What’s really at issue is a matter of history, causality, and faith. Do we owe our high standard of living to the market or the state? That is the question. The interventionists and statists credit the state because they get their causal connections mixed up (and this is because they have not studied economics) and they take a leap of faith to credit the government for things it cannot possibly do. The state from the ancient world to the present has created nothing. It has only taken. The market, on the other hand, delivers more miracles every day than we can count. This isn’t dogma; the evidence is so overwhelming that it takes a leap of faith to believe otherwise. [Full article]
Source link: http://blog.mises.org/2289/a-little-chaff-with-my-wheat-please/
A Little Chaff With My Wheat, Please
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It costs almost nothing to add “sifted” to the label though actually sifting rice would be more costly, or to spread untrue gossip about your competitors rice being “unsifted”.
Is the Judiciary a branch of government?
In the first case I’m a consumer who has a bag of rice labeled as “sifted” – whatever that means – and a chipped tooth.
In the second case I’m an entrepeneur that produces a good product, but now have a bunch of people who chipped their teeth on something else or on competitors products blaming me (maybe at the behest and with compensation from a competetor).
The government helps neither case – it can establish meaningless “sifting” standards (like the USDA sniffs meat, but allows fatal e-coli through). USDA Grade A, but toxic. Sifted, but with enough rocks to pave my driveway. It usually says if you meet it’s utterly irrelevant standard, you have effective immunity.
The market? I don’t think it is a very good mechanism for determining what is true or accurate as much as what is the most popular opinion. Illusion seems to sell better than information – why are so few ads didactic, instead most have beautiful women in immodest dress pushing otherwise prosaic products? Or offer painless weight loss (and are rarely effective)?
There is a cost for determining the accuracy of information, and I don’t think most people are willing to pay it. Most people don’t google for even common scams. This tends not to be a problem where fraud is uniform (either the labels are meaningless so you have to test anyway, or the population is honest so the label is trustworthy). There is a problem in transition – where society is changing and honesty is common but not universal.
It is very difficult to impose a cost for inaccurate information, especially if you don’t accept that things like intentional lies can be the subject of a tort or a violation of a contract assuming you allow for courts in the first place. Even if you allow for both, the sunk cost necessary to redress small violations is often larger than the value of the damages.
The market can’t seem to provide Liberty either – the FEC shows more money goes to the Big Two than any of the 3rd parties that might redistribute power more equally instead of wealth.
The brand of peas I buy has a caution that, despite all care, there may be pebbles mixed in and that one should inspect it. Perhaps the paradigm should be that all ‘raw’ foods should be inspected for contaminants. We have allowed a paradigm to form of expectation of quality that our forbears didn’t expect. We are too indoctrinated to think within narrow chutes when it comes to life, perpetuated by the State as they are the biggest winner when the masses are myopically bulling their way through life. I suppose ‘prepared’ foods would have gone through an inspections process and rocks and pebbles would be removed, but that might be too much of an assumption.
When one does find a rock in bag of raw peas, the inclination is to be indignant and portray oneself as a victim. At the end of the day we are coddled in a manner that would not have been dreamed of years ago, and we are spoiled. We are trained to think someone else is looking out for us, and the peddlers of ‘progress’ are more than willing to perpetuate that notion in exchange for power. When the ‘mechanism’ fails, someone else has to pay for THEIR oversight, the ‘victim’ is blameless. I guess that is the best way to define ‘progress’ within the context of Statist Progressives. “we’ll do your thinking for you, and if something bad happens, we’ll find a third party scape-goat to persecute”.
I think the obvious example here is pasteurization. Milk coming from a cow’s udder is sterile; it only gets bacteria in it when lazy, shiftless producers fail to take proper sanitary precautions. By insisting on pasteurization, the advantage shifted from careful, wholesome milk producers who CLEANED their cows’ udders to the slobs, who would put in e coli and other bacteria, and then boil them back out, while insisting that clean milk producers do the same. Thus did regulation lead to the following: degradation of the cleanliness standard of milk produced; commoditization of a product leading to disaster for small Eastern farmers; a switch in power from farmers to dairies; and production of less-healthful and flavorful milk for everybody to benefit the slob producers.
The government made it possible to reward the worst producers at the expense of the best!
Tom, who must drive over 2 hours to buy raw milk directly at a dairy (the cream floating on top is kinda cool [many friends from Russia recount stories of drinking milk "warm from the cow." My father also fessed up to it: sweet, creamy, and a taste out of this world.])
Apparently people can’t tell phishing from real messages.
