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Part 2.2 – Livestock Industry Consolidation in the 1980s

As an abundance of American farmers were closing their doors in the 80s, we began to see massive consolidation across the livestock industry. The largest meatpackers were growing rapidly and absorbing their competition. Processing plants were dwindling in numbers but exploding in size. Some critical people who took office during the Reagan Administration contributed to this consolidation. 

One influential player was an economist and philosopher named Robert Bork. He was a Yale law professor who had Ronald Reagan’s ear at the time. In 1982, Reagan appointed Bork as a Court of Appeals judge and gave him the ability to directly rewrite antitrust doctrine. Robert Bork had a much different approach to antitrust law (antitrust prevents companies from getting too large and dominating the market). Bork’s philosophical approach is part of what lead to deregulating The New Deal and loosening up on antitrust laws in place since the 1890 Sherman Federal Antitrust Act. He argued that allowing companies to massively scale (even to monopolies), would drive down prices which he claimed benefited the consumer.

Milton Friedman, a Nobel Peace Prize recipient was quoted saying, “Corruption is government intrusion into market efficiencies in the form of regulations." Friedman was Reagan's other key economic advisor in addition to Bork during this time. Milton pushed "unrestrained" capitalism, meaning true capitalism didn't have any sort of regulation (excluding unlawful activities like fraud and deception), and that the social responsibility of businesses is to increase profits, leaving social responsibilities to individuals and politicians, not executives. 

These philosophies – the notion that monopolies aren't a bad thing, is one of the concepts that ultimately lead to countless questionable mergers and acquisitions in the 2000s that allowed The Big 4 to rise.

"Over the past 30 years the number of US hog farms dropped by a stunning 89 percent, from 660,000 in 1980 to just 71,000 today, while the number of cattle ranches decreased by 40 percent, from 1.6 million to just 950,000."

To this day, production continues to grow more and more concentrated – as about 5% of all U.S. animal operations now produce more than 50% of our food supply animals. 

Video Clip – Milton Friedman on Donahue in 1979 


Part 2.2 sources: HuffPost

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