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talkpolitics2011-07-18 08:38 pm
kylinrouge.livejournal.com) wrote in talkpolitics2011-07-18 08:38 pm
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Food Regulation or: You'd Think We Could All Agree On This
Well apparently I thought wrong. There is great division in these here lands over the proper handling of food regulation (or lack thereof) by our glorious Big Brother government, who exist only to extract our hard-earned tax money from us at gunpoint. Who put these clowns in power, anyway? I certainly didn't. That would require having me come out of my bunker to go to the polls, and there are Black Panthers there ready to pounce on me! But I digress.
Now, we can't have a discussion without some baselines and clarifications, the first of which is the fallacy that libertarians want anarchy. They don't- they are perfectly accepting of a nice democratic republic with a nice Constitution. They simply don't like being told what they can and can't do, and would like these restrictions kept to an absolute minimum. Fraud, perjury, forgery, violence, or really any process that relies on force or lying should be illegal, and we all agree on that.
I have a personal issue with libertarians in that some (to not cast a generalized glance) advocate a society driven by a profit-motive, but a lot of things that act toward the benefit of society go against the profit motive. Testing your food, stickers with expiration dates, very rigorous safety measures, all of these cost money and yet in a society without safety laws, these people are expected to still follow these procedures that cost them a lot of money? This didn't happen in history, and I don't know why it would happen if all regulations were removed. That's my one gripe, and I'd like to not focus on it as much to just address the issues I'm about to bring up.
To that degree, we discuss under the premise that it should be illegal to lie to your consumers. How do you keep an industry from lying to its clients? That is one of my first questions. One way is through government regulation. Here is an anecdote about how Heinz became the market leader in ketchup:
By the start of the Twentieth Century, Heinz was a major ketchup producer, but so were several companies who padded their bottom line by mixing rancid tomatoes into their product.
Seeing an opportunity, Heinz joined the chorus of scientists, consumer advocates and government officials who were clamoring for federal oversight of the processed food industry, even sending future Heinz CEO Howard Heinz to lobby President Theodore Roosevelt in favor of a the Pure Food and Drug Act, which prohibited some of the processed food industry’s most revolting practices and gave enforcement authority to the agency which would later become the FDA. In 1906 the Act passed, and most of Heinz competitors were pushed out of business.
Because Heinz was one of only a handful of major ketchup producers who were already in the business of mass producing ketchup solely from fresh tomatoes, they quickly capitalized on the vacuum that formed as the rancid ketchup industry collapsed. Heinz became the market leader, and it remains so today.
Others would advocate merely that you provide government funding to test, and require safety labels on products that may contain harmful substances. Let the people decide after reading the labels whether or not they want the product, right?
My point is simply to indicate that, despite Heinz’ belief that “pure food . . . is good business,” the truth is that thousands of American consumers bought rancid ketchup for decades, even though they had the option to choose Heinz’ safer product. Market forces left thousands of Americans sick from tomato mold. It wasn’t until the federal government got involved that rotten tomato ketchup left the shelves of local groceries.
My argument is thus: History shows that people aren't quite the rational thinkers we'd like them to be. Even today, people make poor choices all the time and it costs them dearly. We have warning labels on cigarettes, but smoking is still very popular. We have warning labels on alcohol, but that hasn't stopped alcohol-related diseases or DUIs. My argument is that warning labels are not enough. To truly remove a harmful product from the shelf is to regulate against it. To set a limit of harmful content in a product that makes it illegal to sell above that amount.
Why should we allow this to be a risk? What benefit does tainted food serve being on a shelf? Even if you allow compensation to the person who ate the tainted food, if it's deadly then they're likely going to die before they get a dime. Liability is a non-factor to the consumer when dealing with deadly substances.
