The Power of Concentration: Local Ruminations on Global Ruination
By Wylie Harris
The Touchstone
Vol. XIV, No. 3, September/October 2004
Online at: http://www.rtis.com/touchstone/oct2004/21.html
This past February a little-noted legal milestone rose up, was briefly celebrated or despised by those aware they had a stake in the matter, and just as quietly faded from view, settling into history's "Who Knew?" file. In an Alabama courtroom full of cowboy hats, U.S. District Judge Lyle Strom ruled that meatpacking giant IBP had used its market share to unfairly lower the prices it paid to ranchers selling their cattle in spot markets. The specifics of the case are the fodder of dry economic treatises: percentage market shares, profit margins, and the like. But its implications, belying the lack of media coverage, go to the very core of how corporations do business in the United States, and from that deep wellspring, they send ripples into virtually every aspect of economic life and freedom both in this country and around the globe.
The case, which began in 1996 as Pickett vs. IBP, accrues historical import from a number of sources. One is the origin of the legislation under which it was brought. The previous round of price-fixing, collusion, and market concentration among meatpacking companies led to the Sherman Antitrust Act of 1890. For three decades the big packers successfully evaded the Act's consequences, but after a 1917 Federal Trade Commission inquiry revealed years of secret price-fixing agreements among them, they agreed to sell off the infrastructure -- stockyards, railroad stocks, meat stores, and publishing capacity -- that had allowed them such a high degree of market control. In 1921, Congress passed the Packers and Stockyards Act (PSA), which created a federal administration of the same name to prevent a recurrence of monopoly in the meatpacking industry. Cattle markets remained relatively competitive through the 1970s, with the top four packers controlling some 20% of the market [1]. (This measure of market concentration, the share controlled by the top four firms, is known as the four-firm concentration ratio, or CR-4.) But the 1980s saw the beginning of a wave of mergers that increased that share to over 80% at present [2]. By comparison, the level of market concentration that first inspired the Sherman Act was a relatively paltry 55% [1]. Pickett vs. IBP -- now Pickett vs. Tyson, thanks to merger mania -- marks the first time that a class-action lawsuit was successfully certified under the eighty-year old PSA [3].
The crux of the case was IBP's market share, which at 38% was large enough to allow it to control prices [4]. IBP contracts to buy about half its cattle from large feedlots at undisclosed prices -- so many that on a given day, it might own nearly twice as many cattle as its plants could process. At those times, sellers on spot cattle markets -- like the Pickett plaintiffs, and the estimated 30,000 ranchers in the legal class they represent -- were offered unfairly reduced prices. The reduction was estimated at $5.62 per hundredweight for every 100,000 head of cattle that the firm controlled through contracts [3]. Put another way, IBP/Tyson's price-fixing artificially depressed the price of cattle by 5%, in effect enabling it to receive for free one out of every 20 cattle it purchased [5]. The federal district court found that gouging, over the eight-year period covered by the case, to be worth a $1.3 billion award to the plaintiff class.
According to a USDA report, the CR-4 in beef packing, at 81%, is high compared to that for other meats [6]. At first glance the system seems to be working; in an industry where market concentration is above average, the resultant monopolistic practices were caught and corrected. However, the question remains whether concentration becomes problematic when it exceeds an industry average, or when it passes some absolute threshold. According to some economists, the potential for market distortion arises whenever four-firm concentration ratios exceed 40% [7]. If this is the case, much cause for concern appears in the same initially reassuring USDA document, which notes, "About 10% of U.S. manufacturing industries are more concentrated than cattle slaughter, while the other three slaughter classes (hog, chicken, and turkey) are close to the mean for manufacturing [6]." CR-4's for those other three classes, respectively, are 59%, 50%, and 45%, all above the 40% threshold at which the potential for market-distorting effects of concentration can arise [2]. Moreover, those values are "close to the mean" for all manufacturing in the United States.
The system is working, all right, but maybe not in the way we'd like to think.
