Getting it Backward

You can learn a lot about people’s unstated assumptions just by looking at the way they frame their questions. Take the debate over genetically modified foods, for example. It’s generally presented as a controversy over whether the government should “allow” GM foods to be sold without proper labeling. But that’s the direct opposite of what’s really at issue. It’s not that the government currently doesn’t require the labeling of GM foods, and that it should start doing so. The fact of the matter is, the government now actively interferes with the labeling of GM foods, at the behest of the agribusiness and food processing industries, even when grocers and food packagers want to indicate its presence.

In the past, for example, Monsanto has had mixed success in taking legal action in various jurisdictions to prohibit grocers from labeling milk as rBGH-free. Their “argument,” if you can call it that, is that since rBGH is legal and there is allegedly no “sound science” calling its safety into question, the very fact of labeling a product as free from it constitutes “product disparagement” by implying that a product without it is something some people might prefer. In other words, Monsanto doesn’t want to allow you to know what’s in the competing brands of milk. In Ohio right now, as a matter of fact, it’s illegal to label milk as free from rBGH.

And now a position paper from the USDA/FDA calls for prohibiting the voluntary labeling of food as GMO-free as “false, misleading or deceptive.” U.S. trade representative Islam Siddiqui, formerly of Monsanto, is lobbying the UN Codex Committee on food labeling to incorporate the USDA/FDA position.

More broadly, regulatory standards frequently become a de facto ceiling rather than a floor. Regulation and litigation are used to prohibit any competitor from adhering to a higher standard than the regulaions require. For example, in one jurisdiction the big meat processors appealed to the federal district court to suppress a competitor’s voluntary practice of inspecting for Mad Cow Disease more frequently than the law requires. Since the USDA standard is based on “sound science,” meeting a more stringent standard amounts, as such, to impugning the quality of meat that only meets the regulatory standard! So far from simply establishing a minimum standard, the regulation amounts to a maximum standard that suppresses quality competition. In other words, it’s a government enforced cartel of the kind that would be illegal if the meat processors established it among themselves by their own voluntary action!

This is a very common pattern in what passes for political debate in the United States. Just about every time “libertarianism” comes up for discussion at Daily Kos, for example, it’s usually a matter of minutes before the first commenter proclaims that libertarians had their “laissez-faire” utopia in the Gilded Age, with child labor and adulterated meat and the big trusts. The regulatory state came about, they say, because Americans couldn’t stomach the results of laissez-faire. But this is nonsense. The model of corporate capitalism that emerged in the late 19th century was as far from the outcome of a free market as you can get. It was the result of a top-down revolution imposed by the state: the railroad land grants, high industrial tariffs, patent cartels, and the use of federal power to liquidate the radical labor movement, among other things. And when the large corporations that emerged from this state capitalist regime still found there was too much market competition to establish stable and effective trusts, they turned to the regulatory state to suppress competition in the Progressive Era (as described by Gabriel Kolko).

Time and again, “Progressive” friends of the regulatory state bring up this evil or that, and challenge advocates of freed markets as to whether we’d just “allow” it to happen. But in fact, it’s almost never a matter of whether or not the state should prohibit the evil. In most cases the state is actively intervening at present to make the evil possible, and protecting those responsible for it from the market penalties for their actions.

The question is not whether the government will “allow” corporate power. The question is whether it will stop propping it up.