Wednesday, March 31, 2010

Food Inc.

The movie Food Inc. that appeared last year (I saw it in June in Rhinebeck, NY's Upstate Films) seems on the surface to be just another left-wing protest movie. However, it captures a number of libertarian themes.  If you haven't seen it I highly recommend it.

First of all, it outlines serious risks associated with centralization of the food supply.  While centralization reduces costs it also creates risks such as the spreading of disease.  Second, it shows that USDA and government influence have contributed to harming small agriculture.  Organic farmers are often harassed by the USDA, which serves as an agent of large producers.  Third, it shows that many laws have been passed that reflect not the public interest but the interests of agribusiness.   After watching the movie, you will be glad that American agriculture has not been completely collectivized. I doubt that the movie's makers aim to pursue libertarian goals. However, the film makes clear that government's role has been to represent the large agribusiness firms, an inevitable outcome of socialist intervention. Government has not had a beneficial effect on the management of the nation's food supply.  Besides the issues the film raises, government has generally encouraged restriction of supply, which in other contexts would be illegal.  The effect has been to raise food prices.  At the very beginning of American socialism, during World War I, Herbert Hoover served as the food administrator whose job was to raise food prices by creating a food cartel.  This policy has been the American government's since the days of the New Deal.  Scientific management, in which the large producers excel, has driven down costs and prices in some areas.  The film argues that because they do not offer the same profit margins via fast food outlets, the same methods have not been applied to healthier foods like fruits and vegetables, which pound for pound now cost as much as and sometimes more than meat.

The aspects of the centralization story that libertarians might find most disturbing are first of all the role of government intervention in eliminating price signals.  If there are legitimate risks to centralization, the pricing ought to reflect this (i.e., lower prices would need to compensate consumers for the risk of contamination).  However, given restrictions on pricing and supply, government may eliminate these signals.  Second, the government has served as the enforcement wing of agribusiness in a variety of ways.  Libertarians will see at once that the pattern fits many other industries. Third, the courts' and regulators' harassment of small growers that the film depicts, whereby horrific conditions on agribusiness-related farms are given a free pass but much better conditions on small farms are found to violate trivial regulations that do not serve the public and the small farms are forced to close.

Overall, the film presents an argument against centralization of markets (that is, in favor of states' rights and elimination of federal regulation) and parceling of the market to prevent excessive emphasis on scale economies at the expense of innovation and other forms of competition. As well, it makes clear that when government gets involved, the producers will eventually dominate the public using the governmental system that was initially put in place under the pretense of serving the public.

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