Concentrated political power is bad. Checks and balances in government is an American creation. There is balance, not concentration. The legislature makes laws. The executive enforces laws. The judiciary interprets laws. Neither Britain nor Rome before us achieved this system or its successful results.

Concentrated economic power is bad. Antitrust is an American creation. Balance, rather than concentration is sought. Consumers have buying choices, producers have selling choices. JP Morgan and Shell Oil built wide-ranging 19th Century economic empires. They choked off innovation, controlled politics, and stymied general prosperity. The early 1900’s meat packers conspired, bought stockyards and railroads, and fixed prices. They were broken by (gasp!) government involvement in 1921. And we are better off.

Markets, supply and demand work. But like a garden, they need tending. Aggressive weeds produce as much photosynthesis as tomatoes, but the taste is sour and the nutrition absent.

Our economic system deteriorates when power becomes is concentrated. It is dry rot. The flow of products and money exists, the economists shrilly point out, but communities wither and die. Like yellowed soybeans growing in alkali soils, the iron necessary for plant growth is physically present, but the plants cannot absorb it. Vacant main street windows stare unblinking at empty sidewalks as productive assets and profits are diverted to the few dominant firms.

There must be limits to market dominance. Nebraska has a strong corporate farming law, now being challenged in court, prohibiting corporate ownership of agricultural production. Texas has no such law. Both states produce nearly the same number of cattle. Nebraska has over 2,000 cattle feedlots. Texas has approximately 200.

The economic gluttony produces little benefit. A recent McKinsey study, cited in The Economist, found 70% of mergers fail to produce the expected gains. CEO’s gain huge bonuses for achieving a merger, but shareholder value declines. But maybe we can still buy at WalMart.

Consider the poultry industry. Poultry integrators killed the open market in the 1960’s. They restructured the industry so a company’s plant is surrounded by contract growers beholden to it. They promised efficiency, prosperity and profitability in the South. They lied. Classic bait and switch. If you are a good boy, Tyson will merely order forced facility upgrades, and deny you the ability to weigh birds, understand the payment system, and prohibit you testing their feed supplied to you. If you are not a good boy, your short term flock-to-flock contracts stop coming, other integrators won’t pick up your contract, and you file bankruptcy.

Many livestock producers are having a good year. Crop farmers had a good year in 2004. New life was given, but we fear it is not a systemic shift. Few argue the independent producer decline will halt without action. If you fall out the window at the 43rd floor, you are still doing all right when passing the 27th floor. But this does not mean you don’t have a problem. Best to address it now.

Government creates monopolies through patent and copyright laws. Monsanto likes these laws. Government should dismember monopolies with as much vigor. Monsanto does not like these laws, They are called antitrust laws. But monopoly dismemberment is the easiest, and least intrusive way to make the markets work, provide choice, and spur innovation.

It is also a cure for rural dry rot. MS