Defending the Undefendable II: Freedom in All Realms

13.

BREAST MILK
SUBSTITUTE PURVEYOR

The so-called infant formula crisis is yet another stick used by critics of the market to beat up on the free enterprise system. Exhibit “A” in their indictment is the fact that manufacturers of this product sell it in powder form in poverty-stricken Third World countries. The problem there, is that the water the baby formula is mixed with is impure. Thus, the result of mixing the powder and this water is harmful to the infants.

But why blame the marketplace? There has not ever been so much as a hint that there is any problem with the breast milk substitute itself. No, it has always been beyond reproach. The sole cause of the problem is, instead, the water. And, who, pray tell, is in charge of water supply? The free enterprise system? Not a bit of it. Rather, it is the state apparatus that has arrogated to itself control of this “vital body fluid”. Thus, the responsibility for the failure of breast milk substitutes lies in the so-called public sector, not in the private one.

Nor are our friends, the leftist critics of capitalism, at all apologetic about this. No. Any call for the privatization of the water supply is likely to be met with derision and worse by them. Should we turn reservoirs over to the tender mercies of profits, greed, and markets? Not in their view. Instead, they have a perverse hatred for that small bit of this market that has been taken over by entrepreneurs: bottled water. The temerity of these people. They blame a private product for misery, when it is government provision that is at fault. Often, they do their utmost to ban the innocent, privately manufactured powder, while doing their utmost to protect the real culprit of the piece, government control over water supplies.

Exhibit “B” in the case against the use of infant formula is the fact that hospitals often give these products away for free to the mothers of newborns. This encourages the parents to use it, one, because it is free, and two, because it comes with the imprimatur of the medical profession.

Now, let us sit back and contemplate all this for a moment.

First, market opponents are forever criticizing laissez faire for encouraging greed, profits, high prices, etc. Along comes an institution that provides something, not only at a low price but for free, and what is their reaction? Thankfulness? No. The very opposite. Secondly, while natural breast milk is indeed in most cases considerably superior to the chemical substitute, there are some women who are unable to breast feed. For them, instant milk is a Godsend. Even for mothers who can function in this regard, the baby formula can still serve as a supplement to the natural process. Are these women to be penalized because some ignorant and/or uncaring mothers will undoubtedly abuse this product? If so, then we might as well ban alcohol, chocolate, ice cream, hot dogs, French fries, because some irresponsible people will indulge in them to excess and hurt themselves and/or their babies.

Giving things away like this is only the tip of the iceberg. Loss leaders, or outright freebies on a temporary basis, are indeed a ploy of companies to enter new markets. How better to encourage people unfamiliar with a product than to charge a spectacularly low price for it or give it away. Since any item can be used to excess, and thus prove harmful (dosage is all), the logic of opposition to making a gift of infant formula is to ban low prices or giveaways for anything. One wonders if these market critics would accept this logical implication of their stance.

What about the problem regarding the Chinese baby formula that supposedly had poison in it. As a result, many young children were killed, it is claimed. Does this not give us pause for thought before defunding purveyors of this product?

No.

This can happen with anything consumed by human beings. Artificial breast milk? Yes. But also, apples, bread, lima beans, steaks, ice cream, you name it. Should the government be placed in charge of all foodstuffs, medicines, etc., on the grounds that the market is imperfect, and that some people will be killed by it?

There are problems with such a solution. First, the problem with the Chinese baby formula occurred in 2008. Laissez faire capitalism was hardly in operation at that place or time. China, despite its magnificent strides in that direction, is not yet the paradigm case of free enterprise. As for the importation of this dangerous product to the U.S., the governmental Food and Drug Administration (FDA) bore full responsibility for allowing this disaster to occur.

The market has many advantages vis-à-vis government certification of safety, whether for food, drugs or any other product. When failures occur (and they can take place under either institutional arrangement, public or private), there is an automatic feedback mechanism at work in the market: loss of money and eventual bankruptcy. This does not work in the government sector. No matter how many lives the FDA has ruined, it is still in business.

Yes, some people will undoubtedly perish by using products that emanate from the private sector. That is the penalty for not living in the Garden of Eden. But more, many more, will do so if these tasks are given over to the statist bureaucrats.

