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Policy analysts and pundits are grappling with big questions about how Democrats can win more rural voters and shrink the growing rural-urban economic divide. In my cover story for the @washmonthly I argue that antitrust needs to be part of this solution washingtonmonthly.com/magazine/janua…
Recent reports and articles by Brookings and the NYT suggest that there’s no hope for rural economies and perhaps the only solution is for people to move. This narrative that NYC and SF naturally cluster wealth overlooks policy decisions that got us here washingtonmonthly.com/magazine/novde…
Concentrated corporate power sucks wealth out of small towns, closing local businesses and shrinking jobs. Take the case of what Dollar General is doing to rural grocers (and what Wal-Mart did before them) civileats.com/2018/12/17/dol…
In fact, monopolies rule the entire food system. The top 4 players control over 60% of pork/beef processing, global seed and agrichemical sales, grain trading, equipment manufacturing, and soy/corn milling. And these stats undersell goliaths regional dominance
As a result farmers “the apotheosis of independence” (as @ChopraFTC said at an @EconomicPolicy event) have lost open markets in which to buy and sell goods. They must accept bad deals on ever-costly inputs and sell for whatever a dominant processor will offer
In the 1980s, farmers received roughly a third of every dollar spent on food. Today they get 15 cents, half as much, while middlemen have absorbed the rest. Farm incomes are down 50% since 2013 yet companies like Tyson, Cargill, and Monsanto tout record profits
Granted, corporate consolidation and forces to “get big or get out” have significantly shrunk ag’s role in rural economies over time, but research suggests that a decentralized food system could spur rural development – see @stlouisfed stlouisfed.org/community-deve…
And the deleterious drain of monopolies can be seen in many rural sectors. This paper by @joseazar @mioana and @Econ_Marshall clearly shows how labor market concentration is higher in rural areas and smaller cities, resulting in lower wages there papers.ssrn.com/sol3/papers.cf…
Deregulating the airlines cut off access to many once vibrant heartland cities and made it harder for them to compete in the national economy. Hospital and insurance monopolies are shuttering rural care providers, and the list goes on and on. washingtonmonthly.com/magazine/march…
Obviously there are no silver bullets here. It’s worth exploring how fair trade, a Green New Deal, healthcare reform, and other progressive policies can all benefit rural America. MO voters show progressive policies have rural appeal, even if Dems don’t dailyyonder.com/letter-langdon…
But I think lax antitrust policy played a big role in exacerbating regional inequality. Reigning in corporate power can give local and independent businesses a fighting chance to decentralize opportunity and keep wealth circulating within communities instead of corporate HQs
