Concentration of Power in the Food Business

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Concentration of Power in the Food Business

by the Union for Radical Political Economics (URPE)

‘Science for the People’ Vol. 7, No. 2, March 1975, p. 8 – 16

When you begin to see more food on your TV screen than on your kitchen table, it’s time to take a look at the folks who bring you that food. Food no longer comes to us from family farms and little grocery stores. Over three-quarters of our farm products come from only one-fifth of all farms.1 The food then passes through a shrinking number of food processing companies. In 1964, only 24 (out of about 32,000) food processors made 57% of food sales.2 We buy almost four-fifths of our food in huge supermarkets, almost half of which are chain stores.3 

When a small number of firms do most of the business in a certain industry, that industry is highly concentrated. We will try to show that increasing concentration in the food industry has a lot to do with the fact that working conditions, employment, and food quality are staying the same or going down, while food prices are going up. 

But knowing “who done it” is not enough. It is also necessary to ask how the huge farms, firms, and stores became so powerful, and how they stay in power. 

Many people feel that the solution to our food problems is to put the Del Montes in moth balls and bring back the Mom and Pop stores and family farms. We think the problem is much deeper. Because the Golden Rule in our economy is Seek Profits, new Del Montes would eventually spring up to replace the old. But we would be unlikely to get the opportunity to watch that process take place again. Del Monte doesn’t want to be broken up. When a firm gets as big as Del Monte, it has a huge aresenal of economic and political weapons, and an enthusiastic fan club in Washington.

I. How Business Grows 

Once upon a time most of today’s monopolies were smaller firms competing in what was called “free enterprise.” When many firms compete with each other for profits, some will gain more profits than others. They do not stash these profits away in mattresses; they use them to gain more profits. 

A company has two basic ways to increase its profits through the production process: It can enlarge its size by building bigger plants and hiring more people. Or it can change the way it operates by introducing new machines, new materials (like plastics for wood), and new patterns of work. Both ways increase production, and they frequently go hand in hand. But we have to make a clear distinction between them because they have quite different effects on workers. The simple expansion provides more jobs whereas the second type, called “rationalization” or “modernization” tends to replace workers by machines. 

We also have to see how both ways of increasing production are inter-connected, how one can’t happen without the other, in order to understand: 

  • how monopolies grow 
  • why a huge company is not simply the sum of two or more small ones but a qualitatively different thing 
  • that it is therefore virtually impossible to divide huge companies up in order to go back to the “good old days” 
  • that the number of permanently unemployed people will grow in the long run 
Changing the Work Pattern

The first and easiest thing a company reinvesting its profits does is to hire more workers and enlarge the buildings. Once a sizable number of workers are together in one place, jobs can be broken down into small steps. So the individual worker has to repeat a tiny part of the whole production process again and again. For example, one person stays in the back of a large supermarket unpacking, another puts things on shelves, and another rings up sales on the cash registers. 

These changes are profitable for the employer for several reasons: 

  • Workers doing only one step of the whole process don’t have to be trained as long for the job. In addition, the employer pays less for this unskilled labor. In a supermarket, for example, one person who needs to be trained can cut the meat, but the person simply wrapping .it up needs to know much less and therefore is paid less.
  • Administrative and overhead costs are smaller per unit of output. Since more things are sold in a supermarket than in a small store, the rent, the costs for telephones, etc. are spread over more products. 
  • The work can be speeded up — even with the same tools and machines — because the same workers do not have to go out to unload the material, then carry the shipment to the shelves, and then go back to the cash register. All this time spent walking back and forth is lost money for the employer because it cuts down on actual production time. The more production is divided into small tasks, the more the worker is “nailed” to one spot: she/he can be supervised more easily and additional speed-up can be enforced. 
Machines Replace Workers 

This “division of labor” has an important quence. It is easier and more profitable to introduce machines into simple rather than complex, integrated processes. At first, simple machines are just tools for the worker, making his/her task simpler. Eventually, a series of simple steps can be done by a more complex machine, reducing the worker to a mere extension of the machine. Finally, the tasks of several machines and workers are integrated into a new, complicated “automatic” machine, replacing large numbers of workers, leaving some as supervisors and repair-people. 

