The Global Politics of the Plate
Luigi Russi, a law graduate of Bocconi University and the University of Oxford, is currently a doctoral candidate in Sociology at University of Exeter. His first book Hungry Capital: The Financialization of Food (Zero Books, 2013) tries to bring home the effects of something as apparently virtual as finance on one of the most intimate aspects of everyday living, namely our food. His second book Everything Gardens and Other Stories: Growing Transition Culture (University of Plymouth Press, 2015) explores the cultural politics of Transition Town initiatives. Russi was interviewed via email in May 2015.
Daniel Tucker (DT): In your book Hungry Capital you research how food has been intertwined with finance. One way that you explore this is that financial speculation caused the rise in food prices in some parts of the globe, a theme explored by one of the films by Ryan Griffis and Sarah Ross that will be screened as part of the Moving Units event series. This research on finance would be very interesting to know more about since the project that inspired Moving Units is Grain Pit by futurefarmers, a mobile replica of the grain trading pit from the Chicago Board of Trade where futures markets were invented and have only this year gone entirely towards virtual trading.
Luigi Russi (LR): A futures contract is an agreement that fixes the price of a commodity, when delivery is to take place in the future (as opposed to buying and selling for immediate delivery, which is called a ‘spot’ transaction, so that the material exchange of goods and the determination of their price are contextual). In view of this, futures markets are financial markets where traders take positions in futures contracts, thereby buying and selling commodities – including agricultural ones – for future delivery. While one may think that these ought to form a relatively secondary insurance market, in comparison to ‘spot’ markets, futures markets are actually more centralized than the latter. This means that any price-sensitive information (such as whether there are droughts, or whether good/bad harvests are to be expected) is quickly elaborated by the trading decisions of futures market operators, and – for this reason – futures markets have come to be regarded as reliable indicators of trends in commodity prices, even by operators that engage primarily in ‘spot’ trades.
This is particularly important to understand what happened in 2007-08 (and, again, in 2012), when a matrix of derivative instruments worked to warp this ‘price discovery’ function of futures markets. In essence, this was due to the interaction of regulated futures markets with unregulated over-the-counter derivative contracts. These contracts, which enjoyed more widespread use after the year 2000 thanks to the Commodity Futures Modernization Act, allowed investment banks to offer ‘simulated’ ownership of a basket of commodities to their clients. What this means is that they undertook to deliver to their client a cash flow that tracked the changes in an index of commodity futures. In order to balance out this commitment, banks would go on to open futures positions that they periodically renewed, so as to be in a position to easily fulfill their obligation on the over-the-counter contract. This caused an unusual pattern of trading on the futures market. Whereas one would expect traders to open and close futures positions in response to information pertaining to the anticipated scarcity of a commodity in the future, the periodical rollover undertaken by investment banks led to the recurring opening and closing of futures positions merely to balance out their exposure on the over-the-counter derivative contracts, regardless of any other circumstance having to do with the actual production and consumption of commodities. This, in turn, nurtured an ecosystem of speculators (such as hedge funds) around these periodical and recurring movements on the futures markets, leading into a trend of rising prices (what is technically called ‘contango’).
As I mentioned in the beginning, trends on the futures market are also watched by ‘spot’ traders, who will – for instance – hoard if they see that futures prices are rising, since they understand those prices to show where the spot market is heading next, hence making it more advantageous to hold on to any commodities that can be stored and put on the market at a future date. This is it, then: the point where a web of contracts and virtual transactions on the futures markets translates into real price increments on the markets for immediate delivery, leading to actual scarcity and hunger.
The role of futures market, I argue in Hungry Capital, has therefore been absolutely pivotal to the price hikes and ensuing shortages of food that affected the most vulnerable around the world, both in 2007-08 and again in 2012. The closing of the physical trading pit in Chicago does not mean that futures markets have been disbanded but, simply, that transactions are now being undertaken electronically, without the need for a physical pit. This, of course, poses other peculiar challenges, such as the possibility of increased use of algorithmic trading. This is trading carried out by specially programmed software, and which can induce further price-distorting influences, in that it undertakes trading depending on price trends, rather than on actual information pertaining to the supply of the commodity being traded.
DT: You also explore the implications this “financialization of food” has in developed countries for how supermarkets work. Can you explain a little bit about how food distribution is impacted by finance?
