Friday, March 30, 2012

Is the Pink Slime Issue Just A Matter of Consumer Preferences?

Previously I made a post entitled ‘Pink Slime: What is Seen and Unseen.’ Having made its way through some social media channels, it has received some interesting comments. A couple common arguments that seem to stand out, not only in my posts, but also in other articles could be generalized as follows:

"This is how the free market works. Supply chains will adjust. This isn't a unique situation that requires any further analysis. It doesn't stand out among the millions of other choices consumers make on a regular basis between numerous other products."

"Why even mention it. So what if consumers are uninformed. Education and evidence are really irrelevant to this issue (or any issue for that matter) because people are irrational. "

These comments really help to clarify the real issue here. The supply chain is really at the heart of the issue for many of those slamming pink slime. Its not pink slime in and of itself that is their only problem. They don't like modern food supply chains (think ADM, Monsanto, Wal-Mart), and if they get their way, our food supply chains would more closely resemble the balkanized gasoline market, with all of the restrictions and the required bottlenecking boutique of gasoline blends etc. and of course the high prices.

If I thought this were simply about food preferences, food choices, and consumers making decisions based on those preferences, and the markets  responding, then of course this would all be a moot discussion. Those that simply choose to avoid finely textured lean beef, are not necessarily the problem. The goal of the purveyors of the pink slime propaganda isn't simply to persuade consumers to choose alternative products, but to build the sentiment that will support coercive government intervention in the market place. (as has happened in other states with laws regarding 'child labor', ‘dust’ regulation, 'CDL  requirements for operating farm machinery', 'battery cages' in egg  production, 'gestation crates' in pork production, fat taxes, sugar taxes, salt  taxes, hormones, antibiotics, biotechnology...pick your technology,  ingredient, and regulation).

From fiction to reality, biotechnology, 'pink slime', pharmaceuticals, modern  food supply chains and processing, (name your villain) are all contemporary  analogs to 'Rearden Metal' from the book Atlas Shrugged. When Dagney had to go out on her own and  start the 'John Galt Line' it was in fact largely in part a response to the loss in demand as a result of the dynamics of public opinion regarding Rearden Metal, penalized for being virtue. Given the negative public perception and the heavy burden of the regulatory environment for the railroads, Taggert Transcontinental stock was plummeting.

Recognizing this dynamic between public opinion, market forces, and the regulatory apparatus and making it known is essential to the  perpetuation of a free society. As Don Boudreaux of George Mason  University states so well:

"What matters mostly – overwhelmingly – is the climate of opinion. And so affecting the climate of opinion for the better seems to me to be, by far, the only long-term means of ensuring the stability of a free society."

But, can we really affect public opinion for the better? Are people obstinate and irrational in their views?  Is evidence irrelevant?

 "Reason, my dear fellow is the most naive of all superstitions...logic is a primitive vulgarity" -Dr. Pritchett, Atlas Shrugged.

 Is evidence always and everywhere irrelevant, or is it just minimized by propaganda and undervalued in general?  Does the assumption of perfectly rational behavior have to hold to make these arguments, or to approach these issues utilizing the analytical way of thinking that economics teaches?  Should we just assume that all behavior is mindless and throw in the towel?  That would certainly relieve many of us a lot of stress and of course, that's what the interventionists like Dr. Pritchett in Atlas Shrugged wanted people to think. They desire a public that has grown disdainful of facts and evidence, looking to intellectuals and politicians to make things right.

But, as Steve Horowitz points out in his textbook 'Lessons for the Young Economist':

“When we look at the world and try to make some sense of it, one of the most basic and crucial distinctions we all make—usually without even realizing it—is the difference between purposeful action versus mindless behavior...The lessons in this book apply to purposeful actions performed by
conscious people who have goals in mind.”

As Dr. Horowitz goes on to explain, even if people often 'miscalculate' or aren't "perfectly rational people" the logic of economic thinking holds. As Economist Peter Boettke states:

"The great free market economic thinkers from Adam Smith to F. A. Hayek never argued that individuals were hyper-rational actors possessed with full and complete information, operating in perfectly competitive markets.... Efficient markets are an outcome of a process of discovery, learning, and adjustment, not an assumption going into the analysis."

