Tracing consequences both seen and unseen.
Eric D. DixonTo Protect and Subvert
Posted at 12:42 am on January 24, 2012, by Eric D. Dixon

Public choice article of the day, from The Atlantic:

Roughly 70 percent of all antibiotics used in the United States are given to healthy farm animals to foster rapid growth and make up for unhygienic living conditions. Many bacteria that live on animals adapt and transfer to humans, spreading superbugs that are often resistant to treatment.

For more than 35 years, the FDA has recognized that giving antibiotics to farm animals poses a risk to human health, yet the agency has done almost nothing to stop it. Indeed, it has mastered the art of making inaction look like action. Last May, NRDC and our partners sued the FDA to prompt it to take action. Instead, the agency retrenched.

It started by claiming the livestock industry could police itself. In our lawsuit, we asked the FDA to finally rule on two citizen petitions — one filed 12 years ago, the other six years ago — urging the agency to stop the use of antibiotics in healthy animals. In November, the FDA announced that although it shares concerns that the use of antibiotics to make animals grow faster is dangerous for humans, it would deny the petition because it was pursuing an alternative strategy.

This “alternative strategy” turns out to be just another name for the status quo. Instead of banning the use of antibiotics in healthy animals, the FDA is allowing the livestock industry to follow a voluntary approach. But we already know voluntary doesn’t work. The FDA has been operating under that model since 1977, yet the practice has expanded exponentially over the years. Talk about the fox guarding the hen house.

In December, the FDA tried to further justify its inaction by erasing the historic record. Back in 1977, the agency proposed to withdraw approval for the use of several antibiotics in animal feed based on findings published in two notices posted in the Federal Register. The notices containing the findings have been listed in the Federal Register for more than three decades. But just before Christmas a few weeks ago, the FDA pulled the notices. Soon after it buried its 35-year-old proposal, the agency tried to have it both ways. On January 5, it proposed banning off-label uses of a class of antibiotics known as cephalosporins on healthy livestock.

To be clear, although I’d like to avoid the consumption of antibiotic-treated livestock as much as possible, I don’t think the FDA should ban it — a clear overreach of government power.

FDAThe lesson here, though, is that when a government agency is tasked with protecting the public interest, public-sector incentives make it a near certainty that the agency will eventually instead collude with special interests in working against the public interest. Instead of serving the one function that is clearly useful for industry oversight — education and advice to consumers who can then make a more informed choice — the FDA has become a legal arbiter of illusory safety.

If the FDA allows a product or practice, the public at large regards it as safe. If the FDA disallows something, society assumes danger. But instituting a top-down decision-making process to centralize the level of risk that consumers should be allowed to take leads to a system that serves nobody well. Life-saving drugs are barred from being used by people who are more than willing to accept their potential hazards. The sale of healthy food is criminalized because of the mere possibility that it could make somebody sick, despite the fact that people can and do get sick from the FDA-approved alternative. And, as shown in The Atlantic, because people trust that D.C. paternalists are looking out for them, they carelessly consume anything that the FDA has let slip through its otherwise iron grip.

A bureaucratic overlord is incapable of choosing the correct balance between risk and reward even for the people in his neighborhood, let alone for more than 300 million strangers scattered throughout the country. There is, however, an alternative, as Larry Van Heerden noted in The Freemam:

The first step to correct these problems is to abolish the FDA, stripping the government of the power to approve drugs (and medical devices) for the market or to remove them from the market. Any rule-making for disclosure and lawsuits for fraud should be devolved to the states.

Even if the FDA were omniscient, objective, and impervious to outside influence, it would be wrong to give it the power to withhold drugs from the market. The proper function of government is to protect individual rights and guard against fraud, not to restrict freedom of choice to protect people from their own ignorance. In fact, the FDA has shown itself to be imperious, subject to prevailing political winds, and indifferent to the thousands of deaths and injuries it has caused.

[…] Forcing all consumers to live by rules that cater to the least responsible individuals imposes huge costs on everyone else and ultimately fails to protect even the willfully ignorant.

[Cross-posted at Shrubbloggers.]


Filed under: Corporatism, Drug Policy, Food Policy, Nanny State, Public Choice, Regulation
Comments: 2 Comments
 

David M. BrownWhat if there were deficit thinking, thinking deficit, on a desert island?
Posted at 1:43 am on August 9, 2011, by David M. Brown

Let’s attempt the program of “economic stimulus” on a desert island. Five persons have survived the shipwreck. Joe is good at gathering berries and reeds, and dressing wounds; Al is good at fishing, hunting and basket-weaving; Bob is good at making huts and gourd-bowls; and Sam, who wants to spend all his time sharpening sticks, and who regards any other kind of employment as beneath him, cannot produce a tool of any usefulness.

Let more and more of the resources that would have been exchanged in life-fostering and productivity-fostering trade between Joe, Al and Bob be confiscated by a fifth person, the king (who happens to have the only gun, a Kalashnikov that he grabbed from the ship before it crashed; elsewise no one would listen to him). And let this confiscated wealth (after a suitably large finder’s fee for the king has been deducted) be given to Sam to subsidize his slow and pointless blunt-stick production, since it would allegedly be unacceptable for Sam to have to accept alms in accordance with the sympathies and judgments of his fellows. And let the king perpetually demand more and more “revenue” to distribute and perpetually bray that criticism of his taxing and spending policies by “economic terrorists” is undermining confidence in the island’s economy.

What are the effects of this confiscatory and redistributive process on the prospects for the islanders’ survival? Discuss.

[Cross-posted to Davidmbrowndotcom.]


Filed under: Culture, Economic Theory, Efficiency, Finance, Food Policy, Gains From Trade, Government Spending, Health Care, Labor, Law Enforcement, Local Government, Market Efficiency, Nanny State, Philosophy, Politics, Property Rights, Taxes, Trade, Unintended Consequences
Comments: None
 

Sarah BrodskySubsidies for Grocery Stores
Posted at 7:41 am on April 25, 2010, by Sarah Brodsky

I love Schnucks, but I can’t agree with this:

Robert Buchanan, assistant professor of finance at St. Louis University, gives the Schnucks credit for trying something bold and innovative — and for not jacking up the prices at the downtown store.

As for the businesses who are struggling as a result, that’s a fact of competitive life, he said.

“Retail is very much a Darwinian struggle, and the best operators are going to win,” Buchanan said.

The competition for lunch customers in downtown St. Louis isn’t simply a matter of the best food establishment winning out. Schnucks received state and federal “incentives” and tax increment financing from the city–subsidies that allow it to keep prices low and put smaller eateries out of business.

The story of the Schnucks Culinaria in St. Louis illustrates how government efforts to subsidize grocery stores can effect neighborhoods. Small stores and diners are hurt. The people who gain the most are the office workers who get access to cheap, convenient salads and sandwiches. But it’s not like those salaried employees wouldn’t have been able to eat any other way. They could have packed lunches from home just as cheaply if they had cared to take the trouble.

We should keep in mind the unintended consequences of grocery store subsidies the next time activists like Michelle Obama call for eradicating food deserts. To politicians, any place without a fancy deli that suburbanites would find attractive is a food desert–and all the small cafeterias that are already there had better get out of the way.


Filed under: Food Policy, Taxes, Unintended Consequences
Comments: None
 

Henry Hazlitt"[T]he whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
Henry Hazlitt, Economics in One Lesson
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