In the Heinz example, they started out by advertising the product as being pure while the others used rotten tomatoes, but people still continued buying rancid ketchup. Despite having all the information, market forces continued to favor the cheaper, tainted food. Using this historical evidence, my conclusion is that people can't make rational decisions even under the best circumstances. To really understand this topic you really have to look at the pure food movement in the 1900s and how hard it was to get people to not eat rancid food. To get them not to eat contaminated meat from butchers which was food colored to not look bad. To have food produced in the same place that rats defecated in. To have no laws against expiration dates. It was very difficult in that day, despite vast amounts of information available to the people, to get them to stop poisoning themselves without laws. It sounds crazy to just believe people will eat something that can kill them, knowing it can kill them, but I believe that it's a well-educated, white, wealthy viewpoint. They don't know what it's like to be poor, hungry, and uneducated. It's just a fact of life that abject poverty causes a lot of bad decision-making, and there's no way to stop the cycle without regulation that keeps poison off the shelves.
Secondly, I believe that it makes no sense to allow a company to produce something that can kill somebody. There is no reason for it to be on the shelf in the first place. How big is the label? Is it big enough or is it hidden with small text? How is it marketed? You run the risk of people being deceived. If there is merely a law to test the product, but none that makes it illegal to actually do it, then what can you do? If the warning label sufficiently covers the risk (assuming it hasn't been hampered in any way), what can someone do for compensation?
The Pure Food and Drug Act was initially concerned with ensuring products were labeled correctly. Later efforts were made to outlaw certain products that were not safe, followed by efforts to outlaw products which were safe but not effective.
Let's not confuse my analogy with alcohol and cigarettes as some sort of bizarre argument to outlaw those things. Both of them are okay in moderation, but it only takes one bad piece of food to get poisoned. That is the essential difference.
A regulatory system prevents tainted food from making it to stores. It prevents people from even having the option to consume. The whole point of market regulation is to mitigate externality, not allow a broader range of (very poor) choice to the consumer. This is the key point here of a regulatory system.
When you mitigate externality, you keep from incurring extra costs. You have to remember: Salmonella spreads, e.coli spreads. Just allowing them to produce tainted food runs the risk of it spreading to the rest of their products. For example, under current regulation if a farm is found to have tainted spinach then it is forced to get rid of all their spinach, and their entire process of making spinach has to be reevaluated. That's what regulation does.
A final note is that I am aware and acknowledge the imperfections in our system. There is corruption, there are regulatory agencies that promote bad food, there are inefficiencies and many other problems. I wish to improve this system, and I believe that it doesn't come from doing away with it entirely and returning to the age of robber barons and the most unsanitary food conditions our country has ever had.
Source: http://www.sodahead.com/united-states/libertarians-are-dumb-or-why-we-eat-heinz-ketchup/blog-298247/?page=2
Source: http://en.wikipedia.org/wiki/Pure_Food_and_Drug_Act
Source: http://en.wikipedia.org/wiki/Externality
Now, we can't have a discussion without some baselines and clarifications, the first of which is the fallacy that libertarians want anarchy. They don't- they are perfectly accepting of a nice democratic republic with a nice Constitution. They simply don't like being told what they can and can't do, and would like these restrictions kept to an absolute minimum. Fraud, perjury, forgery, violence, or really any process that relies on force or lying should be illegal, and we all agree on that.
I have a personal issue with libertarians in that some (to not cast a generalized glance) advocate a society driven by a profit-motive, but a lot of things that act toward the benefit of society go against the profit motive. Testing your food, stickers with expiration dates, very rigorous safety measures, all of these cost money and yet in a society without safety laws, these people are expected to still follow these procedures that cost them a lot of money? This didn't happen in history, and I don't know why it would happen if all regulations were removed. That's my one gripe, and I'd like to not focus on it as much to just address the issues I'm about to bring up.
To that degree, we discuss under the premise that it should be illegal to lie to your consumers. How do you keep an industry from lying to its clients? That is one of my first questions. One way is through government regulation. Here is an anecdote about how Heinz became the market leader in ketchup:
By the start of the Twentieth Century, Heinz was a major ketchup producer, but so were several companies who padded their bottom line by mixing rancid tomatoes into their product.
