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Tuesday, May 31, 2016

Would You Like Steroids in Your Burger?

How Government Promotes Food Fraud

Which is healthier: Pop-Tarts or almonds? Frosted Flakes or avocados? Fruit Loops or wild-caught sockeye salmon? According to the Food and Drug Administration (FDA), Pop-Tarts, Frosted Flakes, and Fruit Loops count as “healthy,” while almonds, avocados, and salmon contain too much fat to be labeled as healthy foods.

Consumers continually do the work of reevaluating what is healthy. 

Current FDA guidelines, developed in 1994, define foods as not healthy when a serving has more than 3 grams of fat. Sugar content is not considered when deciding if a food is healthy.

Long before government bureaucrats and experts took notice, and before the FDA guidelines were first issued, nutrition research had shown the harmful effects of sugar.

Indeed, in 1983, Kellogg’s changed the name of its cereal from Sugar Frosted Flakes to Frosted Flakes. Presumably, this name change was due to already growing consumer concern about sugar content in food. Consumer demand began to create change at least 33 years ago.

Only now is the FDA reconsidering its definition of healthy “in light of evolving nutrition research.”

What Role Should Government Play?

Government bureaucrats are spending our tax money to regulate what can be called “healthy.” With their dismal record and limited knowledge, it is hard to believe they are capable of making our food supply healthier. (See Michael Munger’s “Unicorn Governance,” Freeman, September 2014). What is the proper role of government in regulating our food supply?

Most would agree that laws to stop coercion are called for.

In his book The Constitution of Liberty, Nobel laureate F.A. Hayek explains that coercion is not limited to the use of physical force by government or others “to make us obey its commands.” Fraud and deception are forms of coercion.

Hayek tells us that we can be coerced and still seem to have choices. If my choices have “been so manipulated that the conduct that the coercer wants me to choose becomes for me the least painful one,” I am being coerced. Coercion occurs “when one man’s actions are made to serve another man’s will, not for his own but for the other’s purpose.”

Hayek explains that government should prevent fraud and deception for the same reasons it should prevent coercion:

Deception, like coercion, is a form of manipulating the data on which a person counts, in order to make him do what the deceiver wants him to do. Where it is successful, the deceived becomes in the same manner the unwilling tool, serving another man’s ends without advancing his own. Though we have no single word to cover both, all we have said of coercion applies equally to fraud and deception.

Freedom, Hayek writes, “demands no more than that coercion and violence, fraud and deception, be prevented.”

Does Government Promote Fraud?

While government uses our resources to determine what is “healthy,” cases of fraud and deception are ignored and even actively encouraged.

Recently, the NFL advised players to eat little meat while traveling in Mexico and China. Some meat produced in these countries “could be contaminated with anabolic agent clenbuterol.” Players who eat the meat are at risk of failing a drug test and violating the NFL policy for performance-enhancing substances.

Even after banning the chemical in 2002, China has experienced widespread use of clenbuterol as a dietary additive, particularly for pigs. Consequences for human ingestion include “nausea, dizziness, hypertension and hyperglycemia.” Despite stiff prison sentences for farmers convicted of violating the ban, use of the substance continues. (I consider the root causes of acting to harm others in “Is Tribalism the Worst Idea in History?”, February 2016.)

“Deception, like coercion, is a form of manipulating the data on which a person counts, in order to make him do what the deceiver wants him to do.” — F.A. Hayek

You may have no plans to travel to Mexico or China, but Mexico wants to sell its meat products in the United States, and China want to sell us chickens. Currently, chickens are still subject to country-of-origin labeling. However, the US government wants you to be in the dark about the country of origin of the beef and pork you are eating. At the end of 2015, Congress voted to end country-of-origin labels on imported meat. Department of Agriculture Secretary Tom Vilsack said the government will stop requiring the labels. Congressmen supporting the legislation said they were required to act because, according to a ruling by the Word Trade Organization, requiring labels results in “unfair discrimination.”

Unfair discrimination? Consider this scenario of discrimination: You’re in the supermarket about to choose a strawberry-filled breakfast pastry. You pick up a package showing strawberries oozing out of a pastry. To your dismay, as you read the ingredients, you find there are no strawberries in the product; the filling consists of sugar, artificial color, and artificial flavor. You choose to “discriminate” against this brand and purchase a brand made with real strawberries.

Do ingredient labels on foods result in “unfair discrimination”? Of course not. Only consumers can decide which products are in their best interest to eat, and labeling provides information for making choices. To prevent food labeling is “a form of manipulating the data upon which a person counts,” and that is deception.

Who might benefit from such deception? Those wishing to sell products with lower-quality ingredients or ingredients that consumers do not want in their food.

Due to concerns over food safety, many consumers want to know the country of origin of the foods they buy. The generally accepted definition of meat doesn’t include poisonous steroids as additives. Now Congress has denied consumers this information.

The United States government is therefore promoting fraud and deception against consumers.

The Free Market to the Rescue

It is estimated that up to 80 percent of the olive oil sold in the United States is fake. Since many consumers buy olive oil for health reasons, the adulteration of the oil with cheaper canola and soybean oil is not welcome news. In tests conducted by the University of California, noted brands such as Colavita, Newman’s Own, and Whole Foods all failed to meet the standards for extra virgin olive oil.

In a free market, firms have an incentive to differentiate their products as higher quality. Currently, 100 percent of the olive oil purchased by my family is certified as genuine by either the California Olive Oil Council or the North American Olive Oil Association.

In addition to food ingredients, there are growing numbers of consumers who value imported foods that meet certain socially responsible standards. Organizations such as Fair Trade USA provide certifications.

The FDA tells us, “now is an opportune time to reevaluate regulations concerning nutrient content claims, generally, including the term ‘healthy.’” Not true; consumers continually do the work of reevaluating what is healthy. Twenty years ago, kale and quinoa were unknown to most Americans. Today, they are ubiquitous even in fast food restaurants such as Panera Bread.

Now is always the opportune time for the government to prevent coercion and fraud. Government should stick to its knitting. The free-market will do the rest.

  • Barry Brownstein is professor emeritus of economics and leadership at the University of Baltimore. 

    To receive Barry's essays subscribe at his Substack, Mindset Shifts.

    His essays also appear at the American Institute for Economic Research, Intellectual Takeout, Learn Liberty, The Epoch Times and many other publications. Barry’s essays have been translated into many languages, most frequently Spanish and Portuguese. He is the author of The Inner-Work of Leadership.

    Barry holds a Ph.D. in economics from Rutgers University and a B.S. in mathematical statistics from CCNY.