Producers too often shamelessly use whatever excuses are at hand to justify their prodding the state to prevent consumers from patronizing rival producers. Trumped-up health ‘concerns’ are a prominent set of easy excuses when the good in question is food or drink. “Those foods offered by our rivals are likely to kill or injure our beloved consumers!” cry rent-seeking producers, feigning an overriding concern for the health of the public. “For the health of our citizens, our rival producers must be stopped from selling their foul foods in our market!” Conveniently, of course, when such restrictions are implemented the favored producers no longer must compete as vigorously for consumers’ patronage. (Question: What does diminished competition do to producers’ incentives to maintain the safety of the foods they sell to the public?)
Anyway, here’s a history lesson: today’s expressed concerns about the safety of genetically modified foods and the calls for governments to restrict consumers’ freedom to buy these foods are, in their essence, nothing new. In the late-19th century similar ‘concerns’ over the safety of American beef and pork were used by some beef and pork producers to sic state restriction on rival beef and pork producers. European ranchers and farmers, disliking the competition from American ranchers and farmers, played the safety card as means of securing protection from their American rivals. Likewise within the U.S.: local butchers and local slaughterhouses throughout the U.S. played the same safety card as a means of securing protection from the upstart and wildly successful Chicago meatpackers such as Swift and Armour. That this safety card was illegitimate – that is, that charges of unsafe beef and pork were unwarranted – doesn’t matter if enough people believe the charges. The widely believed myth of dangerous foods enables the state to protect powerful producers from competition.
Cronyism and rent-seeking are nothing new. But they are perhaps becoming more widespread as the scope of state involvement in private affairs expands.
Don Boudreaux, “If Only We Could Be Protected From the Disease of Rent-Seeking”, Café Hayek, 2016-07-14.
March 28, 2018
QotD: Rent-seeking through “health concern” trolling
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