The resulting increase in output per worker means that the single product costs the company less. But the lower costs are not passed on to higher wages or lower prices; instead they increase profits. These in turn are used to hire people to invent new machines and products, to increase advertising, and so on. 

Creating a Company Empire 

Growth at the factory level has a strong influence on relationships between different companies and between companies and banks — that is, at the “business-level.” It allows a businessperson to compete from a stronger position. If she/he competes successfully enough, he/she becomes a good credit risk and can borrow money from banks at cheaper rates than the poor credit risks. Eventually she/he becomes big enough to expand by buying small companies that weren’t so good at competing, to drive other companies out of the market by charging very low prices (but only until those firms have been driven out), and to expand into other lines of business. 

In other words, when you pull ahead in a game of Monopoly and start buying everybody else’s houses and hotels while they go more and more deeply into debt to the Bank, you are, in a harmless game, doing what monopolies do every day in real life. 

Vicious Businessmen? 

It should be stressed that the cause of this development is neither the malicious intent nor the “conspiracy” of businessmen but rather the simple laws of the competitive capitalist system. Even a capitalist with the most humanistic beliefs has to submit his workers to inhuman speed-ups and working conditions. He has to introduce labor-saving devices and lay-off workers, or he will be crushed in the race for markets, raw materials and profits. He either drives others out of business or he himself is driven out. There are no other choices. 

Off to a Slow Start

In industries like steel, chemicals, railroads, and oil, the process of concentration started at the end of the last century. By the 1920’s, these industries were already dominated by a handful of gigantic companies. The food industry lagged behind, and did not become highly concentrated until more recent decades. One reason for the lag was agriculture’s greater dependence on nature. Weather changes unpredictably, and it cannot yet be completely coordinated with standardized industrial processes. The introduction of machines, a sary step for the creation of big farms and processing plants, constantly bumped up against natural barriers. Feedlots, for example, could not become too large until someone had the money to spend to develop certain antibiotics which made it possible to keep thousands of cows in one place without diseases spreading like wildfire. And food sales were confined to small markets for many years because quickly spoiling natural products could not be shipped over vast distances. As new chemical preservatives and refrigeration methods were invented, food could be shipped all over the country and into other countries. After these developments food processing and agribusiness became major U.S. industries. 

This does not mean that in the food industry monopolies suddenly “appeared.” To use the farming sector as an example, there were 6.5 million farms in the U.S. in 1935. By 1969 the number had dropped to 2.7 million.4 Fortune has predicted that in a few decades we will only have 100,000 to 200,000 large farms left.5 Characteristically, the number of farms has been decreasing at a faster rate in the recent census years, showing the increasing power of a few thousand farming companies. 

II. Types of Concentration 

Here are some important ways a farm food company, or store can gain power: 

(1) Buying a company in the same business: When a large farm buys a small one, or a supermarket chain buys a Mom and Pop store, or a large dairy buys a few thousand smaller dairies, the process is known as horizontal integration because all units are at the same level of production. 

(2) Buying a company that handles some other stage of production of the same product: When a flour mill buys a wheat farm, the process is called vertical integration — control of production from top to bottom. 

(3) Buying a company in an unrelated industry: When an airplane company buys a cereal producer, the company becomes a conglomerate — a mixture of different kinds of companies. 

(4) Contracting: Many giant food processors get their raw food from small farmers who had previously signed a contract promising to sell their crops to the processor (often a farmer can find no other buyer). In this way, although the small farmer owns his/her own land, she/he becomes the equivalent of an employee of the big company. 

(5) Financial control: Many banks own their own farms. Banks and some large companies can control small farms and companies by giving or denying loans. 

