E. Coli and capitalism

E. Coli

About 3 years ago I began buying meat or fish from Fresh Direct and Whole Foods in New York. The first is an Internet-based retailer. You order online and deliveries are made to your apartment from warehouses in the outer boroughs. The advantage supposedly to Fresh Direct was that the food was under tighter control than in supermarkets where meat and fish are sold long after their expiration date. Their website brags:

Our food comes directly from farms, dairies and fisheries (not middlemen), so it’s several days fresher and a lot less expensive when it gets to your table. Our fully refrigerated, state-of-the-art facility (minutes from Manhattan in Long Island City) lets us meet standards no retail store in the country can match. We follow USDA guidelines and the HACCP food safety system in all our fresh storage and production rooms. Since customers don’t shop in our facility, we can maintain different environments for each type of food we sell. For example, we have seven different climates for handling produce, ensuring that the bananas are as happy as the potatoes.

As much as I enjoyed the convenience of ordering from Fresh Direct, I cut them out last October when I discovered that the initial capital investment came from Peter Ackerman, a George Soros type investor who funds NGO’s around the world dedicated to overthrowing the latest designated enemy of the U.S. State Department–including the Albert Einstein Institute that Stephen Zunes is haplessly trying to defend against the charge of meddling in Venezuela’s internal politics.

Whole Foods, on the other hand, is a nationwide chain that first established a foothold in New York a few years ago. Whatever I wasn’t buying from Fresh Direct, I’d pick up at Whole Foods. As its name implies, it puts a heavy emphasis on organic meat and produce. Their website, competing with Fresh Direct as to who is best positioned to Save the Planet, informs us:

This is where it all began. Whole Foods Market is all about organics, and organics is all about respect for the earth and the natural processes that have nourished us for millennia. Organic agriculture works in harmony with Nature to produce food that is free of man-made toxins, promoting the health of consumers, farmers and the earth, with an eye to maintaining that health far into the future.

Organic farming is a hopeful enterprise, practiced with compassion and empathy for the land and the creatures upon it.

Somehow, the “health of consumers” went by the wayside this week when Whole Food was implicated in a major E. Coli outbreak, as today’s Washington Post reports:

Whole Foods Market pulled fresh ground beef from all of its stores Friday, becoming the latest retailer affected by an E. coli outbreak traced to Nebraska Beef, one of the nation’s largest meatpackers. It’s the second outbreak linked to the processor in as many months.

The meat Whole Foods recalled came from Coleman Natural Foods, which unbeknownst to Whole Foods had processed it at Nebraska Beef, an Omaha meatpacker with a history of food-safety and other violations. Nebraska Beef last month recalled more than 5 million pounds of beef produced in May and June after its meat was blamed for another E. coli outbreak in seven states. On Friday it recalled an additional 1.2 million pounds of beef produced on June 17, June 24 and July 8, which included products eventually sold to Whole Foods. The recall is not related to the recent spate of E. coli illnesses among Boy Scouts at a gathering in Goshen, Va.

Whole Foods officials are investigating why they were not aware that Coleman was using Nebraska Beef as a processor, spokeswoman Libba Letton said.

Also of some interest in light of the Democratic Party’s “change” mantra is the role of a Democratic Governor in doing favors for Nebraska Beef:

The force behind Nebraska Beef is Nebraska businessman William Hughes. Hughes was a top executive at the now-defunct BeefAmerica. In 1997, the USDA yanked its inspectors from BeefAmerica’s Norfolk, Neb., plant because of repeated sanitation violations, including contamination of meat with fecal matter. The company had to recall more than 600,000 pounds of beef after the USDA traced E. coli O157:H7-tainted meat from a Virginia retailer to the Omaha packer. It filed for bankruptcy the following year.

By then, Hughes was already part of a group of Nebraska Beef investors. The state gave the company additional financial support in the form of $7.5 million in tax credits under its Quality Jobs Act. Then-Gov. Ben Nelson (D), now a U.S. senator, sat on the three-member jobs board that approved the tax credits. Nelson’s former law firm, Lamson, Dugan and Murray, represents Nebraska Beef.

While state leaders welcomed Nebraska Beef and the jobs that came with it, residents who lived near the plant did not, and for more than a decade, they battled the company over manure strewn in the street and workers walking off the kill floor and into the local grocery store covered in cow splatter, said South Omaha resident Janet Bonet.

Labor unions have also criticized Nebraska Beef over its labor practices. Since 1998, the company has had 47 workplace safety violations and paid more than $100,000 in fines, Occupational Safety and Health Administration records show. Lamson said most were not serious.

I have never bought beef at Whole Food, but now wonder about the chicken and fish that I have. For that matter, the food could be just as unsavory as John Mackey, the founder of Whole Foods, another businessman with political ambitions as grandiose as Peter Ackerman’s. Starting off as a leftist undergraduate at the U. of Texas, Mackey evolved into a libertarian as soon as he started a food business as he explained in a salon.com interview:

When I was in my very early 20’s I believed that democratic socialism was a more “just” economic system than democratic capitalism was. However, soon after I opened my first small natural food store back in 1978 with my girlfriend when I was 25, my political opinions began to shift…

I didn’t think the charge of capitalist exploiters fit Renee and myself very well. In a nutshell the economic system of democratic socialism was no longer intellectually satisfying to me and I began to look around for more robust theories which would better explain business, economics, and society. Somehow or another I stumbled on to the works of Mises, Hayek, and Friedman, and had a complete revolution in my world view. The more I read, studied, and thought about economics and capitalism, the more I came to realize that capitalism had been misunderstood and unfairly attacked by the left.

