beef to soybeans, orange juice to corn. But buying food is increasingly too expensive for the poorest families. About 33 million people are going hungry in Brazil, compared with about 19 million people at the end of 2020, according to the Brazilian research group Penssan.

Rio's city hall provides locals with seeds, tools and a $100 monthly stipend to farm strips of land in the slum communities, requiring them to sell half the produce at cheap prices and donate the rest. Selling vegetables next to where they are grown cuts out transport costs, and with few expenses thanks to the government support, Manguinhos can sell lettuce and other produce at as little as a fifth of store prices.

"The arrival of the pandemic, the lack of jobs and a difficulty to buy food has only propelled these projects," said Mariella Uzeda, a researcher at Brazil's state-run agricultural agency Embrapa.

When Mr. Barros cooked up the Carioca Gardens program in 2006, Rio's main objective was to stop families from building shacks on unused land.The gardens soon became havens for locals eager to escape the gangs and militias that dominate most of Rio's more than 1,000 favelas.

These days, gang members largely welcome the new gardens. But there is often tension. Every few weeks, the military police storm Manguinhos at dawn, battling local gang members who fight back with a tirade of bullets and the occasional grenade. The plants go unwatered on those mornings.

The gardens have encouraged people to eat a wider range of vegetables, but many of the favela's residents couldn't care less if the vegetables are organic or particularly nutritious. They say they just want enough to eat." [1]

1. World News: Urban Farming Grows in Brazil as Food Prices Jump
Pearson, Samantha. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 13 Sep 2022: A.16.