Horse Burgers And Food Regulation

Abolish government regulation of food, what could possibly go wrong? Over the last few weeks the Irish and UK food industry has been rocked by the discovery that many beef products actually contained horse meat. This has raised all such of questions and it is highly likely that other frauds were committed. In this context, it is worth examining why we have government intervention in the economy. It is regularly asserted that the government is only a burden on the private sector and that we would all benefit if the market was left alone. Do consumers need the government to protect them from unscrupulous businesses or can the market regulate itself?

Let’s begin with the market view where there is no government regulation. In theory all businesses will have an interest in providing safe food, after all if not, they will get a reputation for unsafe food and people will not buy from them. Businesses could voluntarily join private regulatory bodies who will charge for an inspection. These firms too will have an incentive for high standards as it will give them a good reputation. If any business is caught say, selling horse meat disguised as beef, they will lose their customers. Therefore in the libertarian view, the market will protect the consumer far better than any possible government bureaucrat.

Were it only so simple. In reality there are numerous problems with leaving market forces to protect consumers which is why almost all countries have government regulation of food. The main problem is that consumers do not know the conditions of what they are buying. To use an economic term, they suffer from asymmetric information (a situation where one party knows more than the other). If I buy a packet of beef, how can I know if it actually is beef? How can I possibly know how hygienic it is? The simple fact is I can’t. There is no way for me to find out the conditions of the abattoir or the farm the cows were raised on. If it was raised in filthy conditions or isn’t even beef, there is no way the consumer can tell.

This is a serious problem as food is necessary for life and it can also kill us. How can I tell if my food is poisonous? There are so many diseases that food can contain that it is impossible for any non-scientist to be able to identify them. A libertarian may claim that someone dropping dead midway through a meal is something of a giveaway. However, diseases generally do not kill instantly, but rather over a period of time. It takes years for cigarettes to give someone cancer. If your food contains diseases that slowly diminish your health over time then someone would never know and the business could continue operating (and poisoning).  Likewise considering the vast diversity in the food we eat and places we eat in, it is near impossible for a consumer to narrow a case of food poisoning to a single restaurant (without professional help).

Contrary to what libertarians argue, government regulation actually helps the market function. If there is no regulation of food, a situation best described as the wild market (free market is too value laden) uncertainty would distort the market. If there is a chance my next meal will poison me then I am less likely to eat out. By providing a guarantee that all food is safe, government regulation removes this uncertainty and provides a boost to all restaurants. Likewise it prevents a race to the bottom where a business can gain a competitive advantage by undercutting its rival’s safety standards. Businesses could be placed in the unfortunate position of having to choose between cutting standards or losing customers. Government regulation is therefore beneficial to honest businesses that hold high standards as it penalises dishonest businesses that can subsidise their inefficiency by cutting safety standards.

The libertarian argument is based on the false belief that people will choose how safe they want their food. It creates an artificial divide between risk takers and safety conscious. Everyone wants safe food and few will deliberatively pay less and consider it a fair trade off. Then who will buy the cheap food of questionable safety? The people who always lose out in a libertarian world, the poor. Poor people do not prefer more dangerous food nor do they get extra utility from it. They but it because they have no choice. That is what being poor means. The people who bought the cheap Tesco horse burgers were those who were too poor to afford anything better. Not for them is the luxury of comparing different restaurants and choosing the one that best meets their standards. They have to take what they are given. That is why we have government regulation, to protect the poor who otherwise would be defenceless victims.

But can people not exert consumer sovereignty? Can they not switch to businesses with safe food? Would the dishonest not be driven out of business? Well, that depends; do you think Tesco will go bankrupt because they sold horse burgers? Will Aldi be the victim of market forces as consumers vote with their feet? Will the next Pope be a Protestant? Consumers hold far less power than is often claimed and are less effective at holding business to account as they are at holding politicians accountable. Such is the market power if corporations like Tesco (due to brand and size) that people will continue to shop there, presuming the problem has been fixed. Of course, if Tesco suffers no loss in sales then it has no incentive to keep a tight each on safety standards. Therefore the libertarian claim that unsafe foods will be driven from the market is unrealistic.

