Critical reading for the exam. This is current context writ large - remember the key details and use them in a fiscal policy/public spending/public services essay:
Britain’s long-standing opposition to tax-rises is slowly softening
Politicians on right as well as left are beginning to confront the need to raise more money
DENIS HEALEY had a bittersweet message when he took to the stage at Labour’s annual conference in 1973 with a pledge to increase taxes. There would be “howls of anguish” from the rich, the then shadow chancellor promised delegates in Blackpool. But he added: “Before you cheer too loudly, let me warn you that a lot of you will pay extra taxes, too.” Pay they did. Two years later, Healey raised duties on alcohol and tobacco and increased the basic rate of income tax from 33% to 35%. It was the last time a British chancellor moved the basic rate upwards.
Today such rhetoric—and such a policy—is alien. The tax burden as a share of GDP has dropped some three points below where it stood in Healey’s day. Income-tax rates have fallen steadily, as tax-free allowances have risen (see chart). The bracing, revenue-raising budgets of the past have given way to ones that trumpet tax cuts and do their best to disguise measures that might bring in more money.
Yet the long-term tax-cutting trend may be over. If the quality of public services—in particular, the National Health Service—is to be maintained, Britain faces the grim prospect of across-the-board tax increases. Healey’s budget, one of the harshest in the post-war period, raised tax equivalent to 1% of GDP. According to official estimates, putting the country’s finances on an even keel requires permanent tax rises in the region of 2% of GDP each decade, for many decades to come. Political minds on the right and left are turning to the question of how to raise this kind of money.
Until recently, politicians could dodge tough decisions on tax. From the 1950s to the late 2000s, the economy in general and wages in particular grew much faster than they are growing today. That made it easier to collect extra revenues. In the decade to 2008, bankers’ juicy salaries and rising employment meant that income-tax receipts rose by 60% in real terms, despite a softening of the income-tax regime.
As a result, the public is unused to the idea of structurally higher taxes. A hysterical political culture and round-the-clock media coverage makes it hard for chancellors to take unpopular decisions, says Kenneth Clarke, who did the job in 1993-97. “A few years ago [an increase in taxes] would not have been regarded as sensational,” he says. “People knew perfectly well that sometimes taxes went up and down.” In 2002 Gordon Brown increased national-insurance contributions (NICs), promising the extra money for health care. But such boldness is rare. These days, governments prefer to raise money by stealth. In the Healey budget of 1975, there were eight big tax measures. In George Osborne’s budget in 2016 there were 86 crafty little ones, including higher taxes on landfills.
But the reality of Britain’s financial straits is forcing a rethink. The best estimates say that the NHS needs another £20bn ($28bn) per year by 2022, equivalent to 1% of GDP. Other departments are also squealing. This week the head of the army issued ominous warnings about the need for more cash. Voters will have to pay more or receive even less—and after eight years of cuts, they have no appetite for the latter.
The two main parties are responding, albeit cautiously. Labour talks boldly about raising revenues, including by reversing recent cuts to corporation tax. But even its avowedly socialist leaders blanch at increases to tax for anyone bar the rich. They have ruled out increases to the basic rate of income tax, VAT or NICs. Only those earning over £80,000 a year—about the top 4%—would face higher taxes (a policy which might not raise money at all, in part because high earners are adept at managing their finances). Recently a shadow minister raised the prospect of those in big houses paying more council tax. He was promptly forced to resign.
Among the Tories, there is a growing clamour for more spending, if not yet for higher taxes. This week Boris Johnson, the foreign secretary, took a break from his day job to demand that the NHS receive an extra £100m per week. When it came to the matter of how to pay for it, Mr Johnson fell back on the idea of a “Brexit dividend”, an optimistic notion given that Brexit is expected to cost the exchequer money.