Here concentration, integration, and monopolization are used to describe more or less the same political and economic process although they each have slightly different connotations: Integration means the buying off of smaller or weaker businesses, centralizing the administration without changing the actual production. Concentration is the process by which several factories are re-shaped to form one productive unit on a large scale with new machines and work patterns. Monopolization is when a company or conglomerate gains financial and political control over a large and important part of the market and resources. 

Watching Borden Grow 

Bordon is an example of a huge company which has used almost all these methods. 

Between 1922 and 1964, eight large dairy companies had acquired 2000 smaller ones. Kraftco and Borden alone accounted for 63 percent of the takeovers [i.e. horizontal integration]. Borden’s use of integration is noteworthy. 

In the mid-fifties, Borden began to diversify into chemicals and plastics and food processing. Elsie the Cow took over the factory to utilize her cal and gelatin by-products. By 1960, Borden had purchased nine chemical companies, a glazed fruit processor, Wyler dehydrated foods, and several fruit and vegetable specialty houses. The company became sensitive to the attraction of aged foods, and began processing acquisitions in rapid succession: Realemon in 1962; Aunt Jane Foods and Old London in 1963; Cracker Jack and Wise Potato Chips in 1964; Gana Jellies and Henderson Portion Paks in 1965… Since 1969, a confectionary company, North American Sugar, and Pepsi Cola [of] Indiana. Borden’s chemical division produces thermoplastic housewares and furniture, foam trays for meat, Mystic tape, Krylon paints, Ozon toiletries… Borden also owns its own packaging companies. 6

So Where Are Prices Set? 

Supply and demand still govern prices, but that doesn’t mean anything anymore because big companies govern and can manipulate supply and demand. When one or a few companies makes a large enough share of the sales of a certain product, then the firm can take advantage of “monopoly pricing.” If, for example, giant Campbell’s Soup feels soup prices are too low because there is too much soup around, it can produce less soup. Or, more likely, it can make “silent” agreements with Lipton’s to raise prices. If Campbell’s fears that people are straying too far into Lipton’s soups, it can buy Lassie more TV time. 

Companies do not usually compete for a bigger share of the market by lowering prices. Huge companies have too many ways in which they can punish a firm trying to increase its market share by competition. If, for instance, Lipton decided to sell its soups cheaper, it might have to fear a foreclosing of a loan because Campbell’s has “its man” on the board of directors of the bank; or Lipton might get into difficulties with the supplies for its canneries because Campbell’s controls the trucking company, or Lipton might fear a close scrutiny by the Internal Revenue Service since Campbell’s may have a better connection into IRS. The competition may take place around access to cheap supplies, investment opportunities, advertising space, political influence, and so on, but the companies always form a solid front against mers where prices are concerned. 

Meat Power 

Last summer, the big meat processors — only three firms make ¼ to ⅓ of the profits in the meat industry — provided us with an example of how American food companies deals with the public when they don’t get their way. President Nixon, forced by the outrage over soaring beef prices, introduced Phase 3½. This was a control of meat prices on the consumer level, while farm prices were allowed to rise. It was an attempt to cut business profits. The big meatcutters reacted by closing down the stockyards in order to create an artificial meat shortage. Usually, however, companies try to use their power over supply and prices in more quiet ways to avoid arousing the anger and awareness of the public. This case was more dramatic than most. 

So: How can a company be forced to set lower prices according to the “Laws of Supply and Demand” when that company and others control supply and demand?

Low Prices…for Farmers 

Consumers are not the only victims of “monopoly pricing.” Cargill is one of the nation’s largest grain companies. In the early 60’s an Arkansas farmer co-op was trying to attract farmers. After this co-op had set its price, Cargill offered the farmers a higher price. The farmers left the co-op to sell to Cargill. When Cargill had finally undermined the co-op, it set new, lower prices for the farmers. 