Seeing an opportunity, Heinz joined the chorus of scientists, consumer advocates and government officials who were clamoring for federal oversight of the processed food industry, even sending future Heinz CEO Howard Heinz to lobby President Theodore Roosevelt in favor of a the Pure Food and Drug Act, which prohibited some of the processed food industry’s most revolting practices and gave enforcement authority to the agency which would later become the FDA. In 1906 the Act passed, and most of Heinz competitors were pushed out of business.
Because Heinz was one of only a handful of major ketchup producers who were already in the business of mass producing ketchup solely from fresh tomatoes, they quickly capitalized on the vacuum that formed as the rancid ketchup industry collapsed. Heinz became the market leader, and it remains so today.
Others would advocate merely that you provide government funding to test, and require safety labels on products that may contain harmful substances. Let the people decide after reading the labels whether or not they want the product, right?
My point is simply to indicate that, despite Heinz’ belief that “pure food . . . is good business,” the truth is that thousands of American consumers bought rancid ketchup for decades, even though they had the option to choose Heinz’ safer product. Market forces left thousands of Americans sick from tomato mold. It wasn’t until the federal government got involved that rotten tomato ketchup left the shelves of local groceries.
My argument is thus: History shows that people aren't quite the rational thinkers we'd like them to be. Even today, people make poor choices all the time and it costs them dearly. We have warning labels on cigarettes, but smoking is still very popular. We have warning labels on alcohol, but that hasn't stopped alcohol-related diseases or DUIs. My argument is that warning labels are not enough. To truly remove a harmful product from the shelf is to regulate against it. To set a limit of harmful content in a product that makes it illegal to sell above that amount.
Why should we allow this to be a risk? What benefit does tainted food serve being on a shelf? Even if you allow compensation to the person who ate the tainted food, if it's deadly then they're likely going to die before they get a dime. Liability is a non-factor to the consumer when dealing with deadly substances.
In the Heinz example, they started out by advertising the product as being pure while the others used rotten tomatoes, but people still continued buying rancid ketchup. Despite having all the information, market forces continued to favor the cheaper, tainted food. Using this historical evidence, my conclusion is that people can't make rational decisions even under the best circumstances. To really understand this topic you really have to look at the pure food movement in the 1900s and how hard it was to get people to not eat rancid food. To get them not to eat contaminated meat from butchers which was food colored to not look bad. To have food produced in the same place that rats defecated in. To have no laws against expiration dates. It was very difficult in that day, despite vast amounts of information available to the people, to get them to stop poisoning themselves without laws. It sounds crazy to just believe people will eat something that can kill them, knowing it can kill them, but I believe that it's a well-educated, white, wealthy viewpoint. They don't know what it's like to be poor, hungry, and uneducated. It's just a fact of life that abject poverty causes a lot of bad decision-making, and there's no way to stop the cycle without regulation that keeps poison off the shelves.
Secondly, I believe that it makes no sense to allow a company to produce something that can kill somebody. There is no reason for it to be on the shelf in the first place. How big is the label? Is it big enough or is it hidden with small text? How is it marketed? You run the risk of people being deceived. If there is merely a law to test the product, but none that makes it illegal to actually do it, then what can you do? If the warning label sufficiently covers the risk (assuming it hasn't been hampered in any way), what can someone do for compensation?
The Pure Food and Drug Act was initially concerned with ensuring products were labeled correctly. Later efforts were made to outlaw certain products that were not safe, followed by efforts to outlaw products which were safe but not effective.
Let's not confuse my analogy with alcohol and cigarettes as some sort of bizarre argument to outlaw those things. Both of them are okay in moderation, but it only takes one bad piece of food to get poisoned. That is the essential difference.
A regulatory system prevents tainted food from making it to stores. It prevents people from even having the option to consume. The whole point of market regulation is to mitigate externality, not allow a broader range of (very poor) choice to the consumer. This is the key point here of a regulatory system.
When you mitigate externality, you keep from incurring extra costs. You have to remember: Salmonella spreads, e.coli spreads. Just allowing them to produce tainted food runs the risk of it spreading to the rest of their products. For example, under current regulation if a farm is found to have tainted spinach then it is forced to get rid of all their spinach, and their entire process of making spinach has to be reevaluated. That's what regulation does.
