The Illusion of Choice

   The majority of the world's economy is based on some form of capitalism.  The idea behind capitalism, especially in its laissez-faire form, is that competitive markets of privately owned industries work to increase the growth of our economy and act to control prices through competition and supply and demand.  The strength of such an economy lies in the diversity of its participants, just as diversity is the strength of an ecosystem.  Competition is incredibly important in promoting the health of the economy and, frequently, the people and environment.  Theoretically, as consumers, we can essentially choose between those producers based on their price, quality, and even behavior within society.  We vote with our dollars as to whom is going to succeed and who is going to fail.  The higher the number of competitors, the higher the impact of with whom we choose to spend as market share is spread in reasonable quantities amongst the products of that segment of the industry.  A problem arises, however, when the number of competitors decrease as our options of with whom to "vote with our dollars" has diminished impact.  Called an oligopoly, this kind of market can either create fierce competition or collusion.

Oligopolies have other effects beyond fierce competition and collusion.  In an oligopoly, a mere handful of companies control the market in which they participate.  This creates, in itself, very powerful entities with extreme economic power that create a barrier to entry for a new producer to join the market.  In a sense, it's like imagining a fight between a pit bull and a chihuahua.  Although there may be the unique instance where a chihuahua may win, most of the time the bigger dog is going to be successful.  In an oligopoly, a winning chihuahua is more likely to be acquired and absorbed into the larger competitor.  In fact, one of the most common and frequently used corporate strategies is acquisition.  Regardless of whether the acquired companies succeeds or fails post-acquisition, it still acts in the parent corporation's best interest by eliminating competition.   This is, essentially, the death of the "American Dream". 

My father was one of those dreamers.  In 1976 with a mere $10,000, he became a service station dealer.  By around 1999, his $10,000 investment had grown into a corporation that was valued at $32 million in capital assets.  According to one of Texaco's marketing representatives at the time, my father's sales constituted 50% of all gasoline sales west of the Willamette River and was the largest volume gasoline dealer in the entire Pacific Northwest.  Thinking back to the pit bull vs. chihuahua analogy, it's not surprising what happened to his business.  Just a year later, Texaco, his host brand, attempted to acquire his company for $30 million.  My father refused and for a variety of reasons, some of which Texaco itself had a large hand in, his company is no more.  No matter what tactic my father tried, Shell-Texaco's control of the gasoline market followed him until his business was no more.  I do not think that my father's own experience is something novel or unique.  Instead, it is simply par for the course and something that occurs in nearly every industry. 

To prove my theory that the power of oligopolies and their acquisition strategies have put a relatively unseen stranglehold on competition and an entry barrier, I did what anyone has to do on an at least once a week basis--I went grocery shopping.  I headed down to Safeway (yet another large corporate entity) and grabbed a cart.  My goal for my shopping trip wasn't simply to pick up the Throwback Pepsi that I adore.  It was to actually start looking at what was lining the shelves themselves.  As a mom, I can probably list off at least a hundred different food brands from Frito-Lay to Kraft Mac and Cheese to Progresso soups.  I have considered myself to be a fairly ethical consumer who tends to purchase the less commonly known brands in an effort to at least give what I perceive as "chihuahuas" a bit of chance for my economic "vote".   We don't eat Ball Park or Oscar Meyer hot dogs--we eat Hebrew National.  I only buy Oroweat because I know that Oroweat has bakeries in the area and I want to support my local community.   Just like I am more likely to buy a Reser's brand food item than say Mission because it is in support of my local economy.  Walking through a grocery store, we seemingly have at our disposal a veritable smorgasbord of brands to choose from.   It isn't true.

Starting in the produce section, who is selling what is really hard to glean but I am aware that a number of farms have been accumulated into super farms of a sort.  I'm not going to even try to figure out who grew the lettuce I bought yesterday.  It's simply too hard but the moment I started passing through the rest of the aisles and actually looking at labels on some of the foods randomly, I began seeing a common theme.  It became almost poignant in the cereal aisle where the mass majority of that particular aisle consisted of either three brands--Kellogg's, Post, or General Mills. Even what appeared to be small brand less familiar cereals generally fell under the blanket of one of those three.  It was with near desperation that I finally found a cereal that was not affiliated with one of those three companies--Barbara's cereal.  In the basket, it went alongside the two heads of lettuce probably grown on a super farm. 

From product to product as I, with increasing panic, examined labels of what I perceived to be various brands, I discovered that a massive percentage of the food stocking the shelves at Safeway and probably any other grocery store--even locally owned--ended up going to one of 4 major food industry producers--ConAgra, General Mills, Kelloggs, or Kraft.  My estimate is that at least 75% of the total shelf space within a grocery store is being utilized by one of these four companies.  I had always known on some level that many of our products lining our grocery store shelves probably were part of a larger corporation but I had never really considered just how extensive it was.  By the time I left the grocery store, I was in a state of shock.  It was far worse than I had ever imagined.  When I got home, I was frantically scouring the labels of the products that lined my own shelves.  ConAgra, General Mills, Kelloggs or Kraft--nearly everything my children and I eat was manufactured by one of these four companies.  Even my ethical choice, my beloved "Hebrew National" hotdogs were merely yet another brand owned by ConAgra.  My beloved Oroweat?  Well that turns out to be a brand under Bimbo Bakeries.  They are apparently one of the world's largest bakeries and also make Wonderbread.

When we walk into a grocery store, we think we have so much choice when it comes to who is going to be the recipient of our voting dollar.  Unless we want to make everything from scratch, what we face as we go through the aisles isn't really freedom of choice.  It's the illusion of choice.  It's sad and ironic that the only areas where there seemed to be more diversity of choice in Safeway was in the beer and wine departments and on the dog food shelves.  Some of you may not think that this is necessarily a bad thing but it's actually a breathtakingly, horrifying situation that we find ourselves in.  Thinking back upon what I have previously said in regards to the importance of diversity within a market to not only promote growth within the economy but also assure the health of both people and the environment, it is absolutely disturbing that the companies who are feeding us the majority of our foodstuffs are in fact an oligopoly.  We are talking about the sustenance of our lives.  That's chilling and no matter how hard you try to find an alternative, odds are what you are going to eat, what you're going to feed your children will most likely still go to those four companies. 

We wonder how the hell we got into this economic situation where economic wealth has been piling up towards the top 1%.  This is part of the reason how.  We think we have all these differing choices and, in actuality, it's all an illusion--magic trick of different product name and fine print.   Below are links to the product listings of ConAgra, General Mills, Kellogg's and Kraft.  See for yourself the reality of your choice. 

ConAgra
General Mills
Kellogg's
Kraft