and insider manipulation of the commodity market is of marginal significance
to the tycoon’s contribution to economic, technical, and social progress.
13.8 The Past and the Present
The comparison between the bureaucratic and baronial patterns of industrial
development can provide clarity to some contemporary debates in Australia.
It helps to explain the general weakness of Australian agribusiness and the
absence of domestic corporate strength andfinancing. The North American
grain empires established by the self-made entrepreneurs of the late nine-
teenth and early twentieth centuries laid the foundation for the corporations
that dominate the wheat trade today. The Food and Agriculture Organization
of the United Nations (FAO) reported, in 2003, that 60 per cent of the world’s
grain-handling facilities were in the hands of four corporations: Cargill, CHS,
Arthur Daniels Midland, and General Mills. All four began life in Minneapolis
during the grain boom.
General Mills began life as the Minneapolis Milling Company in 1856,
founded by Illinois Congressman Robert Smith, and was bought byflour
baron Cadwallader Colden Washburn, who built a dam, canal, and water
tunnels to feed a network of mills. William Cargill, a Scottish immigrant sea
merchant, established the Cargill Elevator Company in Minneapolis in the
late 1880s, and grew his business by establishing a network of elevators along
the tracks built by James Hill’s Great Northern. It is now the largest privately
held corporation in America and the main competitor to Arthur Daniels
Midland, which began life as the Arthur-Daniels Linseed Company in Minne-
apolis is 1923. CHS is the descendant of the North Pacific Grain Growers’
cooperative, established in Minnesota in 1929.
TheSaskatchewanWheatPoolinCanadabecameaprivatecorporationin1996
and launched a successful takeover of its Winnipeg-based competitor, Agricore
United, in 2007. It now operates as Viterra—a wholly owned subsidiary of
Glencore—andisthemajorgrainhandlerinSouthAustraliaandwesternVictoria.
The landscape of the Australian grain industry today is a consequence of the
triumph of the baronial model over the bureaucratic model of wheat handling in a
contest played out a century ago. Its lessons should not be allowed to go to waste.
References
ABS (Australian Bureau of Statistics). 1953.Official Year Book of the Commonwealth Australia,
cat. 1301.0. Canberra: Australian Bureau of Statistics.
Anderson, H. 1958.Wheat Handling. Melbourne: Macmillan.
Barons versus Bureaucrats