Scale Economies, Scale Externalities: Hog Farming and the Changing American Agricultural Industry
American agriculture is inexorably concentrating into the hands of a small number of large conglomerates. Expanding farms pursuing scale economies would normally have to abide by a system of environmental and other laws that would, in theory, require farms to account for negative externalities. If those laws were observed and enforced, they would help strike a balance between the greater profitability and the larger externalities of scaling up. But these laws are not widely observed nor rigorously enforced, which upsets this balance and gives large-scale farms a cost advantage while insulating them from corresponding responsibilities.