This Is What Happens When The Free Market Has Its Way

This weekend I caught glimpse of a jarring Seattle Times headline – “Pot products recalled for pesticides in Colorado, but not in Washington.”

Here, in 2016, was a perfect example of what industries will do when the free market “has its way.” The use of harmful pesticides on marijuana is hardly an anomaly. Over the course of history, we have seen that when businesses are given the freedom to either poison their consumers or not, the results have been disturbingly lopsided.

Why is this so?

The answers lie in the faulty assumptions of free market philosophy – the very theory which allows for industries to be free from government regulation.

The core assumption of human rationality influencing consumer choices, first and foremost, seems to be responsible. The concept is simply unnatural. It assumes a consistent and pure level of rationality that does not exist in buying practices. Look, I understand why Baruch Spinoza, Thomas Jefferson, and Adam Smith loved equipping their fellow humans with a virtuous capability like rationality. They lived in times where the power of the individual was stunted by various forms of Christianity and monarchism. Their motivations were pure. And while casting humans as “rational beings” helped create a myriad of powerful political concepts, it has also helped prop up a quixotic understanding of political economy. After all, human decision making is complex. Humans are not dumb, but we are also prone to myopic choices.

Even if we grant that humans always make rational choices, the consumer is often not given the opportunity to make fully informed decisions. That’s because without any government regulation, businesses are not required to let you know what is in their products. The marijuana example I mentioned earlier illustrates this hands off approach. So too does the recently passed “Common Sense Nutrition Disclosure Act” which argues that it’s simply too burdensome for businesses to inform consumers about what is in their food. Here’s Speaker Paul Ryan’s (R-WI) justification:

The government should not be placing more harmful barriers in the way of hardworking small businesses. This important legislation would roll back the FDA’s burdensome menu labeling rule, giving American restaurants, grocery and convenient stores the flexibility they need to be successful.

In essence, the freedom to not tell people what they are consuming is given greater priority than the rights of the people to know what they’re consuming. Avoiding a short-term burden on the company is given higher priority than the long-term health of the consumer. This terrible trade-off was noticed by numerous organizations like the American Diabetes Association, the American Heart Association, and the American Institute for Cancer Research. In response, they all signed “A Joint Statement in Opposition to H.R. 2017,” where they provide a robust defense of the consumer’s right to know:

We, the undersigned organizations and researchers, oppose the “Common Sense Nutrition Disclosure Act of 2015.” We do not think that it is common sense to weaken a policy that would allow people to make their own, informed choices about how many calories to eat at a time when obesity rates are at a record high. The bill would undercut the Food and Drug Administration’s (FDA) menu labeling regulations and undermine congressional intent to provide access to calorie labeling in a broad range of chain food service establishments.

The national menu labeling law requires chain restaurants and similar food establishments to provide consumers with calorie information for standard food and beverage items on menus and menu boards. Studies show that providing nutrition information at restaurants can help people make lower calorie choices, and a national poll found that 80 percent of Americans support calorie labeling at supermarkets and restaurants. H.R. 2017 would undermine the benefits of the national menu labeling law and confuse and mislead consumers.

By prioritizing freedom above all other moral and political considerations, free market ideologists like Speaker Ryan put an uneven burden of responsibility on the consumer. Should it be up to me, the consumer, to dig into the marijuana industry and see if the pot I’m about to smoke is laced with harmful pesticides? Is the burden on me to see if the beef I’m eating at McDonalds is actually from a cow? Is that what “freedom” is all about?

Milton Friedman quipped that “underlying most arguments against the free market is a lack of belief in freedom itself.” Such an unnuanced statement is as insulting as it is odious. One can believe in the power of the free market (and freedom) while also advocating for government regulation and the right for consumers to have adequate information to make a “rational decision.” To say otherwise is to believe in an ideology detached from human behavior.

The results are clear: when given unchecked autonomy, industries will not consider the long-term health of their consumers. That is an unfortunate byproduct of blindly allowing industries to have unchecked freedom. To quote Friedman again, “one of the great mistakes is to judge policies and programs by their intentions rather than their results.” A terrific insight into a profound blind spot of humanity – too bad proponents of the free market don’t examine theirs.

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Nick Cassella
Nick Cassella graduated from the University of St Andrews in Scotland in 2014. After graduating, he worked on the Initiative 594 campaign before joining Civic Ventures, where he now manages Civic Skunk Works' social media presence.