My main objection is questions phrased as: “Do we owe our high standard of living to the market or the state?” This is a bit like the choice of the democrat v.s. republican presidential candidate (I’m voting CP or LP). There are other options. If Virtue is a cause of Freedom (If I don’t have to spend a large amount of effort protecting myself and property, I can do more productive things), which allows a free market, then the dichotomy is between self-control and government control. (Also, “state” typically omits but implies the adjective or prefix “welfare” which I won’t get into beyond this note)
The distinction is important. If self-control is a necessary (though perhaps not sufficient) condition, then simply eliminating government results in Pre-Taliban Afghanistan or Post-Saddam Iraq. They aren’t examples of instant free markets providing increasing standards of living as soon as whatever government disappears.
And to a large extent, politicians provide a market of mercenaries (A mercenary is to violence what a prostitute is to sex). The purchase may be indirect, but generally it ends up that whoever wins plunders the outsiders for the given term. That gives corporations reason to support mercenaries on both sides. I don’t think this “market” is doing anything but destroying our society, but I do think it is functioning to distribute unjust gain efficiently.
Mr. Rockwell made several errors in “A Little Chaff with my Wheat, Please”.
Before delineating, let me make it perfectly clear that I agree with him 100% that government regulations are not the solution to this problem.
He gets derailed, though, when he turns the issue into the Good (and virtuous) business world versus the Evil (and contemptible) government. In this world, businesses are angelic, purely out to serve customers, and catering to their every need. While there are in fact many businesses that do an admirable job of providing beneficial goods and services to consumers, there are others that seek to profit at the expense of customers, even if it costs the lives and health of some of them. In light of this reality, what is the best way to address this situation?
Before addressing some of Rockwell’s individual statements, consider the following facts.
1) For decades, the manufacturers of foods containing trans fats have done their best to downplay the dangers relating to them. They have suppressed research documenting the damage they do, stymied the publicizing of such research, and resisted disclosing their content in foods. They have actively promoted foods containing them as being beneficial, while trying to steer consumers away from healthy, traditional foods. (I will be happy to supply complete documentation for anyone interested in learning the truth here).
2) The artificial sweetener Aspartame has been found to cause a variety of serious health problems in the many individuals who are sensitive to it. (I will be happy to supply complete documentation for anyone interested in learning the truth here).
3) For many years, the tobacco companies insisted that their products were not addictive and did not cause serious diseases. They funded studies to “prove” this and found doctors to vouch for the healthfulness of their products.
Now consider the following statements by Rockwell:
“They [The free market] will provide as much of little as consumers desire to know”. Problem: What if the market has suppressed damaging information and the consumer doesn’t even know what dangers to look out for, such as trans fat content?
“The reason is that food producers profit only from service to buyers, not from fraud, sickness or trickery”. Problem: If consumers are given wrong information, then they may buy products that they believe to be healthful, which are in fact damaging, for example margarine of Aspartame.
“… We recently experienced the debunking of the government’s preferred diet from mid-20th century until the present day, when the bureaucrats told us to eat maximum quantities of carbohydrates and not so much meat” Problem: While this statement is true, Rockwell does not seem to appreciate that it was the manufacturers of processed foods who were behind this government policy, the same group he likes to romanticize.
A well-functioning marketplace requires that consumers have access to accurate information. Just as a nation cannot make an intelligent decision about whether or not to go to war based on erroneous information, consumers cannot make sound decisions about what to eat based on food propaganda. Unfortunately, when you look at the track record of the FDA (aspartame, many poor decisions related to pharmaceuticals, etc.), USDA (food pyramid), it becomes obvious that the government is ill-equipped to offer consumers protection. Producers themselves cannot generally be relied on, as discussed above.
After years of research the subject, I am now confident that the foods which I choose for myself and my family will be nutritious and safe. I will repeat the question that I sent to Mr. Rockwell via email: How can the average citizen obtain reliable nutritional information in the Misinformation Age?
in reply to D. Saul Weiner. “How can the average citizen obtain reliable nutritional information in the Misinformation Age?”
you mention examples of producers who manipulate the markets by lying to consumers. you mention examples of government giving bad information to consumers and the market. you mention how producers influenced the government to give that bad information.
the answer to this problem lies with consumers. consumers need to educate themselves before making a purchase. responsibility. that is the path that you yourself took. you said that you have done a lot of research and now feel that you can make good choices about the food you buy. that is exactly the solution to your question.
i sympathize that this is not easy and there are many sources of bad information out there. but in the end nobody is going to look out for you and your family. not the government and not producers. the only person who will do a good job of that is you.
While I agree with the argument(s) that Lew is making, I also believe there’s an element at play here that is important to remember: namely, latent legal ideals and paradigms from past eras that differ quite a bit from our current one. During the reconstruction and the end of the industrial age, you could make a better argument for minimum wage laws than you could now (though, they were still wrong in principle). But the fact is, while times have changed for the better, the laws have not reflected that change. We still have politicians up there talking about how, while the country is in good shape, it’s also in bad shape, and they can fix it. Over the course of the last century, times HAVE changed for the better (relatively, in terms of quality of life—certainly not in terms of liberty), and it’s time the Statist laws that were brought about during harder times were rolled back to reflect that. It’s also time that politicians stop playing off the perceived “poverty” of folks, the “harsh times”, etc. They use this as a goad, they tell people that things are bad, so that those folks will look to THEM (and the rest of the state) to fix it…and thus, they engage in shameless self-preservation.
