9 - Economic governance and the American meatpacking industry

Summary

In recent years, the meatpacking industry has received public attention as an industry in turmoil. Bankruptcies, corporate restructuring, labor strikes, internal labor conflict, and wage reductions are typical themes in news reports on the industry. Although these reports present images of an industry undergoing major change, they rarely explore the fundamental political and economic properties so essential to understanding that change. This research begins such an effort by analyzing the changing nature of economic governance in the industry.

In presenting the history of governance transformations in the meatpacking industry, I employ the tools of analysis that were introduced in Chapter 1, particularly the heuristic model of the transformation process. In applying this framework, this chapter highlights markets and corporate hierarchy. Although other modes of governance have played a role, transitions to and from markets and corporate hierarchy have dominated the meatpacking industry. Thus, a central concern in this chapter is the conditions that facilitate transformations between these two forms of governance.

In tracing governance transformations, this study divides the history of meatpacking into three major time periods and follows a common format within each. First, each historical period begins with a discussion of economic changes and other pressures on the existing system of coordination. This discussion often highlights changing technology, but other factors are considered as well. Second, the search process is analyzed. The focus is on the role played by existing governance mechanisms and the state in successful or unsuccessful adaptations by economic actors to the new environment.