LR: What I mean by the financialization of food is the increasing weight of financial calculation for the purpose of orienting decisions pertaining to the production and consumption of food. In this sense, supermarkets display a trend that affects the wider corporate world, and which has sometimes been described succinctly as ‘CFOs [Chief Financial Officers] being the new CEOs’. What this implies is that those calling the shots in large business organizations are increasingly those who can back them with numbers, often above any considerations specific to the particular market in which a company is operating. One obvious way in which this occurs is when a company’s stock is traded on the stock exchange, so that its return on equity has to be weighed up against that of companies doing completely different things like, say, making tires. However, this is just the most obvious way in which food processors as well as distributors can end up compulsively calculating their operational strategies. There are groups, like Cargill, that are not floated on financial markets. Yet, these corporate behemoths are often very diversified, with divisions spanning from seed production to financial products.
In the case of supermarkets, there is a trend that sees them increasingly interested in developing products that have nothing to do with food distribution, such as supermarket banks (like TESCO Bank in the UK) that offer various consumer credit services such as credit cards and loans. The moment a company working with food begins differentiating in this way, the possibilities are multiplied for forms of internal benchmarking (e.g. how well-performing is the food division relative to the consumer credit division?) that make considerations pertaining to the specifics of food production secondary to those for financial viability. In this sense, I like to look at supermarkets as giant calculative machines that are busy translating the food economy into manageable schemas of financial calculation which place their concerns at one step removed from those of many of the other players along the food chain that have a more involved stake in agricultural production, first and foremost the farmers themselves.
DT: In your latest book, Everything Gardens and Other Stories: Growing Transition Culture, you explore the collective experiment Transition Town Totnes in the UK where a community of people tried to take on what implications climate change were having and should have on their life together. I am curious what connections you might make between these small-scale local experiments and the vast chains of food distribution and finance you have studied before? A few of our events for the Moving Units series explore these themes, from Sean Starowitz’s Bread for Work project inside of the locally-owned Republic Bank and a roundtable discussion the theme of “Intimate Economics” as a way to explore the tensions between some of the primary reasons communities are drawn to participate in sustainable agriculture and economic localism – because of a desire for intimate connections with other people who are involved in providing for our basic needs – farmers, small businesses, neighbors.
LR: When I began thinking about Everything Gardens, I thought that it would be a kind of sequel to Hungry Capital. Whereas the latter was meant to open the Pandora’s box of financial alchemy that was choking the food system, the former was meant to show how things could be done differently.
However, while researching and writing Everything Gardens, my thinking has changed enormously, and it has made me realize that this partition was, in many ways, simplistic. Experiments like that of the Transition Town Totnes, I feel, are best regarded as aids to collective imagination than as blueprints that can simply be rolled out in a comprehensive effort to redress the constitutive imbalances of the food system. Asking something like Transition to solve the problems of the global food system (many of which require more and more far-reaching re-drawings of global governance regimes) is tantamount to asking them too much, too soon.
In my experience of it, small-scale local economies usually start sprouting around projects that can act as starters (like a local and complementary currency scheme, or a community-supported agriculture scheme), and through which people can begin experimenting with the possibilities open to them for undertaking further relocalisation interventions. In Totnes, for instance, things started small, from communal gardens to a complementary currency scheme, and have now grown to accommodate forms of communal ownership and management such as community land trusts, which are feeding into a growing ‘relocalised’ economy. To say that this will have an impact on the dynamics I describe in Hungry Capital is premature and, probably, the wrong question. What matters is that people come to witness and recognize around them more and more possibilities for engaging their activism and productivity towards new collective forms that might, over time, radically alter the shape of their everyday.
DT: Speaking of everyday transformation that is grounded in “relocalization”, I have been thinking about one of the films we are showing in this series, After Winter, Spring by Judith Lit. It focuses on farmers in the rural Périgord region of southwest France whom identify as “peasants” – which is particularly surprising to hear in the U.S. where a confusing kind of class-consciousness that is further complicated by debt-ridden lifestyles has tended obscure any kind of precise or critical understanding of one’s own social class. The farmers in the film practice many traditional farming and rural craft techniques and speak of how their life practices drive them to pay a certain kind of attention to the everyday life cycles of animals, soil, their neighbors and even their own mortality. One of our other presenters, Cynthia Main, will be demonstrating her work handmaking tools (such as rakes, barrels and buckets) and is particularly interested in showing urban dwellers what a rural economy “looks like and feels like.” Can you say a little bit about the psychic and aesthetic dimension that is at work in these kinds of practices – what you’ve seen in terms of slowing down, handmaking, being attentive…and how some aspect of that sensibility might be able to inform attempts to reform the “global governance regimes” that are currently organizing the financial, economic and political systems that cause housing and food crisis from France to India to Kentucky?
