Monday, September 1, 2008

What they don't know can't hurt them

Dean Baker highlights an overlooked story about testing for Mad Cow disease. Apparently:
The Department of Agriculture banned a small meat packer from testing its cattle for Mad Cow disease. It seems that the problem is that the big meat packers don't want the expense of testing their cattle, but they also don't want this small meat packer getting a competitive advantage from being able to certify that its beef as been tested and shown to be free of Mad Cow disease.
People often conflate "pro-business" with "free-market", but these are really two different things. The Bush administration has certainly been "pro-business": reducing environmental standards on industry, protecting American steel manufacturers with a tariff, offering no-bid contracts to American businesses in Iraq. But it is rarely "free-market".

This is a case where one meat packer wants to differentiate its product based on quality. Since it is a small producer, it may not be able to compete with larger producers based on price. However, by allowing competition, the government can expand--more accurately, not prevent--consumer choice. For anyone who is concerned about Mad Cow disease, they have the option of paying for more strictly tested beef. For others, there would still be a cheaper alternative.

The additional benefit is that other producers would likely be compelled to increase their testing regimens to compete with this small producer. By allowing businesses to compete, we end up with higher quality, safer products, at a lower cost.

Certainly government agencies should play a role in verifying claims made by producers. But it shouldn't prevent a company from making a factual statement about one of its products.

"Pro-business" allows powerful interest groups to lobby the government for protection and favors. "Free-market" makes these interests compete to provide better, safer products for consumers.

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