By pushing prices for consumers up and prices for small independent suppliers (like farmers) down, monopolies provide themselves with large profit margins. One sign of this process is reflected in the percentage of the consumer’s food dollar which ultimately reaches the farmer. The government reports that farm prices have risen 16% over the last 25 years, while the non-farm share of the food dollar has risen 76%.7 The farmer’s share of our food dollar has fallen below 40%. And we ask who benefits most from food price inflation! 

Conglomerates: One Example 

Tenneco began as a natural gas transmission company which feeds the huge metropolitan areas of Northern Ohio, New York, Chicago, Minneapolis, and Central Wisconsin. It branched out into oil production and ship-building before it entered the food business. In 1954 it started using its million extra acres of oil land for farming. It leased 600,000 acres to “independent” farmers and started raising cattle on the remaining land. Since then is has acquired packaging and chemical companies. In the late 1960’s a number of industrial empires acted on the basis of government reports about the creasing world need for food. Corporations like hound, Kaiser, and Boeing smelled huge profits to be made from people’s need for food. They soon acquired agricultural as well as food processing operations. 

Financial Control 

The most powerful monopoly control is in the hands of big financial institutions. One of the outstanding amples is the Bank of America. It acquired huge amounts of farm lands by foreclosing farm mortgages during the Depression years. Besides owning farm land, the bank also holds stock and directorships in processing companies like Hunt, Foremost, etc. and makes almost half of all loans for farm investment in California, the biggest farming state in the U.S. The bank is not interested in lending to farms with sales under $20,000 a year, and advises such farmers to retire. (Augustine Maruchi, President of Borden, is also a director of the Chemical Bank and the Bank of America.) 

These large, diversified, powerful companies are not accidents. They are the success stories of our profit system. All three branches of the food industry, like U.S. industry in general, are becoming more and more concentrated.

III. The Effects of Concentration 


Because food companies, especially at the processing stage, are so large, they can determine the prices small farmers and processors will get for their food as well as the prices we pay at the store. 

Supply and Demand?

We are constantly being told that in our free enterprise system, prices are decided in the open market, according to Supply and Demand. That is, when people are not buying a certain product, its price is supposed to go down. We are also told that our present inflation is the result of increased demand and insufficient supply. But if prices are really set that way, why didn’t April’s massive consumer boycott bring meat prices tumbling down? It brought some small time butchers and meat packing firms tumbling down? but left the big packers in a position to tell Wall Street Journal reporters that their profit outlook for the year was still rosy, despite the boycott. When asked if he was worried about future boycotts, one packer said: “People found out during the first one that prices aren’t set on the picket line. “8 

Keeping the Small “Competitor” in Line

Big firms do not stop at pricing. They also decide what will be produced, what methods of production will be used, and whether or not new firms will be able to enter the field. They can decide these things because of their size and power. If a big firm decides to charge a low price, a little firm can’t charge a high price, because who would pay it when they could get the same product for a low price? If big firms start using expensive machines that enable them to produce more goods more cheaply, many little firms will be driven out of business because they can’t afford these machines. By advertising, big firms create a desire for fancy new products. Did you ever want a frisbee before you or your friends saw one on TV? If little firms cannot afford to produce these new products, they may be left trying to sell goods that nobody wants anymore. And by their control over these factors, big firms set the conditions which determine whether little firms will be able to find enough money to enter the business. It is becoming harder and harder for new firms and farms to get started, and for small ones to stay in business. 

Political Power: One Person, One Vote?

Big companies gain formal political power by giving large campaign contributions, by supplying people to fill top appointive positions in government, and by lobbying for favorable legislation. 

ITT is perhaps the best known contributor to President Nixon’s recent campaign. ITT produces Hostess Cakes; Wonder, Profile, and Butter Top Breads; Gwaltney’s meat products; Morton frozen foods; and Pearson candies. Here are a few other food producers who were involved in the Nixon campaign; R. Douglas Stuart of Quaker Oats, Donald Kendall of PepsiCo, and Thomas Carol of Lever Brothers. Contributions don’t always buy the results companies want, but they help. 

