Most people think the next economic crisis will begin when shortages become obvious and prices start soaring.

I disagree.

The battle over the next economic crisis has already begun, and what worries me most is not the shortages themselves. It is the growing resistance to doing anything effective about them.

After appearing on BBC Radio Five Live to discuss Rachel Reeves' proposed food price cap, I came away convinced that many people still believe markets can solve every problem. Faced with shortages of food, fuel or energy, their answer remains the same: let competition work, let prices rise and let markets adjust.

But what happens when people cannot afford those prices?

Markets can ration food by price. They can ration fuel by price. They can ration energy by price. What they cannot do is guarantee that everyone gets access to essential goods when shortages emerge.

That is the issue we need to confront.

In this video, I explain why I think Britain faces the risk of a genuine supply crisis, why free-market dogma could make that crisis much worse, and why the opposition to intervention is already organising itself. Calls for rationing, market support, public provision or emergency government action are already being dismissed as socialist or statist.

The real question is simple. When shortages arrive, should access to food, fuel and energy depend upon the ability to pay, or should the government act to ensure everyone gets what they need?

I argue that food, fuel and energy must be treated as public goods in a crisis. The alternative is rising hardship, growing anger and potentially serious social unrest.

The crisis may still be ahead of us.

The fight over how we respond to it has already begun.

This is the audio version:

The Debate Ammunition for this video is available here.

This is the transcript:

The coming economic crisis is real. It's going to happen, and opposition to dealing with it is already visible.

I realised this when I appeared on the Nicky Campbell show on BBC Radio Five Live on 21 May. The topic was Rachel Reeve's proposed food price cap. What I heard from other guests revealed exactly what we are up against. Free market dogma is already being deployed against any serious response to this crisis. That dogma will cost lives if it is allowed to prevail, and that terrifies me.

Rachel Reeve's proposed food price cap was a panic reaction to rising prices. No one could pretend that this was a serious policy. It was, in fact, a terrible idea because it relied on a market solution to a problem that markets cannot solve. We are facing absolute shortages of essential raw materials, and markets cannot solve that problem by pricing people out of essentials, like food. That is not a viable solution for UK society. That is a death sentence.

We have a coming physical supply crisis, and no established framework to deal with it. This crisis is as serious as COVID, and in many ways, I think it might be worse. COVID was manageable through vaccines, just as the 2008 global financial crisis was manageable through public spending, but this crisis involves physical shortage of the things our economy needs to function, and that is not going to be so easy to overcome.

The consequences will fall hardest on those least able to absorb this shock. Those on the living wage are already priced out of essential items, and that reality is not a neutral position. It is a political choice, and it was that politics that I heard on this programme.

What the other guests said on air revealed exactly why my saying these things matters.

A supermarket representative said I was exaggerating the crisis to come, and competition would solve the problem.

A farmer was even more simple. He said, “Let the markets rip”.

Both reflect a worldview in which markets self-correct, and people adjust, except they can't if they don't have the money to do so.

The man from the supermarket will still be able to afford his food and his petrol. So will the farmer. But they cannot imagine what it is going to be like for those who will be unable to do so. That is not, though, a lack of imagination. It is indifference to others, in my opinion.

And if we let markets rip, people will die. I said that very plainly on air on the BBC, and I'm not sure that went down so well, but people died during the COVID crisis because the government failed to intervene early enough, and people already die in this country of the cold; around 25,000 people a year are thought to do so because pensions are too low. And a crisis of food and fuel this winter, and the two are likely to go together, could produce something far worse. My claim was not an exaggeration; it was a straightforward observation based upon the evidence of what is likely to happen.

Markets will not prevent these deaths when people cannot pay market prices for either food or energy, and that was the point that I was making on air.

Two of my arguments hit home in that discussion, and they are worth restating. The first was a very simple slogan. I said, we need to prioritise ‘food, not finance'. That I think is important. We do need to talk about food. We need to ignore the finance because. At the end of the day, people can't eat finance. People do need food. Let's get the Maslow hierarchy of needs right here, and we have to meet the essential needs of the UK population if we are going to avoid a crisis.

My second observation was that a mother who cannot feed her children is always one of the angriest people on earth. That happened to resonate with another caller into the programme, who was a mother, who was concerned about this very issue. But I didn't make the observation up to suit her. It was something I first thought of in 2008. And I realised then that I was the parent of young children, and if I was not going to be able to feed them, I was going to be very angry. This is my point. We need to manage that anger because we cannot afford civil unrest.

And civil unrest over fuel inflation is already visible in parts of Africa. It's a reality that this is happening there. Let's not pretend otherwise.

And real food shortages are already emerging in Southeast Asia, and I think in Indonesia in particular, and that is going to lead to real crises there as well.

Markets must not then be allowed to rip because people will not tolerate the injustice of them doing so. The fact is that letting markets try to solve this problem will be a recipe for civil disaster, and that is the problem that we are facing.

We have got free market dogmatists who are going to fight any reasonable response to this crisis. They are already making a choice about who they think should bear the cost of what is going to happen, and their choice is to let it fall on those who cannot afford to pay.

The words ‘communist', ‘statist' and ‘socialist' are already being used to dismiss any intervention of the sort I was talking about, like rationing, price controls and market support. But I was not making a party political argument.

I was arguing that people need food, heat, and fuel to stay alive. Everything else is incidental after that, and it seems that those who are market dogmatists just do not care about that point. Callous indifference, dressed up as an economic principle, is not an answer to this crisis.

And what all this means is clear. And that is why I'm raising these issues now, time and again, whenever I get the opportunity to do so. This crisis is coming, and the resistance to dealing with it has already formed. Free-market dogma is the ideology of that resistance, and it must be challenged. The alternative to intervention is not stability; it will be disorder, and we need to resist that, and the draconian response it will create from our government, which has the powers to intervene now in ways that I think are deeply antisocial in themselves.

Food, energy, and fuel must be treated as public goods in a crisis and not as market commodities.

We need to prepare for this argument about how to respond to this crisis because it is the argument that will define what happens next in our society. Do we want to get through the coming crisis, or do we want to descend into mayhem, with a lot of casualties on the way?

That is the choice that we have available to us? I think we must take action to prevent ourselves from descending into mayhem. But what do you think? There's a poll down below. Let us have your comments as usual. Please do like this video, if that's what you do, please do share it, and if you'd like to buy us a coffee and support our work, we'd be very grateful. There is a link down below.

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