From the editors: this is part 1 of a series on America's Broken Promise by Joe Maxwell that will be releasing over the next several weeks. Joe Maxwell is the President of Farm Action Fund. In this series he is going to break down the fundamental problems with the modern economy and why many American's feel they can't get ahead.
My father and grandfather believed that if they worked hard, took responsibility, and served their community, they had a fair opportunity to build a good life. They could afford a home, put groceries on the table for their family, pay the energy bill, and own an automobile that got them to work and where they needed to go. Their labor gave them economic independence.
That, to me, is the American promise.
It isn't a guarantee that everyone will succeed or that everyone will have the same amount of wealth. It is the promise that in this blessed, extraordinarily wealthy, and productive country, people who work hard and take responsibility should have a fair opportunity to provide for their families, own something of their own, build a better life, and leave something for the next generation.
America has the land, natural resources, ingenuity, technology, and people to produce abundance on a scale my grandparents could scarcely have imagined.
Yet for millions of Americans, the ordinary expectations of my father's and grandfather's generations are becoming extraordinary achievements.
Why?
Over the next three articles, I want to examine three things every American depends on—food, energy, and shelter—and ask whether the markets that provide them still deliver capitalism's benefits to the people whose labor makes our prosperity possible.
At the heart of that question lies the fundamental force that makes capitalism work:
Competition.
Capitalism is more than private ownership and the ability to make money. It is a system in which people and businesses compete to earn our business.
Competition gives entrepreneurs a reason to innovate. It gives workers and producers alternatives. It gives consumers the power to choose. It rewards businesses that serve people well and disciplines those that don't. Competition also puts a check on economic power. A business may want to charge more, pay less, or impose tougher terms, but in a competitive market it risks losing customers, workers, or suppliers to someone else. Supply and demand still matter, but competition helps ensure that prices and terms are tested in a marketplace rather than dictated by whoever holds the most power.
Protecting competition isn't an attack on capitalism. It is the defense of capitalism.
Government shouldn't run our markets or decide who wins and who loses. But it does have a responsibility to establish and enforce laws and rules that protect competition. Government shouldn't determine the outcome of competition. It should protect the conditions under which competition occurs. Demanding that capitalism work for the people whose labor and enterprise make it possible isn't socialism. It is what a competitive capitalist economy is supposed to do.1
Without competition, markets stop disciplining economic power. Power becomes concentrated in fewer hands, while farmers, workers, small businesses, and consumers are left with fewer choices.
And when that happens, the American promise begins to break down.
Follow the Food Dollar
Consider the food we eat.
In 2024, Americans spent about $2.58 trillion on food. Of the $2.17 trillion spent on domestically produced food, American farms received about $256.7 billion for the commodities that went into it. That means farmers received 11.8 cents of each dollar spent on domestically produced food. The remaining 88.2 cents covered everything that happened after the farm gate—processing, transportation, storage, wholesaling, retailing, and other costs.2
That doesn't mean corporations simply pocketed the other 88.2 cents. Those activities involve real work and real costs.
But it does raise a question:
Where does the economic power reside between the farm gate and the grocery cart?
Think about what happens when you have only one place to sell something you produce—or only one realistic place to buy something you need.
You have less power in the transaction. You may have to accept the price or terms offered because walking away isn't really an option.
Competition changes that relationship. When there are other buyers and sellers, people have choices. They can compare offers, negotiate, and walk away from a bad deal.
Joe Maxwell
For more on farming and the American economy
That ability to choose is one of the ways capitalism gives ordinary people economic independence.
In a competitive economy, one of the most important freedoms a person possesses is the freedom to say no—to a bad price, a bad contract, a bad job, or a business that isn't serving them. That freedom exists only when there is somewhere else to go.
When the Farmer Runs Out of Buyers
I see this firsthand in agriculture.
Take beef.
America has thousands of cattle producers. But thousands of sellers do not necessarily make a competitive market if those farmers and ranchers face only a handful of realistic buyers.
In 1980, the four largest beef packers accounted for about 36 percent of purchases of steers and heifers. By 2019, that figure had reached about 85 percent. USDA has noted that cattle producers in many parts of the country may have only two to four buyers available to them.3
There is nothing inherently wrong with a large packing plant or a successful company. Scale can create efficiencies, reduce costs, and benefit consumers.
The question is what happens when a farmer has nowhere else to go.
A cattle producer doesn't need Washington to guarantee what his cattle are worth.
They need enough buyers competing against one another that the market—not a handful of powerful companies—determines what cattle are worth.
Research by economists at Iowa State University and the University of Nebraska helps explain the problem. They estimated that buyer power in the fed-cattle market resulted in an average price markdown of about $3.69 per hundredweight—or 2.6 percent of the fed-cattle price. Their research found that most of that effect came not simply from who owned the plants, but from where packing plants were located and how many cattle were already sold to the packers through a contract.4
Another packing plant may be 300 miles away, but the cost of hauling cattle that far may make it an unrealistic alternative.
Contracts can give cattle producers valuable certainty. But as more cattle are committed for sale by the farmer through contracts and fewer are sold through negotiated cash transactions, fewer cattle are involved in the trades that help establish widely used market prices. USDA itself has raised concerns about whether those increasingly thin cash markets provide sufficiently reliable price benchmarks. It’s like an auction: the more buyers who compete openly for what is being sold, the better the market can determine its value.5
So the problem isn't simply that four companies are big. The real question is whether the farmer still has meaningful choices.