The United States' agricultural economy has been characterized as an hourglass. At the bottom there are some 2 million farmers producing food for the 285 million consumers at the top. But in transit from farm to table the food passes through a mere handful of multinational corporations. Herein lie both the power and the problem of concentration. When the number of buyers is small relative to that of sellers, the former have much greater control over prices. This situation, called oligopsony, was the plaintiffs' beef in Pickett v. IBP. When those few buyers turn around to become sellers to a large group of customers -- as in the relationship between the food industry and consumers -- it is equally problematic. Increased size, and thus market share, is conventionally assumed to trigger corresponding increases in efficiency, and thus lowered costs to consumers. But empirical data do not always fit this theoretical pattern. In a recent economic analysis of 32 separate food-processing industries, increasing concentration led to increased market power in 28, lower processing costs in 14, and higher consumer prices in 28. In other words, the main effect of market concentration appears to be increased prices for the consumer [8, 9].
A quick jog through the United States' food system illustrates these inequities while revealing some subtleties in the hourglass analogy, as well as highlighting some of its less savory implications. At the broad base of the hourglass farmers sell to a limited number of processing firms whose concentration in the livestock sector has just been described. For grains, companies like ADM, Cargill-Continental, and General Mills dominate milling and crushing, terminal grain handling, and corn and soybean export, with CR-4 ratios in these sectors in the 60% -- 80% range [2]. In food processing, CR-4 values range from 19% for fresh and frozen seafood to 85% or more in breakfast cereals, cane sugar refining, vegetable oils, and malt beverages. General-line food wholesalers, like Sysco and SuperValu -- the companies that supply retail grocery chains and food service outlets -- had a CR-4 of 41% in 1997. For retail groceries (the top four being Kroger, Albertson's, Safeway, and Wal-Mart), it was 27% in 2000 -- pleasingly low relative to the 40% threshold, but nearly double its level of only four years before. In the nation's largest 100 cities the local CR-4 for retail groceries was much higher, about 72%. Commercial food service, the point in the chain where the consumer lays down cash and picks up a hot meal, is the least concentrated sector in the whole hourglass of the food system. The CR-4 among restaurant companies as of 2000 was 21% [10].
Even organic foods, often regarded as a panacea for the conscience of the progressive consumer, have become an increasingly oligopolistic sector as the market has grown exponentially in recent years [11]. Efforts to weaken the national organic standards in 1997-8, and again this year, were led by organic food corporations whose profits would be increased by the inclusion of toxic sludge, irradiated food, and genetically modified organisms in the list of allowable practices for organic certification. Ownership of these companies by conventional food corporations is increasing; such pairs include Cascadian Farm and Muir Glen (General Mills), Celestial Seasonings and Soy Dream (Heinz), Odwalla (Coca-Cola), Nature's Farm (Tyson), Horizon (Dean), and Ben and Jerry's (Unilever) [12]. Since 2000 more organic food has been sold in conventional supermarkets than in any other type of retail outlet [13].
The problem of concentration, unfortunately, is not limited to its thorough and increasing pervasion of the food industry. As noted earlier, corporate concentration is high throughout all sectors of manufacturing -- and it has been that way for a while, with the food industry overall a relative newcomer. At the end of World War II the top three firms in meatpacking, dairy, and flour milling each controlled around 40% of their respective markets, while those manufacturing cigarettes (80%), farm machinery (84%), and automobiles (90%) were twice as concentrated, or more [14]. The wartime lessons of the profit potential in cooperation between big business and government, meanwhile, inaugurated the formation of the "military-industrial-congressional complex (MICC)" [15], among whose modern legacies is the seemingly absurd case of national-defense analysts concerned that record levels of concentration among arms manufacturing firms are leading to reduced competition and poorer military readiness [16, 17]. The pattern established by the MICC, in which defense firms lobby Congress for public funding of projects that even their supposed beneficiaries do not support, has become the standard avenue of corporate influence on government [18]. Agribusiness presents a compelling example of this assertion. As a sector, it spent $60 million on campaign contributions and $78 million on lobbying in the 2000 election cycle, and achieved a tidy rate of return in the $ 23 billion it received in public subsidies in 2002. (Seventy percent of those funds went to the largest 10% of recipients, while 60% of farmers received no federal aid [19, 20].) Another illustrative case from the food sector is the above-mentioned one of the ongoing and increasing pressure for relaxation of the national organic food standards. Yet another is the ultimately successful pressure, exerted by the U.S., Brazil, and other countries at the behest of their resident sugar and sweetener industries, on the World Health Organization to soften its warnings against sweetened foods as factors in the global obesity epidemic [21, 22]. Examples from other industries are all too readily available.
