‘Government Approved’

A little noticed effect of government regulation of industry is that it acts in ways to protect already established businesses from up-start competition, doing a disfavor to consumers. Part of the way it achieves this is through licensing and “seals of approval.”

A small section of a recent report on the current egg recall notes how the USDA issues such government approval:

A USDA official, though, told FoxNews.com that USDA agencies have had no involvement in food safety regulations over shell eggs. The official said USDA’s chief task was to send an official to the farms, including one involved in the latest outbreak, to grade the eggs — in other words, inspect them for thickness and cracks and other quality assurance factors in order to give them a USDA seal of approval.

“Quality” is here based on standards developed by a government bureaucracy. The story notes how such standards do not necessarily ensure safety:

That stamp, though, does not certify that an egg is salmonella-free.

[picapp align=”left” wrap=”true” link=”term=egg+recall&iid=9572284″ src=”http://view2.picapp.com/pictures.photo/image/9572284/egg-recall-spans-least/egg-recall-spans-least.jpg?size=500&imageId=9572284″ width=”234″ height=”155″ /]So what we end up with is a government regulatory system that favors one type of product over another based on somewhat subjective evaluations and not necessarily the safety of the product. When consumers see this “seal of approval,” it incorrectly conveys to them that a product, in this case an egg, is better than those without the approval. They are duped, and their independent judgement is diminished.

Government does this all the time in other types of regulation, despite the supposed good intentions of the regulators. It gives individual consumers a false sense of security, while at the same time acting — unintentionally or not — to stifle competition in the regulated industry.

* The preceeing was originally posted on the Young Americans for Liberty blog.

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2 Responses to ‘Government Approved’

  1. This post was great on YAL — I meant to comment there if I didn’t.

    I’m working part time at a small health food store, and it’s been interesting to note that regardless of their other political opinions (or apathy as the case may be) all the employees understand very well the problems with government regulation of food and nutritional supplements.

    I guess that’s the case with every issue, though: Everyone realizes how much is sucks when the government bothers them, but they too often fail to make the connection on all the other issues with which they’re unconcerned.

    • Adam Fowler says:

      The general assumption is that big business hates regulation. But, in fact, they at times like it because it puts up barriers for potential competition (those smaller businesses unable to afford regulatory compliance). That’s a point not often noticed.

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