Speculative futures trading inflates food prices by valuing crops before they grow.

Evidence

Financial capital would simply render everything speculative, propounding the already salient contradiction in capitalism between actual value and market price. Finance would value (and, hence, organize) social production and social goods based on their speculative returns, rather than social need. This is happening, to a certain extent, in today’s global food markets, where the vast majority of basic cereals are bought and sold before the seeds are in the ground, thanks to the trade in commodities futures and derivatives (Bello 2009; Russi 2013). The result has been a massive spike in global food prices as financial capital flees more abstract securities (speculative information technology, credit default swaps, etc.) and seeks to shore up portfolios in more “material” investments (food, gold, energy, etc.). — Max Haiven, Cultures of Financialization, 510

Categorization

• ADDENDUM: Strong material for the ‘Grafting & Growth’ tree/infrastructure article angle on material vs. abstract value, and especially relevant as direct precursor material to deWaard’s cultural argument about finance colonizing everyday commodities.
• XREF: Connects to deWaard’s argument about finance colonizing everyday life, and to earlier chapters on the price/value contradiction under capitalism. — connects to: Financial speculation externalizes its risks and costs onto the powerless — Max Haiven, Cultures of Financialization, 332; Grain elevator storage physically disentangled grain from its grower for futures trading — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 71
• QUESTION: Worth verifying: the claim that ‘the vast majority of basic cereals are bought and sold before the seeds are in the ground’ via futures — is this quantitatively accurate?

Broader Connections

• Financial speculation externalizes its risks and costs onto the powerless #expands (0.72) — Max Haiven, Cultures of Financialization, 332