Nationalizing means no one is really interested in making the thing succeed. They are now only interested in not getting fired. No one's the owner. This is how whole Soviet economy worked and it was a very unpleasant sight.
Being part of something that feeds your countrymen and pays a living wage = not interested in success, but being overworked and underpaid = wanting to work? I think you fail to realize the corporate interests and misinformation that goes into censoring any inkling of Marxist ideas. In fact, many of Marx writings were banned and he got kicked out of multiple countries.
They’re talking about ownership and management, not the cogs who couldn’t give a shit either way if it’s public or private as long as they get (under) paid.
And what about every other economy that exists on the spectrum between today’s US and the CCCP?
Also, I haven’t experienced this myself, but I do have family that does this today. They stand in line to receive their food rations, although they see it as a positive in that it is preventing them from sliding into poverty or starving. Despite how annoyingly the program is administered, at least in my state.
It's probably better to look at the sad history of UK and French nationalization. No Gulag, only mediocrity with just as awful labor/management relations.
Putting them in receivership then spinning them off could work (possibly nuking the investors and definitely the company leadership but keeping the workers/factories intact).
The issue is that the regulations initially cut into the profits for meat packing companies. Then over time they serve as a barrier to entry, essentially creating artificial monopolies and anti-competitive market stagnation. It's unintended consequences all the way down, with fair competition, sustainable agriculture / food production, and food safety concerns all being different goals, which are sometimes at odds. Admitted the costs and trade offs is the first step to making real hard decisions, and we're just nowhere close to being there as a culture.
> The issue is that the regulations initially cut into the profits for meat packing companies. Then over time they serve as a barrier to entry, essentially creating artificial monopolies and anti-competitive market stagnation.
I would say the issue is that antitrust officials stood idly by and allowed extreme market consolidation
>For four decades, the U.S. government has watched idly as a handful of largely foreign-owned meat corporations grew horizontally by killing off or gobbling up their competitors and vertically by gobbling up their supply chains. Today four massive companies – JBS, Tyson Foods, National Beef, and Cargill – control over 80 percent of America’s beef. Three companies – JBS, Tyson, and Smithfield Foods – control 63 percent of America’s pork. Two of those – JBS and Tyson – also control 38 percent of poultry.
Historically, we last saw this sort of cartel acting in the US 100 years ago leading to legislation that has slowly been whittled away until the problem has returned.
The author seems to be operating upon the assumption that the meat processors are the bottleneck but provides no support for that assumption. I would like some more information. To my mind, if meat processors are the source of a bottleneck issue, how long has that been the case? From a personal standpoint, I have not seen any indication that they were a bottleneck prior to the pandemic but I will admit I was not looking very hard as meat seemed to be in reasonable supply and at a reasonable price.
Since we know that personnel levels were an issue for just about every industry with the pandemic raging, it would seem a more reasonable assumption that, if these meat processors are the bottleneck, the pandemic and their associated restrictions are the problem which are a the result of government regulation and recommendation. I am no fan of the Biden administration, but the solution they are taking currently is something I find myself more agreeable to rather than just stepping in and buying a major player in the market.
This assumption doubly makes no sense when you shop at a grocery store with their own butcher. You could just walk from the meat case to the meat counter and see that they are not jumping on the opportunity to undercut the meatpacker prices.
The news on the "Big Four" meatpackers has me banging my head against a wall.
The market is nothing at all like an oligopoly. Sure, there are only a few big "meatpackers" that compete for the freezer isle, but only if you ignore the tens of thousands of independent butchers and restaurant suppliers that don't source their meat through them.
In actuality you have one of the most diverse markets in America, marked by a couple of large, low margin players that compete in just one of the segments.
I shop for meat at a specialist butcher in town that sources their own beef from an independent Oregon farm. But even there, they just raised all of their prices and they are sold out of everything.
There has been a concerted effort as of late to blame all rising consumer prices everywhere as a lot of independent actors. But you can't get around that there is just a lot of extra money in the economy right now and no amount of finger pointing is going to stop prices from rising.
> you can't get around that there is just a lot of extra money in the economy right now and no amount of finger pointing is going to stop prices from rising.
I tend to agree on two points, there is more money, and there are higher prices. However, there is a blind spot hiding in here which is easy to pass over and that's the assumption on the distribution of that extra money. The reason that this is important is that food scarcity for whatever reason, demand or supply constrained, is often the tipping point in an abrupt political developments, and we would like to avoid those if possible.
The government literally put $6000 of stimulus money into our family's checking this year. I got a 45% raise. At least in my world it seems like just about everyone had more money this year. We bought a chest freezer and splurged on much more meat this year than previous years.