Yet, despite this abundance of information on corporate power and its abuses, few people seem to be aware of it, or able or willing to dig it up for themselves. Much of that ignorance, or apathy, is a consequence of concentration in yet another economic sector: that of the media. By swamping in a flood of propaganda, any information not in keeping with the corporate line, media outlets have an immense power to limit public knowledge of the problems caused by corporate influence. It's impossible to get riled up about a problem you don't know exists. As the number of media companies dominating the idea market dwindles -- from 50 in 1984, to today's crop of six (Time-Warner, Sony, Disney, News Corp., Gannett, General Electric, Viacom and Clear Channel) -- such control becomes ever more pervasive [23]. Of particular interest in that short list is General Electric, owner of NBC, also a major defense contractor. These firms' rise to global media dominance has been a thoroughly bipartisan affair. While FTC Commissioner Michael Powell drew fire for the most recent relaxation of market-ownership limitations [24], the previous ratchet, in the form of the Federal Telecommunications Act of 1996, came on the watch of a complaisant William Jefferson Clinton.
But even when individuals overcome the flood of biased corporate media information to confront the challenges facing society, and find enough others of like mind to make their collective will for change felt against the waves of campaign cash swamping the polls, still another concentration-based hurdle remains. The very machines with which many cast their votes, it turns out, are manufactured by a small set of politically connected companies. The largest two such companies in the United States, Diebold and ES&S, together manufacture machines that count at least 80% of the votes in the U.S. This includes not only the controversial touch-screen voting machines, but also those used to scan traditional paper ballots since 1964. The two firms are owned by two brothers, Bob and Todd Urosevich, and both have strong ties to the GOP. Their machines run software based on the same original tamper-prone code, and the industry as a whole is not legally subject to federal oversight or regulation [25, 26].
Though surpassingly dry in the recitation, corporate concentration is also one of the surpassingly central issues of our time. One of the great ironies in corporations' historical rise to dominance has twin heads. The Fourteenth Amendment, passed during Reconstruction with the intention of securing basic freedoms to former slaves, has been used largely to secure those rights to corporations instead. Moreover, that precedent of "corporate personhood" depends on the headnotes -- which carry no legal weight, and in any case, do not accurately represent the court's finding of the case that supposedly established it [27]. These corporate "persons" routinely exhibit behavior fitting the World Health Organization's diagnostic standards of psychosis, pursuing profits to shareholders with no regard for any costs considered "external" [28]. They have bequeathed us a free market society in which markets aren't free, governed by a democracy whose votes are apportioned on a per-dollar rather than a per-person basis.
As in so many things, the answer to the seeming hopelessness of resistance against the global corporate economy is to focus on the local. Don't trust the corporate food system? Buy from a local farmer, or plant a garden [29]. Don't think you're getting the full story from primetime news? Check out any of the flourishing, if low-circulation, crop of alternative sources [24]. Not sure your vote is being counted the way you cast it? Demand paper ballots and hand counts at your polling place. What this ultimately amounts to is a grassroots decentralization, a local reclaiming of power from those who have abused its trust at national and global levels. That sounds like a far cry from cowboy justice in an Alabama courtroom, but the connections are plain to see, if you just concentrate enough.
References
1. Schlosser, E. 2001. Fast Food Nation. Houghton Mifflin Co,. Boston. 356 p.
2. Hendrickson, M. 2002. Concentration in Agricultural Markets. Report to the National Farmers Union. http://nfu.org/documents/01_02_Concentration_report.pdf
3. Guebert, A. 2004. Cowboy justice clips meatpackers. The Final Word, 20 February. http://newfarm.org/columns/final_word/0204/2.20.04.shtml
4. Johnson, J. 1998. Piling On. Farm Journal. http://www.nobull.net/legal/news/pilingon.htm
5. Jury Awards $1.3 Billion to Cattlemen in Pickett Case against Tyson and Meat Packers. Press Release, Organization for Competitive Markets, 17 February 2004.
