What lessons can we take from this sad story? One, obviously, is that it’s high time for Congress to take a hard look at the laws governing co-ops. It needs to be made clear that no corporation gets the legal privileges of a co-op unless it truly represents the little guy without any conflicts of interests. While there is nothing wrong per se with co-ops becoming vertically integrated, the law should ensure that the money co-ops make on all their operations goes back directly to their members.
Another lesson is that monopoly begets monopoly. Gary Hanman wasn’t wrong when he told farmers that the increasing concentration of ownership among agribusinesses meant that farmer co-ops had to grow bigger, too. But he didn’t tell them that as their traditional co-ops merged and consolidated into the Goliath that became DFA, they were creating a new oppressor. This dynamic is what Supreme Court Justice Louis Brandeis meant when he referred to “the curse of bigness.”
The final lesson is that we are all dairy farmers now. As more and more sectors of the economy become highly concentrated, more and more of us become victims of monopsony power. That’s true if you’re a nurse trying get a raise after the last two hospitals in town merge. It’s true if you’re a doctor trying to negotiate fees with the last remaining health insurer doing business in your county. It’s true if you’re a small manufacturer trying to get Walmart to stock your product. It’s true if you’re a small retailer who can’t reach customers except by agreeing to the fees and terms that Amazon sets. And it’s true if you work for a newspaper, magazine, or journal that has no choice but to take the prices Google or Facebook offer for internet ads.
Everywhere we turn, employees, independent contractors, and small-scale producers of all kinds, including members of the creative class, find that corporate consolidation leads to fewer and fewer companies competing for their services. Stronger antitrust enforcement is part of the answer. But so is finding new ways of re-empowering cooperative enterprise in every sector of our political economy.
How Rural America Got Milked