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The Commercial Ecology of Scavenger Capitalism: Monsanto, Fossil Fuels, and the Remaking of a Chemical Giant

Published online by Cambridge University Press:  07 November 2017

BARTOW J. ELMORE
BARTOW J. ELMORE*
Affiliation:
Bartow J. Elmore is assistant professor of environmental history at the Ohio State University. E-mail: elmore.83@osu.edu
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Abstract

Monsanto’s transformation from a chemical firm to a biotechnology business in the 1980s and 1990s reveals that an increasingly small corporate cartel gained dominion over petroleum refining byproducts and that this concentration of ownership had profound implications for the future solvency of Monsanto. As the price of petrochemical feedstocks rose, Monsanto, a company that made 80 percent of its products from fossil fuels, began to pursue an alternative path to profits. In short, concentrated corporate ownership of critical natural resources forced some companies in the chemical commodity production business to pursue radically new ways of generating cash flow. This was especially true for scavenger capitalists such as Monsanto, firms that had historically made their money by scavenging raw material stockpiles produced by booming commercial industries. For firms invested heavily in commodity production but lacking proprietary claims to critical natural resources, the key was finding new ways to make money without depending on fossil fuels. For Monsanto, biotechnology offered a way out.

Type
Articles
Information
Enterprise & Society , Volume 19 , Issue 1 , March 2018 , pp. 153 - 178
Copyright
Copyright © The Author 2017. Published by Cambridge University Press on behalf of the Business History Conference. All rights reserved. 