6. MacDonald, J.M., Ollinger, M.E., Nelson, K.E., and Handy, C.R. 2000. Consolidation in U.S. Meatpacking. Food and Rural Economics Division, Economic Research Service, U.S. Department of Agriculture. Agricultural Economic Report No. 785.
7. Mattera, P. 2004. 7. How Agribusiness Has Hijacked Regulatory Policy at the U.S. Department of Agriculture. Good Jobs First Corporate Research Project, presented at the Food and Agriculture Conference of the Organization for Competitive Markets, 23 July. http://www.agribusinessaccountability.org/pdfs//289_USDA%20Inc..pdf
8. Azzam, A. 2002. The Effect of Concentration in the Food Processing Industry on Food Prices. Cornhusker Economics, 06 February.
9. Lopez, R.A., Azzam, A.M., and Lirón-España, C. 2002. Market Power and/or Efficiency: A Structural Approach. Review of Industrial Organization 20:115-126.
10. Harris, J.M., Kaufman, P.R., Martinez, S.W., and Price, C. 2002. The U.S. Food Marketing System, 2002. Economic Research Service, U.S. Department of Agriculture. Agricultural Economic Report No. 811.
11. DeLind, L.B. 2000. Transforming Organic Agriculture into Industrial Organic Products: Reconsidering National Organic Standards. Human Organization 59: 198-208.
12. Cienfuegos, P. 2004. The organic foods movement - Led by Heinz Corporation or we the people? Time to choose is now. CropChoice.com, 31 May. http://www.cropchoice.com/leadstry.asp?RecID=2595
13. Dimitri, C., and Greene, C. 2002. Recent Growth Patterns in the U.S. Organic Foods Market. Market and Trade Economics Division and Resource Economics Division, Economic Research Service, U.S. Department of Agriculture. Agriculture Information Bulletin Number 777.
14. 14, A.W. 1948. Farming and Democracy. Yale University Press, 227 p.
15. Higgs, R. 1995. World War II and the Military-Industrial-Congressional Complex. Freedom Daily, May.
16. General Accounting Office. 1998. Defense Industry: Concentration and Options for Preserving Competition. Report Number NSIAD-98-141.
17. Garamone, J. 1999. DoD Concerned About Defense Industrial Base. American Forces Press Service.
18. Gottlieb, S. 1997. New Defense Megacorporations Will Change Domestic Power Equation. Jinn Magazine, 15 July. http://www.pacificnews.org/jinn/stories/3.15/970715-megacorp.html
19. Center for Responsive Politics. www.opensecrets.org
20. Environmental Working Group Farm Subsidy Database. www.ewg.org/farm
21. Brownell, K.D., and Nestle, M. 2004. The Sweet and Lowdown on Sugar. New York Times, 23 January.
22. Stein, R. U.S. Says It Will Contest WHO Plan to Fight Obesity. Washington Post, 16 January.
23. Morton, B. 2003. In the Beginning, There Was Reagan. Baltimore City Paper, 05 April.
24. Hightower, J. 2004. The people's media reaches more people than FOX does. Common Dreams, 16 June. http://www.commondreams.org/views04/0615-14.htm. (This article contains pointers to alternative media in various formats.)
25. Landes, L. 2003. The fix is in: GOP and Brits will count California's recall votes. OpEdNews, 02 Oct. http://www.opednews.com/landes100203_CA_recall_vote.htm
26. Landes, L. 2004. Two voting companies and two brothers will count 80% of the U.S. election. Online Journal, 28 April. http://onlinejournal.com/evoting/042804Landes/042804landes.html
27. Hartmann, T. 2002. Unequal Protection. Rodale, 320 p.
28. Bakan, J. 2004. The Corporation: The Pathological Pursuit of Profit and Power. Free Press, 240 p.
29. Good starting points in the search for locally grown food include eatwellguide.org, localharvest.org, and csacenter.org.
