Monday, November 03, 2008

Fun With Free Markets

Not really, but this coincidence is worth pointing out: First the Chinese are now having trouble with melamine-tainted eggs. Melamine is suppposed to be used in kitchen counter-tops and the like, not in food, but it gets there because it registers as protein in the cheapest ways to measure protein and it's a lot cheaper than protein for the producers. Of course it's not a food...

You may remember melamine in pet food and how it killed cats and dogs in the U.S., then in milk which killed small children in China, then in candy and so on, and now in eggs. An unregulated market with less than perfect information provides incentives for stuff like this, and that is one of the reasons markets need rules and regulations. Of course it's true that markets often ultimately "self-correct" (though it's the government who has gone in to destroy the melamine-tainted animal feed), as is the case in China right now. But the cost is a lot of death and a complete collapse of the markets in which the problems finally are diagnosed. Just ask the Chinese dairy farmers.

That's the first set of events. The second set is this: Behind our backs while we are all eagerly looking towards the elections and the next administration the current administration is busily scratching consumer-protections and environmental protections everywhere. De-regulating the markets as busily as it can!