I haven't seen any significant supply constraint. The food would not be scarce if the prices actually raised at the pace of inflation.
> you can't get around that there is just a lot of extra money in the economy right now
If this were explained by across-the-board inflation, we would not have seen the decades long shift of the profits from those raising animals to the meat packers as the market consolidated.
Agriculture Secretary Tom Vilsack: Farmers are losing money on cattle, on hogs and poultry that they're selling at a time when consumers are seeing higher prices at the grocery store. And there are now record profits or near-record profits for those in the middle.
And I remember talking to a producer the other day at Council Bluffs, and he said, I don't get this. I just sold my cattle, and I lost $150 a head. But the processor made $1,800 a head. How can that be?
> and I lost $150 a head. But the processor made $1,800 a head.
I am pretty sure $150 is "Net", while $1800 is "Gross". Not to mention Meatpacker gets all the benefits of current market because of how and when the deal and distribution are structured. As is the case in every industry, I have no idea how to fix this.
Another point worth mentioning, US Beef pricing are much more susceptible to export market demand than pork or poultry.
I would take the rancher anecdata lightly, cattle prices have increased hugely over 2021. There were a couple of big dips (where meatpackers probably shut down or had worker problems), but it doesn't look like raising cattle was worse in 2021 than 2020 or 2019. https://futures.tradingcharts.com/historical/GF/2021/0/conti...
(Unless of course, they sell at contracted prices that didn't account for... across the board inflation)
And again, none of this explains why my local butcher who doesn't buy from midwest feed lots raised their prices.
Is anyone else terrified when they see proposals like this? I don't intend to discourage curiosity, but I'm disappointed that the author doesn't have a little more of an idea on why this is bad... particularly before writing an article on the subject. The idea isn't bad merely because it 'reeks of dreaded socialism.'
Check out his other posts. The author, Matt Bruenig, writes about this topic extensively, and is very open to debate. You should go kick his ass (intellectually) if you think he’s fucking up.
How about just applying existing antitrust law to the cartel?
>A cartel is a group of independent corporations or other entities that join together to fix prices, rig bids, allocate markets, or conduct other similar illegal activities. Cartel conducts are mainly subject to criminal penalties under United States antitrust laws, although there are some cartel conducts, such as monopolization, resale price maintenance, etc. are subject to civil penalties.
Because the government will do an even worse job? Did we not learn anything from Soviet Central Planning? Given the relative incompetence of our existing agencies, I think this would be a total disaster.
It’s difficult to determine if the incompetent agencies are that way due to something inherent, or if they have been weakened due to the interference of ideologies.
There are also quite well run government agencies. Parks Dept, Medicare, the food safety groups, etc.
Soviet Central Planning had a lot of other issues besides just being government agencies. It’s useful to understand where they government has done a good job, and where they haven’t, because blanket statements are an ineffective way of looking at a nuanced issue.
How about instead of nationalization, just make it easier for farmers and ranchers to sell directly to consumers.
My parents buy beef by the half cow, it's like a coop in MO. It comes out to about $3.69 /lbs. It is a lot of money of up front but much cheaper than the grocery store and much better quality than the average store bought beef (its not prime but its still good). It is hard for the farmers to do this any other way because in order for the farmer to sell to a store or local shop, there has to be an inspector on sight with the cow is slaughters, when it is processes, and when it is packed. This is impossible for a small time operation to do so they have to either do these coops or sell to the big guys that have the inspectors in the building.
The whole process is so wrapped in government regulations that it will always lend itself towards a few big players because they are big enough to have an entire staff of USDA inspectors in the building, a local butcher cannot.
It would be pretty easy to solve and actually save the government money. Inspect butcher shops and meat processors like restaurants, i.e. Annual and spot inspections of the facility and their processes, and make the processor put the information on the packaging of the meat.
31 comments
[ 2.7 ms ] story [ 74.2 ms ] threadAlso, I haven’t experienced this myself, but I do have family that does this today. They stand in line to receive their food rations, although they see it as a positive in that it is preventing them from sliding into poverty or starving. Despite how annoyingly the program is administered, at least in my state.
This usually happens when there is already a natural monopoly (or near to) - and usually results from regulatory capture [1].