Can the farmer say no to one buyer because another buyer is ready to compete for their cattle?
That is how our capitalist economic system should work. Unfortunately, today, the power in the market is concentrated in the hands of a few, which diminishes competition and erodes our capitalist system into an oligopoly market system.
The Market Behind the Grocery Shelf
The same principle applies when food reaches our communities.
USDA reports that the 20 largest food retailers accounted for 65.2 percent of food sales in 2022 among supermarkets, grocery stores, warehouse clubs, and supercenters.6
But national statistics can disguise what families experience where they actually live. USDA research found that grocery markets become considerably more concentrated when measured locally rather than nationally.7
A family doesn't buy its groceries from the national grocery market. It buys them from the stores it can realistically reach. If there are only one or two realistic choices, it matters very little that dozens of grocery companies operate somewhere else in America.
The marketplace can look more competitive on the shelf than it actually is behind the shelf.
Capitalism Works When People Have Choices
This is why I believe we need to think differently about competition.
The important question isn't simply how many companies exist. It is whether people have meaningful alternatives.
Can the cattle producer find another buyer? Can the independent processor find another customer? Can the grocer find another supplier? Can an entrepreneur enter the market with a better idea? Can a family shop somewhere else? Can a worker take his or her labor to another employer?
Those choices are not incidental to capitalism. They are what make capitalism work.
When businesses know customers can leave, they have a reason to serve them well. When buyers know farmers have somewhere else to sell, they have to compete for their cattle. When employers know workers can leave, they have to compete for their labor. When entrepreneurs can enter markets, established companies have to keep innovating and earning their customers.
Competition is capitalism's self-correcting mechanism.
When meaningful alternatives disappear, that mechanism weakens.
What Is an Economy For?
There is also a deeper question here.
An economy isn't simply a machine for producing wealth. It is the system through which people use their talents and labor to provide for their families, build businesses, buy homes, serve their communities, and hopefully leave something behind for their children.
The measure of a healthy economy cannot simply be how much wealth it produces. We should also ask whether the people doing the work have a fair opportunity to build economic independence from that work.
That doesn't mean government guarantees anyone success. It doesn't mean government decides what cattle are worth, what groceries should cost, or which businesses should survive.
It means protecting the competitive conditions that allow people to make those decisions for themselves.
A farmer needs another buyer. A small business needs another supplier. An entrepreneur needs a path into the market. A worker needs another employer. A consumer needs a meaningful choice.
The goal isn't to make every company small or punish success. It is to make sure that success does not become economic power so great that others lose the opportunity to compete.
More alternatives, not more government.
Restoring the American Promise
For my father and grandfather, economic independence wasn't an economic theory.
It was the ability to work, earn, save, own a home, feed a family, and build something for the next generation.
That opportunity should not belong only to people who already possess wealth or market power. It should belong to the farmer who raises the cattle, the worker who processes the food, the entrepreneur trying to start a business, and the family pushing a grocery cart through the store after a long day at work.
America's promise isn't that everyone will succeed. It is that everyone should have a fair opportunity to try.
And that opportunity depends upon an economy in which people retain the power to say no because they have somewhere else to go.
Freedom requires independence. Independence requires economic opportunity. And economic opportunity requires real competition.
The question isn't whether America should have capitalism.
The question is whether we will protect the competition that makes capitalism worthy of the promise we attach to it.
In the next article, I will examine another place where that promise is being tested: the energy markets that determine what it costs us to get to work, run a farm or business, heat our homes, and move nearly everything we buy.
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- Federal Trade Commission. (n.d.). Competition counts. https://www.ftc.gov/advice-guidance/competition-guidance/competition-counts
- U.S. Department of Agriculture, Economic Research Service. (2026, March 10). Food Dollar: Summary findings. https://www.ers.usda.gov/data-products/food-dollar/summary-findings
- MacDonald, J. M. (2024, January 25). Concentration in U.S. meatpacking industry and how it affects competition and cattle prices. U.S. Department of Agriculture, Economic Research Service. https://ers.usda.gov/amber-waves/2024/january/concentration-in-u-s-meatpacking-industry-and-how-it-affects-competition-and-cattle-prices
- Moschini, G., & Smith, T. J. (2026). Spatial price competition and buyer power in the U.S. beef packing industry. American Journal of Agricultural Economics, 108(3), 771–798. https://doi.org/10.1111/ajae.70003
- U.S. Department of Agriculture, Agricultural Marketing Service. (2024). Price discovery and competition in markets for fed cattle [Fact sheet]. https://www.ams.usda.gov/sites/default/files/media/ANPR_PriceDiscoveryFactsheet.pdf
- U.S. Department of Agriculture, Economic Research Service. (2026, August 17). Retailing & wholesaling: Retail trends. https://ers.usda.gov/topics/food-markets-prices/retailing-wholesaling/retail-trends
- Zeballos, E., Dong, X., & Islamaj, E. (2023). A disaggregated view of market concentration in the food retail industry (ERR-314). USDA Economic Research Service. https://ers.usda.gov/publications/105557