But this is where many of our regulations also come from, the constant dialogue between mindless constituents and self-serving politicos. It’s almost like the chicken and the egg quandary. Are things really bad? Or do politicians TELL people that things are bad, just so that they’ll vote for them, or so they’ll support their liberty-stomping regulations? I think, most of the time, it’s somewhere in between…more of an exaggeration on the part of the pols. And so, the cycle continues. Pols cry wolf. People get outraged. People demand action. Pols take action. Pols keep jobs. People lose liberty.
Secondly, I think that some good DOES come from government regulations. See Julian Sanchez’s piece on how the FDA helped bring modern medicine to where it is today. Anyway, I appreciate looking at a box and knowing exactly what is in it. But what I think the general populace is ignorant of, regarding regulation, are 2 things: 1, what would the market have done in the absence of government regulation, and 2, what are the costs of such regulation, and who bears them. The second is the more important one, I feel, because said costs are largely indirect. Just as Ruwart spells out many times in “Healing Our World”, what we allow the government to do, indirectly, we would never allow to happen directly to us. We would never allow people to steal money from us at the point of a gun, but we let the government do so. And thus, people see the DIRECT benefits of regulation (no gravel in their rice, nutritional facts on all packaged food, etc); at the same time, they are not aware of the ACTUAL costs that they pay, as consumers, nor are they able to compare it to what the free market would have done, since the free market is no longer free in that arena.
So, it is this correlation (or lack thereof) between direct benefits vs. indirect costs, that I think is a major root cause behind people’s unwillingness to deregulate. That, and, as you said, people are afraid of the “anarchist” free market self-regulation.
While I agree with the argument(s) that Lew is making, I also believe there’s an element at play here that is important to remember: namely, latent legal ideals and paradigms from past eras that differ quite a bit from our current one. During the reconstruction and the end of the industrial age, you could make a better argument for minimum wage laws than you could now (though, they were still wrong in principle). But the fact is, while times have changed for the better, the laws have not reflected that change. We still have politicians up there talking about how, while the country is in good shape, it’s also in bad shape, and they can fix it. Over the course of the last century, times HAVE changed for the better (relatively, in terms of quality of life—certainly not in terms of liberty), and it’s time the Statist laws that were brought about during harder times were rolled back to reflect that. It’s also time that politicians stop playing off the perceived “poverty” of folks, the “harsh times”, etc. They use this as a goad, they tell people that things are bad, so that those folks will look to THEM (and the rest of the state) to fix it…and thus, they engage in shameless self-preservation.
But this is where many of our regulations also come from, the constant dialogue between mindless constituents and self-serving politicos. It’s almost like the chicken and the egg quandary. Are things really bad? Or do politicians TELL people that things are bad, just so that they’ll vote for them, or so they’ll support their liberty-stomping regulations? I think, most of the time, it’s somewhere in between…more of an exaggeration on the part of the pols. And so, the cycle continues. Pols cry wolf. People get outraged. People demand action. Pols take action. Pols keep jobs. People lose liberty.
Secondly, I think that some good DOES come from government regulations. See Julian Sanchez’s piece on how the FDA helped bring modern medicine to where it is today. Anyway, I appreciate looking at a box and knowing exactly what is in it. But what I think the general populace is ignorant of, regarding regulation, are 2 things: 1, what would the market have done in the absence of government regulation, and 2, what are the costs of such regulation, and who bears them. The second is the more important one, I feel, because said costs are largely indirect. Just as Ruwart spells out many times in “Healing Our World”, what we allow the government to do, indirectly, we would never allow to happen directly to us. We would never allow people to steal money from us at the point of a gun, but we let the government do so. And thus, people see the DIRECT benefits of regulation (no gravel in their rice, nutritional facts on all packaged food, etc); at the same time, they are not aware of the ACTUAL costs that they pay, as consumers, nor are they able to compare it to what the free market would have done, since the free market is no longer free in that arena.
So, it is this correlation (or lack thereof) between direct benefits vs. indirect costs, that I think is a major root cause behind people’s unwillingness to deregulate. That, and, as you said, people are afraid of the “anarchist” free market self-regulation.
