In 1932, North Dakotans voted 57 to 43 to ban corporations from owning or leasing farmland. In 1963, the legislature enacted a law that required pharmacies be owned by a state-registered pharmacist. The effect was to ban chains, except those operating at the time the law was passed. In 1980, North Dakotans voted to establish a State Housing Finance Agency to provide mortgages to low-income households.
In recent years several of these laws protecting independent farmers and businesses have come under attack by big corporations. After several attempts by Big Pharmacy failed to convince the legislature to repeal the Pharmacy Ownership Law, Walmart spent $9.3 million to finance a ballot initiative. In November 2014, the initiative lost by a vote of 59-41.
In 2015, big corporations did convince the legislature to overturn the 1932 anti-corporate farming law. This June, North Dakotans voted to reinstate the old law by a resounding margin of 76-24.
Today the economic structure of North Dakota reflects its focus on independent and cooperative businesses. The Pharmacy Ownership law, for example, has markedly benefited North Dakota. A report by the Institute for Local Self-Reliance (ILSR) found that on every key measure of pharmacy care, including quality and the price of drugs, North Dakota’s independent pharmacies outperform those of neighboring states and the U.S. as a whole. Unsurprisingly North Dakota also has more pharmacies per capita than other states. Its rural residents are more likely to have a nearby pharmacist.
North Dakota’s banking system reflects a similar community-based structure. An analysis by ILSR found that, on a per capita basis, the state boasts almost six times as many locally owned financial institutions as the rest of the nation (89 small and mid-sized community banks and 38 credit unions). These control 83 percent of the deposits of the state. North Dakota’s community banks have given 400 percent more small business loans than the national average. Student loan rates are among the lowest in the country.
As Stacy Mitchell, director of ILSR’s Community-Scaled Economy Initiativeobserves, “While the publicly owned BND might well be characterized as a socialist institution, it has had the effect of enabling North Dakota’s local banks to be very successful capitalists.” In recent years, local banks in North Dakota have earned a return on capital nearly twice that of the nation’s largest 20 banks.