By Wylie Harris
The Touchstone
Vol. XIV, No. 3, September/October 2004
Online at: http://www.rtis.com/touchstone/oct2004/21.html
This past February a little-noted legal milestone rose up, was briefly celebrated or despised by those aware they had a stake in the matter, and just as quietly faded from view, settling into history's "Who Knew?" file. In an Alabama courtroom full of cowboy hats, U.S. District Judge Lyle Strom ruled that meatpacking giant IBP had used its market share to unfairly lower the prices it paid to ranchers selling their cattle in spot markets. The specifics of the case are the fodder of dry economic treatises: percentage market shares, profit margins, and the like. But its implications, belying the lack of media coverage, go to the very core of how corporations do business in the United States, and from that deep wellspring, they send ripples into virtually every aspect of economic life and freedom both in this country and around the globe.
The case, which began in 1996 as Pickett vs. IBP, accrues historical import from a number of sources. One is the origin of the legislation under which it was brought. The previous round of price-fixing, collusion, and market concentration among meatpacking companies led to the Sherman Antitrust Act of 1890. For three decades the big packers successfully evaded the Act's consequences, but after a 1917 Federal Trade Commission inquiry revealed years of secret price-fixing agreements among them, they agreed to sell off the infrastructure -- stockyards, railroad stocks, meat stores, and publishing capacity -- that had allowed them such a high degree of market control. In 1921, Congress passed the Packers and Stockyards Act (PSA), which created a federal administration of the same name to prevent a recurrence of monopoly in the meatpacking industry. Cattle markets remained relatively competitive through the 1970s, with the top four packers controlling some 20% of the market [1]. (This measure of market concentration, the share controlled by the top four firms, is known as the four-firm concentration ratio, or CR-4.) But the 1980s saw the beginning of a wave of mergers that increased that share to over 80% at present [2]. By comparison, the level of market concentration that first inspired the Sherman Act was a relatively paltry 55% [1]. Pickett vs. IBP -- now Pickett vs. Tyson, thanks to merger mania -- marks the first time that a class-action lawsuit was successfully certified under the eighty-year old PSA [3].
The crux of the case was IBP's market share, which at 38% was large enough to allow it to control prices [4]. IBP contracts to buy about half its cattle from large feedlots at undisclosed prices -- so many that on a given day, it might own nearly twice as many cattle as its plants could process. At those times, sellers on spot cattle markets -- like the Pickett plaintiffs, and the estimated 30,000 ranchers in the legal class they represent -- were offered unfairly reduced prices. The reduction was estimated at $5.62 per hundredweight for every 100,000 head of cattle that the firm controlled through contracts [3]. Put another way, IBP/Tyson's price-fixing artificially depressed the price of cattle by 5%, in effect enabling it to receive for free one out of every 20 cattle it purchased [5]. The federal district court found that gouging, over the eight-year period covered by the case, to be worth a $1.3 billion award to the plaintiff class.
According to a USDA report, the CR-4 in beef packing, at 81%, is high compared to that for other meats [6]. At first glance the system seems to be working; in an industry where market concentration is above average, the resultant monopolistic practices were caught and corrected. However, the question remains whether concentration becomes problematic when it exceeds an industry average, or when it passes some absolute threshold. According to some economists, the potential for market distortion arises whenever four-firm concentration ratios exceed 40% [7]. If this is the case, much cause for concern appears in the same initially reassuring USDA document, which notes, "About 10% of U.S. manufacturing industries are more concentrated than cattle slaughter, while the other three slaughter classes (hog, chicken, and turkey) are close to the mean for manufacturing [6]." CR-4's for those other three classes, respectively, are 59%, 50%, and 45%, all above the 40% threshold at which the potential for market-distorting effects of concentration can arise [2]. Moreover, those values are "close to the mean" for all manufacturing in the United States.
The system is working, all right, but maybe not in the way we'd like to think.
