Entire Volume 17 issue 1 - Journal of World-Systems Research ...

THE COFFEE COMMODITY CHAIN 80
market were quickly dismantled. World market prices crashed, and since 1989, coffee prices have
been at historic lows, with the exception of a brief price spike in 1994-97. 19
Growers have been
pressuring their states for protection from the low prices, but under current conditions, in which
each country must compete for niches in the world market, the coffee producing states have been
unable to recover the degree of solidarity that allowed them to cooperate in the regulation of the
market during the 1960s and 1970s. Meanwhile, the tremendous market power of the TNC
roasters has allowed them to maintain or even increase the wholesale prices they charge for their
roasted coffee, even as world market prices for green coffee have fallen to historic lows. This
price spread is one major source of capitalist super-profits in the U.S. cycle.
The motive force behind the relocation of coffee production and the reorganization of the
coffee commodity chain seems to have gradually shifted from the level of material life to the
level of capitalism. During the Genoese and Dutch cycles, the uses of coffee in material life – the
coffeehouse phenomenon – provided the major impetus. During the British cycle, the spread of
consumption to the working classes was again the motive force, but behind this spread of
consumption was the capitalist reorganization of the material lives of the mass of the population.
And this prompted the working classes themselves to take a more market-oriented view of coffee
consumption. During the U.S. cycle, although the spread of coffee consumption to new
consumers again played an important role, the increasing demand for coffee was itself largely a
creation of the advertising and demand-creation strategies of the TNCs
First, the demand for the new product, instant coffee, after the war, was largely a creation
of big capital and the U.S. state. Brazilian coffee officials, seeking new ways to use the surplus
coffee that was piling up in Brazil during the 1930s, had consulted with Nestlé technicians, who
modified the spray drying machinery they used to produce powdered milk, and produced instant
coffee. Instant coffee had been produced and sold before, but it had not been very good. This new
process could produce large quantities of instant coffee relatively cheaply, which were superior in
taste to previous products. Before Nestlé could commercialize the new process, the war
intervened. But during the war, the U.S. government added instant coffee to the rations provided
to its troops, simultaneously creating a huge new demand and bringing into existence a new
industry to meet it. After the war, people who had gotten used to the taste and convenience of
instant coffee in the armed services formed a ready-made market, and the new instant coffee
industry advertised vigorously to spread the demand. Second, even the spread of the coffee habit
to new consumers outside of the U.S. and Europe was driven much more by the advertising
campaigns of the globalizing TNCs than had ever been the case in previous cycles. They were the
ones spreading what Leslie Sklair (2002) calls the culture-ideology of consumerism: you are what
you consume. Coffee became one element of a lifestyle that had to be purchased in the market,
necessitating increased hours and intensity of work to enable people to purchase their desired
lifestyle.
The reorganization of the coffee chain in response to these new increases in demand once
again had impacts on the material lives of the people who grew the coffee. One major change
19 Coffee prices began to rise slowly in about 2006, and by October 2010 had reached levels not seen since
the end of the price spike in 1997. This was a result of prolonged low prices since 1997, causing many
small growers to lose or abandon their land, or pull out their coffee trees and plant other crops. Under
present conditions, however, this period of higher prices is likely to also be short-lived, as the rising prices
will stimulate new planting, causing a new oversupply in a few years.