Many people believe state regulation is needed to protect us from bad business practices. I debunked this argument in How to Think About Regulation. But the belief also rests on some false history most of us learned in State schools.
Most students are taught about a famous book, The Jungle by Upton Sinclair. It supposedly shows how, once upon a time, before State regulation…
- Meat packing plants endangered Americans with poison food
- The motive was profit
But here’s what most people don’t know…
- The Jungle was a novel, not a factual report
- Most of what Sinclair wrote was pure fiction, unconnected to reality
This is your chance to learn the truth.
The Jungle was intended to dramatize working conditions, NOT food safety. In fact…
Sinclair’s fictional claims about food safety were limited to a mere 12 pages, but these pages got all the attention, leading Sinclair to later write . . .
“I aimed at the publics’ heart, and by accident I hit it in the stomach.” [citation](Source: Gabriel Kolko, The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916, Chicago: Quadrangle Books, 1967, p. 103.)[/citation]
Sinclair’s novel caused a sensation. It led to Congressional investigations, even though many politicians were skeptical. For instance, here’s what President Theodore Roosevelt wrote about Sinclair in July 1906 (even though he shared Sinclair’s distrust of big business):
“I have an utter contempt for him. He is hysterical, unbalanced, and untruthful. Three-fourths of the things he said were absolute falsehoods. For some of the remainder there was only a basis of truth.”
[citation](Source: letter to William Allen White, July 31, 1906, from “The Letters of Theodore Roosevelt,” 8 vols, Cambridge: Harvard University Press, 1951-54, vol. 5, p. 340.)[/citation]
Sinclair’s fictional characters talk of workers falling into vats and being turned into “Durham’s Pure Leaf Lard,” which was then sold to the public. This was supposedly made possible by the alleged “corruption of government inspectors.” [citation](Source: The Age of the Moguls by Stewart H. Holbrook, Garden City, N.Y.: Doubleday & Company, Inc., 1953, pp. 110-111)[/citation]
Yes, you see, there were government inspectors, even back in 1905. So does it really make sense that the solution to this supposed food safety problem was . . . government inspectors?
In fact, there were hundreds of inspectors. They came from all levels of government, federal, state, and local, and had been at work for more than a decade. As for their supposed corruption (and Sinclair’s other claims), a Congressional investigation found little evidence. Instead . . .
The 1906 report of the Department of Agriculture’s Bureau of Animal Husbandry refuted Sinclair’s worst charges point-by-point. The report labeled his claims…
- “willful and deliberate misrepresentations of fact”
- “atrocious exaggeration”
- And “not at all characteristic (of the meat packing industry)”
[citation](Source: U.S. Congress, House, Committee on Agriculture, Hearings on the So-called “Beveridge Amendment” to the Agriculture Appropriation Bill, 59th Congress, 1st Session, 1906, pp. 346-350.)[/citation]
Meanwhile, as Congress went through the time-consuming process of investigating Sinclair’s fictions, the free market was regulating the meat packing industry in its own harsh way. Meat sales plummeted.
This led the meat packing industry to lobby Congress for increased regulation!
The industry actually wanted The State to protect them from the consumer backlash by imposing regulations that would restore consumer confidence, even though new regulations were totally unneeded! The result was the passage of the Meat Inspection Act of 1906.
But this was not a triumph for the idea of State regulation. Instead, it was a victory for cronyism and corporate welfare . . .
- Taxpayers picked up the $3 million price tag for the new regulations
- Big meat packers benefited because small packers had a more difficult time complying with the new regulations
Upton Sinclair himself actually recognized this, and opposed the law! [citation](Source: Upton Sinclair, “The Condemned-Meat Industry: A Reply to Mr. J. Ogden Armour,” Everybody’s Magazine, XIV, 1906, pp. 612-613.)[/citation]
The myth of The Jungle has had a terrible impact on the American mind. It has led millions of people to believe that regulation by politicians and bureaucrats is superior to regulation by the free market forces of consumers, investors, lenders, insurance companies, and legal liability.
- If the meat packing industry wanted government regulation, then it should have paid for it, not the taxpayers
- And all packing companies should have been free to reject State regulation, especially small producers
- This would have allowed consumers to decide what they preferred, and what they were willing to pay for – meat inspected by The State, or meat regulated by the self-interest of the meat packers.
In other words…
- State regulation, using initiated force, was completely unjustified, even if Sinclair had been writing fact, instead of fiction.
- We should have relied on consumer controlled regulation instead.
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– End –
Thank you to Lawrence W. Reed, President of the Foundation for Economic Education. The facts used in this essay were drawn from an article he wrote for the The Freeman: “Ideas and Consequences: Of Meat and Myth.”
His article, in turn, relied heavily on the classic book by the historian Gabriel Kolko, The Triumph of Conservatism. Kolko may be a Marxist, but no one has done better work on the intersection of The State with American business.
