Mislabeled food and the myth of ‘consumer sovereignty’

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Even the best food labeling system can’t guarantee that consumers know what they are buying. To but it bluntly, the bastards lie

by Ian Angus

One of the great lies of mainstream economic theory is “consumer sovereignty” – the idea that the consumers actually control the economy by “voting with their wallets,” deciding what to buy and thus forcing corporations to do their bidding. I discussed some reasons why this isn’t true in a recent article on claims that consumers are to blame for the BP oil disaster.

An issue I didn’t deal with there is the fact that the theory depends on the assumption that consumers know everything relevant about products, prices, etc., and so can make informed and rational buying decisions.

Of course, that’s nonsense. Every part of the capitalist market is characterized by what a few economists recognize as “information asymmetry” – the sellers have far more information than the buyers. And, although it’s hard to get an economist to admit this, the sellers deliberately and constantly withhold important information from buyers.

In the United States during World War II, for example, price controls created a strong incentive for corporations to reduce the quality of food products, in order to keep their profits up. Historian Lizabeth Cotton reports that when consumer groups campaigned for a simple A-B-C quality labeling system for canned foods to facilitate comparisons, the National Canners Association responded that this was a “war” against brand names “in which our system of private enterprise is at stake.” Congress obediently passed a law forbidding any such mandatory labeling system. (A Consumers’ Republic, Vintage Books, 2003. p. 69)

More recently, North American agribusiness has successfully blocked demands for compulsory labeling of genetically modified foods. No matter what your opinion on GM foods, it’s obvious that consumers can’t vote with their wallets if they don’t have the information.

But even the best food labeling system can’t guarantee that consumers know what they are buying. To but it bluntly, the bastards lie.

Today’s Ottawa Citizen reports on a recent study by the Canadian Food Inspection Agency (CFIA), a  federal government department whose website says it is “Dedicated to safeguarding food, animals and plants, which enhances the health and well-being of Canada’s people, environment and economy.”

The study tested a variety of foods sold in Canadian stores, to determine whether they lived up to the claims on their labels. They found misleading label information on 63% of candy items, 59% of breads and baked goods; and 49% of snack foods. Among other things, the products studied had more sugar, more fat, and more sodium than the manufacturers claimed.

Twenty percent of candy products and 30% of baked goods had less product in the package than the label claimed.

Twenty percent of “lean ground beef” contained more than the legal limit of fat, and 4.4% of ground beef contained meat other than beef.

That’s important information for consumers, but you won’t find it on the CFIA website. The newspaper had to file an Access to Information Act application to get it – and even then, the data doesn’t identify which companies and products are violating the law. The agency has the power to prosecute, but it prefers to work with companies “to educate them about the rules and bring them into compliance.”

Excuse me? Putting too much sugar or salt or fat in our food isn’t a problem of education – these companies are pure-and-simple liars, and in a  society that put people before profit they would face the consequences.

The fact that they will get off with secret “education” is just another proof that consumer sovereignty is a meaningless phrase.