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Misleading Ads and the Need for Marketplace Repair

Posted by: Mitch Rofsky @ Nov. 3, 2014, 1:49 p.m.



Better World Club is headquartered in Portland, Oregon, and one of the hottest propositions in this year’s elections is Measure 92—requiring the food labeling of Genetically Modified Organisms—GMOs.

The proposition attempts to take one step toward correcting an imperfection in the marketplace.  My initial blog post discussed how the marketplace (and the government) are both essential but not perfect, focusing on one marketplace imperfection: the ability of polluters to impose their costs on 3rd parties.

Here’s another: inadequate consumer information.

In economics class, adequate information is just assumed. But that’s not the case out in the real world. Did the women who died of thalidomide back in the 1960s understand the drug they were taking? Would you know the caloric content of the food you eat without government labeling? (I sure didn’t back in my 20s when I was eating a pint of Haagen-Dazs Ice Cream almost every night—not realizing its 1,080 calories or 68 grams of fat. It is only because of food labeling requirements that I haven’t had a pint since.  It was Coffee, BTW.)

So, government is necessary to require disclosure—and, given the debate about GMOs—such labeling is both appropriate and necessary.

But wait, say a number of scientists, GMOS are safe. Consumers will be misled. Then make that case. Convince the consumer—but don’t hide the content of the food.

But wait, say opponents, a national marketplace should have national, not state, regulation.. Of course, this is the opposite of what conservatives normally argue.  But even at face value, it should be ignored:  if labeling is defeated at the state level over and over again, it will be considered unpopular and never adopted federally.

We need to both recognize the flaws in the marketplace (which conservatives refuse to do) and repair them (ditto).   Providing consumer information is one step in that direction.

So, let’s see if Measure 92 passes. (And, if it doesn’t, be prepared for the following post:  Citizen’s United and how uncontrolled spending distorts U.S. politics.)


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