Wednesday, May 26, 2010

14 Governmental Frontiers

In post 13, we began to think about economics. Today, our main subject will be the role of government, especially the role of government in the "free" market.

Here's the main question to think about: do you see any parallels between Schlosser & Limerick? Think back to the governmental role that we read about on day 3, in Patty Limerick's history. Then think about Schlosser's perspective. In his introduction, Schlosser wrote:

The political philosophy that now prevails in so much of the West - with its demand for lower taxes, smaller government, an unbridled free market - stands in total contradiction to the region's true economic underpinnings. No other region of the United States has been so dependent on government subsidies for so long, from the nineteenth-century construction of its railroads to the twentieth-century financing of its military bases and dams. One historian has described the federal government's 1950s highway-building binge as a case study in 'interstate socialism' -- a phrase that aptly describes how the West was really won. (Schlosser, Fast Food Nation, 7-8).

But what is socialist about the fast food industry? As Schlosser reiterates on page 111, in his portrait of potato-baron J. R. Simplot, "Simplot displays the contradictory traits that have guided the economic development of the American West, the odd mixture of rugged individualism and a dependence upon public land and resources." Simplot got his first major break selling onion powder to the U.S. Army, before selling frozen french fries to McDonalds. It's not quite socialist, but it is what Schlosser calls an "oligopsony"(page 117) - a market in which a few huge players exert undue influence. These huge players seem to be private companies, but they have myriad, subtle, public ties.

As Schlosser explained in chapter two, corporations lobby for low taxes, which mean that the public schools struggle for funding, so then corporations step in with special edutainment sponsorship deals for schools that are really disguised advertisements -- and that allow the corporations to then take even more tax write-offs. The same process with schools happens for parks: when public governments can't fund adequate parks, McDonalds introduces its private playlands. Since foods eaten in childhood will become "comfort foods" for a lifetime, McDonalds hopes that appealing to children will create lifelong consumers.

Yet beyond this clever tax-deductible advertising, fast food has many more deep government ties. Fast food is an industry that took advantage of government subsidies for researching food science for the military, as well as subsidies for highway construction and suburbanization and farm fertilizer and farm commodities. Despite accepting all those government handouts, the fast food industry also fights against government oversight, opposing any increase in the minimum wage, any restrictions on advertising to children, or any improvement in the laws to maintain worker health and food safety.

In a parallel book, journalist Michael Pollan reports on Iowa farmers who tell Pollan that their corn crop is "a welfare queen." (Michael Pollan, Omnivore's Dilemma, page 41). U.S. farm subsidies give billions a year to agribusiness, to encourage farmers to grow more and more corn, to make cheaper food available to consumers. All that government-subsidised corn gets used to fatten up beef-cows quickly, even though cattle aren't evolutionarily capable of digesting corn, and the corn-diet leads them to an increasing number of diseases. It's still the cheapest way to make hamburgers. It also goes into high-fructose corn-syrup that sweetens our sodas and hamburger buns, as well as other corn-derived chemicals that go into so much processed food: diglicerides, dextrose, lecithin, corn starch. Chemists breaking down the atomic content of a McDonalds meal measure the soda as 100 percent corn, milk shake is 78 percent corn, salad dressing is 65 percent corn, chicken nuggets are 56 percent corn, cheeseburger is 52 percent corn, and even the fries are 23 percent corn (mostly because they're cooked in corn oil -- if this perplexes you, Pollan explains it wonderfully in his book, chapter 7). You may think you're eating a balanced meal, but it's mostly government-subsidized cheap corn, disguised into other flavors, so that your stomach doesn't know quite how much it's eating, and the industry can sell you even more. The problems for consumer's health, the cow's health, the cow-workers, and the farming environment are hidden. As Schlosser writes, "The real price never appears on the menu" (Schlosser, 9).

The role of government in Schlosser's story is a particularly complex one. The government works to insure food safety and worker safety. Governmental anti-monopoly laws should protect small businesses from giant corporations. Government investigates mob involvement in meatpacking, scale-tampering among meatpackers, price-fixing, mis-labeling, the disposal of toxic waste from the meatpacking corporations and giant agribusinesses, and, most importantly for public health, the periodic e. coli outbreaks in food. Yet again and again in Schlosser’s story, the U.S. government seems ineffective at protecting small businesses, independent ranchers, the lowest workers, or even all food consumers.

