Free-market fundamentalism? Not hardly

If you really want to get your blood boiling, read “Entrepreneurship Gets Slaughtered”, an L.A. Times op-ed on the Department of Agriculture’s disgraceful decision to prevent Creekstone Farms from testing all its cows for mad cow disease (free registration required):

According to the Washington Post, Creekstone invested $500,000 to build the first mad cow testing lab in a U.S. slaughterhouse and hired chemists and biologists to staff the operation. The only thing it needed was testing kits. That’s where the company ran into trouble. By law, the Department of Agriculture controls the sale of the kits, and it refused to sell Creekstone enough to test all of its cows. The USDA said that allowing even a small meatpacking company like Creekstone to test every cow it slaughtered would undermine the agency’s official position that random testing was scientifically adequate to assure safety.

That is to say, the Department of Agriculture would rather expose Americans to the risk of a rather horrible death from mad cow disease than to admit that maybe, just maybe, they are not as capable of protecting consumers as the private sector is. And that’s their official statement, the one which presumably contains the most favorable rationalization of their actions.

What didn’t get mentioned in their official statement, but which is correctly pointed out in the article, is that the more likely reason for Agriculture’s decision is that most of the meat-packing industry is vehemently opposed to the notion of testing every cow:

“If testing is allowed at Creekstone … ,” the president of the National Cattlemen’s Beef Assn. told the Post, “we think it would become the international standard and the domestic standard, too.”

There are three separate issues here that I’d like to address one at a time. First, let me re-emphasize the fact that Creekstone was voluntarily choosing to go above and beyond the required safety measures in an attempt to guarantee that their meat was clean. Apparently, this should come as no big surprise, as Creekstone is known for working hard to reduce the use of antibiotics, for using humane slaughtering techniques and for paying high wages. The point, though, is that the notion that, absent government regulation, companies would produce shoddy, dangerous products is utterly absurd. Sure, many companies would like to be free of government safety regulations, but consumers rather like not contracting diseases from their food, being injured by their appliances, etc. and many are more than willing to pay extra to prevent such things. In fact, the primary way for slipshod, cut-rate corporations to prevent their competitors from luring customers with safer products is through (surprise) government regulation.

Which brings me to my second point: agency capture. From the article:

The Department of Agriculture seems to have only one purpose in preventing Creekstone from testing — appeasing the big slaughterhouses. The USDA has a long history of doing the bidding of the meatpacking industry at the expense of the public. Indeed, in many academic studies, the department is presented as a textbook example of the problem of “agency capture,” wherein an agency becomes so identified with the companies it regulates that it becomes an extension of those companies.

Agency capture is a phenomenon closely related to the rent-seeking that engenders special-interest legislation, pork-barrel spending and all the other so-called “corruptions” of government that are, in fact, the necessary consequences of a government with the ability to control the economic fates of millions through legislative and even bureaucratic actions. In the case of agency capture, both the agency and the currently successful corporations in whatever area the agency is supposed to be regulating have an incentive to maintain something pretty close to the status quo (another example can be seen in the European Patent Office’s ridiculous attempt to destroy e-commerce). The currently successful corporations have that incentive because the status quo is obviously treating them pretty well, and why change anything when you’re getting rich? The agencies have that incentive because the status quo is something they know how to deal with, whereas changing conditions require smarts and adaptability, qualities inherently antithetical to the bureaucratic mindset.

Which brings me to my third point: the economy currently operating in the United States is a pretty far cry from a free market, despite the mindless babble about Bush and his administration being “free-market fundamentalists.” The fact that the Department of Agriculture thought it reasonable to justify their shutdown of Creekstone’s testing on the grounds that it would undermine their “scientific credibility” (as if they had any to begin with) is just further proof of this fact. What we have in this country is a state-sponsored corporatism beloved of Democrats and Republicans alike because it puts the reins in their hands while maintaining just enough freedom to avoid (at least for the moment) the Communist death-spiral. Marx invented the term “Capitalism” even though the system he was denouncing already had a perfectly good word to describe it: mercantilism. Somehow, he and his followers came to confuse the mercantilism against which his writings were opposed with the laissez faire notions being propounded by what were then called liberals and so this strawman of “Capitalism” came to be the symbol of the free market. As such, it should come as no surprise that those who derive their political and economic ideas from Marx confuse the neo-mercantilism of the status quo with a free market, but the real disgrace is that so many purported “defenders of liberty” make the same fundamental mistake, mouthing a dogma of free markets while identifying the corporate-welfare sector as “capitalist heroes”.

Maybe I’m dead wrong about everything. Maybe a free market would be as terrible a thing as the diehard socialists claim. But we’ll never know until the Creekstones of the world are given the freedom to try to produce a safer product without federal regulators, working in concert with the worst of the mega-corps, shutting down their operation.