But what about private regulation? Could it provide the benefits of government without, you know, being the government? The problem is that they have no incentive to do so. Look at the financial crash. All those banks were subject to private market accountants yet that did little to deter them. This is because a private firm’s aim is not to ensure the highest standards are met, but that they make the highest profits. In order to do this they must make sure that businesses hire them. No business will pay for accountants to say their food is unsafe; rather they would use it as a PR exercise. There is an unspoken agreement that the private regulators praise the business in return for getting rehired the next year. Regulatory capture happens in the private sector too.

No business will willingly impose standards on itself if it knows it will not meet them. It will only agree to what it would have done anyways. Businesses held accountable on the quality of their food, gets replaced with exercises in marketing and advertising, where all companies try to give the impression their food is safe, but not through quality standards but through spin. Take the green washing as an example. Polluting industries hire PR firm to make them look environmentally friendly while still polluting. Firms will have to spend extra resources in “signalling” to consumers that they are safe. This can be done by buying impressive looking furniture and buildings, that don’t make the business any healthier, but gives the impression that it is. (Ever wonder why banks have such grand offices? It is to give consumers the impression that they are reputable institutions, not scams to steal their money).

The recent scandal over horse burgers shows why we have government regulation. Without some kind of government food regulation we would never have known about this in the first place. In a libertarian world, there would be nothing to stop unscrupulous businesses from tampering with their food products, safe in the knowledge they will be neither caught nor punished. We all like to moan about government bureaucrats, but its times like these that remind us why we have them in the first place.


Filed under Economics

28 responses to “Horse Burgers And Food Regulation

  1. Well written…
    I still prefer government agency as regulatory bodies and checker with non-government organization or university as independence researcher.

    University should have their own fund to voice up their concern. It believe that is university roles as researcher and government advisory panel.

  2. An episode that illustrates several of the points you make is the swill milk scandal in the nineteenth and twentieth centuries in New York City. Cows were fed mash from distilleries. The milk produced by the cows was then consumed by people, including a large number of children. This wouldn’t necessarily kill the children instantly. This situation went on literally for decades and only changed when regulation came about.

    That economic models that are contradicted by evidence continue to be used is an odd characteristic of the field. Could you imagine such a thing happening in, let’s say, physics?

  3. Since profit overrides all other motives, it would be utterly insane to expect corporations to self-regulate.

    They have no long-term vision. They can see no farther than the next quarter’s profit margin.

    There have been documented instances in which car manufactures have calculated that it would cost them more to recall vehicles with potentially deadly flaws than to simply let a few people die and hope no one made the connection.

    Internal documents obtained by Congress show Toyota repeatedly bragged about saving more than $100 million by not conducting a more expensive recall.”
    That’s only one recent example. I recall reading about similar events involving american car makers and tire manufacturers years ago.

    Corporations of every sort will cut corners to increase the bottom line regardless of the risk to the public until something really drastic happens. Then they shift into damage control mode and, most of the time, end up spending less on that than they would on producing the highest quality, safest products possible.

    The primary reason people submit to governance in the first place is for the safety and security of society, to “Promote the General Welfare”.

    Unfortunately, in a system such as capitalism, which promotes plutocracy rather than democracy, the government soon becomes the property of the wealthy minority. Once this condition exists there are only token regulatory agencies issuing toothless regulations written by the very corporations they’re intended to regulate.

    To put it simply, as long as this system of usury and the for-profit paradigm remain predominant, things will simply continue on the present trajectory to global, neofascist totalitarianism.

  4. “We all like to moan about government bureaucrats, but its times like these that remind us why we have them in the first place.”

    The reason why we have them may not be because they do a better job ensuring that food is safe than voluntary solutions on the market would do, even if they do in fact do a better job. Many government programs are established by one special interest or another for one reason or another and then are rationalized after the fact with reasons like this that may or may not be true. Very often the rationalizations aren’t true. I haven’t researched this particular issue of when government food regulations began or why, but judging by other cases I am definitely skeptical of the claim that they were implemented solely to make food safer. There are undoubtedly many bureaucrats benefiting from the introduction and continued existence of government programs that regulate food.

    • Read “The Jungle” by Upton Sinclair. There may be a few indications therein as to reasons for regulating food producers.

      Simply put, it’s essential when profit is the motive for everything. No manufacturer is really interested in anything other than maximizing profit by any means necessary. Profit trumps everything, including Life itself.