But some in his party are thinking seriously about how more revenue could be squeezed out of voters. Last year the Tories’ election manifesto promised to make asset-rich pensioners pay more towards the cost of their care in later life, by including the value of their homes in assessments of their means. The policy’s poor design meant that it was rightly criticised as a “dementia tax” on those unlucky enough to run up large bills for social care; it was hastily dropped. Yet many Tories remain open to tapping the wealthy. “There is a critical mass that tax on wealth will have to happen at some point, as the system is unsustainable. It is something the prime minister is cautiously interested in,” says Chris Wilkins, who was head of strategy in Downing Street until last summer.
Others, such as Nicholas Boles, a former Tory minister, have suggested raising NICs, arguing that the idea might win public support if it were made clear that the revenue went to the NHS. Various technocrats, including Nick Macpherson, a former permanent secretary at the Treasury, have given cautious backing to something akin to a hypothecated tax for the NHS, an idea normally unpopular with economists.
Tax reform is unlikely during this parliament. The legislative calendar is crowded by Brexit and the government has only a slim majority. Slowly, however, political tectonic plates are moving. The prime minister is under increasing attack for her timidity. Polls show that half of voters think taxes should rise, the highest proportion since 2004. If the public want to maintain current levels of public services, they must pay. Eventually the government, and the opposition, will have to take their lead from Healey and admit it.
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They used to say that if IBM sneezes the US catches a cold; and if the US sneezes, the rest of the world catches a cold. Will housing take the place of IBM? Think about this for the UK, as the BoE pencils in rate increases:
Summary
Mortgage rates have been rising along with treasury rates.
Housing data is starting to fall as higher rates make housing less attractive.
New home sales and existing home sales volumes are contracting.
Interest rates have been rising across the curve over the past several weeks. Interest rates on the short end of the curve, 0-5 year duration, have been rising much faster on a relative basis than 20-30 year treasury rates.
Even though the move in interest rates has only taken place over a few weeks, and most of the action has been on the short-end of the curve, the rising rates have already started to impact the housing market. The economic data for the housing sector has started to drastically miss expectations and has moved into contractionary territory.
Mortgage rates have risen recently which has impacted the housing market. It is surprising how quickly the impact was felt from such a short move and truthfully, not a big one on the long end.
Mortgage Rates:
Source: FRED, EPB Macro Research
Mortgage rates have risen to an average of 4.40% for a 30-year fixed and 3.85% for a 15-year fixed. These rates are roughly 100 basis points off the lows in 2016. A 100 basis point move in long-term rates has dented the housing market as I will outline below. What would happen if rates moved 300 basis points?
In an over-leveraged economy such as the United States, a small move in interest rates has massive impacts on the rest of the economy. It is for this reason that the economy cannot withstand higher interest rates.
Earlier this week, the Census Bureau released the report on New Home Sales. The New Home Sales report, published by the Census Bureau each month, provides national and regional data on the number of new single-family houses sold and for sale. It also provides national data on median and average prices, the number of houses sold and for sale by stage of construction, and other statistics. New Home Sales, or homes that were just built, make up 10% of the housing market. Existing Home Sales are roughly 90% of the market.
New Home Sales Year over Year Growth:
Source: Census Bureau, EPB Macro Research
New home sales are falling at an annual rate of 2.2% as of the last report. The trend in new home sales growth is also lower as the chart above shows.
The growth in the supply of new homes is increasing which is going to put downward pressure on prices, on top of the impact of rising mortgage rates.
New Home Sales Supply Year over Year Growth:
Source: Census Bureau, EPB Macro Research
The growth in the supply of new homes is trending higher, increasing at a rate of 17.24% in January after being in negative territory for much of the past two years.
Supply is coming online for new home sales at the end of the economic cycle; this will put heavy downward pressure on prices over the next several months.
New Home Sales Median Sales Price Year over Year Growth:
Peak public transport exposes the arrogance of our civic planners
Tom Welsh Sunday Telegraph 18.2.2018
It’s all very embarrassing for Sadiq Khan, the Mayor of London. Not only is the body that runs transport in the capital on his behalf in crisis, facing a deficit of almost £1 billion following his grossly irresponsible and Corbyn-esque promise to freeze fares, but the number of people using that transport has fallen too.