The United States' agricultural economy has been characterized as an hourglass. At the bottom there are some 2 million farmers producing food for the 285 million consumers at the top. But in transit from farm to table the food passes through a mere handful of multinational corporations. Herein lie both the power and the problem of concentration. When the number of buyers is small relative to that of sellers, the former have much greater control over prices. This situation, called oligopsony, was the plaintiffs' beef in Pickett v. IBP. When those few buyers turn around to become sellers to a large group of customers -- as in the relationship between the food industry and consumers -- it is equally problematic. Increased size, and thus market share, is conventionally assumed to trigger corresponding increases in efficiency, and thus lowered costs to consumers. But empirical data do not always fit this theoretical pattern. In a recent economic analysis of 32 separate food-processing industries, increasing concentration led to increased market power in 28, lower processing costs in 14, and higher consumer prices in 28. In other words, the main effect of market concentration appears to be increased prices for the consumer [8, 9].
A quick jog through the United States' food system illustrates these inequities while revealing some subtleties in the hourglass analogy, as well as highlighting some of its less savory implications. At the broad base of the hourglass farmers sell to a limited number of processing firms whose concentration in the livestock sector has just been described. For grains, companies like ADM, Cargill-Continental, and General Mills dominate milling and crushing, terminal grain handling, and corn and soybean export, with CR-4 ratios in these sectors in the 60% -- 80% range [2]. In food processing, CR-4 values range from 19% for fresh and frozen seafood to 85% or more in breakfast cereals, cane sugar refining, vegetable oils, and malt beverages. General-line food wholesalers, like Sysco and SuperValu -- the companies that supply retail grocery chains and food service outlets -- had a CR-4 of 41% in 1997. For retail groceries (the top four being Kroger, Albertson's, Safeway, and Wal-Mart), it was 27% in 2000 -- pleasingly low relative to the 40% threshold, but nearly double its level of only four years before. In the nation's largest 100 cities the local CR-4 for retail groceries was much higher, about 72%. Commercial food service, the point in the chain where the consumer lays down cash and picks up a hot meal, is the least concentrated sector in the whole hourglass of the food system. The CR-4 among restaurant companies as of 2000 was 21% [10].
Even organic foods, often regarded as a panacea for the conscience of the progressive consumer, have become an increasingly oligopolistic sector as the market has grown exponentially in recent years [11]. Efforts to weaken the national organic standards in 1997-8, and again this year, were led by organic food corporations whose profits would be increased by the inclusion of toxic sludge, irradiated food, and genetically modified organisms in the list of allowable practices for organic certification. Ownership of these companies by conventional food corporations is increasing; such pairs include Cascadian Farm and Muir Glen (General Mills), Celestial Seasonings and Soy Dream (Heinz), Odwalla (Coca-Cola), Nature's Farm (Tyson), Horizon (Dean), and Ben and Jerry's (Unilever) [12]. Since 2000 more organic food has been sold in conventional supermarkets than in any other type of retail outlet [13].
The problem of concentration, unfortunately, is not limited to its thorough and increasing pervasion of the food industry. As noted earlier, corporate concentration is high throughout all sectors of manufacturing -- and it has been that way for a while, with the food industry overall a relative newcomer. At the end of World War II the top three firms in meatpacking, dairy, and flour milling each controlled around 40% of their respective markets, while those manufacturing cigarettes (80%), farm machinery (84%), and automobiles (90%) were twice as concentrated, or more [14]. The wartime lessons of the profit potential in cooperation between big business and government, meanwhile, inaugurated the formation of the "military-industrial-congressional complex (MICC)" [15], among whose modern legacies is the seemingly absurd case of national-defense analysts concerned that record levels of concentration among arms manufacturing firms are leading to reduced competition and poorer military readiness [16, 17]. The pattern established by the MICC, in which defense firms lobby Congress for public funding of projects that even their supposed beneficiaries do not support, has become the standard avenue of corporate influence on government [18]. Agribusiness presents a compelling example of this assertion. As a sector, it spent $60 million on campaign contributions and $78 million on lobbying in the 2000 election cycle, and achieved a tidy rate of return in the $ 23 billion it received in public subsidies in 2002. (Seventy percent of those funds went to the largest 10% of recipients, while 60% of farmers received no federal aid [19, 20].) Another illustrative case from the food sector is the above-mentioned one of the ongoing and increasing pressure for relaxation of the national organic food standards. Yet another is the ultimately successful pressure, exerted by the U.S., Brazil, and other countries at the behest of their resident sugar and sweetener industries, on the World Health Organization to soften its warnings against sweetened foods as factors in the global obesity epidemic [21, 22]. Examples from other industries are all too readily available.
