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Mad Government Disease

Mises Daily: Monday, March 26, 2001 by

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Farmer Freeman woke up one morning last week to find two dozen armed federal officers on his Vermont farm, gathering up his sheep. They were taking them to Iowa, where the sheep would be slaughtered and then tested for mad cow disease.

This wasn't Freeman's first mad-cow encounter with the government. Last summer, Freeman and other sheep farmers rejected an offer to voluntarily liquidate their herds in exchange for $2.4 million in payment. A legal battle ensued, in which the courts rebuffed the government's sheep buy-back program. The government decided to start taking sheep anyway.  

It is a frightening Reno-like episode of the state resorting to legal coercive power after its efforts have been thwarted in the courts.  Moral justification is based on the assumption that markets are inherently instable and, if left to operate on their own, inevitably would infect us all with sickness and disease.

The truth of the matter, of course, is that government policy worsens the dangers of outbreaks such as mad cow disease. Much of this mad cow crisis, in fact, has been fabricated so as to justify the already bloated budgets of the Department of Agriculture and the Food and Drug Administration.

Freeman raises sheep, not for their meat or wool, but for their milk, which is used in the production of exotic cheeses. Last summer, the Vermont Health Department asked sheep owners to stop selling the cheese, even though there is no evidence that mad cow disease can be spread through milk.

The USDA has said that four sheep from Freeman’s flock showed signs of transmissible spongiform encephalopathy, which is a class of neurological diseases that includes both bovine spongiform encephalopathy (BSE), or mad cow disease, and scrapie, a sheep disease which has been in the United States since 1947 and which is not harmful to humans. Although there have been no confirmed cases of mad cow disease in the United States, the government said that Freeman's sheep could possibly have BSE because they might possibly have been exposed to mad cow disease through contaminated European feed.  

The USDA tests could not confirm whether the sheep have BSE or scrapie. The animals will be killed and their brain tissue studied at a USDA lab in Ames, Iowa. We can assume there will be enormous political pressure on the lab workers there to find something egregious with the sheep in order to justify the government’s egregious actions that were employed in getting them there.

George Gray, a government scientist employed at Harvard University, admitted the risk posed by the animals is small. But, he added, "You can construct a chain of possibilities" leading to widespread contamination.  "It’s impossible to say never," he said.  "It’s impossible to say it couldn’t happen."

On any given day, there are an infinite number of bad things that technically could happen. If this has become the argument for infinite government intervention in our lives—intervention which, by the way, makes for a pretty nice living for Harvard scientists—then we might as well file away the Constitution and declare the framers’ experiment dead.

What’s irritating about mad cow disease is that it has been the actions of the British government that have made the problem grow to its present proportions. In a market setting, farmers have an incentive to reduce the incidence of such diseases because of the impact on profits. Farmers would institute precautionary measures while purchasing insurance to cover their losses.  

However, when the benevolent British state reimburses farmers for livestock lost to mad cow disease, the market’s tendency toward minimizing the effect of such diseases is impeded. In fact, the farmer who plans poorly is compensated for his bad decisions on his farm. Moral hazard exists in any setting.

Robert Higgs’ analysis from his book Crisis and Leviathan is especially applicable here. The incentives that exist to the public-sector actor are completely different from that which influences his private-sector counterpart. A mad cow scare allows the Department of Agriculture bureaucrat to achieve his goal of spending his budget—or even exceeding it, perhaps, so as to justify larger budgets in the future.

Politicians have the incentive to comply with this scheme, since public-sector employees represent a large voting bloc. In the process, new layers of bureaucracy will be created, and they will remain after the crisis recedes. We should expect more talk of crises in the news whenever bureaucrats feel pressure from politicians to reduce spending.

And so government grows, like a disease. The cure involves dividing it and reducing its size before it kills the body politic. It remains to be seen whether any cases of mad cow are ever found in the U.S. It’s clear, however, that we should be much more concerned about the state’s response to the disease than about the disease itself.

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Christopher Westley, adjunct scholar of the Mises Institute, is an assistant professor of economics at Jacksonville State University. Send him mail and see his Daily Article Archive. See also Murray N. Rothbard's Anatomy of the State.