      As far as government regulatory agencies are concerned, they would absolutely do a better job if they were free from influence, no, control, by the very corporations they were created to regulate.

      We can talk about what goes on in reality or in a perfect world. As long as the for-profit paradigm exists, underpinned by its attendant usurious monetary system, the reality will remain the same; the wealthy ruling class will own and operate the faux government at the expense of the working class.

      • “No manufacturer is really interested in anything other than maximizing profit by any means necessary.”

        That’s not true. For example, I’m a manufacturer and I’m interested in things other than maximizing profits.

        • Are you a monsanto, or exon or general motors or any major multinational corporation?

          Excuse me for not excluding any small corporations that have no significant impact on either the “market” or the general welfare.

          Let me qualify my statement; All major corporations, members of the corporatocracy, are devoted to profit before anything else. It’s a built in, essential aspect of capitalism.

    • Arah you’re too cynical. I can’t see what business or special interest gains from checking food for horse meat. While bureaucrats may have a vested interest in keeping regulations and their jobs once its set up, they wouldn’t have any influence in the original setting up.

      • “Arah you’re too cynical.”

        How ironic🙂. I would argue that I am the one who is optimistic about the goodness of others while you and most other statists are quite cynical. I believe that people are generally good and that many would voluntarily help feed and clothe and house their fellow neighbors in need in the absence of governments aggressively forcing them to give a portion of their money to others. In my opinion, you would have to have a very cynical view of human nature to think that people would just let these people suffer.

        • Not entirely. The treatment of the homeless shows that people can be indifferent to the sufferings of others and find justification. However, the main question is efficiency. I would love to help the homeless but I’m not sure if dropping coins into a cup is the best way. As people don’t know if the money will be well spent, they don’t give. Instead if there was a government shelter or soup kitchen, I would be more than willing to pay for that.

          In the aftermath of a natural disaster the government can (note they can doesn’t mean they will) better organise relief and reconstruction. I cannot personally provide much for my neighbours nor will it be much good if only I helped (again we come back to the free rider problem).

          So I don’t see people or capitalism as inherently evil or greedy. But nor am I naive. I recognise its problems and incentives that may not be best for society. The owner of a polluting factory may be lovely and generous while toxic fumes are belched into the air. It is not from mistrust of the people that I recognise the need for the people.

      • Not to mention that William Posner’s comment was definitely cynical: “No manufacturer is really interested in anything other than maximizing profit by any means necessary.”

        Of course I don’t think that there is anything wrong being interested in making profits so long as you only permit yourself to act justly. It’s possible for people to profit by acting unjustly (e.g. as many large corporations do when they lobby the government to gain special privileges over other firms by gaining tax-funded subsides or using the coercive power of the state to outlaw competition, etc), but when no such aggression is involved then both parties profit in a mutually-beneficial trade. That’s a good thing. But anyway, Posner said it all large businessmen were mean and selfish. I agree with him if his criticism is only aimed at crony-capitalism / state-capitalism, but if it is aimed at free market capitalism then I would have to disagree and say that there’s nothing wrong profiting by helping others by selling them products and services.

        • Ok it was quite cynical, but it is a recognised fact that profit is the driving force of capitalism. Making a profit is not an evil or bad occupation, but it does carry certain incentives. If you can make more profit by selling substandard meat then a firm will have an incentive to do so. These abuses happen on the free market even without government.

          On a side note, not all deals are mutually beneficial. We may expect them to be, but they may turn out otherwise (risk is a large factor in the economy). Imagine there is a deal that has a 60% chance of benefiting you and 40% chance it will harm you. You may freely enter into the deal, but end up worse off.

          • “On a side note, not all deals are mutually beneficial.”

            I agree. On a related note: Not all coerced exchanges harm one of the parties involved, but almost all of them do. And I’m not one to say that I have more of a right to decide whether a person should exchange their property than that person. So even if I was quite confident that I could benefit them by exchanging their property (while simultaneously benefiting others and harming no one), I would still not force them to make the exchange. Let people occasionally make mistakes rather than violate their rights. Peace.

        • Do you really believe in “enlightened self-interest?
          I can’t imagine you could be so naive.

          The only purpose of profit is to ensure the dominance of those who take it over those from whom it is taken.

