Dr. William Heffernan
Presentation Summary for April 1, 2004 William D. Heffernan
The dairy sector is a part of the larger food system that is undergoing
major economic change in this country and around the world. The food
sector is in the process of becoming more like other sectors of the economy
that have undergone major structural change. The economic system has moved
from what is often called "early capitalism" to "mature capitalism." The
former is characterized by competition and entrepreneurs, while the latter
is characterized by oligopoly and a large corporations. Early capitalism
and mature capitalism are as different from one another as mature
capitalism is from communism.
One of the assumptions behind this new structure is that a price can be put
on everything. The argument is then made that the market will assemble
all the costs and benefits to determine the most efficient utilization of
resources to achieve the maximum quality of life. This economic model
provides the academic legitimacy for the current economic system.
Economists argue that this evolving system is inevitable; sometimes they
refer to it as a "natural system." The alternative view that I as a
sociologist adhere to is that the current system has and is being put in
place by humans (and their organizations) and it can be changed by humans.
Focusing on vertical integration, horizontal integration, and other
mechanisms used by firms to gain control of the global food system, we
diagramed three "food system clusters" and predicted the emergence of two
or three more. We began with the five global seed firms that own the
intellectual property rights to biotechnology and extend it to the five
retail food firms in this country that have 50% marketshare. At the global
level, four food retail firms are emerging. Although the clusters include
dozens of firms, three or four dominant firms are evident in each of the
food system clusters. Given the economic and political power of these
clusters, any of them could move into most countries of the world and crush
any national level domestic firm. In this new economic system, power
relationships become more important than efficiency in a firm's survival.
Obviously, economic models focusing on income and capital alone cannot
accurately reflect either an individual's or a society's quality of life.
Above relatively low family income levels, researchers have shown that
there is little relationship between income and happiness. Psychologist
Abraham Maslow described five needs of human beings. The first two,
physical and security needs, are highly tied to level of income, but the
three higher level ones, the need for social relationships, recognition,
and self-actualization are not necessarily fulfilled by higher income and
more material possessions.
Having conducted research on the needs of farm families being forced from
their farms in the 1980s for economic reasons, we documented that the loss
of the farm was more than just an economic loss to the families and
communities involved. A sustainable, socially-just and democratic society
is not built on the values of the marketplace alone.
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