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Two Very Fashionable Frauds

October 20, 2004Thomas J. DiLorenzo

Tags Free MarketsHealthMedia and CultureU.S. Economy

Two years ago I was on a faculty committee to choose the one book that incoming freshman would be asked to read and discuss in discussion groups during freshman orientation. It was the school of business’s turn to choose the book, so I thought it would be valuable, for once, for the freshman to read a book that was not the latest popular left-wing polemic, as seemed to be the practice.

Academic politics being what it is, I had little hope of convincing the other members of the committee to choose a book by Mises, Rothbard, Hayek, Hazlitt, Friedman or Rand. But still, since the committee members were all part of a school of business and management, I had hopes that we would at least adopt a book on the history of American entrepreneurship, the debate over globalization, the high-tech revolution, etc. I quickly learned that the only positive role that I could possibly play on that committee was to hopefully embarrass the other members out of adopting another truly awful, economically ignorant attack on capitalism.

The most passionate debates centered over two books that were favored by several members of the committee and which, it turns out, have become almost cult classics among the academic left. These are Fast Food Nation: The Dark Side of the American Meal, by Eric Schlosser and Nickel and Dimed by Barbara Ehrenreich. Both are New York Times bestsellers and both are shockingly ignorant of the most elementary level of economic logic. (I did succeed in embarrassing my colleagues out of choosing them).

In The Constitution of Liberty, Friedrich Hayek made the point that one of the keystones of socialism is the denial of individual responsibility. Thus, the crusade for socialism always included attacks on individual responsibility. For if individuals do not have free will, and are not responsible for their actions, then their lives must be controlled somehow—preferably by the state—according to the socialists. They must be regulated, regimented and controlled—for their own good.

This is the underlying message of Fast Food Nation, in which the author makes the remarkable scientific discovery that a steady diet of chocolate milkshakes and French fries, combined with little or no exercise, will make you fat. Schlosser has nothing at all good to say about the fast food industry despite the fact that millions of Americans (and others) express their disagreement with him every day by spending their money at these establishments.

Schlosser fails to acknowledge that American consumers are as educated as they have ever been and can judge for themselves where the best place to eat is. Just as everyone has understood that smoking is bad for your health for well over a hundred years, if not longer, it is common knowledge that a super-sized double cheeseburger with fries has considerably more calories than baked chicken and broccoli. We don’t need Eric Schlosser to inform us of this.

One gets the impression that despite his voluminous discussion of the alleged problems of the fast food industry, Schlosser has never paid close attention to the menu items at Wendy’s, McDonald’s, or Burger King. These fast food restaurant chains, and many others, have adapted to the American public’s demands for healthier foods by cutting down on fat grams, offering more and more salads, wrap sandwiches, and other more healthful items, as well as all kinds of low-carb offerings. The free market is working, in other words. But Schlosser’s book is nothing if it is not an uninformed attack on the free market in the food industry.

Schlosser reveals his true agenda in the book’s epilogue, where he sings the praises of "scientific socialists," a term that Lenin used to boast of the alleged accomplishments of Soviet socialism. He lambastes capitalism in general and waxes eloquent about the alleged munificence of government intervention, from the job-destroying minimum wage law to "public works" departments and road-building programs, which have been perhaps the most colossal examples of government waste, fraud, inefficiency, and corruption.

He ends the book by recommending a blizzard of government intervention, as though that will make us all thinner, fitter, and healthier. We need more government "job training" programs, he says, despite the fact that such programs were even deemed to be abysmal failures by the U.S. Congress itself in the 1970s when it sunset the Comprehensive Employment and Training Act (CETA). We need more laws that give special privileges to labor unions, says Schlosser, who is apparently ignorant of how such union power played an important role in almost destroying the American steel and automobile industries, among others, over the past several decades.

The food industry is regulated by federal, state, and local bureaucracies, and by "consumer activist" busybodies in the nonprofit sector, but that is not enough for Schlosser, who advocates layers and layers of additional regulatory regimentation. He ignores the most important type of "regulation" of the fast food industry: consumer sovereignty. It is the quest for the consumer’s dollar that creates the most potent incentives to offer safer, tastier, and healthier food, but Schlosser makes no acknowledgement at all of this important fact.

Creating a new Soviet-style bureaucracy to control, regulate, watch over, and punish ranchers, farmers and supermarkets is also on Schlosser’s policy menu, further revealing his rather childishly naïve, pie-in-the-sky view of government as some sort of omniscient and benevolent nanny.

Free commercial speech is also a problem that could be corrected with advertising bans. This, too, reveals Schlosser’s economic ignorance: Advertising makes the fast-food industry more competitive, and therefore more likely to offer healthier food. If McDonald’s is the first to come up with say, a tasty, low-carb meal, it will want to advertise that fact heavily. And if it is popular, the profitability of the meal will induce all of McDonalds’ competitors to produce similar offerings.

Schlosser does nothing more than repackage some of the same tired old myths about capitalism that earlier generations of muckraking socialists perpetrated. Indeed, on the back of the paperback edition of Fast Food Nation is a blurb from the San Francisco Chronicle proclaiming that Schlosser is "channeling the spirits of Upton Sinclair and Rachel Carson." Indeed he is. Sinclair was the early twentieth-century socialist author of the book, The Jungle, which turned out to be a wildly inaccurate and unfair portrayal of the meatpacking industry. Rachel Carson’s fable about the alleged dangers of pesticides, the 1962 book, Silent Spring, became a classic of the environmental movement despite the fact that it was a work of fiction. The book had a powerful influence, however, and governments throughout the world banned DDT and other pesticides beginning in the early 1970s. This ban has led to the death of literally millions of people in the Third World from malaria. It has also caused numerous crop disasters as voracious insects that were once killed off with DDT are no longer, and substitutes are often unaffordable in Third World countries.