          • How do you take profit from someone? Value is subjective. If you have a pair of gloves and I have a hat and I would rather have your gloves than my hat and I say, “Hey, I’ll trade you my hat if you give me your gloves,” and you would rather have my hat than your gloves and so you say, “Sure, it’s a deal” and give me your gloves, then we both profit from the exchange. But we haven’t taken any profit from anyone; that doesn’t make sense. We’ve each voluntarily given something to the other and due to our subjective values we both believe that we are better off than before the exchange, so it can be said that we both profited. And I also think it would be inaccurate to say that either of us was dominating the other.

            • The problem is that you describe a barter system. In a monetary system it is easier to see profit. For example if I buy something for 3 euro and sell for 4, I make a profit of 1 euro. What Richard is saying is that what happened is that my profit came at my customers expense. I’m guessing the domination part is reference to work, but I’ll let him elaborate

  5. John Pennington, San Francisco

    The case for government regulation seems so strong to me that I can’t understand why anyone would argue otherwise. You bring out several important points here.

    • I oppose government regulation for moral reasons, not because of my beliefs regarding the economic question of what the likely outcomes would be if some people forcefully regulated the peaceful actions of others.

      Specifically, I believe it is unjust for anyone to use physical force against another person who is acting peacefully. Note that I believe that offering to sell others food is a peaceful act, not an aggressive one. And of course it is still peaceful even if the vendor does not listen to a third party that wants to inspect the food and/or tell the vendor how to make it or what to include or not include in it.

      • Force is not used in food regulation, it is only at the end of a chain of actions and re-actions if the system is challenged. However, I could say the same thing about private property. If I trespass on your property and refuse to leave, eventually you will resort to force to remove me. Hence private property is based on coercion. Therefore by your own logic you should oppose it.

  6. GM

    You should be comparing the current situation with a theoretical circumstance in which bodies such as food safety authorities have no legislative remit, but instead rely on their reputations and value offerings to stay ahead of potential or existing competition and thereby to gain repeat business. You threatened to perform this correct analysis in paragraph two, but then proceeded to give a rehash of painstakingly detailed commentary on Why Things in the Real World Aren’t Perfect, justified by the incorrect and unproven assumption that government regulation automatically provides a solution. There was no explanation regarding how the mechanism of government provides a superior conduit of consumer demand than market interactions do, which is the key issue at stake here. It was merely assumed that everybody wants “safe food” (not defined, since it can’t be – this is a matter of degree and probabilities), and, upon combining this with proof of the obvious fact that the market is imperfect, that you have shown that the government should write laws so that all food is safe.

    “Consumers hold far less power than is often claimed and are less effective at holding business to account as they are at holding politicians accountable.” – oh really? Compare the corruption and failures which politicians and substandard government services get away with on a daily basis with what Mr Gerald Ratner, Arthur Anderson, Worldcom, and every other of the millions of unsuccessful entrepreneurs and businesses have failed to get away with, and think again.

    It is obvious why this would be so. When you vote, you get only a handful of choices once every couple of years, and you are coercively bound to pay for the decision of the majority for the several years until you get another vote. It’s a package deal of mammoth proportions and costs over which the individual has close to zero marginal influence. When you use the market, on the other hand, you can use the products of any supplier you wish, in a quantity of your choosing, whenever you want, with the only condition being that you gain the consent of the supplier (which is the right which gives each person the freedom to act in a “sovereign” manner as a producer, too – see Rothbard’s disctinction between consumer sovereignty and individual self-sovereignty). Unlike the political outcome, the market allows the marginal influence of the individual to have an impact with respect to each and every economic decision which they make (importantly including their decisions whether and what to produce and supply, not just what to consume).

    It’s not perfect, because perfection is impossible. But businesses fail every single day, whenever they fail to meet sufficient consumer demand. Political parties fail every once in a while, but governments themselves need never fail without a revolution: they exist because of their brute force ability to tax and print money, and never go away so long as they have that power. They simply don’t need to react to meet the demands of their customers like businesses do. Consumer satisfaction and success in the market can be roughly measured in the revenues and profits which each and every specific business achieves on a daily basis, incorporating the effects of the granular and dynamic possibilities of millions of individual independent decisions. Consumer satisfaction in the political realm, by comparison, is barely measured: it is measured only once every few years, with a pathetically small number of possibilities, and in such a way that minorities can be ignored. Honestly, why on earth would a utilitarian feel compelled to prefer the latter to the former? Reflecting on the distinctions between each mechanism provides clear explanations as to why the inefficiencies of the market, which undoubtedly exist, are multiplied thousands or millions of times over when politics is what counts.

