Organic Consumers Association: When Corporations Play ‘Monopoly,’ Consumers Lose

by Organic Consumers Association | May 9, 2018

Robert Reich wants you to know about the biggest economic problem you’ve heard almost nothing about—the Monopolization of America—and how it affects what you pay for food and other consumer products.

In his latest video on Facebook, released Sunday and already seen by more than 500,000 viewers, Reich says America’s monopoly problem stems from the “hidden upward redistribution of money and power from the majority of Americans to corporate executives and wealthy shareholders.”

The only way to fix it? Revive antitrust enforcement.

Reich recently visited with Missouri farmers, whose profits have been disappearing. He explains:

Monsanto alone owns the key genetic traits to more than 90 percent of the soybeans planted by farmers in the U.S. and 80 percent of the corn, which means Monsanto can charge farmers much higher prices. And farmers are getting squeezed from the other side too, because the food processors they sell their products to are also consolidating into mega companies that have so much market power they can cut the prices they pay to farmers. This doesn’t mean lower food prices to you, it means more profits to the monopolists.

Reich also takes his video viewers to a grocery store, to point out how it looks as if you have a lot of choices as you cruise the aisles. But when you take a closer look, you see monopolies everywhere.

Did you know that 82 percent of beef packing, 85 percent of soybean processing, 63 percent of pork packing and 53 percent of chicken processing are all controlled by just 10 huge corporations—Tyson, Kraft, Dean Foods, Pepsico, Smithfield, ConAgra Foods, Nestle, General Mills, ABInBev and JBS?

Reich also points to products like toothpaste, sunglasses, plastic hangers and cat food. And yep, monopolies there, too.

Bottom line? Massive consolidation has created just a handful of giant corporations that don’t have to compete because they control the marketplace. And that means, as Reich puts it, “they can jack up your prices.”

Which industries are playing “Monopoly?” Big Pharma, health insurers, online travel, cable and internet service are just a few of the industries highlighted by Reich as being able to charge you more because they have little or no competition.

And it’s not just consumers who get gouged—lack of competition keeps wages low, too.

“Workers with less choice of who to work for have a harder time getting a raise,” Reich says. “When local labor markets are dominated by one major big box retailer or one grocery chain, for example, those firms essentially set wage rates for the area.”

As if price-gouging and shafting workers weren’t bad enough, these mega corporations also have a lot of political power. Reich says antitrust laws are supposed to promote fair competition for the benefit of consumers. It was during the Gilded Age that progressive reformer President Teddy Roosevelt successfully used the Sherman Antitrust Act to dismantle trusts, including the Northern Securities Company and Standard Oil.

For the next 65 years, things got better for consumers thanks to the Sherman Antitrust Act. But all that changed in the 1980s when Robert Bork wrote “The Antitrust Paradox,” which criticized the antitrust law and proclaimed trusts to be just fine. Bork’s philosophy was aligned with the conservative Chicago School of Economics and embraced by the Reagan administration.

Since then, Reich says, “antitrust has all but disappeared,” rushing in the new economy, characterized by declining competition and unprecedented consolidation.

“Big techs, sweeping patents, standard platforms, fleets of lawyers to litigate against potential rivals and armies of lobbyists have created formidable barriers to new entrance,” Reich says. As a result, the rate at which new businesses are formed has been slashed by nearly half.

“Big Tech along with the drug, insurance, agriculture and financial giants dominates both are economy and our politics,” Reich says. “It is time to revive antitrust.”

What does this mean for the future of our food? Well, the $62.5-billion Bayer acquisition of Monsanto, now that the European Commission and U.S. Department of Justice have given the green light, is certainly a big step in the wrong direction.

“The monopolistic and criminal histories of Monsanto and Bayer have been well documented,” said Ronnie Cummins, international director of Organic Consumers Association. “Allowing these two companies to merge into the world’s largest seed and pesticide company spells disaster for consumers, for the environment and for farmers who will now have even fewer choices.”

But as Cummins affirms, “The industrial chemical agriculture model—where factory farms and GMO monoculture crops have produced unhealthy food while poisoning the environment and creating a nightmare of superweeds and superbugs—is not the future of food. We will continue to promote an alternative organic regenerative model that truly nourishes the world while restoring the ecosystem.”

Check out Regeneration International’s website to learn how you can join the regeneration movement.

Organic Consumers Association is a nonprofit consumer advocacy and grassroots organization. Keep up-to-date with OCA’s news and alerts by signing up for our newsletter.