Yet, despite this abundance of information on corporate power and its abuses, few people seem to be aware of it, or able or willing to dig it up for themselves. Much of that ignorance, or apathy, is a consequence of concentration in yet another economic sector: that of the media. By swamping in a flood of propaganda, any information not in keeping with the corporate line, media outlets have an immense power to limit public knowledge of the problems caused by corporate influence. It's impossible to get riled up about a problem you don't know exists. As the number of media companies dominating the idea market dwindles -- from 50 in 1984, to today's crop of six (Time-Warner, Sony, Disney, News Corp., Gannett, General Electric, Viacom and Clear Channel) -- such control becomes ever more pervasive [23]. Of particular interest in that short list is General Electric, owner of NBC, also a major defense contractor. These firms' rise to global media dominance has been a thoroughly bipartisan affair. While FTC Commissioner Michael Powell drew fire for the most recent relaxation of market-ownership limitations [24], the previous ratchet, in the form of the Federal Telecommunications Act of 1996, came on the watch of a complaisant William Jefferson Clinton.
But even when individuals overcome the flood of biased corporate media information to confront the challenges facing society, and find enough others of like mind to make their collective will for change felt against the waves of campaign cash swamping the polls, still another concentration-based hurdle remains. The very machines with which many cast their votes, it turns out, are manufactured by a small set of politically connected companies. The largest two such companies in the United States, Diebold and ES&S, together manufacture machines that count at least 80% of the votes in the U.S. This includes not only the controversial touch-screen voting machines, but also those used to scan traditional paper ballots since 1964. The two firms are owned by two brothers, Bob and Todd Urosevich, and both have strong ties to the GOP. Their machines run software based on the same original tamper-prone code, and the industry as a whole is not legally subject to federal oversight or regulation [25, 26].
Though surpassingly dry in the recitation, corporate concentration is also one of the surpassingly central issues of our time. One of the great ironies in corporations' historical rise to dominance has twin heads. The Fourteenth Amendment, passed during Reconstruction with the intention of securing basic freedoms to former slaves, has been used largely to secure those rights to corporations instead. Moreover, that precedent of "corporate personhood" depends on the headnotes -- which carry no legal weight, and in any case, do not accurately represent the court's finding of the case that supposedly established it [27]. These corporate "persons" routinely exhibit behavior fitting the World Health Organization's diagnostic standards of psychosis, pursuing profits to shareholders with no regard for any costs considered "external" [28]. They have bequeathed us a free market society in which markets aren't free, governed by a democracy whose votes are apportioned on a per-dollar rather than a per-person basis.
As in so many things, the answer to the seeming hopelessness of resistance against the global corporate economy is to focus on the local. Don't trust the corporate food system? Buy from a local farmer, or plant a garden [29]. Don't think you're getting the full story from primetime news? Check out any of the flourishing, if low-circulation, crop of alternative sources [24]. Not sure your vote is being counted the way you cast it? Demand paper ballots and hand counts at your polling place. What this ultimately amounts to is a grassroots decentralization, a local reclaiming of power from those who have abused its trust at national and global levels. That sounds like a far cry from cowboy justice in an Alabama courtroom, but the connections are plain to see, if you just concentrate enough.
References
1. Schlosser, E. 2001. Fast Food Nation. Houghton Mifflin Co,. Boston. 356 p.
2. Hendrickson, M. 2002. Concentration in Agricultural Markets. Report to the National Farmers Union. http://nfu.org/documents/01_02_Concentration_report.pdf
3. Guebert, A. 2004. Cowboy justice clips meatpackers. The Final Word, 20 February. http://newfarm.org/columns/final_word/0204/2.20.04.shtml
4. Johnson, J. 1998. Piling On. Farm Journal. http://www.nobull.net/legal/news/pilingon.htm
5. Jury Awards $1.3 Billion to Cattlemen in Pickett Case against Tyson and Meat Packers. Press Release, Organization for Competitive Markets, 17 February 2004.
