Mad Cow Regulation
When people discuss the morality of government intervention in the affairs of private businesses, there are those who feel that the government is derelict in its duty if it doesn't regulate and inspect virtually everything. Others suggest that the needs of society are best served by businesses made productive by the absence or near absence of all state control. Beyond the federal government's questionable constitutional authority to regulate as much as it does, those of us who advocate little or no regulation point to the history of more powerful businesses making use of the government as a tool to eliminate their less powerful competitors.
The national firm can afford an army of lawyers to do all of the things and file all of the reports necessary to be in compliance with the most complicated regulations. The national firm can afford a battalion of lobbyists to make sure that the regulations are really complex, while favoring those things which the firm does best, and wherein it may hold exclusive patent rights. The large firm may actually have some of its employees on the working committees that actually hammer out the regulations for congressional or agency approval.
The “Mom & Pop” business owners don't sleep well at night if they have to talk to a lawyer, and may be ruined by his fees. If they know what a lobbyist is, suffice it to say that they have none in their employ. “Mom & Pop” work long hours, six days a week and keep the books after church on Sunday—in the unlikely event that they were invited to the working committee, there is no time left in the day, and no budget for travel and lodging expenses. The mid-sized business is in scarcely better a position.
The quintessential example of big business using government to fight little business may very well be the Enron debacle.
Yet , even with examples like Enron, the call for government involvement in free enterprise goes on. There is somehow the thought that while businessmen will take every opportunity to steal from or defraud their customers, the regulators are knights in shining armor, who are essential to our very lives and good health. Otherwise intelligent people somehow miss the concept that in a truly competitive environment, a business's reputation and its repeated customer satisfaction are more important than its price. A true competitor will strive mightily to be sure his product has no jagged edges or poisonous paint, will not burst unexpectedly into flame, has no harmful side effects, and will not kill or even sicken his valued customers.
Nonetheless, when it comes to the food we eat, even some of the staunchest free market advocates think about giving the government a role in its provision. After all, we have all heard those stories about what goes into hot dogs, sausages, and Chinese food.
But a curious story has been playing out in the courts for about four years. Apparently, a true competitor in the meat packing industry, named Creekstone Farms Premium Beef, concerned that even with USDA inspection of its beef, the company had been harmed by the international fear of mad cow disease. With Japanese import restrictions, Creekstone lost a third of its sales and was forced to lay off about 150 employees [LINK]. The Japanese standard is to inspect one-hundred percent. [LINK]
Creekstone positions itself as a top of the line beef producer. Everything is “natural” or “premium" or both. They are not inexpensive. According to the Associated Press, the USDA tests about one percent of slaughtered cows, which USA TODAY reports will soon drop to around a tenth of a percent. Creekstone's plan to recover some of the lost beef market was to build a half million dollar facility and hire people to test one-hundred percent of its cows. Now, the government may indeed be correct in holding that the one percent testing level is appropriate—the Bush administration points to a low level of human death from mad cow (none in the US, 150 world wide, mostly in England) to justify the testing level. But if Creekstone wants to spend the time and money to test one-hundred percent, why should the government care—it is not as though they were trying to test less, they want to test more! Why should anyone care if they wanted to test every cow five times over? The animals are dead. Creekstone is not asking the government to perform any additional work. The cost will have to be borne by Creekstone and its customers, something which the company feels will satisfy more customers, rather than fewer. Why should anyone care?!?
The government answer is that one-hundred percent testing will make its one-tenth percent testing seem inadequate. And by law, the Virus Serum Toxin Act of 1913, the USDA determines how many cattle are to be tested, where, and for what. The necessary testing kits can be purchased only with USDA approval.
It gets a little crazier. In 2007 a judge ruled that the 1913 law did not apply in the case of Creekstone, as the Act gave the USDA jurisdiction over test kits for “prevention, diagnosis, management or care of diseases of animals.” The animals Creekstone wanted to test were already dead! But now, in 2008, the US Court of Appeals ruled 2-1 in favor of the USDA on the theory that “diagnosis can be considered part of treatment.” Does the court believe that slaughtered cattle with mad cow disease can be treated?—perhaps resurrected?
So who really cares what Creekstone does? The New York Times reported that:
Top officials of the National Cattlemen's Beef Association, which represents 27,000 cattle ranchers, argued strongly in an interview that Creekstone should be stopped. Testing young animals, said Jan Lyons, the group's president, ''is like testing kindergartners for Alzheimer's.''
Terry Stokes, the chief executive, said, ''If you let one company step out and do that, other companies would have to follow,'' at considerable expense.
So we have a company in a small niche of the market, trying to maintain its customer base by assuring them a very high standard of safety in the food they eat. Their customers may very well be paranoid, but their money is green. But there are plenty of us who are unwilling to eat a twenty or thirty dollar steak (plus shipping and cooking) no mater how tasty, no matter how safe. There is plenty of market left for the big firms. But under the guise of protecting the public, the government is used to put the little guy under. “I'm from the government, and I am here to help.”
Send him mail
6 November AD 2008
St. Leonard of Noblac, Abbot
This article can be viewed full screen at
[ Comment Archives ]