Monday, July 8, 2013

What's an uninformed consumer?

NPR's Morning Edition had a pair of stories today relating to the negotiations that are just starting for the Transatlantic Trade and Investment Partnership, or T-TIP as the cognoscenti are fond of calling it. (Doesn't it just sound so cute?) The stories focused on two farmers, one in Delaware, the other in Burgundy.

The French farmer was not excited about competiting with U.S. agriculture:
"I'm worried about open business because [I'm] sure we will not win because it's too different," he says. "If it's open, I think in 10 years, we all disappear in France and Europe. The cost in the U.S. is less than in Europe."
The story explains that "Most American beef is banned in Europe. Only a small percentage of what is known as non-hormone treated cattle is allowed in."

Conspicuously missing from the story was any mention of the health concerns around meat animals raised with hormones to make them grow faster, to say nothing of the heavy use of antibiotics in cattle, both to promote growth and as a prophylactic measure to more or less control the diseases that would otherwise run rampant through groups of cows living in their own dried shit and eating a grain-based diet for which the cow is not evolved. By which I mean, the story said nothing about any of that.

What you often hear from advocates of trade agreements is that these are just "covert barriers to trade." The idea is that the policy-makers say they're implementing a ban on beef raised with hormones and lots of antibiotics out of genuine concern for the environment or consumer health, but all they're really doing is trying to sneak around rules that are supposed to allow goods to move freely between countries.

And the concept of covert trade barriers isn't an inherently crazy idea. There are benefits that come with trade, and sometimes people oppose trade to protect a relatively small group within their country at the expense of the public at large.

But the thing is, protection of human and environmental health isn't a crazy idea either, and it would be nice to see the relevant argument included in a news story about trade agreements.

Back on the other side of the pond, the farmer in Delaware is a convinced supporter of GMO crops and he's not happy about the EU's decision to label food packages based on whether they contain GMOs.
"It gives a signal to the less informed purchaser ... the less educated consumer would interpret that as, 'Well, I don't want to eat that it contains genetically modified organisms,'" he says.
So out of concern for less informed purchasers, we're going to take measures that keep customers from being ... informed.

I'm not categorically opposed to genetic engineering. Even the term "GMO" is poorly chosen, since it stands for "genetically modified organism," and pretty much everything we eat has been genetically modified by humans through selective breeding. From that perspective, genetic engineering is a point along a spectrum, not a radical break, and then one way of framing the GMO question is whether any particular crop is good: good for increasing yields, good for reducing agricultural pollution, good for health, good for different groups of farmers, ...

But other people see it differently. They object to the technology itself. They are concerned that the technology may be inherently unsafe.

I'm OK with mandatory labeling. I can understand the case against it: if you think the technology is fundamentally inoccuous, you'd rather not have the added expense of having to specify that your food has GMOs. But there's already so much on labels, how much more nuisance would it be to put "Contains GMOs"?

Oh, and that business about the uninformed consumers? At least as insincere as anyone claiming to be concerned about the environment, just as a way to hide a trade barrier. If we're really concerned about labeling that might bewilder the poor little "less informed" purchaser, we might start with the word "natural" and continue on through the raft of dubious claims implying health benefits from buying various kinds of heavily processed, overpriced food.

But the real acid test is whether someone supports bans on labeling. That's a rule where, not only do products not have to say if they do have GMOs; other products aren't allowed to say if they don't have GMOs. The argument here is an extension of the Delaware farmer's stated concern: if people see some products labeled "Doesn't contain GMOs," they'll assume that GMOs must be bad, and so they'll shy away from buying things that don't say they don't have them.

Well, that's certainly a risk. But is it really a big enough risk, or a serious enough one, to justify forbidding producers from convying true information to the consumer? It seems like that would be hard to square with any kind of claim to being a supporter of free markets and the liberties of producers and consumers, but somehow the Titans of Industry manage to do it.

I'm sure Rand Paul will make it a centerpiece of his 2016 presidential bid.


  1. Covert barriers to trade, huh? I wonder how they would explain this blindly obvious concept: if Europe won't let European Company Alpha sell Product X for health or environmental reasons, how is it reasonable to expect them to let U.S. Company Beta sell Product X-1 (which has the same toxic stuff in it)?

    Anybody with kids would recognize this tactic. I generally think of it as Whatever-Gets-Me-What-I-Want. It doesn't have to make sense; my kids have informed me fairly often that logical consistency is for wimps. Returning to the subject at hand, I've heard a lot of business owners of varying sorts extol the virtues of competition but, if you talk to them for long enough, eventually they will tell you (indirectly, of course) how much they hate having to compete and what sorts of interesting (-ahem-)things they'd be willing to do to avoid it.

    1. In one of his books, John K. Galbraith wrote (and I'm approximating here): Everyone in America thinks competition is great--for everyone else.

      I agree with the example in your first paragraph, but the answer that you'll receive is usually as follows: Product X (or rather Input X or Technique X) doesn't actually pose a risk to health or the environment; the European failure to use Input X is more or less incidental to their overall inefficiency, and becomes a convenient excuse for keeping those more efficient American producers out of the market--i.e., a covert barrier to trade.

      It ain't pretty, but it does help one preserve one's faith in the magic of the market.