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Why There Should Be a Free Market in Food Labeling

January 31, 2014 in Economics

By Mises Updates

Nutrition facts

Dave Albin writes in today’s Mises Daily:

The articles from Lipsky and the food manufacturers both miss the point. The price of any good or service could be altered through state regulation of labeling GMO products (and new price equilibrium established) but there is no need for this to happen. Producers and consumers can and do take care of this on their own. Also, prices rising and falling is a natural consequence of any functioning market. The price is a signal to producers and consumers, and is used to allocate scarce resources, such as food. Rising prices create opportunities for producers, while falling prices indicate that either demand for the good or service is declining, or the supply is too abundant relative to demand. It is the distortion of these pricing signals that causes the real problems, not the fact that prices rise and fall.

So, it is widely known that some consumers care whether or not they are eating GMO foods, while others do not. Food producers are listening. A similar process occurred when the organic food movement began many decades ago — a “new” food market was created based on consumer demand. There is no reason to think that food choices and labels can’t change without legal mandates from the government. In fact, it is the mandates that would remove choice and knowledge on labels of food products for consumers.

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