I been down to Macon, Georgia, I ate the furs off a Georgia peach. Plucked me a chicken in Memphis. Mama, I still got feathers in my teeth. Ate a pound of pork Huntsville, Alabama, from a fine Alabama hog. I went to Dallas, Texas. Got no love, my baby left me. Fed the bone to a Louisiana dog. Hear me talkin’, a meat man, woo, meat man! The Matt Vickery song, recorded by Jerry Lee Lewis is full of innuendo, and so is the book the Meat Racket¸ by Christopher Leonard. Mr. Leonard, who is a Fellow at the New America Foundation, has a resume that shows an obsession with meat not unlike many of the fact-free causes that get rooted in the American psyche.
Ever since the beginning of political economic discourse, there has been an obsession over food and food policies. The Reverend Thomas Robert Malthus is famous because he was one of the first in a long line of people who predicted gloom and doom because the world could not produce enough food to sustain the population. When he made these predictions in 1798, the population of the world was estimated to be around 800 million. Today, it is over 7 billion, almost 8 times as large. These “Malthusian” predictions have permeated our culture today and in many cases find their way into discussions about modern food production and processing techniques.
Most “Malthusian” arguments eventually prove themselves to be incorrect, not because they were specifically wrong when they were first developed but because the world changes over time. In 1798, corn was grown on small farms using technology powered by oxen. Today, broad areas are covered by huge farms where a handful of people can produce more grain that the entire nation of England did in Reverend Malthus’ time. In fact, agriculture and the food processing industry have led the wave of productivity growth that has made life throughout the world so much better.
Another English movement of the turn of the 19th century were the Luddites. Luddites were textile artisans who protested against the technology (like spinning frames and power looms) that brought about the Industrial Revolution. The movement was named after Ned Ludd, a worker who allegedly smashed two stocking frames in 1779 in protest. While Malthusians are worried that no change will happen, the Luddites worry about change and how productivity will destroy the working class.
While these arguments have a certain populist flair, over the past three centuries we have seen just how dangerous they can be. Economies that have best provided for their people are those that have adopted new technologies and new ways of doing business and through these developments have ensured that shortages have not occurred and that populations have not starved to death. Those that have taken the opposite path, be they Mao’s China, or Pol Pot’s Cambodia, or the Taliban’s Afghanistan have seen nothing but stagnation, genocide and despair.
Leonard is a good storyteller, and this book presents a great story. But it is a story that is tied together by Luddite tradition. The underlying theory is that small and local is good and that large and national is bad. There is no evidence to support this and the overall story presented in the book is based on anecdote, on speculation and on innuendo. It is also a story tied together by contradiction.
The base premise of the Meat Racket is that vertically integrated processing companies using technology and new processes to ensure that a reliable supply of fairly standardized animals are available for slaughter, have led to the demise of the farm economy. In other words technology is destroying agriculture. At the same time, Leonard argues that farmers cannot operate their small independent enterprises without charging consumers very high prices. You can’t have it both ways, either small farms work and provide products that consumers want at a market clearing price or they don’t. Economies work for consumers, not for producers – so if the technology brought to the production process by an integrated processor helps to lower consumer prices than that is good.
Leonard contradicts himself again in claiming that vertically integrated meat producers are exploiting consumers with above market prices. Again, if meat companies are so cheap that they destroy local communities how are their prices too high. Of the few statistics used in the book, the financial statistics showing that companies like Tyson Foods have very ordinary profit margins kind of proves the point that the savings from technology are being passed on to consumers. The huge growth in the demand for meat also supports the fact that prices are not inordinately high.
Another contradiction essential to Leonard’s argument is that the contract system developed by integrated processors destroys farmers. At the same time he argues that farmers are signing up for contracts in droves. Are farmers so stupid that they would want to involve themselves in something that they know will bankrupt them? The simple truth is that farming is a risky business. This is the reason why the Department of Agriculture is one of the largest Federal agencies. A huge part of the DOAs job is to help farmers mitigate risk. This is also the main reason why so many farmers sign up as contract producers. Simply put, the integrated meat processers help farmers stay on the land while at the same time reducing risk.
The bottom line is that the American meat processing industry – from thousands of small processors to a handful of large integrated multinationals – is a vital part of the economy, providing thousands of jobs and independent supplier opportunities throughout the country, while at the same time providing consumers with a reliable supply of safe, healthy and reasonably priced proteins.