[1] https://en.wikipedia.org/wiki/Regulatory_capture
I would say the issue is that antitrust officials stood idly by and allowed extreme market consolidation
>For four decades, the U.S. government has watched idly as a handful of largely foreign-owned meat corporations grew horizontally by killing off or gobbling up their competitors and vertically by gobbling up their supply chains. Today four massive companies – JBS, Tyson Foods, National Beef, and Cargill – control over 80 percent of America’s beef. Three companies – JBS, Tyson, and Smithfield Foods – control 63 percent of America’s pork. Two of those – JBS and Tyson – also control 38 percent of poultry.
https://lpeproject.org/blog/break-up-the-modern-meat-trust/
Historically, we last saw this sort of cartel acting in the US 100 years ago leading to legislation that has slowly been whittled away until the problem has returned.
https://en.wikipedia.org/wiki/Packers_and_Stockyards_Act
Since we know that personnel levels were an issue for just about every industry with the pandemic raging, it would seem a more reasonable assumption that, if these meat processors are the bottleneck, the pandemic and their associated restrictions are the problem which are a the result of government regulation and recommendation. I am no fan of the Biden administration, but the solution they are taking currently is something I find myself more agreeable to rather than just stepping in and buying a major player in the market.
The market is nothing at all like an oligopoly. Sure, there are only a few big "meatpackers" that compete for the freezer isle, but only if you ignore the tens of thousands of independent butchers and restaurant suppliers that don't source their meat through them.
In actuality you have one of the most diverse markets in America, marked by a couple of large, low margin players that compete in just one of the segments.
I shop for meat at a specialist butcher in town that sources their own beef from an independent Oregon farm. But even there, they just raised all of their prices and they are sold out of everything.
There has been a concerted effort as of late to blame all rising consumer prices everywhere as a lot of independent actors. But you can't get around that there is just a lot of extra money in the economy right now and no amount of finger pointing is going to stop prices from rising.
I tend to agree on two points, there is more money, and there are higher prices. However, there is a blind spot hiding in here which is easy to pass over and that's the assumption on the distribution of that extra money. The reason that this is important is that food scarcity for whatever reason, demand or supply constrained, is often the tipping point in an abrupt political developments, and we would like to avoid those if possible.
I haven't seen any significant supply constraint. The food would not be scarce if the prices actually raised at the pace of inflation.
If this were explained by across-the-board inflation, we would not have seen the decades long shift of the profits from those raising animals to the meat packers as the market consolidated.
Agriculture Secretary Tom Vilsack: Farmers are losing money on cattle, on hogs and poultry that they're selling at a time when consumers are seeing higher prices at the grocery store. And there are now record profits or near-record profits for those in the middle.
And I remember talking to a producer the other day at Council Bluffs, and he said, I don't get this. I just sold my cattle, and I lost $150 a head. But the processor made $1,800 a head. How can that be?
https://www.npr.org/2021/09/13/1036769709/a-handful-of-big-m...
I am pretty sure $150 is "Net", while $1800 is "Gross". Not to mention Meatpacker gets all the benefits of current market because of how and when the deal and distribution are structured. As is the case in every industry, I have no idea how to fix this.
Another point worth mentioning, US Beef pricing are much more susceptible to export market demand than pork or poultry.
(Unless of course, they sell at contracted prices that didn't account for... across the board inflation)
And again, none of this explains why my local butcher who doesn't buy from midwest feed lots raised their prices.
>A cartel is a group of independent corporations or other entities that join together to fix prices, rig bids, allocate markets, or conduct other similar illegal activities. Cartel conducts are mainly subject to criminal penalties under United States antitrust laws, although there are some cartel conducts, such as monopolization, resale price maintenance, etc. are subject to civil penalties.
https://www.law.cornell.edu/wex/cartel
There are also quite well run government agencies. Parks Dept, Medicare, the food safety groups, etc.
Soviet Central Planning had a lot of other issues besides just being government agencies. It’s useful to understand where they government has done a good job, and where they haven’t, because blanket statements are an ineffective way of looking at a nuanced issue.
My parents buy beef by the half cow, it's like a coop in MO. It comes out to about $3.69 /lbs. It is a lot of money of up front but much cheaper than the grocery store and much better quality than the average store bought beef (its not prime but its still good). It is hard for the farmers to do this any other way because in order for the farmer to sell to a store or local shop, there has to be an inspector on sight with the cow is slaughters, when it is processes, and when it is packed. This is impossible for a small time operation to do so they have to either do these coops or sell to the big guys that have the inspectors in the building.
The whole process is so wrapped in government regulations that it will always lend itself towards a few big players because they are big enough to have an entire staff of USDA inspectors in the building, a local butcher cannot.
It would be pretty easy to solve and actually save the government money. Inspect butcher shops and meat processors like restaurants, i.e. Annual and spot inspections of the facility and their processes, and make the processor put the information on the packaging of the meat.