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In a recent New Yorker, Nick Paumgarten published a lucid, entertaining essay on the financial collapse. Titled “The Death of Kings,” it focuses on the hedge-fund managers, stock gurus, and private-equity wizards who reaped billions from the credit bubble. iStock Photo

What were those people thinking? Turns out, Paumgarten relates that during the flush times, many in the world of finance had a “moment of clarity, an inkling of doom” about what was coming. “The sky was full of signs,” Paumgarten writes.

For many, the awakening came while driving through some overbuilt exurb in California or Florida, or watching a commercial for a subprime lender (“Mortgage consultants are standing by!”), or studying a chart depicting total debt to the gross domestic product.

Paumgarten’s tale is essentially about high-level fecklessness: people with degrees from the nation’s finest universities, rewarded with nine-figure annual salaries, knowingly driving the global economy right over a cliff. Paumgarten doesn’t go there, but the same analysis applies to financial policymakers and regulators; they, too, could gawk at obviously overbuilt exurbs, or wince at debt-to-GDP charts.

The whole sorry spectacle got me thinking of the global food system, the juggernaut that feeds billions every day. It’s not hard to make analogies with the financial sector whose rubble now lays scattered about, ready to be cleaned up on the public’s dime.

Like the financial sector, the food system has dramatically globalized over the past generation, even as it has become increasingly concentrated (PDF). Just as traders in New York, Tokyo, and London — often employed by the same mega-banks — can make, say, the Argentine peso plunge or soar with a few keystrokes, global food commodity markets have become tightly intertwined.

Just last year, the U.S. policy of diverting massive amounts of corn to biofuel — in concert with similar European Union policy on soybeans — sparked steep increases in food prices worldwide, pushing hundreds of millions of people into hunger. In essence, decisions made in Washington and Brussels reduced Haiti’s urban poor to eating mud cakes.

The analogy between food and finance also extends to the concept of leverage. During the boom, a typical Wall Street firm held a dollar in liquid assets for every 25 it used to make speculative bets in stuff like derivatives and credit default swaps. Execs were so confident that real-estate prices go only one way — up! — that 25-to-one leverage seemed like a sound business model. Paumgarten shows that many of them had doubts; but that only makes the situation more stunning.

Whereas Wall Street’s leverage was financial, the food industry’s is mostly ecological and social. (Financial leverage does play a role, as in the case of teetering, debt-gorged Pilgrim’s Pride, the globe’s largest chicken producer.) Companies like Archer Daniels Midland, Cargill, and Tyson have built globe-spanning empires by taking vast amounts of cheap, monocropped corn and soy and turning it into everything from sweetener to meat to car fuel. Mega-processors like Kraft and fast-food chains like McDonald’s and Wendy’s suck in these inputs and churn out cheap, ready-made meals.

These giant entities behave as if soil is an easily renewable resource, that the climate can absorb endless amounts of the greenhouse gas nitrous oxide (a synthetic fertilizer byproduct), and that communities and the biosphere can endlessly bear the toxic footprint of industrial meat production.

And just as in the financial world circa 2006, signs of imminent trouble abound, discernible by anyone who dares look. Consider just a few of the most obvious ones:

• Industrial corn and soy are the lifeblood of the industrial food system, providing livestock feed, cooking oil, sweeteners, and a dizzying array of processed additives. They’re also the feedstock of choice for the biofuel industry, of which food giants like ADM and Cargill form a major part. And, they’re massive contributors to climate change. Industrial corn needs heavy lashings of synthetic nitrogen to reach maximum yield — and recent studies (PDF) suggest nitrogen fertilizers emit four to five times more nitrous oxide into the atmosphere than previously had been assumed. Meanwhile, the expansion of soy into Brazil’s agricultural frontier, egged on by ADM and Cargill, has led to massive deforestation in the Amazon, perhaps the globe’s most important carbon sink. Under the industrial-food regime, we’re literally warming the planet bite by bite.

• Large doses antibiotics are fundamental to the industrial livestock model. Animals crammed together in close quarters over their own waste become immune-comprimised, requiring steady doses just to stay alive. Meat producers also favor antibiotics because they promote fast growth. “An estimated 70 percent of antibiotics produced in this country — nearly 13 million pounds per year — are used in animal agriculture for these nontherapeutic purposes,” claims the Union of Concerned Scientists. A growing body of evidence links intensive hog production with MRSA, an antibiotic resistant staph infection that kills 20,000 Americans per year — more than AIDS. The situation with flu viruses may be even more dire. The current swine flu strain sweeping the globe has been traced to a hog raised by a large-scale operation in North Carolina from 1998; and even conventional veterinary scientists have been warning for years that hog CAFOs create ideal environments for fast-evolving, species-jumping flu strains.

• Industrial-scale vegetable and fruit production relies heavily on domesticated honey bees for pollination — and commercial beekeepers have been haunted since 2006 by large die-offs. Scientists have yet to settle on a single explanation for “colony collapse disorder” — but widespread insecticide use almost certainly plays a role.

One can easily imagine a rollicking New Yorker piece about the aftermath of a food-system meltdown: quotes from wistful agribiz execs about how they saw, and ignored hints of a coming calamity.

But there’s no need to wait fearfully for that day. Just as signs industrial food’s fragility abound, there’s also evidence of robust alternatives nationwide. For 20 years, farmers markets and CSAs have grown dramatically, providing links between consumers and farmer unmediated by transnational food corporations.

In places as diverse as Woodbury County, Iowa, and Hardwick, Vermont, citizens are organizing to use municipal policy as a tool to revitalize and support local food networks. Across the nation, municipalities are launching “food policy councils” — based on the theory that just as cities develop strategies for securing sufficient water and regulating growth, they also need to think about nurturing their foodshed.

And in inner-city Chicago and Milwaukee, Growing Power and the Institute for Community Resource Development are putting the lie to the idea that low-income people tend to eat industrial food because they like it better. These groups — along with Brooklyn’s East New York Farms and Added Value, Oakland’s People’s Grocery, and others — are thriving as they bring fresh food to neighborhoods that too often only have access to ill-stocked corner stores.

All of this activity, vibrant and promising as it is, produces a small fraction of the food consumed in the United States — likely less than 3 percent. Unlike the industrial food system, it’s disaggregated, decentralized, and unsubsidized by the federal government. Yet these shadow food systems represent the best hope we have as Big Food lumbers toward disaster.

Here is where the analogy to the financial system offers some hope. Commenting on how difficult it was for most people not to get swept up in the bubble economy, Paumgarten writes: “The sad fact is that betting against the global financial system requires more than pluck; you need to be a participant. Most of the mechanisms in place for the implementation of pessimism are known only to the members of the guild.”

In other words, nearly anyone could have seen that the U.S. economy had entered a precarious bubble phase. But you pretty much had to have been running a hedge fund to, say, make money by betting against the value of collatoralized-debt obligations.

Food is different. There are multiple ways for individuals and communities to get involved with alternative-food efforts. And unlike shorting securities like a Wall Street “bear,” betting on alternative food expresses optimism, not pessimism.