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References

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Magretta, Joan. “Growth through Global Sustainability: An Interview with Monsanto’s CEO, Robert Shapiro.” Harvard Business Review 75, no. 1 (January–February 1997): 79–88.Google Scholar
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Wlasiuk, Jonathan. “A Company Town on Common Waters: Standard Oil in the Calumet.” Environmental History 19, no. 4 (2014): 687–713.Google Scholar
Zorn, Dirk, Dobbin, Frank, Dierkes, Julian, and Kwok, Man-Shan. “Managing Investors: How Finance Markets Reshaped the American Firm.” In The Sociology of Financial Markets, edited by Knorr-Cetina, Karen and Preda, Alex, 269–289. New York: Oxford University Press, 2009.Google Scholar
Forbes Google Scholar
Los Angeles Times Google Scholar
New York Times Google Scholar
Reuters Google Scholar
St. Louis Post-Dispatch Google Scholar
The Christian Science Monitor Google Scholar
The Sun (Baltimore) Google Scholar
The Wall Street Journal Google Scholar
Washington University Libraries, St. Louis, MOGoogle Scholar
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Monsanto Company. Annual Reports, multiple years. ProQuest Historical Annual Reports, http://www.proquest.com/products-services/pq_hist_annual_repts.html Google Scholar
Beckman, Jayson, Borchers, Allison, and Jones, Carol A.. Agriculture’s Supply and Demand for Energy and Energy Products, EIB-112. United States Department of Agriculture, Economic Research Service (May 2013): i–29. https://www.ers.usda.gov/webdocs/publications/43756/37427_eib112.pdf?v=41407 Google Scholar
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Aftalion, Fred. A History of the International Chemical Industry: From the “Early Days” to 2000. Philadelphia: Chemical Heritage Press, 2001.Google Scholar
Bartow, J. Elmore. Citizen Coke: The Making of Coca-Cola Capitalism. New York: W. W. Norton, 2015.Google Scholar
Chandler, Alfred. Shaping the Industrial Century: The Remarkable Story of the Evolution of the Modern Chemical and Pharmaceutical Industries. Cambridge, MA: Harvard University Press, 2005.CrossRefGoogle Scholar
Chandler, Alfred. The Visible Hand: The Managerial Revolution in American Business. Belknap Press of Harvard University Press, 1977.Google Scholar
Club of Rome. The Limits to Growth: A Report for the Club of Rome’s Project on the Predicament of Mankind. New York: Universe Books, 1972.Google Scholar
de la Peña, Carolyn. Empty Pleasures: The Story of Artificial Sweeteners From Saccharin to Splenda. Chapel Hill: University of North Carolina Press, 2010.Google Scholar
Forrestal, Dan J. Faith, Hope and $5,000: The Story of Monsanto: The Trials and Triumphs of the First 75 Years. New York: Simon and Schuster, 1977.Google Scholar
Hays, Samuel. Conservation and the Gospel of Efficiency: The Progressive Conservation Movement, 1890–1920. Cambridge, MA: Harvard University Press, 1959.Google Scholar
Heller, Chaia. Food, Farms, and Solidarity: French Farmers Challenge Industrial Agriculture and Genetically Modified Crops . Durham, NC: Duke University Press, 2013.Google Scholar
Jones, Chris. Routes of Power: Energy and Modern America. Cambridge, MA: Harvard University Press, 2014.Google Scholar
Love, Dennis. My City Was Gone: One American Town’s Toxic Secret, Its Angry Band of Locals, and a $700 Million Day in Court. New York: William Morrow, 2006.Google Scholar
Mahoney, Richard J. A Commitment to Greatness. St. Louis, MO: Monsanto Company, 1988.Google Scholar
Mahoney, Richard J. In My Opinion: Writings on Public Policy, 1995–2002. St. Louis, MO: Murray Weidenbaum Center on the Economy, Government, and Public Policy at Washington University in St. Louis, 2003.Google Scholar
Nelson, Michael. Guide to the Presidency and the Executive Branch. Washington, DC: CQ Press, 2013.Google Scholar
McNeill, J. R. Something New Under the Sun: An Environmental History of the Twentieth-Century World. New York: W. W. Norton, 2000.Google Scholar
Ndiaye, Pap A. Nylon and Bombs: DuPont and the March of Modern America, trans. Forster, Elborg. Baltimore, MD: The Johns Hopkins University, 2007.Google Scholar
Spears, Ellen. Baptized in PCBs: Race, Pollution, and Justice in an All-American Town. Chapel Hill: University of North Carolina Press, 2014.Google Scholar
Ott, Julia. When Wall Street Met Main Street: The Quest for an Investor’s Democracy. Cambridge, MA: Harvard University Press, 2011.Google Scholar
Robin, Marie-Monique. The World According to Monsanto: Pollution, Corruption, and the Control of the World’s Food Supply. New York: New Press, 2012.Google Scholar
Sabin, Paul. The Bet: Paul Ehrlich, Julian Simon, and Our Gamble Over Earth’s Future. New Haven, CT: Yale University Press, 2013.Google Scholar
Williamson, Harold F. The American Petroleum Industry: The Age of Energy, 1899–1959. Evanston, MA: Northwestern University Press, 1963.Google Scholar
Williamson, Harold F, and Daum, Arnold. The American Petroleum Industry: The Age of Illumination, 1859–1899. Westport, CT: Greenwood Press, 1981.Google Scholar
Beckert, Sven, Burgin, Angus, James Hudson, Peter, Hyman, Louis, Lamoreaux, Naomi, Marler, Scott, Mihm, Stephen, Ott, Julia, Scranton, Philip, and Shermer, Elizabeth Tandy. “Interchange: The History of Capitalism.” Journal of American History 101, no. 2 (September 2014): 503–536.Google Scholar
