Re: AgBio economics [was Re: Health Risks]
Thu, 26 Aug 1999 12:07:49 -0700

On Tue, 24 Aug 1999, Brian D Williams wrote:

> My bet is that if agribusiness had to label products with (contains
> genetically engineered materials) those products would fail in the
> marketplace......

If you look at the libertarian analysis, you see that you don't have to go this far; no coercion is necessary. If your prediction is right, then companies which don't use genetically engineered materials could label their own products as being free from such, and they would get increased sales. The first companies to do this would be copied by others, and soon the absence of such a notification would be a de facto tip that the food did contain such engineered products.

What actually happens in the real world is that companies fear this outcome, so they get laws passed preventing other companies from advertising that their foods don't have genetic engineering in them. They argue that if such notices were allowed, it would imply to the public that genetically engineered foods were unsafe, but the FDA has approved genetic engineering, hence it is safe and such statements cannot be made.

The actual solution, then, is to allow the market to operate and prevent coercion from being used. In our present environment, with so many distortions and misallocations caused by government regulation, it is natural to propose to solve the problem by adding more regulations (forcing manufacturers to disclose that they are using genetic engineering). But if you look deeper you will often find that the problem is caused by existing regulations, and adding new ones is not the solution.