Having established our thesis on this matter, let us now deal with an objection to it, from a very influential group.

According to the Infant Formula Action Coalition (INFACT), several multinational corporations were guilty of launching an aggressive advertising campaign, aimed at selling breast milk substitutes to Third World mothers. This had led to an outbreak of infant deaths from “baby bottle disease,” because, while the product may be perfectly acceptable in Europe or North America, this does not hold for the Third World. The reasons: 1) the water supplies there are usually polluted, so the infant formula is mixed with impure water, with deleterious effects; 2) severe poverty makes it difficult to buy the fuel necessary to boil and sterilize the water; 3) Third World mothers can’t afford to buy sufficient amounts of formula to replace their own milk—they must therefore dilute the formula well beyond the point called for in the written instructions; 4) they do not refrigerate the milk, also contrary to instructions, since very few own refrigerators; and 5) by the time the mother realizes that infant formula leads to a sickly, malnourished baby, her own milk has dried up and she has no alternative but to continue formula usage.

It is presumably for these or similar reasons that many critics of multinational enterprise also approve of Third World or international (United Nations) efforts to better govern the practices of transnational pharmaceutical companies.

The implicit premise of the argument is that as bad as these practices of the multinationals are, the efforts of the various U.N. organizations would not be worse. But, when looked at in this way, such a claim is very difficult to sustain.

For it is conceded by INFACT and other opponents of the multinationals that there is nothing wrong with baby formula per se. The difficulty concerns only the economic situation in the Third World with which the formula must interact: the poverty, the impure water, the illiteracy, the lack of refrigeration, etc.

But which organizations are responsible for this sad state of affairs in the first place? The collectivist economic planning of the Third World socialist governments (and the U.N.) is itself accountable for the poverty, the impure water, the illiteracy, the lack of refrigeration, etc., which are the root causes of the infant formula tragedy. Asking the Third World governments, or the U.N., to take charge and improve matters, is thus akin to asking the arsonist to put out the fire.

Let us now consider a second argument against government control of pharmaceutical multinationals, again on the assumption that the scenario given by INFACT is accurate.

We live in a sea of ignorance. On this side of the Garden of Eden, even with the best of intentions, men are likely to err. Their mistakes are liable to be serious, even, upon occasion, causing the deaths of numerous people. There is nothing that can be done to alter this unfortunate situation; it follows directly from man’s imperfection.

There is, however, one (admittedly imperfect) remedy: if we cannot eliminate this error, let us at least resolve to adopt a system which automatically and quickly rewards people who are less liable to make such mistakes and discourages those who are more prone to make them. The marketplace is far preferable in this regard than the regulatory bureaus which are very indirectly controlled through the political process. In order to further cement this insight, we consider yet another multinational pharmaceutical tragedy which rivals even the milk substitute horror: the thalidomide case.

Now thalidomide (a morning sickness drug that causes birth defects) was produced by a private company and approved for use by the West German regulatory bureau concerned with pharmaceuticals. Given this horrendous mistake, how have the two fared? Which one was forced to cease and desist: the private company, by the marketplace, or the West German regulatory bureau, through the political process? Obviously, it was the former. The latter, although co-responsible for the tragedy, is still operating. A similar point can be made for the Vichyssoise soup company, which quickly went out of business after causing several deaths by poisoning, while the FDA, which oversees all such companies is still doing business at the same old lemonade stand quite nicely, thank you.

Having assumed, arguendo, the accuracy of the INFACT story, it is now time to challenge it. According to the infant formula protesters, the manufacturer’s advertising is responsible for the adoption of breast milk alternatives in the Third World. Yet there is little statistical correlation between advertising efforts and infant formula use.

Then there was the widely touted claim that “up to one million infant deaths per year are attributable to infant formula.” However, as it turned out, the “evidence” for this claim was a “symbolic figure”; i.e., one made up out of whole cloth by an anti-infant formula activist. The problem with this “up to” claim is that it is true even if zero, one, two or three deaths occurred as a result. If John ate one pickle, it is true that John ate “up to 1,000,000 pickles.” This is demagoguery.