Behind the Scenes

Underlying this overt manipulation of national and international politics lies the pressure and threat which concentrated, centralized economic power can exert on the political process. When a very big company producing an important product decides not to cooperate with government policies (by not delivering needed supplies, calling in loans it has made, etc.), chaos can spread through the entire economy. On the other hand, if the government and business can agree on policies, then the government can carry out the policies it wants much more easily. An example is the desperate attempt of the government to correct the balance of payments deficit by promoting agricultural exports. 

IV. Unions and Monopolies

Unions have grown in the twentieth century in tion to these large and powerful monopolies. The bargaining power of unions and business has depended largely on the potential damage one side could threaten to inflict on the other. 

Big business has improved its bargaining position with unions through monopolization and through its ingly international operations. Strikes, and especially traditional strikes, have lost some of their strength because:

  • Big companies are able to produce in advance, compiling large enough inventories so that they do not lose their customers.
  • Multinational corporations can speed up production outside the country (or in non-unionized shops in the United States) to make up for the loss of production at home.
  • Conglomerates have continuing incomes in other industries, normally outside the jurisdiction of the striking union and are able to weather strikes.
  • Most important, monopolies are able to mine the prices of goods they sell, given the absence of market competition in their industries. This means that a wage raise can be passed on in higher prices. The goals of strikes — better standards of living through a redistribution of come from business to labor — have been transformed. Corporations now use strikes to justify higher prices. 
Workers in the Food Industries

Workers in the food industries are even more powerless than workers in many other industries because unionization came late to the food business. Especially where conglomerates from outside the food business have taken over small food companies, unions have not “grown up” with companies in the food business itself. 

Until recently, farm workers weren’t even organized. Growers are still trying to break the United Farmworkers Union. The condition of farmworkers is among the worst in this country. There is widespread malnutrition and other illness. Few children of migrant workers ever graduate from high school. Almost a million children are still employed in agriculture, the third most dangerous occupation after mining and construction. In 1970, the American Friends Service Committee reported, “The child labor scene in 1970 is reminiscent of the sweatshop in 1938 … It should be intolerable for a sizable segment of American industry to depend upon children for its survival. And in 1970, it is not only tolerated but encouraged.”9

The effects of lacking organized power in the food industries are obvious if one compares average weekly earnings in durable goods manufacturing industries ($176) with those earned in food processing ($145), food stores ($104), and farm workers ($22). Farmworkers work an average of 54.9 hours a week compared to the 42.7 hours averaged by non-agricultural workers. That means that farmworkers earn, effectively, less than ten percent per hour of workers in durable goods industries. 

Wages in Monopolies

Workers in small food processing companies earn about two thirds of the wages paid in large ones. This puts them close to the inadequate minimum wage — at around $2.00. This kind of wage difference between big and small companies prevails throughout the economy. Two major factors explain those differences: (1) More workers are unionized in the big companies than in the small ones. (2) Because of more advanced technology and higher output per worker, the big companies can pay more per worker without endangering their profits. 

In fact, workers get a smaller proportion of the total sales they produce in the concentrated industries than in the smaller companies. Although big companies pay somewhat higher wages, workers are still hurt because they don’t get as high a share. The tiny fraction of the companies’ income going into workers’ wages is most visible in highly monopolized industries like oil or chemicals. Since food industries are still somewhat behind those industries in the growth of technology and concentration, these tendencies are most obvious only in a few specific branches of the food processing sector: 

Labor Costs as a Percent of Sales, 196310

 Roasted Coffee: Shops with 10-19 workers: 6.4% of sales. Firms with 500-999 workers: 5.3% 

Pickles, Sauces, Salad Dressing: Shops with 10-19 workers: 15.9%. Firms with 250-500 workers: 10.3% 

Natural and Process Cheese: Shops with 10-19 workers: 8.2%. Firms with 240-500 workers: 4.7% 