    “Everyone wants safe food and few will deliberatively pay less and consider it a fair trade off. Then who will buy the cheap food of questionable safety? The people who always lose out in a libertarian world, the poor. Poor people do not prefer more dangerous food nor do they get extra utility from it. They buy it because they have no choice. That is what being poor means.”

    We are getting to the core of the issue here. Economics on this blog is biased by a desire to help the poor, to “stand up for the little guy”. Not that there is anything objectively wrong with such values, but it must be acknowledged when they are getting in the way of rational analysis.

    Firstly, as I mentioned above, you haven’t defined what “safe food” means, because it’s impossible to do so. There is no objective definition which would hold true over time. Society advances, opinions change, standards improve. Regulations in the 18th century which demanded that all food must be produced to 21st century safety standards would have had what effect? I would say mass starvation. Do you think otherwise? I hope this question would lead you to make the small concession that government regulation is not the primary reason why food is safe (instead, the primary reason is capital accumulation in the food production industry).

    More important again is the depiction of “the poor” (again, not defined, because it can’t be: “poor” by modern Western standards is wonderfully rich by the standards of nearly all other human societies throughout history).

    In a free market, the so-called “poor” have “no choice” but to buy unsafe food? So the poor are supposed to be helpless victims, little more than mindless animals, with no ability to improve their situation.

    However, just because someone is “poor” (again, relative to somebody’s opinion – probably not relative to the experience of most humans alive and who have ever lived) does not mean that they had no say in the outcome of how they came to be poor. That is a baldly false assertion. All the post-hoc rationalisation in the world will not overcome this. You are imagining that “poor” people have the same demand for “safe food” as the people who succeed in getting it without the assistance of the state. How was such demand expressed to enable you, acting as an economist, to so confidently assert that it exists? Is this true for any good or service which is essential to life? Why does it not apply to non-essentials? Then how do you define which goods are essential and which are not, and their essential quantities of supply? Does it apply to the market for husbands and wives and for friendship too? I fear that these are questions with no answers.

    None of this denies the role of luck and circumstance in our life outcomes, but should help to steer the analysis back to something which is within the bounds of necessary economic logic, which would be a useful starting point.

    Incidentally, the reference to the banking crash is facile, since the crash was broadly speaking a matter of insolvency, not of fraud. It is also ironic, given that the insolvencies were not caused by the free market but by Western governments themselves, through their manipulation of the monetary order, and by their cartelisation of the banking system.

    With respect to regulations generally, it is clear that free markets naturally tend toward an appropriate degree of standardization. The British Standards Institute (BSI Group) and the International Organization for Standardization would almost certainly continue to exist even if national and international governments did not recognise them (although they would be incentivised to provide more value by the increased threat of competition). The Food Standards Agency/Food Safety Authority would still exist, to the extent that genuine demand existed for their services. And brands and large organisations would continue to provide their own form of regulations and standardisation too, in the sense of certain uniformities and guarantees whenever you use one of their specific local branches or services (e.g. McDonalds).

    I continue to appreciate your analysis, but I think you need to take it to the next level to defeat the libertarianism which you so profoundly oppose. To achieve this, I’d recommend reading some of the economics books which libertarians actually agree with. This does not include your neo-classical university textbooks.

    • True I did not define what I meant by safe food, but that should be obvious. Clearly no one wants to be poisoned by food. Obviously people should be protected from fraud, like disguising horse meat as beef burgers. I didn’t define it because its unnecessary (and I’d need to be an expert to know where exactly to draw the line)

      Yes there is government corruption, but surely the financial crash should show that corruption also occurs in the private sector. The Libor scandal was outrageous but that is all we know about, after all there is no anti-corruption squad for the private sector. Let’s not forget that we are discussing a blatant example of private sector fraud which was only discovered by government regulatory bodies.