You will read next that American meatpackers prefer working on days when the meat is prepared for export to the European Union, because those are the days when E.U. laws insure that the work is most humane and injuries are rarest (page 265). The U.S. government laws have been gutted, in Schlosser's investigation, especially in the 1980s, and corrupted by corporate lobbyists, ineffective enforcement, and corporate lying – especially about meatpacking corporation's own abysmal safety records.

Some might conclude from this that government is ineffective, and should be minimized. Yet we can’t exist without the government. Each of us cannot independently test our own food for e. coli. We need the government to test our food for us, and the story is bigger even than that. Each of us alone cannot do much to protect decent people like Kenny Robbins (read his story beginning on page 187) from profit-hungry corporations that don’t care about Kenny’s health or safety.

This is one irony of the book: it takes government intervention to insure a truly competitive market, with full disclosure and fair competition. Without adequate government laws, Schlosser reports, half a million ranchers have gone out of business in the last decade. Chicken-farmers have lost their independence to the relentless forces of the mcnugget. Meatpacking workers are losing limbs. Hank, the hero of chapter six, and a sort of modern-day version of the Marlboro Man, ends up killing himself.

The government failed Hank. It failed to regulate the construction of Colorado Springs, so that the city’s poorly-planned water-runoff now destroys Hank’s land. The government did attempt to give tax breaks to conservationists, but these laws ended up favoring wealthy tourists instead of struggling working ranchers like Hank. Most of all, the government failed to prevent mergers among meat-buyers, so Hank no longer has much choice whom to sell his cattle to, and thus very little ability to negotiate a decent price. The government fails Hank, but the solution Schlosser implies is not less government but more.

Schlosser also shows us the government working well: antitrust laws in the 1920s made sure that ranchers had a variety of buyers for cattle. But by the 1980s, the government stopped enforcing these laws as well. The government failed to limit a string of mergers and consolidations that led to monopoly capitalism, so that only two or three companies control most of the market for French-fries, chicken, or beef. This monopolistic (or oligoptic) economy means that farmers aren't dealing with a truly free market. The chicken-farmers especially seem eerily similar to the franchisees we read about earlier, assuming all the economic risks but getting little control, little freedom, and little profit. The story Schlosser tells is one in which more and more of the people working to bring us our McDonald’s Happy Meal end up being “cogs in the great machine” (the title of chapter seven) trapped in an economy of huge consolidated corporations, in which independent farmers or meatpacking employees can’t negotiate equally with giant processing companies.

The western myth of independence actually hurts the potato farmers (“independent to the point of poverty,” Bert Moulton tells Schlosser on page 118), and the cattle-ranchers, who don't use the government as cleverly as Simplot, Karcher, and the other early fast-food entrepeneurs did. As Schlosser argues,

Indeed, the ranchers most likely to be in financial trouble today are the ones who live the life and embody the values supposedly at the heart of the American West. They are independent and self-sufficient, cherish their freedom, believe in hard work – and as a result are now paying the price. (145).

After the “IBP revolution” in meatpacking, the non-unionized de-skilled meatpacking workers seem to have the least independence of all: free only to quit every few months, and sometimes to sue the corporations that injure them. As Schlosser will point out in his conclusion:

Many of America’s greatest accomplishments stand in complete defiance of the free market: the prohibition of child labor, the establishment of a minimum wage, the creation of wilderness areas and national parks, the construction of dams, bridges, roads, churches, schools, and universities. If all that mattered were the unfettered right to buy and sell, tainted food could not be kept off supermarket shelves, toxic waste could be dumped next to elementary schools, and every American family could import an indentured servant (or two)… (261).

Schlosser encourages us to look beyond myths of the free market to understand the real forces at work, what he calls the “relentless drive for conformity and cheapness” of consolidated corporations which actually create a lack of freedom.

Nevertheless, Schlosser concludes that we have some freedom, not as fast-food workers but as consumers. We have the freedom to choose to consume In’N’Out instead of McDonalds, or slow food instead of fast. Government pressure may have failed recently, but consumer pressure can still be powerful, getting fast-food industries to serve healthier, more environmental, more diverse food. No one forces us to eat any fast food, anyway, although all that marketing to children -- and creating comfort foods for life -- is a bit coercive. Still, Schlosser concludes, “Even in this fast food nation, you can still have it your way,” which might mean choosing not to have any fast food at all.

Will you? Will this book change how you eat? I am curious about that, and about your ideas of government involvement in the market. I am looking forward to this week’s blackboard discussion-board.

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