The German newspaper the Spiegel reports: ‘Vast amounts of money are flooding the world’s commodities markets, driving up prices of staple foods like wheat and rice. Biofuels and droughts can’t fully explain the recent food crisis — hedge funds and small investors bear some responsibility for global hunger.’

Not long ago, Dwight Anderson welcomed reporters with open arms. He liked to entertain them with stories from the world of big money. Anderson is a New York hedge fund manager, and as recently as last October he would talk with enthusiasm about his visits to Malaysian palm-oil plantations and Brazilian grain farms. “You could clearly see how supply was getting tight,” he said…

There are plenty of questions to ask Anderson, though — in particular about the role of international investors in the current spike in the price of staple food. Not only is there talk that investors have profited from desperate hunger in Honduras, the Philippines and Bangladesh; critics also wonder if commodity speculators are making the crisis worse.

On Tuesday in Washington, DC, a regulatory body called the Commodity Futures Trading Commission held public hearings on this very question. Farmers and food producers argued that the market was “broken,” suggesting that the steep rise in the price of staple crops was hurting everyone — farmers as well as the people they feed. “The market is broken, it’s out of whack,” said Billy Dunavant, head of a cotton-producing firm in the United States, at the Tuesday hearing.

Regulators on the commission warned against government intervention, and no doubt fund managers like Anderson would, too. But the crisis keeps deteriorating. India and Vietnam have imposed export bans on ordinary rice. Indonesia is following suit. According to the United Nations, North Korea is on the brink of a humanitarian crisis. After unrest shook countries from Egypt and Uzbekistan to Bangladesh, thousands of South Africans took to the streets of Johannesburg last Thursday to protest high food prices. In Haiti, the prime minister was fired after riots over the price of rice.

For those who hadn’t noticed, the food crisis is pretty severe. Something has to be done. The question is, what? All too often, I hear people come up with socialist solutions, but we know that in the long term those ’solutions’ will make the problem even worse.