Can We Afford Safe Food?

Have you stopped beating your wife?  That line has been used by comedians to get a laugh for years, but it teaches us a serious lesson as well.  The joke is that no matter how you answer, you admit guilt to a crime.  The lesson is that if we answer a question we must accept its premise.

And we are all asking plenty of questions these days.  How can we fix the problem of security at our airports?  How can we ensure that the meat supply is safe?  Or, even, how can we keep our children protected from the flu?

Questions like these reveal the anxieties that lurk beneath the surface in all of us, over the aspects of our lives that are beyond our direct control.  Unfortunately, when we put them to our leaders we also accept what economist Thomas Sowell calls an "unconstrained" view of public policy.  Such a view pursues absolute objectives -- like security, or safety -- with little consideration of the sacrifices or costs incurred to achieve them.

Of course, we economists are a little sensitive about these kinds of things.  We've been trained to look at problems like security and safety as  involving tradeoffs.  We can reduce the threat of air piracy by taking actions that, ultimately, increase the cost  and inconvenience of travel.  We can reduce our chances

 of getting the flu by getting an inoculation that will make a small number of us ill, and may even make some of us die.

No one thinks that safety or security comes for free, of course.  But our "constrained" perspective as economists puts costs out in the spotlight, rather than in a footnote.  That's important, because we pay a higher price for each round of improvements in air security or food purity we might contemplate, and the amount of improvement we actually realize will get smaller as well -- the so-called law of diminishing returns.  And the cost of actually achieving the absolute goals we so casually throw about is unacceptably high.

After all, we did achieve complete security over our country's airways in the days immediately following September 11, 2001.  We accomplished that by grounding commercial aircraft coast-to-coast, bringing the nation's air transport grid to a complete halt.  To advocate this as a permanent solution to air safety, of course, is nonsensical.  But if the drastic actions needed to reduce the threat of piracy to zero were actually carried out, they would be so onerous and costly that we would effectively have the same result.

But there is a tradeoff in not  spending more on security

 and safety as well.  If it gets too risky to step on a plane or bite into a hamburger, the basic confidence that helps keep the wheels of commerce rolling in these important sectors of the economy could suffer.  That's why it will always be in the public interest to enforce, and in some cases, raise standards for these industries to follow.

The beef and cattle industry is at that point today.  The mad cow disease threat is tiny, but a sick cow in Washington State has exposed a disturbing gap between the feeding and testing standards of our own meat-packers and their counterparts in Europe and Japan.   As in so many other times in our history, we have behaved as if oceans could protect us from events that have caused so much pain abroad.  The Bush administration's quick reversal of an earlier decision to allow the meat from sick cattle to enter the food chain is only the first of many moves that need to be made quickly to restore our confidence in the meat we buy.

Those changes, if successful, will bring the risks of tainted meat down to acceptably low levels, at the cost of lower prices received by farmers, and higher prices paid by consumers.  If that fixes the problem for you then you might have the potential to be a good economist.

Patrick M. Barkey