It can’t be emphasised enough how shocking this is. Londoners have been fed bullish forecasts about demand for trains, the tube and buses for years, and the Mayor’s office only recently set out in great detail its dream of a city essentially free of cars, part of a country-wide obsession with planning away individualised mobility in favour of collectivised transport.
The alternative – that public transport usage has peaked – would shake his ideology to the core.
This extends beyond the capital. Regional rail operators are in trouble as the number of passengers is not rising as expected after decades of growth. Bus use is falling in large parts of the country. Professor Tony Travers points out that passenger numbers in New York and Paris are flatlining, at best, too.
Khan will be hoping the drop is temporary.
What is going on? A variety of explanations are offered, from the quality and cost of public transport itself, to changing behaviour (a rise in home-working, or an increase in the use of taxi apps like Uber). A hidden recession in the UK, not picked up by the official statistics, seems unlikely and the population is still growing.
But if falling usage persists, admittedly a big if, a zeitgeist will be dead – and well before we once thought, with the exciting future of autonomous electric vehicles still many years away. The implications are enormous. With HS2 already indefensible, its cancellation will become even more urgent. Countless smaller projects will have to be re-examined for whether they remain cost-effective in a very different transport environment.
Schemes to get everyone on public transport are often promoted on the basis of “efficiency”, but that argument only avoids being sinister if officials can claim that their policies are enabling people to more easily do what they already want to. If they persist in making it impossible to use cars as, all the while, public transport usage declines for reasons other than cost, it becomes harder to deny that they’re creating inconvenience for ideological ends.
The risk is of a Leftist backlash. Even if public transport usage is falling because of secular trends – more working at home, more online shopping, businesses moving outside our great cities, cheaper taxis – expect calls for subsidies to be increased to boost demand artificially. Germany is considering introducing entirely free – taxpayer-funded – buses and trains, an idea Labour might find attractive.
But this would be to throw good money after bad. Far better to take this as a lesson in the dangers of hubristic central planning, and a reminder that officials are rarely as far-sighted as they think they are.
People were stunned when the Trump administration unilaterally bailed on the Trans-Pacific Partnership (TPP) trade treaty in January 2017. It seemed like a deadly blow to an agreement that would have lowered tariffs among 12 nations.
What did this move portend for the cause of free trade? Some despaired that it would signal a new trend toward protectionism, not only for the US but the world. There is a certain nationalist myopia in this judgment. Americans are inclined to believe that if Washington is against something, that something won’t happen at all.
What many people did not expect is that the treaty would go ahead in any case, without US participation.
The remaining nations forged ahead and reached a new agreement on November 11. The US finds itself excluded, which could cause real problems for American exporters to countries like Malaysia, Japan, Australia, and Peru. Canada’s lobster industry, for example, will soon have better access to the foreign marketplace than the US’s, which could cause serious problems for an entire industry.
But here is what is most striking. The new draft of the agreement excludes the entire section on Intellectual Property – the most annoying and anti-freedom part of the deal that had huge prominence in all the treaty drafts.
As it turns out, it was the US influence that explained why this treaty included the section to begin with. The section seriously compromised the entire agreement, as Stephan Kinsella explains. It turned what was supposed to be about free trade into a tool for intensifying the hegemonic control of the US pharmaceutical, movie, and publishing industries, expanding patent enforcement, copyright terms, and making much-needed reform that more difficult.
In other words, in this area of policy, precisely due to US participation, the treaty would have enhanced state power, not reduced it, as a free trade treaty should.
“The TPP would only marginally improve free trade, but would export to other countries stronger copyright and patent standards, which would increase the costs these monopoly privilege systems impose on economies, reduce Internet and artistic freedom, increase the prices of pharmaceuticals, and reduce innovation.”
