Originally posted on Christian Michael:

I read an interesting article recently about how in a truly Free Market, British Petroleum would have failed post-oil spill. It would have gone out of business.

The common understanding of Free Market implies that businesses would run flagrantly out of control, abusing all natural resources and killing everyone with their unregulated products, and while I won’t argue that there are a few unscrupulous charlatans who would seek to abuse their power for money, the Free Market threatens them with a severe check to their balance. You see, those who attempt to do business and fail to deliver a quality product soon fail to find business any longer.

And in this day an age, where internet reviews become ever more important for continued business, there is less and less need (if ever there was) for government to tell you if a business is good or not. And on that note…

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  1. Sally

    Consumers often have no way to know how safe the products they buy are or if they will get serious diseases many years down the line. Free market is always ready to provide cheaper goods provided by producers that have no ethics (see the famous ketchup history), and free market can do nothing against externalities.

    You need a government to decide and enforce safety policies and to consider externalities. And those are limitations to the free market. So it’s not a question of “free market, yes or not?” but a question of “how much” free market should be allowed, and that’s obviously not a question that can be answered by free market itself. That’s a question that needs a functioning democracy, an educated population and a transparent media.

    Societies must consider the long-term effects, while companies have often only the short-term in mind and will happily pollute and exploit if allowed to do so.

    I don’t think any sane person can argue in 2012 for either a completely unconstrained market or for a soviet style market, so you’re fighting against the windmills.

    • I’m quite sane and you’re quite cowardly in not having the guts to respond to the real post only to this single paragraph lifted from it and quite dumb because you seem to be equating capitalism and the free market with anarchy. A free market requires that there is a strong legal system with strong rules to make the system run, it simply does not pick winners and losers.

      “but a question of “how much” free market should be allowed, and that’s obviously not a question that can be answered by free market itself. That’s a question that needs a functioning democracy, an educated population and a transparent media.”
      No actually that’s a question that requires laws and a constitution. The rules of economics should not put up to the whim of any democracy or educated populace, which is why we live in a Republic under a Constitution which is incredibly hard to change when you’re actually following (or you could just ignore it like some presidents whom I will not mention by name.) And the correct answer is you need as little government as possible to ensure that the system functions properly and that there is legal recourse to discourage the use of violence and fraud and recourse when they are used.

      “Societies must consider the long-term effects, while companies have often only the short-term in mind and will happily pollute and exploit if allowed to do so.” Actually, again, showing your absolute ignorance about anything but especially business, as corporations are near immortal and their boards and CEO’s always responsible to their shareholders (who are mostly in it for the long term) when the system has not been rigged to only allow for short term thinking (as any intervention by the government always results in) corporation are always more long term thinkers than individuals (and certainly more than lawmakers).

      “Consumers often have no way to know how safe the products they buy are or if they will get serious diseases many years down the line.” Ah yes because FDA with it’s repeated recalls of food produced on government subsidized agriculture with government endorsed labor is clearly doing such a bang up job. In reality if companies didn’t have the government to bail them out they would only have making safe products as an option to succeed. And they’d probably come up with their own private version of the FDA to monitor them so they would not be confused with the rare fly by night operations that are just out to make a quick buck (these are honestly rare in the modern day as the capital required to start up a major business is extreme and the size of such an investment makes you clearly turn to long term thinking.)

    • Sally, have to say I agree with Cris’ response but I am very interested in the great ketchup history. Looked up ketchup history and can not find anything about ethic problems – please enlighten us all as my interest is piqued.

  2. Sally

    Cathy: you can probably find it online somewhere with better details, but at the beginning the producers where happy to use rotten tomatoes adding enough chemicals to “correct” taste and color, and producers that were using safer (and more expensive) ingredients could not succeed in the market. Only when Heinz managed to push the government to pass a legislation that forced the use of safer ingredients those other producers had to change their products. Government didn’t “pick the winners” they just forced safer standards in the interest of all consumers.

    The idea that the interest of the producers are always aligned with the interests of consumers is a pipe dream. Companies will do all they can to be more profitable. Increasing the value for the consumer is clearly one way to go, but there are many other, and only a regulating authority enforce safer rules.

    Mr. Pace’s answer doesn’t tell me anything that I wouldn’t expect him to say, and he has such a polite way to engage his readers, that I have no interest in continuing the conversation with him.

    • Thank you for once again distorting the truth. I can only assume you are referring to the 1906 Food and Drug Act which out and out banned the use of Sodium benzoate as a preservative (it is no longer completely banned) which required the invention of pickling tomatoes before they were turned in ketchup as an effective preservative. It’s use at the time was not a dishonest, it was merely standard practice to use over ripe tomatoes (or under ripe depending on the recipe). The intent was not use cheap product but merely that is what the recipes called for and it was standard practice then (and has returned in some degree now) as to use sodium benzoate a standard practice not an attempt to be cheap–the fact that you can once again use it shows that legislatures shouldn’t be in charge of scientific choices. (One could also look to the fact that the U.S. is about the last country in the industrialize world to fluoridate water despite the fact that the evidence that it has a radically negative effect on the thyroid health).

