The newly rediscovered, nutritious “miracle grain” quinoa, eaten increasingly by health-conscious consumers in the developed countries, is making the rich richer and the poor poorer. At least if we are to believe the recent article in The Guardian newspaper of the U.K. (click here to read the article). The unusually high protein content (14-18%) and other nutrients of quinoa attract health-conscious vegetarians and others who want to avoid animal proteins. As a consequence, the demand—and the crop price—of quinoa has tripled since 2006. The Guardian, consistent with its left-wing ideology, laments this as a bad thing. Why? The primary producers of quinoa are poor South-American countries: Peru, Bolivia and Ecuador. (Quinoa is successfully grown also in other cool-climate regions, such as the Canadian Prairies). The Guardian article claims that increasing demand and price of quinoa in the developed countries is driving poverty in the poor regions of the world: “…[Quinoa trade] is yet another troubling example of a damaging north-south exchange, with well-intentioned health and ethics-led consumers here unwittingly driving poverty there.”

How do increasing demand and crop prices for quinoa drive poverty in South America? The Guardian claims that “the fat-cat exporters and foreign super markets cream off profits” while the poor in Bolivia, Ecuador and Peru cannot afford to eat quinoa (the staple of their diet for milennia) any more. However, this Marxist argument is a myth. The increased demand for and prices of quinoa—or anything else—do not make the rich richer and the poor poorer. Quite the contrary: the increasing demand for and prices of things mean that more value is being created overall, which benefits everyone involved, including the laborers.

It is true that the quinoa farmers and exporters (“the rich”) benefit from the increased crop prices, but they do not hoard the extra money they earn in a vault while keeping the laborers’ wages at subsistence level. It is in the interest of the producers (farmers, producers, distributors, exporters, supermarkets) to invest the excess returns, or a large portion, into further production. This means increased job opportunities for workers. And as the demand for labor grows, wages increase, allowing workers to pay higher prices for quinoa and other consumer goods. Even if the producers choose to spend a portion of their excess returns from higher quinoa prices on consumption instead of investing them, workers will benefit because more demand (consumption) requires more production, and more wealth is created overall.

Another Marxist myth is that producers will try to jack up their prices and simultaneously “exploit” their workers by paying a pittance for their labor. With this method, only the very wealthy could afford to buy anything. However, workers are also consumers, and they constitute a large market. It is in the producers’ interest to achieve the largest possible share in the market segment they choose—and most of them will not be able to choose “the wealthy only”-segment. This means they must attempt to lower their costs and prices in order to reach a large market share and maximize their profits.

Finally, the price increase of quinoa will slow down as the supply will increase to meet the demand, making quinoa affordable again for the South American laborers when their wages and job opportunities have adjusted to the higher price of quinoa.

Capitalist “exploitation” and “the rich getting richer and the poor poorer” are myths, so if you enjoy eating quinoa, please continue to do so without guilt. It is not exploiting the poor in South America but making them better off (which of course is not the reason to eat quinoa—just a beneficial side effect).

8 COMMENTS

  1. The Marxist myths you refer to are so ingrained in our culture that I knew them by heart. I think that the chief agent of this brainwashing is entertainment. Fiction writers, TV and movie producers seem unable to move beyond this plot: greedy business grinds down peasant laborers, they kill a few of them, and then one man decides to take on the corporation. After a few explosions, gun fights, and a Senate investigation, the bad businessmen go down. The hero is thanked by now happy peasants, although he has just destroyed the harvesting & trucking & processing & distribution infrastructure on which their lives depend.

    Movies tend to portray small, Mom & Pop businesses as good and wholesome. Anything larger is automatically corrupt and exploitative. They show a man’s desire to succeed as a good thing, but only if his goal is one store front in a small town. Expand to different towns, hire more employees, and start making real money, and the camera portrays you in starkly Marxist terms…

    It would be nice to see a movie portray government bureaucrats as soul-less, petty, manipulative, dictatorial, and corrupt. It would be nice for this story to show that exploitation takes force–and that force is the exclusive province of government, not of a free market. Then one man could rise against these leeches in the most effective way and…but wait: that story was written a half century ago by Rand.

      • Actually I am, but I steal time from my real job to do it.

        Case in point about fiction portraying evil businessmen: National Public Radio devoted many minutes this morning to a new book that will be published by a new imprint owned by Johnny Depp. The book, “House of Earth,” is the recently discovered (and only) novel written by the Oklahoma folk-singer, Woody Guthrie. The book is a sex-filled continuous diatribe against the greedy bankers that keep poor farmers poor (surprise). NPR opined that, other than the sex, the main reason the book was never published was the virulent anti-communist mood of the times, as if this was a bad thing.

        If Guthrie’s book had instead been about a young man’s struggle to build a useful grain elevator (like “Calumet K”), or showed that enterprise and goal-seeking action is what lifts men from poverty, then we would never have heard about it from NPR.

  2. A sidelight is that plants often grow elsewhere.

    Jaana mentions quinoa in Canada.
    Potatoes (developed by Peruvians centuries ago from a marginal wild plant) and tapioca (a root from Brazil, we know it in “pearl” form – little white balls as desert or in bubble tea) grow around the world.
    Rubber (Brazil tried to prevent growth elsewhere) flourished in Malaysian plantations after someone smuggled plant pieces out of Brazil.
    My neighbourhood on the wet coast has many Himalayan Cedars (close to Lebanon Cedars, they are in the larch branch of the pine family, “cedar” meaning only aromatic wood – native cedars are in the cypress/juniper family).
    And I understand on the southwest coast of SA they are growing Douglas Fir, the big tree from the wet coast of NA.

    In many cases the plant can be modified, by selective breeding or GM techniques, to suit local climate.

    Competition can be achieved by planting elsewhere.

    • Thanks for this, Keith. –i wanted to also add that the day after my post, the CBC [the Canadian public radio] picked up the Guardian’s quinoa story. The interviewer tried really hard to get her Bolivian and Peruvian interviewees to affirm her leftist view that the poor in those countries were indeed getting poorer due to the increased quinoa prices. Instead, the interviewees (one of them a NGO representative) affirmed my arguments: the poor are now better off and can afford better food, send their kids to school, etc.

      Sent from my iPhone

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