After the US pulled out, groups interested in more freedom of movement for goods and services stepped up the pressure, without having to worry about the role of US regulators and industrial monopolists, who have long used these treaties to expand regulatory power.
The Electronic Frontier Foundation explained its role in the victory:
“Back in August, EFF wrote to the TPP ministers explaining why it would make no sense to include copyright term extension in the agreement, because literally none of the remaining parties to the TPP would benefit from doing so. The apparent decision of the eleven TPP countries to exclude not only the copyright provisions, but nearly the entire IP chapter from the agreement, more than vindicates this. As we have explained at length elsewhere, IP simply isn’t an appropriate topic to be dealt with in trade negotiations, where issues such as the length of copyright and bans on circumventing DRM are traded off with totally unrelated issues like dairy quotas and sources of yarn used in garment manufacturing.”
As an American, it is gratifying to see world trade becoming freer. Though the treaty is still imperfect, it does raise hope for more trade and therefore higher living standards. What is downright humiliating for Americans is that the treaty became better only after the US withdrew from it. Here we have an excellent test case of the role of the US in pushing global trade. It turns out that the US influence has been for the negative.
The rest of the world is starting to catch on. There will be no turning back from economic globalisation. It will happen whether the US approves or not.
And that fact leaves American free traders in a very awkward position. Some of us supported US participation in the TPP while others opposed it, depending entirely on one’s judgement regarding how much compromise is considered acceptable. Similarly, the withdrawal from the treaty by the Trump administration was greeted with mixed feelings. There is some bad and some good that comes from that.
The last expectation would be that the treaty would come to more closely approximate a free-trade ideal in the absence of US participation. That is good for the world. It’s not good for US participation in the next stage of world economic integration.
The idea of “going it alone” is not inherently contrary to free markets. If US trade negotiators were genuinely interested in lower barriers of all sorts (and that has to include not only tariffs and quotas but also the thousands of other regulatory barriers), they could go country by country and broaden markets. Even better, so long as we are dreaming: the US could pursue free trade unilaterally.
Sadly, the policy ethos in the United States is turning ever more toward a mercantilist approach. In time, we will discover that the main victims here will not be bad foreigners who are cheating us but American consumers and producers who will face fewer opportunities to live better lives. The rest of the world will move forward.
This article was originally published on FEE.org. Read the original article.
I love this - the initial premise makes you look at the concept of free trade from a different angle; I'm not sure you could use it in an essay, but it does put it in perspective:
People often see international trade and immigration as a way that foreigners take advantage of us, but economists, whether they’re liberal or conservative, Democrat or Republican, tend to see trade and immigration as good for both us and them.
When we teach international economics to college students, economists invoke something called “comparative advantage.” Our best argument, though, is a story.
Imagine a visionary scientist announces that he’s discovered a way to turn corn into cars. Everyone laughs at him. His fellow scientists call him a crank, but he builds a factory in an abandoned port, and lo and behold, corn goes in and cars come out.
Cars that only the rich could drive before are now affordable for all.
The competition hurts existing auto workers, but Americans are clearly far richer as a result of the scientist’s amazing discovery. Cars that only the rich could drive before are now affordable for all.
One day, though, a journalist sneaks into the factory and discovers the scientist’s secret. A bunch of dock workers are unloading cars from a Japanese ship and filling it with corn to take back to Japan. He snaps some pictures and frantically writes an expose. The next day’s headline reads, “Corn-Made Cars a Fraud.”
The government shuts down the company and sends the founder to jail for breaking every foreign-trade law on the books.
The point of the story is the visionary scientist did have a way to make corn into cars. What difference does it make what’s inside the factory?
Foreign trade is a technology.
For all practical purposes, foreign trade is a kind of technology, a creative way to reduce our cost of living, and thereby raise our standard of living. The fact that we keep looking for a dark lining in this silver cloud is a symptom of what I call anti-foreign bias, human beings’ tendency to underestimate the economic benefits of dealing with people from other countries.