LR: I think that the possibility to conceive of alternative possibilities for dwelling together is to a large extent determined by the exposure one gains to people living their lives differently. This, I find, is the power of so-called prefigurative political experiments, that try to imagine – not just narratively but also in practical and material terms – what an alternative society may look like. The basic idea is the same whether these experiments be radical democratic assemblies within Occupy, or peasants who endeavor to renew the materiality of a culture of growing in accord with ecological feedbacks, by honing and devising technologies appropriate to that particular craft.
In this sense, I think what is most interesting about similar efforts, and now I am referring more closely to the peasant condition, is precisely their ability to actively evolve and develop collective forms of life, rather than confine themselves to a museified replication of what peasants ‘used to do in the good old days’. Being a peasant today involves trying to negotiate one’s niche and the space for one’s livelihood amidst a number of different pressures. This requires the ability to upgrade and innovate on existing traditions, reworking them in the light of emerging challenges. In Europe, for instance, peasants have turned increasingly towards ‘multifunctionality’, flanking the actual growing of food with other activities – such as biogas production, or the Italian agriturismo, a kind of rural bed and breakfast arrangement – that might, in the latter example, also fulfill a broadly educational function as occasions for people to witness first hand the life of a modern-day peasant by staying at their establishment as guests, while increasing the resilience of the family farm by opening up additional sources of income.
Hence, far from being a return to the past, demonstrating ‘peasantness’ today sits comfortably alongside other prefigurative experiments that try to bring into being that which they fight for: in this case a culture of living on the earth that attends mindfully to its ecological unfolding.
DT: My last question is about learning. You write about how curiosity drives your exploratory research and how ‘disciplinary straightjackets’ do not support this kind of process. One of the factors that drew me to art was the sense that it did not require the commitment to a discipline. Relevant to that, something I have found through participation in social movements like the “Global Justice Movement” of the late 1990s/early 2000s and then more specifically my engagement with farmer-led organizations like Family Farm Defenders (the only group I know of in the US to also claim the mantle of “peasant farmers”) and National Family Farm Coalition was that regular people were able to come together and learn together about how the global economy worked. This potential to form learning communities and engage in what Brian Holmes has called “extradisciplinary research” is what has sustained my tie to both art and activism beyond my ethical and aesthetic commitments. Can you talk a little bit about how you relate to learning through the lens of ecology and agriculture, but perhaps also the role of art and philosophy?
LR: The way I frame my relationship to learning is through the adjective “expressive”, which I think captures well my relationship to research and applied inquiry. Learning is, for me, the attempt of putting words to embodied feelings and intuitions of meaning.
For instance, from a different standpoint than the one I described earlier, Hungry Capital was more than just a study of food and finance. It was an attempt to try and make up my own mind about questions of global politics, but also of legality and justice, which had been left largely unanswered by my professional education as a lawyer.
Everything Gardens is, instead, my attempt to clarify for myself the ways in which people conceive their self-understandings and ethical inclinations not so much as atomistic individuals but, rather, as persons enmeshed in a fluid milieu of ideas, material practices and embodied sensitivities. In other words, I wanted to expand on a theme I had long been interested in: the idea that sanity is not merely an individual question, but rather a process of cultural discovery so that, if we find others with whom to share ourselves (what you call above a ‘learning community’), and the appropriate resources to undertake the sharing, we can indeed nurture environments where our differences become accepted as part of the everyday.
In sum, my relationship to research is very much one where I flock to it for the space it affords me to freely explore questions that have direct relevance to my own individual experience, and assemble my own ecology of heuristic resources to make sense of those questions. This also means that I tend to follow problems more than disciplinary boundaries and affiliations, and this is not always an advantage in an academic environment where – unfortunately – there are increasing tendencies towards normalization and standardization.
This relationship to research is very much close, for me, to what happens in engaged artistic practice, which I understand as being art that does not merely dialogue with existing expressive traditions, but that also tries to update and creolise those in the face of concrete problems (in a way that recalls the meaning you attach to ‘extradisciplinary research’). Engaged art, I would say, is art that stumbles around for resources out of which to cobble together meaning in the face of emergent unknowns, conjuring a vectored sense of direction towards new possibilities for orchestrating space and for dwelling together.