Raj Patel: At Global Capitalism's Pinnacle, Even Hunger is a Commodity

via CommonDreams:



Published on Friday, May 6, 2011 by The Guardian/UK
At Glencore's Pinnacle of Capitalism, Even Hunger is a Commodity

by Raj Patel


What does it take to make the food speculators at Goldman Sachs look like they're playing for lunch money? A secretive Swiss-based company, and one of the world's largest commodity trading firms, knows. With its initial public offering announced on Thursday, Glencore – a multibillion-dollar mining, energy and food trader that will soon list in London and Hong Kong – is the envy of Wall Street. When Goldman Sachs was floated, the then CEO Hank Paulson made off with $219m. Glencore's chief executive, Ivan Glasenberg, has already earned the moniker "The Ten Billion Dollar Man" for his share of the bonanza.

Glencore will be the first company in 25 years to make the FTSE 100 on its first day of trading, with an estimated valuation of about $60bn. The company has had an average return on equity of 38% (compared to Goldman Sachs's 12%). Its base in the Swiss town of Baar has freed it of even the minimal regulation US-based companies entertain. Not by accident does Glencore find itself in Switzerland. Like the mining and oil trading company Trafigura, Glencore is a descendant of the Marc Rich group. Rich fled the US in 1983 after being indicted by a federal prosecutor, Rudolph Giuliani, for tax evasion and trading with Iran (though he was pardoned by Bill Clinton). As Marcia Vickers reported in a Businessweek exposé: "Rich's philosophy is that no law applies to him."

In exchange for going public and raising money for further acquisitions, Glencore will now have to submit to the bared gums of UK regulators – whose rules are far less onerous than their US counterparts. With the funds from its flotation, the company looks set to dominate the fields in which it chooses to operate. Although primarily a mining and energy company, it has substantial interests in food – controlling around a quarter of the global market for barley, sunflower and rape seed, and 10% of the world's wheat market. ...........(more)

The complete piece is at: http://www.commondreams.org/view/2011/05/06-11