Are there any important difference between technology and foreign trade? Absolutely. When Americans use new technology, we’re better off. When Americans trade with foreigners, we’re better off — and so are they.
Trade is made of win.
From the American point of view, technology and trade are the same. From the human point of view, however, trade is better, because after all, trade is made of win. The corn-into-cars story is the heart of economists’ case for trade, regardless of other countries’ trade policies.
When people say, “We can’t have free trade, because other countries don’t,” economists yearn to respond, “If all your friends were jumping off the Brooklyn Bridge, would you jump too?”
The 19th-century economist Henry George mocked protection against foreign products as a self-enforced blockade. What protection teaches us is to do to ourselves in time of peace what enemies seek to do us in time of war.
Immigration is a good deal too.
If that’s economists’ quick case for trade, what’s their case for immigration? More of the same. Another name for immigration is trading labor, and as we’ve seen, trade is just a technology.
If a company invented a self-driving lawn mower, Americans would rejoice. From the American point of view, the immigration of gardeners from, say, El Salvador has exactly the same effect as the invention of a self-driving lawn mower. Our cost of living goes down, our standard of living goes up. As a happy side effect, the Salvadorans get a huge raise, a raise that allows them to give their families a better life.
This doesn’t mean that most economists want us to adopt free trade or free immigration overnight. The real world is full of complications. Nevertheless, almost all economists think that trade and immigration are greatly underrated.
When you make a deal with another person, both of you are normally better off. When you hire another person, both of you are normally better off. Does it really matter if the other person comes from another country?
Bryan Caplan is an economics professor at George Mason University, and a senior scholar at the Mercatus Center. His writings have been published in the American Economic Review, the Economic Journal,… read more
I just read it, and thought a few of you might be interested in the topics - rent seeking, information failure, regulatory capture, subsidies - as well as just plain-old wanting to know more about an important subject that will affect you. It is purely extension material, so stop here if you think you don't have the time or the inclination...
The organic industry is a case study in rent-seeking.
Adam Smith, the 18th century economist and philosopher, offered good insights into human nature as well as economics. “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices,” he wrote in The Wealth of Nations.
We’re seeing evidence of that in current lobbying skirmishes — for example, over whether novel, effective, inexpensive hearing aids should be made available over-the-counter. The battle lines are predictable: Patient groups are encouraging Congress to pass legislation that would create new standards for hearing aids that could be used by people with moderate impairment and sold at modest cost over-the-counter. Meanwhile, the association that represents audiologists believes “the absence of audiological involvement” would be “detrimental to patient outcomes.”
The real issue is, of course, not “patient outcomes,” but what economists call “rent-seeking” — attempting to manipulate public policy in order to increase profits — on behalf of the association’s members. The excellent new hearing aids, which resemble wireless ear buds, cost about $300, while conventional alternatives can cost many thousands.
The self-interest of audiologists in that situation is quite obvious, of course; less so is the ongoing campaign by the organic agriculture and food and “natural products” industries to discredit and diminish modern genetic engineering of crops and the scientific community that is in any way involved with them.
Is organic farming sustainable and environmentally friendly?
Advocates of organic agriculture tout it as a “sustainable” and healthful way to feed the planet’s expanding population. That is wishful thinking, if not outright delusion, but it is being widely promulgated by the credulous media and the foodie elites. The truth is that organic practices are to agriculture what cigarette smoking is to human health.
In fact, organic practices result in a significant increase in leaching of nitrates into groundwater and impose a variety of stresses on farmland and especially on water consumption. Moreover, although composting gets good (and highly organized) PR as a “green” activity, on a large scale it generates a significant amount of greenhouse gases, and is also often a source of pathogenic bacteria applied to crops.
Another prevalent “green myth” about organic agriculture is that it does not employ pesticides. Organic farming does, in fact, use insecticides and fungicides to prevent predation of its crops. More than 20 chemicals (mostly containing copper and sulfur) are commonly used in the growing and processing of organic crops and are currently acceptable under USDA’s arbitrary and ever-shifting organic rules, and many of those organic pesticides are more toxic than “synthetic” ones. In any case, as was pointed out by Bruce Ames and colleagues in a 1990 academic article, “99.99% (by weight) of the pesticides in the American diet are chemicals that plants produce to defend themselves.”