6. MacDonald, J.M., Ollinger, M.E., Nelson, K.E., and Handy, C.R. 2000. Consolidation in U.S. Meatpacking. Food and Rural Economics Division, Economic Research Service, U.S. Department of Agriculture. Agricultural Economic Report No. 785.
7. Mattera, P. 2004. 7. How Agribusiness Has Hijacked Regulatory Policy at the U.S. Department of Agriculture. Good Jobs First Corporate Research Project, presented at the Food and Agriculture Conference of the Organization for Competitive Markets, 23 July. http://www.agribusinessaccountability.org/pdfs//289_USDA%20Inc..pdf
8. Azzam, A. 2002. The Effect of Concentration in the Food Processing Industry on Food Prices. Cornhusker Economics, 06 February.
9. Lopez, R.A., Azzam, A.M., and Lirón-España, C. 2002. Market Power and/or Efficiency: A Structural Approach. Review of Industrial Organization 20:115-126.
10. Harris, J.M., Kaufman, P.R., Martinez, S.W., and Price, C. 2002. The U.S. Food Marketing System, 2002. Economic Research Service, U.S. Department of Agriculture. Agricultural Economic Report No. 811.
11. DeLind, L.B. 2000. Transforming Organic Agriculture into Industrial Organic Products: Reconsidering National Organic Standards. Human Organization 59: 198-208.
12. Cienfuegos, P. 2004. The organic foods movement - Led by Heinz Corporation or we the people? Time to choose is now. CropChoice.com, 31 May. http://www.cropchoice.com/leadstry.asp?RecID=2595
13. Dimitri, C., and Greene, C. 2002. Recent Growth Patterns in the U.S. Organic Foods Market. Market and Trade Economics Division and Resource Economics Division, Economic Research Service, U.S. Department of Agriculture. Agriculture Information Bulletin Number 777.
14. 14, A.W. 1948. Farming and Democracy. Yale University Press, 227 p.
15. Higgs, R. 1995. World War II and the Military-Industrial-Congressional Complex. Freedom Daily, May.
16. General Accounting Office. 1998. Defense Industry: Concentration and Options for Preserving Competition. Report Number NSIAD-98-141.
17. Garamone, J. 1999. DoD Concerned About Defense Industrial Base. American Forces Press Service.
18. Gottlieb, S. 1997. New Defense Megacorporations Will Change Domestic Power Equation. Jinn Magazine, 15 July. http://www.pacificnews.org/jinn/stories/3.15/970715-megacorp.html
19. Center for Responsive Politics. www.opensecrets.org
20. Environmental Working Group Farm Subsidy Database. www.ewg.org/farm
21. Brownell, K.D., and Nestle, M. 2004. The Sweet and Lowdown on Sugar. New York Times, 23 January.
22. Stein, R. U.S. Says It Will Contest WHO Plan to Fight Obesity. Washington Post, 16 January.
23. Morton, B. 2003. In the Beginning, There Was Reagan. Baltimore City Paper, 05 April.
24. Hightower, J. 2004. The people's media reaches more people than FOX does. Common Dreams, 16 June. http://www.commondreams.org/views04/0615-14.htm. (This article contains pointers to alternative media in various formats.)
25. Landes, L. 2003. The fix is in: GOP and Brits will count California's recall votes. OpEdNews, 02 Oct. http://www.opednews.com/landes100203_CA_recall_vote.htm
26. Landes, L. 2004. Two voting companies and two brothers will count 80% of the U.S. election. Online Journal, 28 April. http://onlinejournal.com/evoting/042804Landes/042804landes.html
27. Hartmann, T. 2002. Unequal Protection. Rodale, 320 p.
28. Bakan, J. 2004. The Corporation: The Pathological Pursuit of Profit and Power. Free Press, 240 p.
29. Good starting points in the search for locally grown food include eatwellguide.org, localharvest.org, and csacenter.org.