“A well-functioning marketplace requires that consumers have access to accurate information. Just as a nation cannot make an intelligent decision about whether or not to go to war based on erroneous information, consumers cannot make sound decisions about what to eat based on food propaganda. Unfortunately, when you look at the track record of the FDA (aspartame, many poor decisions related to pharmaceuticals, etc.), USDA (food pyramid), it becomes obvious that the government is ill-equipped to offer consumers protection. Producers themselves cannot generally be relied on, as discussed above…How can the average citizen obtain reliable nutritional information in the Misinformation Age?”
The government, obviously, is not good at ensuring our “protection”. However, because the State is seen as “all-powerful”, there is a major misconception that it IS. And that anything you see in the store must be true, because the government made sure it is.
And this is why there is no reliable system. Producers are forced, at gunpoint, if necessary, to put accurate nutritional info on boxes and inform people of allergens, etc. (at least in some places). The people assume that everything is correct, so, there is no room for competition, in the eyes of the consumer. Putting reliable info, or even putting info at all, is not a “choice”, so, therefore, it cannot act as a market advantage for certain companies. Conversely, since the people believe they are protected from fraud, there is no direct “weeding out” of bad/fraudulent companies. Surely, if they attract the ire of the State, they will be reprimanded, but there is no grass-roots boycotts or anything of the like…and even when there are, it is by market forces that would be present regardless of government intervention (take, for example, Consumer Reports, and its criticism of the Suzuki Sidekick).
The Answer is to simply do away with the false security blanket of an unrealible and aggressive state, and allow the market, along with private clearinghouses like Consumer Reports, to weed out the bad ones and reward the good ones.
And that brings up a second point. Sure, now, we have Consumer Reports and other like that. But imagine what kind of a market there would be for similar outfits if the false government safety blanket was lifted! There would be various boards and organizations jockying for your dollars (and thus, would be more likely to give you accurate info, just like CR). And with all the money you’d get back by the lower taxes after they abolish all those government agencies, you would be able to afford whichever clearinghouses you wanted.
Now, though, the government takes your money and uses it to regulate EVERYTHING. Like, personally, I don’t eat baby food, and I don’t have kids, but the government uses my money to regulate the baby food industry. If it were left up to the market, I would only have to pay for only those clearinghouses I needed, and other people could pay for the ones that they wanted. And the amount that I pay would be relative to the amount that I care about the quality of the evaluation and the information I get. With the government, I have no choice. If I pay more taxes, their regulation does not get any better. And I have no choice to pay less.
In what you call “the misinformation age”, there is one, and only one, true way to ensure you’re getting the BEST information for you dollar, and that is the market force. The government is no more reliable than anyone else. When your dollar is the driving force behind the quality of information and product, then, and only then, are you most likely to get the best. When the barrel of a gun in the hands of the state is the driving force behind that information, it is severely unreliable and inprincipled.
So, now, we’re stuck in limbo, because of gov’t aggression. An unreliable regulatory State, and unreliable producers. That’s where your “misinformation age” comes from.
Another illustration of Bastiat’s “What Is Seen and What Is Not Seen” (1851).
Evan makes some excellent points about the potential for the marketplace to become a reliable source of nutritional information. In effect, the government has established a monopoly on the truth in nutritional information (e.g. 11th Commandment: Thou shall not eat saturated fats). Government information is unreliable, since it doesn’t reflect the best scientific evidence, it reflects which political constituency has the most money and power. The government crowds out private sources of information and expertise and withholds funding from those who don’t buy into the orthodoxy. If you remove the government from the picture, you allow alternate schools of thought to compete and most likely the truth will come out more quickly.
There is another point that I was trying to make and I don’t think it necessarily came across. People are rightfully concerned about the content and quality of the food that they consume. If those of us who believe in the marketplace, including myself, want to play a meaningful part in the debate, we cannot just slough off people’s concerns and try to pacify them by telling them that the food producers are looking out for them. If we say this, we will have no credibility and we will play directly into the government’s hand. We need to make compelling arguments that the marketplace can do a better job of providing nutritional information and guidance than the regulatory state and consumers will be better off under such an approach.
Dear Lou,
In response to the regulations put on growers of food in this country, you failed to mention the number of people getting sick from foods brought into this country from unregulated countries. Here in Western PA, we have within the last year two major outbreaks of food borne illnesses, one from e-coli and the other botulism.
While this country continues to put stiffer standards on our own growers, it does nothing to enforce standards from other countries. As I shop for produce, I can’t help but notice too, the amount of produce from foreign countries on the grocers shelves and can’t help but wonder what kind of pesticide is being used and wether or not they are using sewage as fertilizer in that country.
The USDA incites they are nothing but a joke and can not enforce everything going on here in the states, let alone what is happening in these other countries, until there is a major outbreak as we have experienced, only offer stiffer standards for growers in this country, making it more difficult and more expensive for these growers to compete within this own country, while forcing them out and promoting the cheaper unsafer products grown on foreign soils, thank you NAFTA and globalization.
Lynn Claypoole
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