The fatal flaw of organic agriculture is the low yields, which cause it to be wasteful of water and arable farmland. Plant pathologist Dr. Steve Savage analyzed the data from the U.S. Department of Agriculture’s 2014 Organic Survey, which reports various measures of productivity from most of the certified organic farms in the nation, and compared them to those at conventional farms, crop by crop and state by state. His findings are extraordinary: Of the 68 crops surveyed, there was a “yield gap” — poorer performance of organic farms — in 59. And many of those gaps, or shortfalls, were impressive: strawberries, 61 percent less than conventional; fresh tomatoes, 61 percent less; tangerines, 58 percent less; carrots, 49 percent less; cotton, 45 percent less; rice, 39 percent less; peanuts, 37 percent less.
These findings are important. As Dr. Savage observed: “To have raised all U.S. crops as organic in 2014 would have required farming of 109 million more acres of land. That is an area equivalent to all the parkland and wildland areas in the lower 48 states, or 1.8 times as much as all the urban land in the nation.”
Is organic food healthy?
Are the products of organic agriculture healthier or otherwise superior in any way? An article published in 2012 in the Annals of Internal Medicine by researchers at Stanford University’s Center for Health Policy aggregated and analyzed data from 237 studies to determine whether organic foods are safer or healthier than non-organic foods. They concluded that fruits and vegetables that met the criteria for “organic” were on average no more nutritious than their far cheaper conventional counterparts, nor were those foods less likely to be contaminated by pathogenic bacteria like E. coli or Salmonella.
And on the subject of contamination: Organic foods are highly susceptible to it. According to Bruce Chassy, professor of food science at the University of Illinois, “organic foods are recalled 4 to 8 times more frequently than their conventional counterparts.”
Organic agriculture is kept afloat by political rent-seeking.
If organic agriculture isn’t sustainable, doesn’t produce more nutritious food and is far more expensive, what is the purpose of USDA-mandated organic standards and certification? “Let me be clear about one thing,” Secretary of Agriculture Dan Glickman said when organic certification was being considered: “The organic label is a marketing tool. It is not a statement about food safety. Nor is ‘organic’ a value judgment about nutrition or quality.”
But that marketing tool has been grossly abused. Organic agriculture’s dirty little secret is that it is kept afloat only by massive subsidies and nurtured by a whole panoply of USDA programs, by misleading advertising, and by “black marketing” that disparages the competition with disinformation.
Academics Review, a reliable, science-oriented nonprofit organization of academic experts, performed an extensive review of hundreds of published academic, industry, and government research reports concerned with consumers’ views of organic products. It also looked at more than 1,500 news reports, marketing materials, advocacy propaganda, speeches, etc., generated between 1988 and 2014 about organic foods.
Their analysis found that “consumers have spent hundreds of billion dollars purchasing premium-priced organic food products based on false or misleading perceptions about comparative product food safety, nutrition and health attributes,” and that this is due to “a widespread organic and natural products industry pattern of research-informed and intentionally-deceptive marketing and paid advocacy.”
It is hardly news that some industries systematically mislead the public to further their interests — who can forget the decades of mendacity from the tobacco industry — but the organic industry’s comparable actions are actively aided, abetted, and supported by the U.S. Department of Agriculture’s Organic Seal and the National Organic Standards Program (NOSP), in clear violation of the NOSP’s mission. Thus, American taxpayers are funding propaganda about organic products that misleads consumers with fraudulent health, safety and quality claims and fools them into supporting production methods that are an affront to the environment. This is rent-seeking.
What about genetic engineering?