Shrinking Job Market and Runaway Shops

Here the circle closes again. The profits withheld from workers’ income goes into further “acquisitions” and into new machinery to replace workers, making output per worker even higher. And that raises the possibility of two tactics which, in the long run, pose the gravest threat to all working people: 

Replacement of Workers by Machines — For instance, in the meat packing and processing industry, 5,000 workers have been replaced by machines between 1970 and 1972 alone.11

Runaway Shops — Big companies have the financial power to transfer part of their operations to other countries. When industries which still need many workers come powerful enough, they close more and more plants here and replace them in countries with much lower wages. The belt of canneries, cotton mills, and sweat shops just across the Mexican border is ample reflection of the dominant motive: to exploit mostly non-unionized workers literally forced by starvation to work for pennies. Thousands of workers in this country are laid off permanently as a result. 

Both of these trends have helped produce a growing and irreversible “structural unemployment” in this country — that is, unemployment built into the economic structure — affecting more and more workers. The official estimates say 4.5 percent of the people are normally unemployed. Official unemployment figures do not include: women and young people who have never worked but might if they could find a job; people without permanent addresses whom the census-takers never find — especially common among Black and Latin men — and people who find only temporary, seasonal or time jobs but would rather work full-time. More realistic estimates suggest that eleven or twelve percent are employed even during prosperity. That means that one out of nine people willing and capable of working is manently unemployed. During this recession, economists predict that the “official” rate will reach six to seven percent. More realistically, that means at least fifteen percent. 

And while millions of people are thrown into the streets, millions of those who have jobs are forced to work overtime because it is almost always more profitable for companies to pay time and a half than to hire more workers. 

Are Machines the Root of All Evil?

There is nothing wrong with having the dirtiest, iest, and most boring work taken over by machines. It could be real progress to free people from the worst drudgery to do better, more creative work. We now have, in this country, the technical means to produce everything we need — food, clothing, transportation, shelter — in the same amount and even better quality if everyone works just 20 (or so) hours a week. 

A wild dream? It could become reality if our economic system was guided by our needs and not, as it is now, by the profits of companies and landowners. In an economy planned to serve our needs, every new machine and invention would be oriented toward improving our lives and not, as it is now, resulting in structural ment, throwing people into the pools of “useless” workers. 

What Can Unions Do?

It is important not to be deceived by the widespread notion, cultivated by business public relations experts, that “what is good for business is good for workers.” It once seemed true that every additional profit would result in more jobs for more workers, back in a period when rapidly expanding industry concentrated only in this country. Now, with runaway shops, the contrary seems to be more the case: higher profits tend to put more and more workers out of their jobs. We need to organize on the recognition that business interests are not in harmony with those of workers, but diametrically opposed. 

Union “closed shop” strategies have helped divide workers into two camps, the skilled and sheltered workers, mostly white male, most in unions; and the “rest”, less skilled, underpaid, unemployed, many Black, Brown and Women workers. The recent food and energy inflations should help us recognize that business is increasingly able, through inflation, to erode all wage gains through secular inflation. We need unions which nize that the fight for higher wages is not the only fight any more. We need to struggle for a redistribution of wealth and control over the economy. For that struggle, the two “camps” must be united. 

V. What We Produce and How

We have given so much space to the growth of monopolies and their effects on workers and unions to raise several important issues: 

  • We are affected by the changing structure of the food business not only as consumers but also as workers.
  • Big companies represent a natural outgrowth of the “old” system in which many firms competed with each other. The rationales of the Mom and Pop stores and the supermarkets are the same. Each tries to make as many profits as possible, regardless of their effects on people, nature, or their competitors. Neither can afford to be different.
  • We cannot have our cake and eat it: We cannot break apart big companies and at the same time preserve the integrity of the profit system. As long as the profit system exists, some companies will grow and swallow others. We could chop up the big companies a hundred times, but they would keep coming back. 
So, Is Bigness “Bad”?