A couple of years ago Mackey made the news for using a pseudonym on the Yahoo stock market forum in an attempt to drive down the price of a company he sought to take over, as Smartmoney.com reports:

In January 2005, someone using the name “Rahodeb” went online to a Yahoo stock-market forum and posted this opinion: No company would want to buy Wild Oats Markets Inc., a natural-foods grocer, at its price then of about $8 a share.

“Would Whole Foods buy OATS?” Rahodeb asked, using Wild Oats’ stock symbol. “Almost surely not at current prices. What would they gain? OATS locations are too small.” Rahodeb speculated that Wild Oats eventually would be sold after sliding into bankruptcy or when its stock fell below $5. A month later, Rahodeb wrote that Wild Oats management “clearly doesn’t know what it is doing. . . . OATS has no value and no future.”

The comments were typical of banter on Internet message boards for stocks, but the writer’s identity was anything but. Rahodeb was an online pseudonym of John Mackey, co-founder and chief executive of Whole Foods Market Inc. Earlier this year, his company agreed to buy Wild Oats for $565 million, or $18.50 a share.

Obviously, despite the lip-service paid to transparency in the marketplace, Mackey is not above tipping the scale in his favor.

This is not the first time that an “organic” food producer has been implicated in an E. Coli outbreak. Only 2 years ago, Earthbound Farms spinach was contaminated with the deadly bacteria. Earthbound Farms, like Coleman, Fresh Direct and Whole Foods, is another “green” producer whose website states:

More than 24 years ago, Earthbound Farm started in a backyard garden, where we grew food we felt good about serving to our friends and family. And that meant farming organically.

Today, our commitment to the health of those who enjoy our harvest is stronger than ever. Earthbound Farm certified organic produce is grown by about 150 dedicated farmers, who use the same organic farming methods on the smallest farm (about 5 acres) as on the largest (about 680 acres). Together, we’re working to bring healthy and delicious organic food to people wherever they live and shop, and to protect the environment.

Since E. Coli is associated with animal waste, it seemed odd at first that spinach could become tainted. It turned out that animal waste was involved, as radical food journalist Michael Pollan explained in an October 15, 2006 N.Y. Times piece titled “The Vegetable-Industrial Complex“:

Wendell Berry once wrote that when we took animals off farms and put them onto feedlots, we had, in effect, taken an old solution – the one where crops feed animals and animals’ waste feeds crops – and neatly divided it into two new problems: a fertility problem on the farm, and a pollution problem on the feedlot. Rather than return to that elegant solution, however, industrial agriculture came up with a technological fix for the first problem – chemical fertilizers on the farm. As yet, there is no good fix for the second problem, unless you count irradiation and Haccp plans and overcooking your burgers and, now, staying away from spinach. All of these solutions treat E. coli 0157:H7 as an unavoidable fact of life rather than what it is: a fact of industrial agriculture.

But if industrial farming gave us this bug, it is industrial eating that has spread it far and wide. We don’t yet know exactly what happened in the case of the spinach washed and packed by Natural Selection Foods, whether it was contaminated in the field or in the processing plant or if perhaps the sealed bags made a trivial contamination worse. But we do know that a great deal of spinach from a great many fields gets mixed together in the water at that plant, giving microbes from a single field an opportunity to contaminate a vast amount of food. The plant in question washes 26 million servings of salad every week. In effect, we’re washing the whole nation’s salad in one big sink.

My father, who died in 1970, was the owner of a fruit and vegetable store in the Catskill Mountains. He also sold fish in the wintertime. After an A&P moved into town in the mid 1960s, his business started to go downhill–a trend that had begun with the decline of the tourist industry a few years earlier.

To this day, I have never tasted fruit and vegetables like those that he sold. Compared to the garbage you buy in supermarkets today, they were like a Platonic ideal. Biting into a tomato in the mid 1950s was like partaking in the Eternal Essence of Tomato. The same thing was true of the fish that he sold which came from fresh water lakes and the ocean, never from fish farms. Some fish that he sold–like Pike or Yellow Perch–are simply unavailable today, even in boutique stores in the richest neighborhoods.

Nearly everything he sold was seasonal and native to a particular section of the U.S. This was long before the days when grapes came from Chile and tomatoes from Mexico. You bought grapes in the summertime because that is when they were available. In December you ate apples from the Pacific Northwest and oranges from Florida and that was that. Whatever you sacrificed in terms of choice was more than adequately compensated by taste. Since much of the fruit and produce was still being produced by relatively small farms, there was less susceptibility to the kinds of bacterial infection described by Michael Pollan.

There has been a tendency among some on the left to think uncritically about the “benefits” of industrial farming, as if input-output ratios based on minimal expenditures is the sole criterion. In many ways, the crisis of agriculture today is no different than it was in Marx’s day. By substituting industrial farming techniques for the “backward” methods of the past, the door is open to the kind of problems Marx described in V.3 of Capital:

If small-scale landownership creates a class of barbarians standing half outside society, combining all the crudity of primitive social forms with all the torments and misery of civilized countries, large landed property undermines labor-power in the final sphere to which its indigenous energy flees, and where it is stored up as a reserve fund for renewing the vital power of the nation, on the land itself. Large-scale industry and industrially pursued large-scale agriculture have the same effect. If they are originally distinguished by the fact that the former lays waste and ruins labour-power and thus the natural power of man, whereas the latter does the same to the natural power of the soil, they link up in the later course of development, since the industrial system applied to agriculture also enervates the workers there, while industry and trade for their part provide agriculture with the means of exhausting the soil.

Marx and Engels’s solution in the Communist Manifesto appears as timely as ever, even if through its implementation we will once again suffer the hardship of only being able to eat grapes in the summertime:

Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.