by hilzoy
Via Effect Measure: the House has voted to override state food safety labeling requirements:
"The House approved a bill Wednesday night that would wipe out state laws on safety labeling of food, overriding tough rules passed by California voters two decades ago that require food producers to warn consumers about cancer-causing ingredients.
The vote was a victory for the food industry, which has lobbied for years for national standards for food labeling and contributed millions of dollars to lawmakers' campaigns. But consumer groups and state regulators warned that the bill would undo more than 200 state laws, including California's landmark Proposition 65, that protect public health."
All but 13 Republicans voted for this bill; 71 Democrats (including my annoying Representative) voted for it, and 125 voted against. The Republican votes are interesting, since it is a fairly clear case of conflict between supposedly conservative principles. On the one hand, this bill is business-friendly, and has GOP contributors and lobbyists behind it to boot:
"The vote Wednesday was a sign of the tremendous power of the food industry in Congress. Corporations and trade groups that joined the National Uniformity for Food Coalition, which backed the bill, have contributed more than $3 million to members in the 2005-06 election cycle and $31 million since 1998, according to data from the Center for Responsive Politics.
The industry also has many top lobbyists pushing the bill, including White House Chief of Staff Andrew Card's brother, Brad Card, who represents the Food Products Association.
A leading fundraiser for the bill's chief sponsor, Rep. Mike Rogers, R-Mich., has also been lobbying on the bill. Matt Keelen, a Republican consultant whose fundraising firm raised more than $315,000 in political action committee donations for Rogers in 2001, is now a lobbyist for the Grocery Manufacturers of America, which has led the charge for the measure."
On the other hand, it violates two other supposedly Republican principles: commitments to states' rights to effective markets. The conflict with states' rights is obvious: this bill deprives states of the power to require labeling they think is important. The conflict with a commitment to effective markets is subtler, but (to me) more interesting, since it concerns the relation between regulation and markets.
Regulation is generally burdensome to individual businesses: without it, they could do whatever they want; with it, their options are more limited. However, some regulation is necessary to the effective functioning of markets as a whole. Markets only work, for instance, when there are effective rules against theft: if everyone could simply steal whatever they wanted with impunity, then many people might not bother to actually purchase anything. Laws against theft are inconvenient to businesses that might otherwise wish to steal raw materials or machines; however, most of them more than make up for this by allowing those businesses to sell their products, rather than just waiting for them to be stolen. However, since there are presumably some businesses that would do better if theft were permitted than if it were banned (e.g., if they were a lot better at stealing things than at making things that people would actually want to buy), sometimes a regulation that is good for markets generally will be bad for some particular business.
Similarly, markets work best when would-be purchasers have reliable information about those aspects of products that matter to them. This is why we require publicly traded companies to obey accounting requirements: the stock market is much more efficient when would-be purchasers of stocks have information about the financial state of the companies they are considering purchasing shares in. And this isn't just a matter of preventing stock buyers from making mistakes. If people did not have access to accounting data from publicly traded firms, and had to decide whether to buy based on, say, gossip, a lot of people might just decide not to invest in stocks at all, since they would not be able to make sound decisions about what to buy. (Or, slightly more technically: since most decisions about purchasing stock would be a lot riskier in the absence of reliable accounting information, people would have to have a higher tolerance for risk in order to play the market than they do now; and thus the market for stocks would be smaller.) This would make our economy as a whole less efficient: companies would have access to less investment capital, and individuals would have less ability to take on, and possibly profit from, the amount of risk that they are willing to bear.
As before, the fact that accounting regulations burden all businesses, while benefitting only those that would do better in a more efficient market, opens up the possibility that a regulation that is bad for some individual business might benefit markets and consumers as a whole.
Labeling requirements, like accounting requirements, are a means of giving potential consumers the ability to access reliable information about features of products they are considering buying that matter to them. They allow us to decide, for instance, whether we want to buy a cheaper product that might cause cancer, or a slightly more expensive one that does not. This is exactly the sort of freedom that conservatives take markets to give us: we, as individual purchasers, get to decide how much it's worth to us not to run the risk of getting cancer, and we enforce our decisions through our collective market power.
Free market ideology would not, I think, imply that consumers need to have access to every known fact about the products we might buy. There has to be a tradeoff between the costs to companies of requiring disclosure and the benefits to consumers of having the information in question. For some bits of information -- e.g., whether a given product has an even or odd number of molecules -- the costs would be high, the benefits would be virtually nonexistent, and so requiring disclosure would be absurd.
But this doesn't apply in the present case. For one thing, the state regulations that are targeted -- California's requirement that carcinogens be disclosed, for instance -- are obviously not useless bits of information, like whether the number of molecules in a product is even or odd. More fundamentally, though, if tradeoffs have to be made, people's elected representatives would seem like the best people to make them. What matters, after all, is how important a given bit of information is to consumers, and elected representatives, for all their faults, are the best people to make those calls.
The House of Representatives has just voted to deprive us, as consumers, of some of the information we take to be relevant to our decisions. In so doing, it has chosen to help a given set of businesses at the expense both of states' rights and of effective markets. In deciding that consumers need not be given information that they take to be relevant to their decisions, moreover, it deprives them of a part of the kind of freedom that markets supposedly secure: the right to decide for themselves which features of products matter to them, and to make their purchasing decisions accordingly. They are, in short, doing something that's good for a specific set of businesses but bad for markets and for consumers as a whole. All this, and it will probably lead to unnecessary additional cases of cancer!
Truly a great moment in the history of conservative principles.
Recent Comments