Hacker News

Never let a good crisis go to waste, or so the saying goes.

The consolidation of food production in the US is a risk to us all.

The US economy is jampacked with collusion price fixing. Most markets are controlled by monopolies or oligopolies.

A thing can have many causes. One is the direct cause: the city exploded because someone pressed the button to launch the nukes and left the coordinates set to zero. Even more direct: the city exploded because a critical mass of uranium was assembled. There can be many indirect causes: someone put an idiot in charge of the nuke-launch button, someone forgot to put a molly-guard on the nuke-launch button, someone invented nukes.

Price is usually determined by producer greed because producer greed causes prices to consistently be set as high as possible. This is usually constrained by market competition, which limits how high they can be set. In rare cases, prices are set low by consumer greed.

A high price has a direct cause: the person in charge of setting prices set a high price. A little less direct: that person is incentivized to set prices as high as they can. Much less direct: there are currently few competitors due to avian flu; we have one of very few chip fabs that can make the widgets; our customers are locked in; our customers signed contracts allowing us to raise prices but forbidding them from cancelling when we do. Greed is always one of the more direct causes of high prices. The fact that capitalist markets use greed as an integral part of their normal functioning does not change this fact.

This was addressed by Matt Levine in today's Money Stuff. The problem was not the presence or lack of competition, it was a technical failure of the market structure. Matt:

This is a familiar story and you probably know the ending. There’s a big market (egg producers selling eggs to supermarkets etc.), and there’s a small market (egg producers selling extra eggs to each other on an electronic exchange). The price in the small market determines the price in the big market. Participants in the small market are also participants in the big market. You can spend a little money in the small market to move the price, which can make you a lot of money in the big market.

Not defending the bad actors here, but there's that whole "show me the incentives and I will predict the outcome" thing. If the market structure rewards manipulation, you get manipulation. The market structure doesn't have to be this way.

And notably, we used to have a somewhat progressive corporate income tax which, at least on paper, provided a quantitative disincentive against too much consolidation. Sometimes the merger of A and B would pay a higher rate than A and B separately. And we gave that mechanism up.

I'm not typically a fan of government intervention in markets but Canada's marketing boards do stop this sort of concentration, so while we have higher average prices we do not get massive swings in prices, nor the physical conditions that come directly out of production consolidation that lead to events (or justifications) like avian flu at the same scale.

Most true small businesses can't exist in markets with a lot of competition. Highly competitive markets have a lot of fluctuation and businesses with little capital fold when there's a downturn.

In fact, most markets naturally go from high competition to monopoly or oligopoly. You can see this in chips, cars, airplanes, steel, ecommerce(Amazon) and beyond. Indeed, many oligopoly situations only fail to be monopolies through either antitrust activity or through nation-states supporting their competitors (chips).

Agriculture in particular tends to be geographically dispersed so it's harder to have absolute monopolies. But some "harking back" claim of "if we only had small business, all the predatory stuff wouldn't happen" really fails to understand the dynamics of markets. Scale in agricultural production is what allows the low prices you get in stores - But $10 cage-free organic eggs are available at my local coop for those who love small businesses (though I prefer the $2 cage free eggs at nearby Grocery Outlet).

We were stuck in the Gilded Age for decades before Roosevelt came along and started big trust-busting efforts. I expect a similar situation to play out here. We're probably in the middle of it in retrospect.

Do decentralized banking is better for business competition and market health.

But we live in a too big to fail, regulatory capture environment.

An assumption required to make capitalism work efficiently is that customers have meaningful choices. Trustbusting is one of the important roles of the government, if it were functional.

>It's so fun how corporations are protected from individual liability

They're not. If you hire a hitman through a corporation it doesn't magically become legal.

we dont need new punishments, the system is just backwards. for things like shoplifting and vandalism it should be double or triple damages with no prison. corporate fraud, cartels, pollution, big time tax evasion has to come with 20+ year sentences and fines based on your income like a traffic violation in norway. flat fines just dont work when the criminal is rich.

in general we should be a lot more strict on sexual crimes (sa, trafficking, child abuse but not voluntary prostitution) and white collar/economic ones including wage theft, but less strict on drugs and property. drug possession and non commercial digital piracy should be decriminalized.

violent crimes are mostly in the right place, the big problem there is racist prosecutors and ineffective anti gang programs not the laws themselves but we need to remove death penalty/life without parole everywhere they still exist.

the point is we need a rebalance not a whole new untested mechanic.

>the fines don't make sense for the white collar crimes.

why do we need to jump to caning instead of increasing the fines to something more than an operating expense?

in this case, if the fine was 1000x the profits instead of the other way around, the problem would be solved, right?

And rotten tomato pelting would probably helpfully lower the rate of people turning their resentments into content.

I'll start this punishment from elementary schools onwards. Early punishment will prevent later crimes.

Alternatively: (As stated in the other replies) jail execs.

except that was never used against the powerful and wealthy, just the same poor who pay the price today.

Along with this we need the revocation of corporate charters and the liquidation of all assets belonging to the owners of any corp that is dissolved in this manner. The penalty for fucking over the public in general should be a lifetime of poverty.

The Associated Monopolies of America.

>The idea that something more nefarious than the bird flue was going on was very unpopular on HN at the time

Because journalists see conspiracy everywhere. It is prudent to wait a bit before seeing malice everywhere

Now we know (or at least - have more proof) what was going on, so the justice system worked. How many conspiracy theories were invented and then turned out to be false? This is news precisely because it turned out to be actually true.

win/wind: get caught, pay minor tax; dont get caught, get to keep minor tax

If you want more aggressive anti trust enforcement, voters must vote better, for candidates and administrations that will aggressively enforce.

"naked conspiracy to manipulate the price of eggs from 2022-2025. "

Who was in charge during this time period?

Do you have any evidence the settlement terms are corrupt? There were 17 states involved. Many of those states have governors that are not in the same party as the president. https://apnews.com/article/egg-prices-collusion-settlement-d...

Collusion is not a market force and is actually highly illegal and corrupting of markets, so this doesn't seem relevant at all.

Greed isn’t “forgotten” its reined in by regulation.

Consumers don't want to understand it because they don't want to consume less.

The chart is meant to show how absurd the conspiracy theory is, but it turns out it’s literally what happened this time around at least. Well they didn’t forget their greed of course, they just temporarily lost the ability to exercise it.

As the article says, people have a hard time understanding it because it turned out not to be what's happening. I was on the other side of the debate, I thought it was absurd, but it turns out egg company executives really were sending each other messages saying "let's manipulate the price upwards so that we can make more money".