And in fact, blogs, even 'micro bloggers' with just a few thousand imprints or less, all have a role to play in adding to this pool of knowledge. Even if they are preaching to the choir (i.e. read mostly by like minded individuals) they provide an arsenal of ideas that help everyone to better structure their thoughts, and share them with others, and occasionally someone that may actually change their mind.  Not everyone is a general like Bodreaux and Roberts at Cafe Hayek,  but given this war of ideas and the role they play in a free society, every soldier counts. Post by post, line by line. While its origins are disputed, the quote often attributed to Thomas Jefferson is no less true:

"The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt."

Wednesday, March 28, 2012


"But you don't want to have public opinion against you. Public opinion, you know, it can mean a lot."
"...I saw the whole industrial establishment of the world...all of it was run, not by bankers and boards of directors...all of it was run by any unshaved humanitarian in any basement beer joint, by any face pudgy with malice, who preached that virtue must be penalized for being virtue." - Atlas Shrugged.
"Cargill cuts 'pink slime' output, sees hamburger price rise' (Reuters)
Consumers say they want healthy sustainable food. They want it to be safe. They want it to be affordable. The market delivered with finely textured lean beef. Now in a classic illustration of group think, lead by celebrities, anti-farm activists, and advocates of big government, these same producers are being punished for catering to the expressed desires of their harshest critics. Some extremists are even peddling petitions and calling for government bans and regulations to 'label' or remove this product from stores and schools. Companies are shutting down operations and laying people off. Beef prices are taking a hit.

This summer, many of these same people will go to their Farmer's Market and feel good about themselves for doing their part to support local farmers, their community, and perhaps even bettering the environment. Certainly a laudable gesture. Others will just go to the nearest big box retailer and feel more comfortable that this product may have been taken off of the shelf or out of their school.  That is what is seen.

What remains unseen is the negative impact that this self-righteous orthorexic food fetish condeming so called pink slime will have on the rest of us. Particularly what is unseen is the loss of value that thousands of family farmers and local producers will have to absorb, while continiung to strive to feed the rest of us in a manner that modern agriculture makes efficient and sustainable.

Thursday, March 08, 2012

Is Corn a Greater Threat Than Al-Queda? Ask Joe Biden.

Last Friday a caller into the Rush Limbaugh show makes the following statements:

"I am a student a Murray State University as a biology major, and I was in biochemistry this morning, and there was an emphasis on discussing the regulation by the government of sugar, and particularly fructose. So he had us read an article, and I'll read you a quote from the article.  It said, "If international bodies are truly concerned about public health, they must consider limiting fructose ... to individuals and to society as a whole." They had five suggestions how to do this.  They said we need to reduce the hours retailers are open, control the location of retail markets, tighten the licensing requirements on vending machines in schools and workplaces, designate an age limit on who can buy the fructose (they suggest age of 17), and then their last suggestion is the doubling of the price through taxation.  And, you know, I just sat there in class thinking: "My goodness, you know, how brainwashed do people have to get to push this?"

This is a prime example of the phenomena that I have dubbed 'ose' gate.( This is essentially a conspiracy theory that modern family corn farmers are producing unhealthy, toxic food additives, and in the process, destroying the planet. But ultimately,the true target is modern technology and capitalism. I would agree with the student, it appears that they were on the receiving end of brainwashing and propaganda, probably in the name of infusing sustainability into the curriculum or being multidisciplinary. It could be, perhaps, that the professor thought what they were doing was an innocent and innovative attempt to get students interested in biochemistry by presenting an application of what's going on in the classroom. However, I would think that they could have provided additional references  for students to weigh in comparison to such extreme policy proposals presented in the article.

What's even more shocking are these words from vice president Joe Biden: 

 I think its just a symptom of general ignorance about where food comes from and how it is produced. The locavore movement and writers like Michael Pollan both seem to be bringing food to the forefront of people's minds. But reading his books or buying from the local farmers market isn't getting the job done. In fact, these venues could at times also be dens of ignorance and misconception as much as a place to educate consumers. Its important that producers of all types and scale as well as all other industry affiliates do their part to clearly communicate what's going on in the industry from gate to plate.


The Rush Limbaugh Show. Friday March 2, 2012.

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