The food system as ‘largest quasi-public utility in the world’
Apropos of the recent debate on Gristmill sparked by James Galbraith’s polemic on free markets, I got to thinking about something I recently read in Paul Roberts’ book The End of Food (which I reviewed here):
[D]uring the late-nineteenth and early twentieth centuries Congress created a vast system of of support for food production: a department of agriculture, whose mission was the provision of affordable food; a system of publicly funded farm programs, meant to maximize output while protecting farmers from market failures to market crashes; a construction campaign of dams, irrigation canals, and other reclamation projects to bring agriculture to desert or semi-desert regions; and a massive railroad network to transport this great bounty from the new areas of production — the Midwestern Corn Belt, the California “Salad Bowl,” the great western-state ranches, and the stockyards of Chicago — to the big urban areas and export facilities. So integral was government in the buildup of the modern food economy that years later, Harvard economist Ray Goldberg described the food system as “the largest quasi-public utility in the world.”
This leads me to two points regarding the free-market debate:
The first is that while consumers may be free to choose, they don’t make their choices in a vacuum.
When I was growing up in the 1970s, I ate sugary breakfasts cereals, just like all of the other kids. This admittedly dubious habit doesn’t represent a moral failure on the part of my parents. Kellogg’s Frosted Flakes and Cocoa Puffs (which I pined for; my mom didn’t always give in) were cheap and readily available — largely because of the vast food-production and distribution edifice alluded to by Roberts.
And I hungrily accepted those shopping choices on the part of my parents — partly, no doubt, for the pleasing sugary jolt provided by those products, and partly because of the deluxe marketing budgets that even then supported them. What child of the ’70s can forget Tony the (cornflake-chomping) Tiger, or that little leprechaun who fronted for Lucky Charms (“always after me Lucky Charms”)?
Actually, in the context of the ’70s, my parents made relatively virtuous breakfast choices for their kids. I had friends who every day ate these little frozen breakfasts packets that included pancakes, “maple-flavored” syrup (artificially blackened and thickened sugar water), and small puck-like sausages. Even then, a budding food fanatic, I found these breakfasts vile.
This exposure to young palates is a key resource for the food industry. Some of us break out of its clutches and find other forms of culinary pleasure. Others don’t.
My point is that we do choose freely, but many of the important decisions that shape our choices are made without our participation — often before we’re born. This fact marks what I think is a huge blind spot in neoclassical economic dogma: a general blindness to market power.
My second point is this: If we can agree that the government played a massive role in rigging up a food system now largely dominated by a few companies like Cargill, Tyson, Wal-Mart, and Monsanto, then we should insist on using the democratic means available to us to force the government to play a role in its reform.
Actually, the government role in erecting our current food system goes beyond building out the long-haul infrastructure now relied upon by the food giants, and beyond the subsidies for large-scale production of ag commodities. I also blame the government for looking the other way while the food industry consolidated dramatically, well beyond any reasonable antitrust standard. As I’ve shown before, as fewer and fewer companies gobbled up more and more of the food market, they systematically dismantled the infrastructure necessary for widespread local and regional food production.
In standard antitrust theory, a market stops being competitive when the four biggest players control 40 percent. Now, we’ve reached a point we’re three companies slaughter 90 percent of cows, one company processes 35 percent of fluid milk, four companies process 64 percent of pork, etc. “Today, in the categories of breakfast cereals, snacks, and beer, three-quarters or more of all products are generated by the top four companies,” Paul Roberts writes in The End of Food.
If we want to create a food system that doesn’t systematically trash the environment, ruthlessly exploit workers (see, for example, meatpacking workers and farm laborers), and churn out unhealthy, bland food, we’re probably going to have to rebuild the food system along local and regional lines. Doing so may or may not mean busting up the food trusts. But it likely means reinvesting in a new infrastructure — and farmers simply don’t have the profit margins to do that, no matter how many consumers make virtuous food choices, and even if we “end all subsidies and price carbon,” to quote the mantra of one Gristmill contributor.
Now, I’m not dismissing the power of individual consumer choice. The alternative-food movement that has risen up over the last 20 years has been an extraordinary joining of forces between consumers and farmers. The gains have been real — farmers markets and CSAs have exploded, national-scale grocery chains have risen up, specifically to market organic food, etc.
But let’s not forget that sustainably grown and ethically traded food, even after all of those important and hard-fought gains, represents something like 3-4 percent of food consumed in the United States. The industrial-food machine slouches on — burning up resources and creating messes as we head into a period of climate change.
Let me end with a quote from another book I’ve been reading, a collection of essays called Real World Economics: A Post-Autistic Economic Reader, edited by Edward Fullbrook. Here’s a little something from the intro by Fullbrook, a British economist:
Neoclassical mainstream economists have made a metaphysical commitment to a particular method of investigating the economic realm. Rather than choosing the individual and society or institutions as its theoretical foundation, it has chosen the individual alone. All economic phenomena is [sic] studied as if it were the result of individual choices made with given preferences, scarcities, and constraints, and always tending toward equilibrium and being always not only of a quantifiable nature but also one reducible to functions of the form “whenever event (or state of affairs) x, then event (or state of affairs) y.”
Fullbrook goes on to call for a more pluralistic economics, one that sees neoclassic theory as one set of tools among many. He warns that any line of economic reasoning that’s presented to the public as is “the economic truth” functions “primarily not as a set of tools for human enlightenment, but, to the contrary, as a concealed ideology, which … smothers real discussion, silences debate, blinds the public to most of economic reality, and ultimately places the human project at risk.”