[corp-focus] Of Caviar and Capitalism

[Robert Weissman]

Of Caviar and Capitalism
By Russell Mokhiber and Robert Weissman

Are capitalism and caviar incompatible? Is the system that prides itself
on the creation and veneration of wealth unable to to maintain a
sustainable market for one of the great trappings of wealth?

Well, at the very least, the tragic story of the global caviar industry
gives pause. It stands as a parable illustrating the pitfalls of the
market fundamentalist ideology that has dominated global economic
policy-making for two decades.

The story of the industry is recounted in a new book by Inga Saffron, a
Philadelphia Inquirer reporter and former Moscow correspondent for the
paper, Caviar: The Strange History and Uncertain Future of the World's
Most Coveted Delicacy (New York: Broadway Books).

For most of the twentieth century, the world caviar market was supplied
primarily by the Soviet Union. Caviar -- the salted eggs of sturgeon or
paddlefish -- is a creation of Russian culture. Although sturgeon once
populated many of the world's great seas and rivers in large numbers,
most of the world's supply after World War I came from the Caspian Sea
and the Black Sea.

After coming to power, Saffron says, "the Soviets realized they could
make a lot of money if they controlled the caviar market."

They exported the product to Western markets to earn hard currency, but
limited supply to increase prices.

"I don't want to say that they had a great environmental record, because
they didn't," Saffron says. "But they did act as a brake on fishing
because they limited caviar exports."

Even when the Soviets embarked on their disastrous dam-building schemes,
which blocked sturgeon from swimming upstream to spawn, they developed
an extensive hatchery system that maintained the sturgeon population.

Communism, it turned out, was pretty good for caviar.

When the Soviet Union collapsed, so did the protections and support
system for caviar.

In the chaos following the fall of the Soviet Union, factories across
the country stopped doing business as government money for operating
expenses evaporated. Funding to maintain the hatcheries similarly
disappeared, and the hatchery system fell apart. Overall, Saffron says,
the hatchery system became much less efficient, and was able to put back
many fewer fish than it had before.

Even worse, perhaps, was the rampant poaching that occurred after the
fall of the USSR.

"Many of the people who had been thrown out of work began to fish
illegally," according to Saffron. "They began to poach for sturgeon and
make caviar in their kitchens, because that is the only way they could
make money. It was the one resource in Southern Russia."

The old Soviet limits on fishing "were ignored, and people just fished
all the time," she says.

Enforcement agencies were weak and ineffectual. Many were bought off or
intimidated by the criminal gangs that gained control over much of the industry.

Today, the sturgeon in the Russian and Kazakhstan portions of the
Caspian are in steep decline, and Saffron has little hope that they will
be saved. International controls on caviar imports are coming too
little, too late, and in any case cannot stop the internal traffic in
the delicacy.

The collapse of the sturgeon in the Russian and Kazakhstan portions of
the Caspian is history repeating itself. Rampant overfishing led to the
rapid destruction of sturgeon populations in Germany, France, the
Eastern United States and the U.S. Great Lakes, all in a matter of
decades in the late nineteenth and early twentieth centuries.

Today, the counterexample to the laissez-faire caviar failure is Iran.
Like the Soviet Union once did, Iran maintains strong limits on fish
catch in its portion of the Caspian and operates a sophisticated and
effective hatchery system.

Countries relying only on price signals to regulate the industry have
witnessed a short cycle of boom and bust.

Countries that have succeeded in maintaining a viable caviar industry
over time have made long-term investments in infrastructure and put in
place systems to ensure sustainable management of limited resources.

Those are key elements for effective economic management and a livable
world.

Markets alone will not deliver them.


Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor, http://www.multinationalmonitor.org. They are
co-authors of Corporate Predators: The Hunt for MegaProfits and the
Attack on Democracy (Monroe, Maine: Common Courage Press, 1999; http://www.corporatepredators.org).

(c) Russell Mokhiber and Robert Weissman

This article is posted at: http://lists.essential.org/pipermail/corp-focus/2002/000137.html