The best kind of argument is one where you already know you're right, which must be what draws in so many people to the row over record food prices. What other issue allows the techno-nuts to bang on about the need for GM crops, the population drones to point out for the nine-billionth time the growing number of mouths to feed in the world, or my comrades on the left to have another go at big bad agribusiness – all at the same time? Some of these points are worth airing; the surging cost of bread or beef around the world is unlikely to have just one cause. But the overriding feature of this debate is how few of the participants feel the need to do any more than dust off their hobby horses.

Meanwhile, at the risk of sounding crass, around a billion people – one in seven of the world's population – go to bed hungry every night.

An urgent problem requires more than age-old solutions. Understanding why food prices are rocketing again – with the cost of wheat and maize up around 70% in the past year – so soon after the bubble of 2008 should make us look more closely at what's changed in the food market.

And one of the biggest answers to that question lies not in the farms of Queensland nor the suburbs of Cairo, but on Wall Street and in Washington.

I'll give you the Digested Read. In 1991, investment bankers at Goldman Sachs in New York launched a new instrument: the Goldman Sachs Commodity Index. By bundling up 18 different staples – from coffee, cocoa, pork, wheat to oil and copper – the financiers offered investors a chance to take a punt on what were then relatively special-interest markets. One of the major selling points was the so-called "China bet": the perfectly-sensible belief that as middle-class Chinese and Indians got richer, they would eat more and better-quality food.

Other banks such as Barclays got in on the act, but commodity funds remained a pretty small business – until the turn of the millennium, when two things happened. First, the US Congress rushed through a piece of legislation that permitted pension funds and others to invest in these new commodity indices. Given that this allowed a giant wave of money to speculate on human essentials, you might think this would have attracted some attention. But you'd be wrong: this was the fag-end of the Clinton era, when Democrats were as mesmerised by financial markets as Republicans and the word "unregulated" was seen as go-ahead and exciting rather than worrying.

The second thing that happened was the collapse of the dotcom bubble.

All of a sudden, badly-burnt fund managers were hunting for safe places to stow their cash. And what could be safer than investing in food? A sleepy, small market woke up with a start: back in 2003 fund managers had $13bn in commodities investing; by the middle of 2008 that sum was closer to $317bn.

Put these two factors together – chuck in the nonsense that is the biofuels industry, which takes food and land from people and makes it into fuel for Hummers – and the result was to turbocharge food prices. In a report last month, Christian Aid reproduces a chart of commodity prices plotted all the way back to the 50s. The line is almost flat for most of the 70s – even the two oil shocks are more like blips. Then comes the naughties and it just shoots straight up to more than double its previous level. There is a bit of a comedown after the popping of the bubble three years ago, but right now the index has more than recovered – to above 2008 levels.

This is different in both size and scope from the kind of futures trading you last saw on Trading Places. The buying and selling of financial contracts on food and other basics has been going on for centuries, and is a useful way of smoothing out demand and supply. But as I say, that was a small market in which specialists traded in pork bellies and other things they knew something about. What has happened over the past decade is that hundreds of billions of new money have been staked on food prices going one way: up. In other words, this is the bubble mentality as applied not just to internet stocks but to the essentials of nourishment. And the losers are not only day traders in Ohio when Pets.com goes bust, say, but the starving in slums outside Mumbai.

In a report published on Sunday, the UN agency that looks at trade and development issues, Unctad, estimates how much index investors had artificially pushed up prices. At the peak of the bubble in 2008, another 20-25% had been added to the cost of a barrel of crude and around 10% to wheat and maize prices. Given that the poor spend something like 70% of their entire income on food, such inflation means the difference between families eating or not.

The past decade has seen something remarkable happen: sharp-elbowed bankers and gullible politicians in America and Britain have turned basic foodstuffs into something to bet on. The result has been mayhem and starvation in Africa and Asia. There were riots in more than 30 countries three years ago, and a spike in world hunger. As commodity prices surge again, I wouldn't bet against a re-run.

"Food markets have been turned into a casino," Joerg Mayer of Unctad told me last week. "And for no other reason than to make Wall Street money."