      (Your discussion of the government which boarders on anarchism is an interesting topic, but will open up a whole other debate. I plan to do a post on anarchism in 2 weeks or so, so we can continue there)

      You try to defeat my argument not through an argument of your own, but through semantics. Yes the meanings of words like “safe” and “poor” are relative and always changing. Yes standards have greatly improved over the last 200 years, that’s what progress looks like. But what was normal then isn’t normal now because our expectations change. It is true that what is poor know was at one time rich, but that means what is rich now is obscenely rich then. That is no more an argument against helping the poor than crucifying the rich.

      You completely misrepresent me when you claim I view the poor has “helpless victims, little more than mindless animals”. Of course I don’t. But let’s be realistic, if you’re poor by definition your opportunities are limited. Lack of money narrows your choices. You could buy better quality food that costs more, but that leaves less for something else. The poor must economize out of necessity and buy the cheapest they can. Not because they are mindless, but because they cannot afford anything else.

      “You are imagining that “poor” people have the same demand for “safe food” as the people who succeed in getting it without the assistance of the state. ”
      I think its safe to assume that people in general have the same desire to live. I think its fair to assume that people don’t want to get poisoned. To think that due to their poverty the poor people have somehow less desire for their own safety seems absurd. If you mean to claim that they “choose” unsafe food due to different preferences then this is completely ridiculous. They do not choose unhealthy food, poverty forces them.

      (Unfortunately you lose the run of yourself at this point, only catching up in the penultimate paragraph)

      Could you address my paragraph where I argue why a private sector regulatory body would not work? Where I point how that they lack an incentive to release information damaging to their clients?

      On libertarian books, I do intend to read more and was recommended the “Machinery of Freedom” for similar reasons that you use. I’ll write my review over the weekend.

      • GM

        ” But what was normal then isn’t normal now because our expectations change.”

        I fear that you are missing the big picture cause-and-effect relationships, and I should have been more clear on this in my original comment. Economic output is not a function of what we expect, demand or desire: it’s a matter of what raw supplies, technologies, machinery and skills – that is to say, what capital – is available. As with every other good, people would prefer if there was an infinite supply of perfectly safe food, but we don’t have it. No law can abolish the economic fact of scarcity. No law can magically improve the technologies or the supplies available to us. In this respect, it simply doesn’t matter what regulations the government imposes; the economy can only produce that which is physically possible.

        The inevitable inability of statists to define the terms they use is important. They speak like their theories and rules have a sort of objective justification or moral underpinning, when in fact they are based on a subjectively modern and myopic frame of reference. This is how it is that they can blame capitalism for society’s ills, despite the fact that the rules they want to enforce would cause mass starvation were it not for the progress which capitalism has already achieved.

        With respect to the poor, again, there is severe bias at work here. You continue to talk as if people have no control over their circumstances, like the “poor” are a particular subspecies who are distinct from the rest of humanity. Do you think we can have a rational economics conversation on the premise that people have no control over whether or not they are “poor”?

        Responding to the point you’ve specfically asked me to deal with, it is true that firms have an incentive to act in the interests of their clients. This holds true for accountants and auditors too. Might they pretend that things are better than they really are? Yes, they might. Yes, it has happened before. There are counter-balancing forces, however: investors generally want to know the truth about the companies to which they allocate capital, which is why they would have an underlying interest in hiring auditors, regardless of the regulations, and auditors want to have a reputation for giving investors valuable information.

        In fact, however, all of this is quite beside the point. Why? Because, to the extent that there are structural imbalances in privately owned corporations, it is likely they will be magnified and multiplied in each and every government enterprise, because government enterprises are free to abuse taxpayers far more liberally than corporations can abuse their shareholders and other stakeholders. Have you noticed the EU’s trouble with its own auditors? Did you notice that the Greek government may have told some lies about its accounts prior to joining the euro? Do you think that government departments and state enterprises tell us the truth about their fiscal matters, and are transparent about how they spend their money and why? The massive scandal around FÁS comes easily to mind, but there are plenty of others.

        None of those examples prove anything in particular, but they should help you pause before you jump to the conclusion that expanding government is a fix for each of the inefficiencies you can spot in the free market. You have to do more than prove that the free market is inefficient; you have to prove that the government is so special that it won’t suffer from the very same inefficiencies. Since the government can tax and print counterfeit money to fund itself, while private entities rely on investors to voluntarily allocate capital to them if they are to survive, I tend to think that it is private entities who are far more likely to behave in a way that creates value instead of destroying it. This is the crux of the matter.