Some people, like consumer groups, argue that size is the root of our problems. Others argue that the size achieved through mechanization and concentration permits our high standard of living, that the enormous ductivity achieved through concentration provides the only way to get fed, clothed, and sheltered. So whether we like it or not, some argue, we have to deal with polies. Both sides have some validity. To balance them sibly, we have to consider the concept of productivity. 

Business’ Concept of Productivity 

The business concept of productivity is simple: it measures the number (or amount) of goods produced per workhour, with minimal business cost. This meaning of productivity does not take into account the quality of the product; whether it’s useful (nutritional) or just junk; whether it’s harmful or healthy; whether it costs the taxpayer a lot of money to dump the garbage going with it (like plastic wrappings); whether it needs a lot of energy to produce the good, causing pollution; whether the worker goes nuts or is content with the work. This concept of productivity does not count what we must pay in taxes, health and hospital bills, with our well-being and the quality of our lives. For business, everything is measured solely in terms of their sales and profits. 

People’s Concept of Productivity

Our concept of productivity must take all these factors into account: to produce the most useful and necessary goods per work hour, involving the least energy and pollution under the most human working conditions. With food, that would mean feeding the largest number of people with the most nutritional and healthiest food with the least waste of energy and natural resources, using machines to do the worst and dirtiest jobs. 

Is It Possible?

We have to begin testing very thoroughly every possible kind of production to measure its productivity by our concepts. The size of productive unit depends on what is produced. It might be true, upon investigation, that we would want even larger steel mills than we have today because pollution could be more easily controlled and work more easily made humane. It might turn out, in contrast, that we would want to cut down the size of feedlots because cattle could be more healthy without antibiotics and other drugs. (On small units, the cattle can graze on grass. If this resulted in less cattle production because of scarce land, we could substitute soybeans and anchovies for beef protein in our own diets.) 

The Backwardness of Scientific Research

Since the 19th century, much scientific research has been financed by and pushed to serve the needs of business. It is not necessarily true that we are stuck with the kinds of chemical fertilizers and insecticides we use today. (Chemistry related to organic farming and biological controls has been underdeveloped for years.) The need for chemicals to preserve food over long distances has distorted the kind of research which scientists have performed. Given our scientific resources and ingenuity, we could certainly discover other kinds of solutions to food production and preservation than we use today. 

So What Kind of Production is Best?

The two arguments remain: Bust the monopolies versus big-business-is-productive. Solutions can certainly not be left to the “natural” development of the profit system. 

The size of production and the levels of “people’s productivity” are much too vital to be left to the crazy rules of the profit system. The food crisis and the energy crisis, having exploded in two short years, should help us realize that we don’t have the luxury of fooling around with minor variations on the same old production for profit theme. “Back to Mom and Pop stores” versus “make big business more profitable” is a false controversy. Size as such is not the central issue. The laws or criteria which determine the size of production are more crucial. Do we let those issues be determined by the drive for profit of a small class of entrepreneurs? Or do we base our decisions upon the needs of people and our scientific insights? We think that the second alternative is the only viable course we have.


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  1. Census of Agriculture, 1969.
  2. “Analysis of the 25,000 Leading U.S. Corporations,” by the editors of News Front, 1971.
  3. “Performance of the Food Processing and Distribution Industries,” Agricultural Economics Staff Paper, April 1975, Michigan State University.
  4. 1969 Census of Agriculture.
  5. Fortune, July 1973, p. 161.
  6. Hank Frundt, “To: American Farmers and Workers,” mimeo, 1973, Sociology Department, Rutgers University.
  7. U.S. Small Business Administration, “Effect of the Wholesome Meat Act of 1967 upon Small Business,” September 1971, p. v.
  8. Wall Street Journal, May 8, 1973, p. 48.
  9. “Earl Butz, Food, Farmers, and You”, Agribusiness countability Project, 1972, p. 12.
  10. Special tabulation of 1965 data for the National Commission on Food Marketing by the Bureau of the Census, Department of Commerce.
  11. U.S. Industrial Outlook, Department of Commerce, 1973, p. 83.