Benbrook, Charles M. “Impacts of Genetically Engineered Crops on Pesticide Use in the U.S.—The First Sixteen Years.” Environmental Sciences Europe 24, no. 1 (2012): 1–13.CrossRefGoogle Scholar
Black, Brian C., Merrill, Karen R., and Priest, Tyler, eds. “Oil in American History.” Special issue, Journal of American History 99 (June 2012): 18–255.Google Scholar
Coase, Ronald H. “The Nature of the Firm.” Economica 4, no. 16 (November, 1937): 386–405.CrossRefGoogle Scholar
Duke, Stephen O., and Powles, Stephen B.. “Glyphosate-Resistant Crops and Weeds: Now and In the Future.” AgBioForum 12, no. 3 and 4 (2009): 346–357.Google Scholar
Davis, Gerald F. “A New Finance Capitalism? Mutual Funds and Ownership Re-concentration in the United States.” European Management Review 5 (2008): 11–21.Google Scholar
Desrochers, Pierre. “How Did the Invisible Hand Handle Industrial Waste? By-product Development before the Modern Environmental Era.” Enterprise and Society 8, no. 2 (June 2007): 348–374.Google Scholar
Desrochers, Pierre. “Industrial Ecology and the Rediscovery of Inter-Firm Recycling Linkages: Some Historical Perspective and Policy Implications.” Industrial and Corporate Change 11, no. 5 (Nov. 2002): 1031–1057.Google Scholar
Englander, Ernie, and Kaufman, Allen. “The End of Managerial Ideology: From Corporate Social Responsibility to Corporate Social Indifference.” Enterprise and Society 5, no. 3 (2004): 404–450.Google Scholar
Helsel, Zane R. “Energy and Alternatives for Fertilizer and Pesticide Use.” In Energy in Farm Production, edited by Fluck, R. C., vol. 6, 177–201. New York: Elsevier, 1992.Google Scholar
Helsel, Zane R. “Energy in Pesticide Production and Use.” In Encyclopedia of Pest Management, edited by Pimentel, David, 1–4. London: Taylor and Francis, 2006.Google Scholar
Helsel, Zane R. “Energy Use and Efficiency in Pest Control, Including Pesticide Production, Use, and Management Options.” eXtension, April 7, 2016. http://www.extension.org/pages/62513 Google Scholar
Hurley, Andrew. “Creating Ecological Wastelands: Oil Pollution in New York City, 1870–1900.” Journal of Urban History 20, no. 4 (1994): 340–364.CrossRefGoogle Scholar
Hyman, Louis. “Rethinking the Postwar Corporation: Management, Monopolies, and Markets.” In What’s Good For Business: Business and Politics Since World War II, edited by Zelizer, Julian and Philips-Fein, Kimberly, 195–211. Oxford: Oxford University Press, 2011.Google Scholar
Langlois, Richard N. “The Vanishing Hand: The Changing Dynamics of Industrial Capitalism.” Industrial and Corporate Change 12, no. 2 (2003): 351–385.Google Scholar
Lazonick, William. “The Financialization of the U.S. Corporation: What Has Been Lost, and How It Can Be Regained.” Seattle University Law Review 36 (2013): 857–909.Google Scholar
Lazonick, William, and Sullivan, Mary O’. “Maximising Shareholder Value: A New Ideology for Corporate Governance.” Economy and Society 29 (2000): 13–35.Google Scholar
Magretta, Joan. “Growth through Global Sustainability: An Interview with Monsanto’s CEO, Robert Shapiro.” Harvard Business Review 75, no. 1 (January–February 1997): 79–88.Google Scholar
Soane, B. D., Ball, B. C., Avidsson, J., Basch, G., Moreno, F., and Roger-Estrade, J.. “No-till in Northern, Western and South-western Europe: A Review of Problems and Opportunities for Crop Production and the Environment.” Soil and Tillage Research 118 (2012): 66–87.Google Scholar
Stone, Glenn Davis. “Field Versus Farm in Warangal: Bt Cotton, Higher Yields, and Larger Questions.” World Development 39, no. 3 (March 2011): 387–398.CrossRefGoogle Scholar
Wlasiuk, Jonathan. “A Company Town on Common Waters: Standard Oil in the Calumet.” Environmental History 19, no. 4 (2014): 687–713.Google Scholar
Zorn, Dirk, Dobbin, Frank, Dierkes, Julian, and Kwok, Man-Shan. “Managing Investors: How Finance Markets Reshaped the American Firm.” In The Sociology of Financial Markets, edited by Knorr-Cetina, Karen and Preda, Alex, 269–289. New York: Oxford University Press, 2009.Google Scholar
Forbes Google Scholar
Los Angeles Times Google Scholar
New York Times Google Scholar
Reuters Google Scholar
St. Louis Post-Dispatch Google Scholar
The Christian Science Monitor Google Scholar
The Sun (Baltimore) Google Scholar
The Wall Street Journal Google Scholar
Washington University Libraries, St. Louis, MOGoogle Scholar
Food and Agriculture Organization (FAO) of the United Nations. Current World Fertilizer Trends and Outlook to 2016. FAO: Rome, 2012.Google Scholar
Monsanto Company. Annual Reports, multiple years. ProQuest Historical Annual Reports, http://www.proquest.com/products-services/pq_hist_annual_repts.html Google Scholar
Beckman, Jayson, Borchers, Allison, and Jones, Carol A.. Agriculture’s Supply and Demand for Energy and Energy Products, EIB-112. United States Department of Agriculture, Economic Research Service (May 2013): i–29. https://www.ers.usda.gov/webdocs/publications/43756/37427_eib112.pdf?v=41407 Google Scholar
Schnepf, Randy. Energy Use in Agriculture: Background and Issues. Congressional Research Service Report, Order Code RL 32677 (November 19, 2004), http://nationalaglawcenter.org/wp-content/uploads/assets/crs/RL32677.pdf Google Scholar
U.S. House Committee on Ways and Means Hearing, Energy Crisis and Proposed Solutions, Part 4, March 14, 17, 1975, 94 Cong., 1st Sess., 1623.Google Scholar
U.S. Tariff Commission. Report on Dyes and Related Coal-Tar Chemicals, 1918. Washington: Government Printing Office, 1919.Google Scholar