A final note is that I am aware and acknowledge the imperfections in our system. There is corruption, there are regulatory agencies that promote bad food, there are inefficiencies and many other problems. I wish to improve this system, and I believe that it doesn't come from doing away with it entirely and returning to the age of robber barons and the most unsanitary food conditions our country has ever had.
Source: http://www.sodahead.com/united-states/libertarians-are-dumb-or-why-we-eat-heinz-ketchup/blog-298247/?page=2
Source: http://en.wikipedia.org/wiki/Pure_Food_and_Drug_Act
Source: http://en.wikipedia.org/wiki/Externality
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I'm arguing for all sides to have more of a role, and the government to have less.
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First off, maximization of profit is not a problem because even restricting the definition of profit to monetary issues you have the time horizon issue. That is I can maximize my profit today by sticking a gun in the face of everyone who walks in my store and demanding all their cash, problem is what do I do tomorrow when no one comes in the store?
Over what time scale do I choose to maximize my profit is the key.
Yes, in a short time horizon unsavory business practices like cutting corners on safety and lying to customers will earn me greater marginal profits than not doing those things. However over a longer time horizon they will cost me everything as I lose market share to competitors who offer superior products that don't actually get their customers sick or dead.
Further you are assuming that consumers are driven solely by price in all of their choices when this is clearly not the case, if it were then no name brand would ever be sold, everyone would just buy generic.
Now, is it possible to get away with producing a substandard product and through clever marketing give it a premium cachet? Sure, for a while. Maybe even for a couple of decades. But the end you always end up looking like Cadillac, Lincoln, and Harley Davidson did a few years ago, an empty shell of a company that can't attract any new customers.
All of this is of course ignoring the very real costs of litigation if you are actually selling an unsafe product as well.
So yes, in a market absent regulation you will have a few companies who cut corners and produce less than safe products for a while till they go out of business however a few of them will manage to get away with it for a few decades, however most producers would voluntarily choose to produce safe products of high quality because they recognize it is in their long term best interests.
However this market sounds amazingly like the one of today with heavy government regulation where a handful companies intentionally skirt the regulations and get away with less than safe products and a small handful of them get away with it for decades (see the recent Peanut Butter and Egg controversies).
In otherwords the world without the regulation would be little different than the world of today in terms of product safety, and this assumes NOTHING other that the threat of litigation and the profit motive replaces the government regulations.
Finally as for the history of what happened, again, the science to even discover the problem with tainted food was less than 30 years old when the first federal food safety regulations were passed, simply put the market was never given the chance to correct for the problem, as soon as the problem was noticed the government jumped in with regulations and imposed a solution on everyone. You keep skipping over that very key part of the history.
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If it turns out that people are willing to accept a higher level of risk in their food supply in exchange for lower prices, then maybe it's a choice they should be allowed to make.
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there are certain things that all prosperous and leading nations have.
Democracy, votes for women , food regulations- all the worlds leading nations have these. And maybe that is why they are the world's leading nations...
You know, this has been a very instructive post . I would like to have it tagged as Recommended, by the mods, plz.
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Inter-state commerce pretty much covers everything too.
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Malicious intent or not, negligence alone is enough.
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They ought to ban it or something.
Ohhh... I got one, millions of people died during the 20th century due to the flu. One of the ways it spread was through exposure to airborne particles from people who sneeze. Ergo we need to restrict the ability for people to breathe openly by requiring filter masks. Basic health demands thus!
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It's also worth noting that in a competitive marketplace, companies have an interest in protecting their reputations. If Kraft Foods started shipping tainted food, for example, other companies would steal all their business.
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Companies do have an interest in protecting their reputations, but that could mean a focus on spin control rather than product quality. Also keep in mind that nobody went out of business due to the tainted peanut butter thing recently, because the source of the problem was so far removed from consumers.
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Another Canadian example is Maple Leaf Foods, which had a listeriosis outbreak in one of its plants and had to recall a bunch of meat products. They certainly attended to the PR side of things, but they cleaned up the problem.
http://www.cbc.ca/news/business/story/2008/08/27/f-crisisresponse.html
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