        I’m taking a break from this blog for a few months. I hope you continue to enjoy writing. It’s good that you intend to read more; I think you would be able to fight my arguments in a much stronger way if you were already familiar with the work of Mises, Hoppe, etc. The Austro-libertarian responses to the points you raise with me would be immediately obvious to anybody who has studied that school of thought to any degree whatsoever.

        Machinery of Freedom is not very good, in my opinion, but it’s not terrible either. If you want to understand the libertarianism which is sweeping the web, you are going to have to read things which are rarely or never mentioned in mainstream media, nor in your textbooks. Good luck.

        • It is true that the increased use of capital is part of the reason why food standards have improved but the law also has had an impact. Obviously I don’t believe it has a magic effect, but it is ridiculous that to pretend that the laws of the land have no effect. They do not create economic resources but they certainly affect how the resources are used. The book “The Jungle” is a good example of how modern advances may not automatically lead to improved standards. It was the laws introduced afterward that improved standards.

          Ok by definition, poverty is the inability to obtain the main benefits of modern life and having a substandard of living. In any system there will be people who cannot afford necessities. I thought it was obvious that everyone can’t afford everything (which is why I didn’t elaborate on it). The problem with putting the emphasis on preferences it that is assumes perfect equality of income. So if there is a choice between beef or chicken some people can afford both, while others can afford neither. The question as to why they are poor is one for another time, but that the poor exist is an obvious fact. It is does not mean I view them as helpless “subspecies” (an accusation too absurd to be insulting) but rather recognise a basic fact.

          Do people have control over whether or not they are poor? We are certain to disagree on this, but I believe that in the short run, no. As a student I have very limited income, a fact that won’t change for many years. The long is open to debate.

          Investors may have an incentive to investigate their own company, but not to share this information with any else. Therefore consumers still remain in the dark. Even potential investors would not be told the true state until they are inside. No business has an incentive to publish damaging information about itself. If the information is never critical then it is only propaganda.

          Is the government worse than the private sector? You say FÁS, but I say look at the entire financial industry. Look at Anglo, AIB, AIG, Leheman etc. This was fraud on a scale that far outstripped FÁS and makes it seem almost petty in comparison. When government regulation fails, it is usually because it failed in its duty to keep the private sector in check. At least when it fails it doesn’t threaten to destroy the entire financial system.

          I’m sorry to hear you’re taking a break and I hope you return soon. I always try to hear the other side of the argument which is why I enjoy your comments (you can only have so much of everyone agreeing with you). Because libertarianism is so far from the mainstream it is hard to find good books a bout it and I have trouble knowing where to start. The reason I read Machinery was because a friend recommended it.

          (On a final note, I only found your message about your secret identity today (though I hadn’t even noticed at the time). For some reason facebook didn’t class it as a message but as “other”. I removed the link so your secret identity is safe with me (though I was a bit disappointed, I imagined you as a caped crusader, fighting statism by night wearing a mask or something.)

          • Great post by GM. Robert, did someone else recommend The Machinery of Freedom other than me? Note that I recommended it to you on my Libertarian Humor post before I knew that you were studying economics. The Machinery of Freedom is written for a general audience so that literally anyone can read it and understand. I am a Mechanical Engineering student and have never studied economics so I thought it would be a good book for me to read. However, I definitely second GM’s recommendation that rather than read Machinery of Freedom you should read Murray Rothbard and Ludwig von Mises and Hans-Hermann Hoppe. David Friedman’s anarcho-capitalism is different; he’s not an Austrian. Of course, there are other anarcho-capitalists who aren’t Austrians (e.g. Bryan Caplan ( ), but the point is that there are many austro-libertarian anarcho-capitalists that you may want to focus on. Good luck in your studies and I hope you do your best to learn and understand their views before you rush to explain why they’re wrong. If you do that then I guarantee your arguments against the economic views held by many libertarians will be much stronger🙂. Peace.

            • Yeah I got an anarchist friend in college who recommended it and Rothbard. Really didn’t like it and my 2nd next blog post will be about it. Literally the only good thing about it is that it is easy to read, with the chapters being more like newspaper articles. But more on that later.

              As soon as I’ve more time I want to read more economic classics of all schools of thought, Austrian included

  7. Pingback: Headlines: Flourishing Fish Fraud | dreamhorseranch: science roundup

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