Perhaps the most illogical and least sustainable aspect of organic farming in the long term will turn out to be the systematic and absolute exclusion of “genetically engineered” plants — but only those that were modified with the most precise and predictable modern molecular techniques. Except for wild berries and wild mushrooms, virtually all the fruits, vegetables, and grains in our diet have been genetically improved by one technique or another — often as a result of seeds having been irradiated or via “wide crosses,” which are created by moving thousands of genes from one species or genus to another in ways that do not occur in nature. Irradiation has produced thousands of useful mutants that comprise a significant fraction of the world’s crops, including varieties of rice, wheat, barley, pears, peas, cotton, sunflowers, peanuts, grapefruit, bananas, cassava and sorghum. Wide crosses have given rise to important varieties of oat, sugar beet, pumpkin, cotton, tomato, rice, bread and durum wheat, black currant, and corn.
In recent decades, using molecular genetic engineering techniques, we have seen advances such as plants that are disease- and pest-resistant, boast higher yields, and are drought- or flood-resistant. These advances make farming more environmentally friendly and sustainable than ever before. But they have resulted from science-based research and technological ingenuity on the part of farmers, plant breeders, and agribusiness companies, not from social elites disdainful of modern insecticides, herbicides, genetic engineering, and large-scale “industrial agriculture.”
As genetic engineering’s successes continue to emerge, the gap between modern, high-tech agriculture and organic methods will become a chasm, which brings us back to the cabal postulated by Adam Smith. There exists in this country (and elsewhere) a well-established, highly professional and vast anti-genetic-engineering industry fueled by special interest groups spending billions of dollars, seeking to line their own pockets but oblivious to the public interest.
Some of the NGOs, their budgets and funders are listed in a table in an article, “The fat lies and fatter wallets of anti-GMO lobbyists,” by Iowa farmer Michelle Miller (no relation to this author), aka the “Farm Babe.” In the article, she describes the massive disinformation campaigns about genetic engineering in agriculture which attempt to make less efficient, inferior organic products more cost-competitive.
These activists have even funded phony “advocacy research” that alleges health problems from genetically engineered crops and foods, “documentary” films — such as “Food, Inc.” and “Genetic Roulette” — and other propaganda tactics. They have powerful allies in the media. Viewers of the Dr. Oz TV show, for example, have been repeatedly warned by “friend of the show” and anti-biotechnology activist/levitator (yes, you read that correctly) Jeffrey Smith and Stonyfield Organic CEO Gary Hirshberg that genetically engineered crops are inadequately tested and are actually responsible for adverse health effects.
In its news articles, op-eds and columns by reporters and columnists such as Keith Schneider, Danny Hakim, Nassim Taleb and Mark Bittman, the New York Times has waged a decades-long campaign of opposition to genetic engineering that has been widely criticized by the scientific community..
Because of discriminatory overregulation of genetically engineered crops worldwide, they “are the most studied crops in history,” in the words of plant biologists Miguel Sanchez and Wayne Parrott, in their landmark analysis of “scientific studies usually cited as evidence of adverse effects of GM food/feed.” Spoiler alert: They conclude, “Importantly, a close examination of these reports invariably shows methodological flaws that invalidate any conclusions of adverse effects.” In other words, the reports are consistently erroneous, representing flawed advocacy research from the same self-interested cast of characters. After the cultivation of more than 5.3 billion acres and the consumption of more than three trillion servings of food derived from genetically engineered crops, there has not been a single documented case of an ecosystem disrupted or a bellyache.
When businesses offer consumers a spectrum of product choices, whether they are made with different technologies or in ways that appeal in some way to personal preferences — like halal, kosher, free-range or organic — market forces can operate. But if businesses get government subsidies to make their products cheaper, or “capture” regulatory policies to limit or boost the prices of what the competitors can offer, that’s rent-seeking — which harms consumers, innovation, the economy, and in the case of organic agriculture, even the environment.
Henry I. Miller, MS, MD, is the Robert Wesson Fellow in Scientific Philosophy and Public Policy at the Hoover Institution. His research focuses on public policy toward science and technology,… read more
