Smith was articulating a basic truth: when an industry grows concentrated, it grows cozy. Cultural differences between dominant firms are homogenized as top executives move from company to company, cross-pollinating attitudes and approaches. Ambituous, firm-hopping workaholic top brass make all their friends at the office, and so their former colleagues from one or two jobs back remain in their social circles.

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Once an industry consists of half a dozen firms, the people running those companies constitute an incestuous financial polycule. They are executors of one anothers' estates, best men and maids of honor at one anothers' weddings, godparents to each others' kids. They play on the same softball teams and take family vacations together.

It would be heartwarming if it wasn't so costly to the rest of us.

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Remember Smith's maxim: "the conversation ends in a conspiracy against the publick, or in some contrivance to raise prices." Class solidarity among corporate executives forms a united front to screw us in every conceivable way, from corrupting our politicians to maiming and cheating workers to gouging buyers.

That's the basis of American #antitrust law.

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When Robert Sherman was stumping for the passage of the #ShermanAct, America's first major antitrust law, he thundered "If we will not endure a King as a political power we should not endure a King over the production, transportation, and sale of the necessaries of life. If we would not submit to an emperor we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity":

https://pluralistic.net/2022/02/20/we-should-not-endure-a-king/

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Or rather, that *was* the basis of American antitrust law - until the Reagan era, when the fringe theories of the Nixonite criminal #RobertBork were elevated to a new orthodoxy. Under #Bork's conception of antitrust, monopolies were evidence of excellence. If a company puts all its competitors out of business, that must mean that it is "efficient."

In Bork's fantasy, the only way a company could attain dominance is by being so beloved by its customers that competitors wither.

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Governments that bust monopolies aren't protecting the public from "autocrats of trade"; they're overthrowing the winners of an election where you "vote with your wallet" to pick the best company.

But Bork and his co-fantasists couldn't quite manage all that with a straight face. They grudgingly admitted that a certain kind of *bad* monopolist could *hypothetically* exist, one that used its "market power" to raise prices or lower quality.

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Only when offenses against our "#ConsumerWelfare" occurred should the state should step in to protect its people.

This may sound good, but in practice, it's a dead letter. The consumer welfare test isn't "If prices go up after a merger, punish the company." Instead, the government must prove the price raises came from "market power," and not from an increase in energy or labor costs, or some other "exogenous factor," like Mercury being in retrograde:

https://pluralistic.net/2022/11/10/you-had-one-job/#thats-just-the-as

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And wouldn't you know it, it turns out that the mathematical models prescribed to distinguish greed from unavoidable circumstance inevitably "prove" that the monopolist wasn't at fault. Surely, it's just just a coincidence that the priesthood that understood how to make and interpret these models were Chicago School Economists who sold model-making as a service to companies that wanted to raise prices.

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Pro-monopoly economists insist that this isn't true, and that their theory still has room to prosecute bad monopolies and cartels where they occur - more, they say this is *already* happening. In particular, they insist that "#greedflation" can't be real, because it would require the kind of conspiracy that Smith warned of, and that their sickly antitrust enforcement is sufficient to prevent:

https://pluralistic.net/2023/03/11/price-over-volume/#pepsi-pricing-power

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This strains credulity. After all, the CEOs of giant companies in concentrated industries *openly boast* to their shareholders about how they've used the covid and Ukraine invasion shocks to hike prices to increase their profit margins - not just cover their additional costs:

https://pluralistic.net/2023/01/23/cant-make-an-omelet/#keep-calm-and-crack-on

While #excuseflation is new, open, naked price-fixing by industry cartels is not.

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Take the meat-packing industry, dominated by a tiny handful of giant corporations whose executives literally ran a betting pool on how many of their workers would get covid each week while working in their cramped, unventilated factories:

https://www.bbc.com/news/world-us-canada-55009228

These companies have seen their margins soar - up 300% over the lockdown - while their payments to ranchers and growers cratered:

https://www.reuters.com/business/meat-packers-profit-margins-jumped-300-during-pandemic-white-house-economics-2021-12-10/

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All this might leave one wondering whether there isn't something a little, you know, "conspiracy against the publick"-y going on in Big Meat?

Let me tell you about #AgriStats. Agri Stats has been around since 1985. Every large meat packer pays to be a "member" of Agri Stats, and they each submit weekly, detailed statistics about *every* aspect of their business: all their costs, all their margins, broken out by category.

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Agri Stats compiles this into phone-book-thick books that each member gets every week, telling them everything about how all of their competitors are running their businesses:

https://www.agristats.com/history

The companies whose data appears in this book are anonymized, but it's trivial to re-identify each supplier. Tyson execs hold regular "naming process" meetings where they go through new books and de-anonymize the data.

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A Butterball exec confirmed that he "can pick the companies for rankings with 100% certainty."

As @ddayen writes in #TheAmericanProspect, these books are incredibly detailed: "bird weights, freezer inventory, and 'head killed per operating hour.'" Within the cozy meat cartels, Agri Stats acts as a clearinghouse that allows every business in the industry to act in concert, running the entire meat-packing sector as a single company:

https://prospect.org/power/2023-10-03-lawsuit-highlights-why-meat-overpriced/

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As interesting as the list of Agri Stats members is, the groups that *don't* get to see Agri Stats' "books" is just as important: "farmers, workers, or retailers." Agri Stats also offers consulting services to its members. As an exec at pork processor Smithfield put it, Agri Stats advice boils down to four words "Just raise your price."

Agri Stats ranks its members based on how high their prices are - they literally publish a league table with the highest prices at the top.

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Meat packers pay bonuses to their execs based on how high the company's rank is on that table. Agri Stats meets with its members throughout the year to discuss "price opportunities" and to advise them to "exercise restraint" by restricting supply to keep prices up. When one Agri Stats member considered leaving the cartel, Agri Stats wooed them back by telling them how to make an additional $100k by raising bacon prices.

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The reason Dayen is writing about Agri Stats now is that the #DoJ #AntitrustDivision has brought an antitrust suit against them. This is part of a *wave* of antitrust actions brought by Biden's DoJ and #FTC, who, along with his #NLRB, are shaping up to be the most pugnacious, public-interest force against corporate power since the Reagan administration:

https://www.meatpoultry.com/articles/29124-doj-sues-agri-stats-for-complicity-in-meat-market-manipulation

All this enforcement isn't a coincidence.

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It comes from an explicit rejection of neoliberalism's core tenets: inequality reflects merit, monopolies are efficient, and government can't do anything. In Biden's DoJ, FTC and NLRB, they're partying like it's 1979:

https://www.eff.org/deeplinks/2021/08/party-its-1979-og-antitrust-back-baby

What's amazing about the Agri Stats conspiracy to raise prices is that it's been going *since the Reagan administration*.

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It's a smoking gun proof that "consumer welfare" *never* cared about price-fixing and robbing the public (can a gun still smoke after 40 years?). There was *never* a time when consumer welfare antitrust cared about consumer welfare. It was always and forever a front for "a conspiracy against the publick," a "contrivance to raise prices."

Big Meat has been robbing America for two generations. Some of those stolen funds were used to corrupt our political process.

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The meat sector gets $50 billion in *public subsidies* and *still* gouges us on prices and rips off its suppliers:

https://www.ewg.org/news-insights/news/2022/02/usda-livestock-subsidies-near-50-billion-ewg-analysis-finds

Which means that it's possible that we're simultaneously being ripped off with meat prices *and* that meat prices are artificially low. Try and wrap your head around that one!

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