In 1970, shortly before DDT was banned, the National Academy of Sciences determined that DDT had saved 500 million lives over the previous three decades by eradicating malaria-carrying mosquitoes. DDT was banned by the U.S. government in the early 1970s despite the fact that no science was presented that it had the effects that Carson and the environmental movement claimed it had.

Even if the National Academy of Sciences estimate of lives saved by DDT is off by a multiple of two, Rachel Carson and her crusade against the pesticide would still be responsible for more human deaths than most of the worst tyrants in world history.

The second, and truly asinine, book of choice by the academic left is Nickel and Dimed, by Barbara Ehrenreich. Although she is a Ph.D. biologist who has written for Time, Harper’s, The New Republic, The Nation, and the New York Times Magazine, Ehrenreich pretended to be an indigent, entry-level restaurant and hotel worker so she could write a book about her experiences. To add to Eric Schlosser’s remarkable scientific discovery that pigging out on fast food seven days a week will make you fat, Ehrenreich makes the momentous discovery that entry level jobs at fast food restaurants don’t pay very well.

Her main theme is that people who leave the welfare rolls and go to work have a tough time of it. Of course, that is true of many who are entering the job market for the first time, whether they have been on welfare or not. On the other hand, the hordes of immigrants from Mexico and Central America—legal and illegal—seem, for the most part, overjoyed at the prospect of having such jobs and moving up and on from there, as generation after generation of Americans has done. They obviously have not read Nickel and Dimed.

What Ehrenreich’s sob stories about the rigors of work at entry level jobs shows is not that capitalist bosses are greedy, uncaring exploiters—the watered down Marxist theme of her sophomoric book—but that the welfare state, combined with the disastrous government-run school system, has destroyed the work ethic and job prospects for millions of Americans. Why prepare oneself for a life of work if it is possible to simply sit back and collect a welfare check?

This of course is yet another example of what economists call the moral hazard problem of the welfare state. By supposedly helping "the poor," the welfare state harms them by inducing them to avoid doing the very things that will make them un-poor—learning how to interact in society, such as at a job; learning a skill or trade; learning how to be a responsible citizen and employee; saving some of your earnings; and getting married and staying married.

The fact is, every mentally capable person looks at entry-level jobs as a first step on the economic ladder. And it is certainly true that there is a great deal of upward mobility in the U.S. labor market for those who want to work, gain experience, learn on the job, and continue to educate themselves. Ehrenreich makes no mention at all of any of this.

Like Schlosser, Ehrenreich whines like a baby about the alleged "cruelty" of capitalism while championing the same tired, old socialistic agenda that Schlosser does. She advocates a super minimum wage that would price out of jobs thousands of the very people she claims to be so concerned about—entry level restaurant and hotel workers. She urges government to build more government housing projects, bemoaning the fact that public housing subsidies declined during the 1990s.

For one thing, welfare subsidies of all kinds often fail to rise as rapidly during times of vigorous economic growth, such as in the 1990s (even if that growth was artificially fuelled by expansionary monetary creation by the Fed). Ehrenreich simply does not understand this. Nor does she seem familiar with the disaster that government-run housing projects have been in every city in America. The absence of property rights in "free" public housing has created a nationwide system of gigantic, abysmal slums plagued by crime and squalor. Ehrenreich thinks we need more of this.

Moreover, all the increases in government spending Ehrenreich calls for would only siphon even more resources from the private sector—the source of all government funding—causing fewer jobs to be created there. It would also place a larger tax burden on all workers, including the ones she claims to be speaking for. The average American family already pays more in taxes than for food, clothing and shelter combined, as Amity Shlaes documents in her book, The Greedy Hand, and Ehrenreich’s big-government agenda would only increase this already confiscatory burden.

Authors like Schlosser and Ehrenreich get big book contracts from major publishers, are treated like celebrities on college campuses and paid hefty speaking honoraria, and are always optimistically portrayed as the next Upton Sinclair or Rachel Carson. But their books are nothing more than carefully scripted, anticapitalist drivel that is void of even the most elementary level of economic logic or analysis. This is why economics is so important: today’s college students who remain ignorant of economics are all the more likely to be bamboozled by books such as these that call for an end to the very system that is the sole source of American prosperity—and of their own economic futures. Capitalism and its essential ingredient—private property—are also a prerequisite for freedom. For as Ludwig von Mises wrote in The Free and Prosperous Commonwealth (p. 67):

Private property creates for the individual a sphere in which he is free of the state. It sets limits to the operation of the authoritarian will. It allows other forces to arise side by side with and in opposition to political power. It thus becomes the basis of all those activities that are free from the violent interference on the part of the state. It is the soil in which the seeds of freedom are nurtured and in which the autonomy of the individual and ultimately all intellectual and material progress are rooted.

Or as Congressman Ron Paul has warned, if we continue to pay attention to authors like Schlosser and Ehrenreich who "reject capitalism and blame it for all the problems we face," and fail to challenge these false views, then capitalism will be "even further undermined" and "the prosperity that the free market generates will be destroyed" (Ron Paul, "Has Capitalism Failed,"July 9, 2002).

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