Big bad evil business is selling tainted meat and offers hazardous working conditions.
Good government says “no!” and changes the bad stuff so now people have clean meat.
Points:
1: Competition apparently didn’t incentivize meatpackers to do better (in that time frame)
2: Government acted in the people’s interest for once.
3: Although it was a private individual who did the muck raking (gov had no incentive to blow the whistle)
I do not bring this up to be a general argument for government. I’m merely remarking that the incentive problem seems to work backwards in the Jungle example, where a wise and benevolent central planner wins against a capitalist playing a zero-sum game with the market.
After reading an author’s book/works, you should do some background research. Where did Sinclair derive his idea from? Which philosophers were Ayn Rand’s inspiration for Objectivism? That sort of stuff.
hmm thanks for the link. I read through it and it does provide a lot of information that supports our idea that the free market is self regulating and that government intervention is ill motivated/disastrous.
So, but what if a situation like Sinclair imagines really did happen? Sure competition increases the quality of goods and services, but what about the time it takes to do so? Are there any examples of government stepping in to speed things up? (supposedly)
In US History II last year, when we got to the early 19th century, we were supposed to read The Jungle. We did.
When we got to the era around The Great Depression and World War II, we were supposed to learn about the economic theories of Mises, Hayek, Milton Friedman, and Keynes (I was shocked to see Mises and Hayek on the course syllabus!). We did not.
Guess which of those four economists was in the history book?
From what I understand…government intervention has created alot of problems in our food industry.
government forces us to pay for corn production (add insult to injury…its actually gmo corn)
government actually goes after real farmers and tried to shut down clean farms, instead of huge factories that produce chicken and beef that are so infested with bacteria they must be cleaned with ammonia and injected with tons of antibiotics (and they are still having many e-coli outbreaks)
cheap gmo corn leads to cows eating corn…leads to cows developing loads of bacteria and new to the world (deadly e-coli strains)…which leads to cows being injected with antibiotics…which leads to cows being injected with hormones…
cheap gmo corn leads to unhealthy gmo corn sweeteners being used in almost every processed food imaginable…which leads to type II diabetes…which leads to an array of health problems…
also, the infected massive amounts of gmo fed cow manuer is running off and actually infecting plant crops with e-coli as well…lettuce, peanuts, spinach…and others…
Thanks for the post, limitgov! I haven’t read The Jungle, but I can’t imagine it was any worse than today with the FDA “protecting” us. Synthetic chemicals and GMO foods are like one big, nasty experiment, and no human can avoid being a subject because the entire environment is contaminated.
"hmm thanks for the link. I read through it and it does provide a lot of information that supports our idea that the free market is self regulating and that government intervention is ill motivated/disastrous.
So, but what if a situation like Sinclair imagines really did happen? Sure competition increases the quality of goods and services, but what about the time it takes to do so? Are there any examples of government stepping in to speed things up? (supposedly)"
Business decisions reflect consumer demand, so the government would have to know what consumers want before consumers do. In this case, the individual or individuals in the government would have to value the safety of the food that the consumers purchase more than the consumers value that food safety themselves. That seems highly unlikely due to the consequences each actor faces.
Given the success of fast food, and the resulting increase in problems like obesity and diabetes, I would say that food safety is not on the minds of most consumers. The free market works well if all the participants are rational. However, businesses don’t meet consumer needs, they meet consumer demand, which far more often reflects wants over needs. Banks can get away with charing usurious interest rates on credit cards because people have the capacity to rationalize their impulsive purchases. The food industry can sell us unhealthy salt and sugar laden crap for food because people are drawn more to the immediate satisfaction of something that tastes good, not to that which will make them healthiest.
I agree that government is not the answer, because the motives of politicians are just as irrational as anyone else’s, generally leading to more harm than good. However, a perfect laissez-faire system can be destructive to it’s participants if they are not rational actors (as humans tend not to be).
The Rev - the food industry is most definitely not characterized by a free market.
And this statement: “The free market works well if all the participants are rational.” I don’t think its true (rather - I think the free market always works well), but I also don’t think it means anything. Who is to say what is rational?
Generally, in a free market, if people are irrational (and what does this mean again? who is to say?), then they will suffer the consequences and hence, there is a constant incentive for the person to shape up and act “rational” (again, whatever that means).
This is typical pessimistic anti market bias. Just because food is bad now does not mean it will continue to be in the future. There is a large monetary incentive to sell people health and fitness.