How Civilizations Die: (And Why Islam Is Dying Too)

by David Goldman

With newly rich East Asians buying more grain at any price, the occasional poor harvest will push the wheat price through the ceiling, as it did during the past twelve months. To make life intolerable for the Arab poor, the price of wheat does not have to remain high indefinitely; it only has to trade out of their reach once every few years. And that is precisely what has happened. After thirty years of stability, the price of wheat has had two spikes into the $9 per bushel range at which very poor people begin to go hungry. The problem isn’t production. Wheat production has risen steadily, very steadily in fact. Wheat supply dropped by only 2.4 percent between 2009 and 2010—and the wheat price doubled. That’s because affluent East Asians don’t care what they pay for grain. Prices depend on what the last (or “marginal”) purchaser is willing to pay for an item (what was the price of the last ticket on the last train out of Paris when the Germans marched in on June 14, 1940?). Don’t blame global warming or unstable weather patterns: wheat supply has been fairly reliable. The problem lies in demand.