Copyright (c) 2010 by Perry Willis. Permission to distribute this blog post for educational purposes is granted, if done with attribution to the author and the Zero Aggression Project. Permission to use for commercial purposes is denied. You can find a full explanation of our copyright policy here.
Reed’s history of U.S. meatpackers seeking regulation to stifle small-time competitors is reminiscent of a more recent EPA Chief who wrote the million dollar plastic liner regulation for landfills during the 1980s. This law put small time operators and municipalities without the necessary funds to convert clay-lined landfills to plastic liners out of business, creating a virtual monopoly for BFI. BFI’s appreciation was illuminated when the EPA Chief was subsequently made CEO at BFI. Meanwhile, BFI shareholders saw shares double in price and split twice. For privileged elites who can pull it off, monopoly profits always trump free market profits. The rest of us should note that monopolies do not arise naturally within a free and spontaneous exchange order, but require the cudgel of government to stifle competition. Likewise, corporations are creatures of the state.
This is a very good example Bob. Thanks for sharing it. I would add that this phenomenon is also a major cause of “too big to fail.” Regulatory cronyism reduces competition and forces mergers, leading to larger and larger firms.
Interesting dilemma, some IMPROVEMENT WAS NEEDED, but the dumbells and crooks in govt may be [and try to gage the relative probabilities] AS BAD OR WORSE than the dumbells and crooks in corporations.
In the article you appear to favor the idea that government investigating itself is to be trusted more than the emotional diatribes of the injured public… NOT A DECENTLY SUSTAINED TRUST.. ala Mueller, and Horowitz, etc…
You failed to get a solution, as you are suspiciously devoid of progress.. nobody won…
Sinclair’s hysteria at least brought down the wrath of the consumers… what he accomplished should not be diminished in your fetishist love of anti-regulatory anything.. today’s alt-media are a possible solution, once we get some decent idea of how everyone can participate… and likely that would engage more of the public in CO-OPERATIVES [like rural electrics and Mondragon, etc] instead of submitting to frequent corporate perversions.
The solution you ask for is in How to Think About Regulation. Two other points…
1. The “problems” Sinclair supposedly exposed in his novel did not in fact exist.
2. Free market institutions are always highly regulated by consumer control and other forces, while state institutions are rarely regulated by much of anything. This renders your assertion that libertarians oppose regulation invalid. The opposite is true. The statists are really the ones who oppose regulation, little though they realize it.
UNLESS the little people being hurt have a voice as loud as the corporate big money press control, your assertion that free market is holy and controls the affairs of the republic et al, is totally absurd.
SAME goes for eliminating corrupt politicians by voting every few years. Unless there are muck rakers and major gossip websites and diligent reformers to enable the story of elected or unelected govt officials to be spread and posted to get public awakened awareness, the voting game is futile.
I would add all so-called “Free Trade” agreements to this list of regulatory overreach. None of which has turned out to be free to the American working middle-class. Again, the only winners for free trade are the big players who can afford the ante.
I agree with your first statement, but only partially agree with your second. I notice that you used scare quotes around the words “Free Trade” in your fist sentence. This is appropriate. So-called “Free trade agreements” are nothing of the kind. They are managed trade designed to benefit privileged interests. So maybe we agree on this point.
But the scare quotes disappear in your third sentence. True free trade, without agreements, and without scare quotes, benefits the middle class most of all, by making products cheaper and reducing the cost of living. The lower the cost of living, the less you have to work to achieve the same lifestyle. We need to STOP focusing on our roles as employees, and focus instead on our roles as consumers. We want to be able to consume as much as we can with as little work as possible. Nothing fosters this outcome better than true free trade, including unilateral free trade, where we lower our barriers and others don’t.
Producers want us to support their protectionist trade restrictions, so they con us into thinking that our role as employees must likewise be protected. But this tricks harms us, because it restricts our more important role as consumers. We need to support free trade so we don’t have to work so hard. But these are only the practical arguments. The more important argument is this…
Trade restrictions require the initiation of force to prohibit peaceful, voluntary transactions. This is not only economic voodoo, it is also deeply immoral. It is evil. Pure evil.
Thanks for your comment.
With respect, I find you making a mistake common to economists; you assume that the role of consumer is separate from the role of consumer. One must have an income if one hopes to support the habit of consuming. Meaning one needs to be an employee, independently wealthy, or live on govt dole. And there must be enough employees to support a tax base to fund the govt dole (part of the current problem with the American entitlement system)
In the simplest of language, income must at least equal outflow, unless you are a government.
Thanks for you comment. Alas, I’ve read it three times and I still can’t figure out what it means. Can you try saying it another way. I would like to understand.
Hey Perry, I believe ol crusty meant to write the following sentence differently. “you assume that the role of consumer is separate from the role of consumer.” It should be “you assume that the role of employee is separate from the role of consumer.”, or vice versa. I don’t think it matters, grammatically.
