Beyond Economics

Beware: If you see Food, Inc., you may never be able to eat meat again. Not that the movie covered that much new ground, it just really puts it in your face all at once. While this movie and post are about agriculture, the message applies to finance, energy, media and many other industries.

Corporations have captured both markets and government
The movie is not the liberal screed you might think. It vilifies corporations and demonstrates how the food industry has taken over both the free market and the government.

Hamburger Helper (thanks to Ray Kroc and the McDonald brothers)
McDonald’s needs an almost infinite supply of uniform tasting beef. Feedlots of cattle are fed (taxpayer-subsidized) corn to fatten them up quickly and cheaply. But cows can’t digest corn properly so e. coli builds up and antibiotics (which become resistant) need to be added. The cattle are slaughtered and processed in huge plants by illegal immigrants who dare not complain about the dangerous and unsanitary working conditions. (The INS only nabs a few at a time so as not to disrupt the plants.) A ground beef hamburger is literally that, with meat that might come from up to a hundred different carcasses. Sounds tasty, doesn’t it. That’s why you need all the fixings and the special sauce. Tyson and Perdue have the same needs for uniform quality(?) chicken.

There’s always Tofu (courtesy of Monsanto)
Here is an example of how one corporation, Monsanto, has gamed the entire system. Monsanto developed a GMO soy bean that now accounts for 80% of the soy beans grown in this country. They have a patent on the seeds and do not allow farmers to keep any of their seeds for the following year. They have a team of 75 investigators that go around and intimidate farmers who are not using Monsanto seed into doing so. (Since Monsanto seed invariably spills over from neighboring fields, they go after these farmers with law suits or visits in the night until they succumb.) During the Bush administration, Monsanto was able to place its people in charge of key regulatory agencies throughout the government.

Don’t say anything bad about corporations (even Oprah got slapped)
There are laws on the books in some states against criticizing the agricultural industry publicly. Remember when Oprah Winfrey was sued for saying she would never eat hamburgers again? She won, but she is big. There are also laws preventing any pictures taken from inside a meat processing plant to be shown publicly. How can markets function without transparency?

ADM, “Supermarket to the World”
The corn industry is subsidized and corn products and derivatives are found in many of the products we buy from sodas to pet food to medicines. It’s no accident that presidential primaries start in Iowa, the heart of corn country.

Where is the outrage?
What I am wondering is why free market proponents are not more outraged by the tremendous consolidation of corporate power (in agriculture, finance, health, media, etc.) over the last 20-30 years? There is such fear of government taking over, what about the corporations? In many cases, large corporations are systematically destroying small businesses and competitive markets. And how about dealing with customer service from a corporate bureaucracy? Perhaps the problem is size, whether it’s government or business. Adam Smith’s vision of free market capitalism did not include the corporation.

Free market advocates would say that we just need the appropriate regulation to set the rules of the game. But whether one is a proponent of socialism or free market capitalism, how do you stop this kind of corporate power? Where will the regulation come from if the corporations own the politicians that pick the regulators? National, state, local…what we have is corporate crony capitalism at all levels. A small example: We had some officials from a local town who spoke to our Business & Economics club describe how one large supermarket chain has bought up all the dead strip malls in their town and is just sitting on them to keep out other large competitors.

Will change come from the top down or the bottom up?
The concluding message is actually market focused, giving up on much hope of political leadership or government regulation and calling on consumers to vote with their spending dollars. For example, Walmart is now carrying organics (and “going green”) in response to consumer demand. In addition, it calls on individuals to get involved in the food system in many different ways, reading food labels, writing elected officials, supporting local farmers’ markets, etc. This is an optimistic message but I fear that, when you consider the public as a whole, there are not enough educated, well informed, and responsible individuals to change the the system from the bottom up. (Not, that I am implying that change can only come from the top down.)

Food Inc. provided some hope of a market based approach although they did note that the big food conglomerates (ADM, Cargill, etc.) are already buying up the small organics. The head of Stoneyfield Farms said he had told his activist friends that he had decided to work from within.

If not Obama, who?
Conservatives had their chance under Bush and Republican rule and they put foxes in charge of the hen houses (FDA, SEC. etc.). Progressives hoped that the historic election of Obama could be a catalyst for change from BOTH the bottom up and the top down, but he has already stumbled, run into a buzz saw in Congress, and is losing the confidence of many of his (perhaps fickle or naive) supporters.

If not now, when?
Whatever your point of view, one would think that the severity of the current economic crisis would have been a wake up call to everyone and given the country a chance for a meaningful national debate and an opportunity to rewrite the rules. Now that the near death moment has passed, it seems that we have quickly descended into politics as usual. I am in deep despair.