Re: [CH] Powder and Comments
Jonathan T. Smillie (jsmillie@protix.com)
Sat, 31 Jan 1998 12:52:15 -0600
At 09:35 AM 1/31/98 -0800, Constance Allen wrote:
>I don't understand what is meant by "free market self-regulation through
>voluntary association and certification".
>
>Would this mean that the beef industry would monitor the quality of the meat
>we buy?
>
>Or that the dairy industry would certify the milk and cheese that is sold?
>
SNIPPED CONTENT
>> Keep in mind that Calvin will most likely have to pass the cost of
>> complying with those regulations on to those eager buyers...that, too,
>> is a fact of life. There are better, more econimcal ways of assuring
>> product quality than relying on bloated government bureaurocacy. Free
>> market self-regulation through voluntary association and certification
>> would create a win-win situation for both producer and consumer.
If I interpret Rich's mail correctly, his argument is that the regulation of food-producers (for example) by the government is unnecessary. The argument, if I remember it correctly from my economic policy classes, goes something like:
"If there is no governmental regulation, the producer is more easily able to produce his products more cheaply, which benefits the consumer. If the producer's goods are not of sufficient quality to survive in a free market, that producer will be forced out of it by superior goods. Enlightened producers, however, will adhere to standards imposed on them by the market- i.e. by the consumer for whom the goods are being produced, because meeting the consumer's expectations is in the best interest of the producer."
This is classic Adam Smith (with a little David Ricardo in there for good measure). It relies on the ability of all consumers to make rational decisions as to what they want, and on the producers to maintain a standard of production by which goods can be safely provided to the rational consuming public at a price which (meeting as it does the expectation of the rational consumer) maximizes the satisfaction of the consumer and the profit of the supplier. The shorthand for this is "enlightened self-interest", which Smith also called "the invisible hand" that drives commerce.
It's a lovely theory. On the economy-wide model, it might even work. But it breaks down because consumers as a class DON"T make rational decisions all the time, and the same rational decision made by two different consumers may not yield the same result. It also imputes to the producer the goodwill to respond to the market, instead of cutting whatever corners he can to produce cheaper than the next guy.
There is a lot to be said against governmental regulation of the food industry. However, I don't believe (personally) that ALL red tape is a bad thing. Sure, there are regulations about how much insect excrement you can have in a pound of sausage, which horrifies people. What these people often don't realize is that a certain level of contamination is endemic to food industries, especially those involving meat, and that the purpose of regulations is not to codify what you can get away with but what you can't- and the penalties for trying to. The fact that E.coli and similar poisoning outbreaks still occur proves that these regulations are not perfect- but I for one feel a lot safer knowing they exist.
Chile-related content:
Calvin's powder ROCKS on bagels with smoked salmon! Had a jalapeno bagel with unsalted butter, two slices of lox and a sprinkle of the good stuff for breakfast. The SO refused to let me put ground habanero in with the coffee grounds, otherwise breakfast would have been perfect- as it was it was still pretty damned good.
Jonathan
***************
<bold>Conservative</bold>, <italic>n.</italic> A statesman who is
enamored of existing
evils, as distinguished from the Liberal, who wishes to
replace them with others.
- Ambrose Bierce, <italic>The Devil's Dictionary</italic>