Sunday, January 22, 2012

Occupy Cargill. What?


"Multiple speakers at the rally railed against Cargill's corporate personhood and its extensive lobbying of governments for free trade policies that benefit its profits at the expense of people and planet."

We know that modern supply chains made possible by companies like Cargill actually help reduce our carbon footprint and in many cases outperform more energy intense 'local' supply chains. ( ) . One thing that Cargill excels at is making markets, matching U.S. agricultural products to overseas markets. This is incredibly valuable considering the importance of international trade to the 98% of all U.S. farms that are family farms. According to the USDA:

  • U.S. agriculture looks overseas to expand sales and boost incomes. Exports also generate additional economic activity that ripples through the domestic economy.
  • Expanding existing market access and opening new markets under future trade agreements will significantly boost U.S. agricultural export sales. 
  • The President's FY2011 budget provides increased discretionary spending of $54 million to enhance USDA's export promotion activities. 
  • Compared to the overall economy, U.S. agriculture is twice as reliant on overseas markets.
  • USDA estimates that anywhere from 26 to 30 percent of farm cash receipts in any one year comes from exports. 
  • Every dollar of exports creates another $1.40 in supporting activities to process, package, finance and ship agricultural products.
  • U.S. agricultural exports, which in FY 2009 reached $96.6 billion, generated an additional$135 billion in supporting business activity in transportation, distribution, food processing and manufacturing. 
  • These exports support approximately 1 million U.S. jobs both on and off the farm. 
  • Some agricultural commodities benefit dramatically from sales in overseas markets.  For example:

    1.  64 percent of our almond crop is shipped overseas. 
    2.  74 percent of cotton is exported.  

    3.  49 percent of U.S. rice goes to international markets.   
    4.  50 percent 
    of U.S. wheat   goes into the export market. 
    5.  34 percent of our soybeans are exported.
  • 96 percent of the world's consumers live outside the United States. 
  • U.S. agricultural export growth is led by the NAFTA countries of Canada and Mexico andnon-Japan Asia.    
(source: )

Cargill's efforts to promote free trade should be applauded, as it opens up markets for the many commodities produced sustainably by U.S. family farmers employing the latest technologies. Of course this leads to profits, but contrary to the claims made in the article, true profits exist only at the BENEFIT of all people involved, and never at their expense (other wise trades would not take place and no profits would be realized). The economic definition of profit is the net contribution a firm makes to society. 

Of course, if firms are accumulating cash at the EXPENSE of others, they are not making true profits, but are either committing fraud or theft or extracting rents through subsidies, special priviledges, or regulatory protections (like restrictions on trade). This behavior can be described in terms of game theory as a Nash Equilibrium, particularly a prisoner's dilemma. When government is permitted to engage in excessive regulation and is granted the power to use the regulatory apparatus to benefit special interests, it pays for (more like forces) everyone to play the game. 

This is the sort of corporate abuse of power that the occupy people should be focused on. The lamenting over Citizens United would be a moot point if the occupiers would actually address the problem of excessive corporate power and abuse at its core- the out of control progessive policy agenda and regulatory apparatus of the federal government. I've yet to get the idea from any in the movement that this is their focus. A corporation is NOT a person. However, taxes and regulations on corporations are taxes and regulations on PEOPLE. Lots of PEOPLE, not just CEO's and shareholders, but the millions of consumers, workers, farmers, and small business owners that depend on the mutually beneficial exchanges for their livelihood and day to day life made possible by companies like Cargill. PEOPLE are most empowered, not by government or progressive policies, but by the ability to engage in socially cooperative exchanges and forming socially cooperative relationships. They have a right to organize and use speach to advance their views and causes through whatever corporate or non corporate vehicle they feel is most effective. However, there is nothing noble about PEOPLE using speach to advance an agenda to restrict the free trade and the social cooperation of others, through any vehicle corporate or noncorporate.  As stated in the article, these occupiers actually seem to be (through their castigation of Cargill's pro trade efforts) supporting policies that enrich and empower corporate interests at the expense of family farmers and the 99% of PEOPLE they claim or think they are advocating for. 


Anonymous said...

Matt, with all due respect, your "theories" do make sense within the world of theory and yet in the real world human behavior, greed, selfishness, etc. are operational long before "society" takes steps to intervene.

As a corporate insider I can attest to the operational fact that these large, multinational corporations pledge of allegiance is “I pledge allegiance to the flag of the united alliance of corporate operational units and subsidiaries and to the profits for which we stand.”

There is no pledge of allegiance in these corporate board rooms to society; nor the governments/citizens of the countries that provide the business infrastructure and protect their business enterprises.

Basically, if you work in these corporations you are expected to essentially renounce your pledge of allegiance to the country you are a citizen of.

Corporations hire public relations firms to figure our how much profit must given to the disadvantaged to pacify the critics. Then, it is back to businness as usual, including "extorting" tax breaks from communities to locate jobs there, raising the percentage of taxes that must be paid by the citizens for the priviledge of having the corporation locate in their community.

Economists are historically focused on evaluating events retrospectively and determining if they can analyze if what works in practice will work in theory. Thus, they may end up writing some profound papers in the future regarding the factors that lead to the global collapse of the sovereignty of individuals, communities and nations to corporate greed.

Some significant effort must be made to balance the intrinsic nature of human greed and selfishness and the corresponding corporations they “create in their image” and the “true” best interest of a sustainable society.

It is time society has a dialog regarding how to ensure globalization, as designed in corporate board rooms, is managed by the societies they depend upon in the long run.

That said, the model for individuals and organizations taking on the threat of corporate greed and selfishness must follow the peaceful proven methods of Ghandi.

Matt Bogard said...

I'm not sure where we really disagree. Nice response.

Matt Bogard said...

I'm not sure where we really disagree. Nice response.