Of Toast & the Precautionary Principle: Commodity speculation revisited
Globalisation can lead to surreal situations. For example, several weeks ago I got a call from a Kenyan guy called Karim Ajania , who's based in San Francisco, and who runs a website for a Mozambican forestry project called Mezimbite. You'd think the website would be focused on, well, Mozambican forestry, but it features contributions on a variety of topics from some pre-eminent global economists, including Sir Partha Dasgupta and Oxford's Paul Collier . Karim told me that h e'd managed to get respected Harvard professor and former economic advisor to Bill Clinton, Jeff Frankel , to write him a short blog on commodity speculation. Karim wanted me to write a reply. Karim had seen a previous article I'd written on food speculation , where I'd suggested that excessive involvement of financial players in agricultural futures markets could distort prices of real food, potentially leading to negative impacts on the welfare of the world's most...