"human rights vs. the right of a company to can horse meat and call it corn"

Economics Economics Questions
1

The title is out of a debate I had with a leftist on campus recently. Actually, it is from an email I have yet to respond to.

He argues for ‘social justice’ to prevail over laissez-faire capitalism where, in his mind, a company could can horse meat and call it corn. In some ways, this is an easy concept to refute.

I asked several people about this, and one response was that you get to the point where you must argue in favor of some regulation, that it is an implied contract when the company puts the label on the can and you buy it, and they break contract.

Or, is it the responsibility of the consumer to open the can, and choose to never buy the product again, which will result in the failure of that company as a result of deceptive practices.

If it is, what then of the harm that comes to the consumer on the first purchase, having lost money via deception?

2

Well that is fraud though, right?

3

Part of inter-voluntary action is that both parties consent to (a) specific agreement(s). When one party knowingly violates that agreement by attempting to pass one thing off as another, that is fraud.

4

So, assuming we are talking about a free market society (and not full blown anarcho-capitalism), how is the protection against fraud enforced? Is it acceptable to argue pro-regulation on the basis of implied contractural agreement?

The gist of what the person is saying is that companies can not be trusted and need government (the great force for moral good) to come in and protect the consumer. They few laissez-faire as an opportunity for all that is evil in man to be practiced wildly. (which is ironic because I think that fear actually fits better under government).

5

As of now, I’m pretty sure something like that would be dealt with by the courts. I don’t know exactly how it would work in a theoretical an-cap society. Probably the same.

I think the question you’ve gotta ask as far as government regulation goes is if it’s really worth it. I mean…how much does it cost to have an agency testing to make sure so called corn isn’t really horse meat? Will they even catch that kind of infraction? What happens if the regulatory agency puts their stamp of approval on horse meat being passed off as corn and no one thinks twice because they trust the regulatory agency?

6

If what you mean by fraud is that the company should be forced to compensate, I don’t think so. I know we’ve been around this corner before, but, lying is not a crime and purchasing a product is not a contract. Who is to say that i must use the standard definition of corn? Maybe i call corn horse meat.

7

Maybe they should just be forced to say "hey we’re calling horse meat ‘corn.’ Or maybe that’s not even necessary. I dunno. Tbh, how does this really hurt anyone? Other than horses ofcourse.

8

The point is that the market already has mechanisms built in to handle lying of this nature…consumer choice.

9

also, who the hell is going to eat this stuff and think “man this corn tastes weird and it happens to look like meat but whatever, it’s probably corn?”

10

lol! yes, I had the thought also that someone may actually like horse meat corn…as another poster replied.

I tend to think the market works this out in company change or failure due to consumer choice.

11

"Maybe they should just be forced to say “hey we’re calling horse meat ‘corn.’ Or maybe that’s not even necessary. I dunno. Tbh, how does this really hurt anyone? Other than horses ofcourse.”

I guess there may be harm done to the consumers and i would assume that the company would be ready to go pit of business after they are outed for such a scam. The real distinction is (i assume, i am merely pontificating my gut reactions here) between indirect and direct harm. Or harm based on direct fraud or harm based on indirect lying. Truthfully, idk. I’m not even sold on the fact that a contract can be validated.

12

I would add that the hypothetical “corn” seller has no incentive or reason to mislabel his product, sell a harmful product, etc, and in fact has a huge incentive to label his product accurately. So, why assume that the mislabeling would happen? It’s kind of like saying that we need price ceilings on bananas because a consumer may pay $10,000 for one.

13

The fraud argument isn’t necessary. As the OP stated, consumer’s, when they want corn, will not buy from that producer, but will turn to its competitors. Also, how does one company’s stupidity (which must lead to its inevitable destruction) justify interventionist policies which makes everyone worse off? Economics does not say that market liberalism eliminates stupidity or entrepreneurial error; it just states that it’s better not to institutionalize stupidity and entrepreneurial error by replacing actual entrepreneurs with government officials (who don’t care about efficient allocation).

14

Here is the response I wrote to him:

On canned horse meat corn, what you are talking about is fraud; lying. Wouldn’t your better senses tell you not to buy that product? Then (unless there is an outburst of people who love horse meat corn) the company will fail due to the most precious market liberty everyone has= consumer choice. Even in a semi-free market, no company would survive long with practices like that.

But this brings out the question, what do you propose? Is it the FDA, a government bureaucracy that is saturated with staff who have open conflicting interest, who is staffed with Monsanto double agents, who will not pull known deadly drugs from market, who approved the harmful bovine growth hormone that every other civilized nation banned, covered up a big pharma company distributing AIDS tainted drugs and killing people, and who suppresses one product for the advancement of heavily lobbied other products like the all natural and cheap to produce stevia right when aspartame came out?

So, we have a massive, militarized bureaucracy, that we are being taxed to pay for, that literally picks winners and losers, and we are no safer for its existence. Not to mention the economic damage it does by creating red tape, expensive licensure and approval processes and massive federal threat just to produce anything in this country, and in the end the dangerous producers with the most money win any way. I would argue that the FDA is violating our human rights by knowingly exposing us to dangers, and actually prolonging that exposure–over what we would experience in a free market–due to the protectionism they provide.

I’d take my chances without the FDA.

15

Nice reply.

16

What about the company that cans warms and calls it public servants?

Not this company. You open the can, warms come out, but then you have to buy the can again. And again, and again…You can only complain or vote to change the label. But then you get more cans, with even bigger warms then before.

17

Well played sir.

18

Sanity.

19

Man, that’s good. The unending cans of public servants worms…once you open it, its all over

20

The free market also provides regulating agencies and intermediary groups. A supermarket would realize that this particular brand of corn was really horse meat and pull it from its shelves. Consumers wouldn’t need to be informed about the truthful labeling of every type of food pruduct, they would just need to trust the supermarket.

Robert Murphy covers a number of ways that consumers are protected without government agencies http://mises.org/media/1412