But, I’m pretty sure his point is that being an employee and a consumer are intrinsically connected unless you’re independently wealthy and don’t have to work. The basic point he’s trying to make, from my understanding, is that if you don’t have money then you can’t be a consumer. Also, how much money one has determines the degree to which one can be a consumer.
I’m translating his comment as I’m interested to know what your response is.
Very good article by the way.
It’s true that my ability to consume is related to my ability to produce. But both things are hampered if OTHER producers are allowed to protect themselves from foreign competition. The wealth I produce will buy more for me as a consumer under free trade, even unilateral free trade, than under protectionism. I want the dollars I earn to buy more so I can potentially work less. For that to happen I must make other producers compete with foreign providers, even if this means that I too as a producer must also compete. Indeed, such competition is more likely than not to increase production, both by others and myself.
Thanks for the kind words about the article.
Again you favor the big players, and ignore the mathematics of size. The middle class cannot impose free trade, because they are all small players by definition. Your ‘free trade’ is a myth unless the powers of the full population are within limits, not thousands to one. Mondragon’s experimenting in ownership of the capital assets being open to all comers who can provide services to the production operations, and by limits imposed on worker co-ops to restrict the range of compensation within the ownership-workforce, achieves that, but the corporate model is a failure. Take your myth of free trade and get real math.
Nobody can “impose free trade”. Free trade is the abolition of imposition. Since the power to impose, i.e., use violence/threats is a sanctified monopoly of gov made possible by public support, the public could stop its worship of rulers and withdraw its support for the monster monopoly that it created and keeps alive. Then free trade could occur.
Without violence to limit progress, our society would have to use reason, rights, and choice. Corporations would vanish. Victimless crime laws would vanish. Individual and voluntary local self-governance would flourish. Our society would mature politically.
The present coercive political system is the problem, not the solution. It will remain until its victims stop forcing it on all of us.
Extremely interesting article! Shared widely. 🙂
Many thanks Alex!
Well, I wrote a lengthy response that was about twenty five sentences, and when I was about to send it, I accidentally hit the refresh button and it all went away. So, summing it up, you wrote an awesome essay arguing against Upton Sinclair.
There’s true wit in brevity. Thank you!
Missing from the analysis is the fact that Jewish religious congregations already had a food inspection service that was supervised by the Rabbinate, in US communities where organized Judaism was practiced. Jewish children got instruction in hygienic cooking as part of their religious schooling, and Rabbis were expected to inspect the food prepared for their congregations. In practice, the Rabbinate made use of the US Trademark law, registering the symbol of a capital letter “U” surrounded by a circle, as a mark indicating that a Rabbi had personally inspected a food product while it was prepared and packaged, and considered it fit to eat.
The difficulty that Chicago’s meat packing industry faced in 1906, is that the Rabbis objected on religious grounds, to enter a building where pigs were slaughtered or where pork was processed. Today Hilary Clinton or some such luminary would be paid a handsome fee to denounce this religious extremism…if a baker can be compelled to bake an anti religious cake, a food inspector can be compelled to inspect anti religious food…but we didn’t have such expedients in 1906 and the best idea pork producers could come up with, was to hire a secular force of food inspectors who would inspect pork and shellfish products. This secular inspection force lacked any ties to a religion, so asking The State to ordain the inspectors and bless their work, seemed sensible at the time. Hence Sinclair’s work of fiction helped to drive local food processors out of business and increased centralization in the food industry.
The unwinding of this process was equally disruptive. Meat packing became decentralized again in the 1970s-80s.
A couple of legislative sessions ago, I ran into the same thing with some Arizona public utilities who opposed our efforts to reduce the impact of federal land-use regulations. They had worked hard with federal authorities to produce them and did not want to give them up! The corporate version of Stockholm Syndrome, maybe?
Sounds like. Some people love their chains.
I came across this book today but haven’t read it. Seems like a similar topic to the Jungle. It’s about how this man and his volunteers forced government to pay attention to preservatives in food. I can’t find a Mises or similar article about this book. Thoughts?
Sadly I know nothing about it. But I’ve put it on my to-buy list.
Perry, I was skeptical of your claims until I checked the report for myself. I have a question, however.
This is the last sentence in the second to last paragraph of the report: ‘The committee agrees with the author that the statements contained in the above paragraphs are “no fairy story and no joke,” and believe them to be willful and deliberate misrepresentation of fact.’
Can you explain what the first half of the sentence means? This part: The committee agrees with the author that the statements contained in the above paragraphs are “no fairy story and no joke”…
It’s hard for me to say given that I don’t know what was said in the above paragraph.
The above paragraph was the paragraph Upton Sinclair claimed the following: rat dungs were all over the meat, that the meatpackers gave poisoned bread for the rats to eat so that they can die, and that the dead rats were mixed into the meat.