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Economic Sense

RSS By: Matt Bogard, AgWeb.com

Matt's primary interest is in the biotech industry and ag policy.

Food Democracy -- Not Now, Not Ever

Jun 24, 2012

By Matt Bogard

Are food choices something that should be determined by democratic decision making? To answer this, it is important to understand the fundamental problem of economics known as the knowledge problem. The problem facing all forms of government including democracies is that centralized decision makers never have enough information or proper incentives to act on the information at hand. As economist F.A. Hayek described it (1945):

"the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all separate individuals possess"

The price system allows us to channel the imperfect knowledge of multitudes of imperfect people with imperfect incentives and utilize it to coordinate decisions. Democratic decision making, on the other hand, allocates resources using command and control based on the more limited knowledge and preferences of a few voters, elected officials or appointed bureaucrats. So, when we move from market based food choices to democratically based choices, we are drastically reducing the amount of information we are willing to consider in making these decisions.

Many people complain about phone and cable bundling packages. Voting is the ultimate form of bundling, only worse: the voter often doesn't get to even choose the "service." As explained in the article "The Public Choice Revolution"  (Regulation, Fall 2004):

"In our democracies, voters do not decide most issues directly. In some instances, they vote for representatives who reach decisions in parliamentary assemblies or committees. In other instances, they elect representatives who hire bureaucrats to make decisions. The complexity of the system and the incentives of its actors do not necessarily make collective choices more representative of the citizens’ preferences."

Voting also fails to capture the intensity of our preferences. When we vote, it's just one vote, no matter how intensely we may care about an issue. With a price system, we can express our interests penny by penny and minute by minute (as we toil to earn an income).

Does that mean that we should leave the country or start a dictatorship? Of course not. We should, however, limit democratic decision making and government involvement to as few areas of our lives as possible, which is what our founders had in mind when they created our constitutional republic.

So what does that mean for food choices? Food is an extremely personal and detailed consumption product. Of all areas of our life, food is an area where we would hope our choices can be expressed as precisely and intensely as possible, based on our own private knowledge, tastes, and preferences, not bundled with the preferences of others or subject to how some stranger may "vote" about it or some politician or bureaucrat may dictate (sorry, Mayor Bloomberg).

In fact, the market does a pretty good job of providing consumers a variety of food choices, from non-GMO organic, to local, to an array of modern sustainable choices made possible by companies like Cargill, ADM and Monsanto. Food in a democracy should be food that we choose to consume, not food that we vote to consume. 


References:

"The Public Choice Revolution," Regulation (Fall 2004).

"The Use of Knowledge in Society." F.A. Hayek. American Economic Review, vol. 35, no. 4 (Sept. 1945), pp. 519-30.

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COMMENTS (1 Comments)

Ric Ohge - Belmond, IA
Wow...I read Op-Ed pieces like this and imagine them totally in sync with King George's thinking in the mid-1760's. After all, the Empire WAS providing common defense, resources, investment, and order to these rag-tag Colonials, who did little but complain about having their voices in the choices Parliament was doling down to them.

A bunch of Yankee upstarts-for sure, without their own landed gentry, no other culture but the one from Mother England, and certainly presumptuous in their unceasing demands to have representation.

Alas, they persisted eventually to the point of shedding blood-so strongly did they feel...and it was the "Tory Spin-Meisters" who contributed so much to the Psychology of their stand, with it's arrogance and self-righteousness...imagine-trying to cow the masses into just shutting up and being thankful for what they were given.

We saw how that worked out for King George...
10:51 AM Jun 25th
 

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