      “The idea that the interest of the producers are always aligned with the interests of consumers is a pipe dream. Companies will do all they can to be more profitable.” That’s at best complete complete ignorance of the market and human nature, and at worst an intentional lie. Oh sorry, I was rude again. I do that when people spout drivel. Companies are after a profit, and guess what they’re after a profit for as long as possible. Keeping customers happy, staying in line with their interests, is what keeps them in business. When the government isn’t there a fun thing happens to businesses that aren’t aligned with the interest of consumers: they go out of business. It’s a fun way of dealing with companies that don’t look to serving customers. If only the government would get out of the way.

      Also you provide a line of drivel, lies, half truths and call me insane, and claim you’re providing a civil conversation but I’m being rude for calling that which walks like a duck and quacks like a duck, a duck. I’m such an inconsiderate son of a bitch that way. Perhaps I should try to hide snide remarks behind a thin veneer of the appearance of education without actually having any knowledge or understanding. I should truly aspire to the high standard you set.

  3. Sally

    Oh oh, you having a bad day?

    I actually didn’t think you were supporting a “completely unconstrained market”, so I was not thinking you were you insane. Thanks for proving me wrong.

    You say “The intent was not use cheap product”:

    You can check out the Heinz biography http://amzn.com/078644178X

    Here’s one of the ads they were running: “Benzoate of soda permits the use of inferior raw materials which cannot be made into food under ordinary treatment. Its presence too often indicates positive unwholesomeness or unsanitary preparation, or both — the kind of food you would not care to eat if you could see it made and what it is made of”.

    So their competitors were cutting costs using unsafe raw materials (as other reports also prove), and they didn’t stop doing so because they were defeated in the free market, but because they were forced to do so by the legislation. And the proof that they could not be defeated in the market is that Heinz had to push so vigorously for the legislation.

    There was no magic “private version of the FDA” that ketchup producers decided to form to provide better ketchup to their customers. You’re just dreaming of different world in order to justify your ideology.

    Where did you get your “what the recipes called for” from? They were making ketchup with rotten tomatoes.

    Wake up. The world is full of companies ready to do all kind of nasty stuff for profit, and ready to falsify the reports, bribe the officials and lobby the government in order keep doing doing so to maximize their profits.

    Sure let’s wait for the chinese toy producers to “come up with their own private version” of a safety commission, we surely don’t want to enforce safety standards on what our children play with. If they produce dangerous toys they will surely go out of business, maybe after having poisoned a few thousand kids. Great idea.

    The problem is not the government in itself (as you seem to believe), but the bad part of government that is in bed with the big corporations. You want to throw the baby out with the bath water.

    • So let’s see here…you suggest I go read a book by Quentin R. Skrabec…and even a brief search of his bio shows he’s a massive proponent of protectionism and government interference…yeah real unbiased source there.

      That add was run when people still didn’t feel safe about eating raw tomatoes (you’ll notice the use or “raw” and “rancid” even in the quote you use…do you even read what you quote?), that’s what they were talking about. The fact is that for some reason there was a belief that tomatoes cooked or uncooked may have been unhealthy, a belief that persisted well until the turn of the 20th century (http://www.tomatogardeningguru.com/history.html)

      And I love how you use Chinese companies (i.e. companies literally run by a government that is out to hurt America) as an example of how corrupt corporations get without government involvement.

      And I never said to throw out all government, you do need restrictions (go back to my point chiding you for confusing capitalism with anarchy, but that would require you to I don’t know…be able to read…but then again I still love how you haven’t had the guts to actually comment on the original article.)

      “The problem is not the government in itself (as you seem to believe), but the bad part of government that is in bed with the big corporations.” That would be called 90% of the government…and they will always be in bed with corporations as long as you give government undo power to control the system in favor of who wins and who loses.

      “There was no magic “private version of the FDA” that ketchup producers decided to form to provide better ketchup to their customers. You’re just dreaming of different world in order to justify your ideology.” No because at the time the progressive movement wanted everything in the hands of the government, which they created the FDA. I would think now a days we should have learned that the government only makes things worse and that most functions should be spun off into public companies but the government holds onto it’s monopolies very tightly and refuses to let private competition in the door.

      And FYI I had a great day yesterday…probably because my life doesn’t involve trolling other people website in a desperate attempt to make myself feel smart.

      • Sally, well I can not find a lot of detail regarding the ketchup but what I did read it is not so much “rotten tomatoes” as that term is vague at best as very ripe tomatoes are used for ketchup so not sure how the term rotten or very ripe compare. The real question to quality appears to be added chemical – coal tar, green tomatoes and tomato skins/left over pulp and some other additive chemicals. But the point that seems to be missing between your argument and Cris’ is that it was the Heinz company along with other manufacturers (I could not locate a list of these other companies) banded together to help educate the public and push the government in protecting the public from what they felt from studies was dangerous. So in reality it was the businesses wanting to monitor themselves for the benefit of the public. So while all groups have good and bad people in the end business usually weeds out the bad because it is bad for business to allow them to stay around.
        Many of the studies regarding chemicals, dyes etc. that cause changes in food production are done and presented by the food industry.
        But look at the current story regarding food – the pink stuff in meat – left over meat products normally used for animal food is now allowed to a certain percentage in processed or ground meat. I can assure you if the FDA was not allowing this type of nonsense if business came up with it and it became public it would not last long but now with the FDA we just keep receiving poorer quality products.
        So although government can and should provide protections to the public it is causing more problems than solutions with its minutia intervention. And this intervention appeals to the lower qualities in people and provides us all with lower quality in products. When the public is given more power you will see more businesses straighten up and provide quality products as you will have competition.

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