[Editor’s Note: The Hill reports today on how the Trump administration has approved new rules to cut back the budget on federal met inspection. The Hill’s article highlights how the old myths behind the genesis of federal meat inspection are still very much alive and well. In The Progressive Era, Murray Rothbard examined how it was the inspectors themselves who wanted inspection for reasons that had nothing to do with improving the quality of food.]
One of the earliest acts of Progressive regulation of the economy was the Meat Inspection Act, which passed in June 1906. The orthodox myth holds that the action was directed against the “beef trust” of the large meat packers, and that the federal government was driven to this anti-business measure by popular outcry generated by the muckraking novel, The Jungle, by Upton Sinclair, which exposed unsanitary conditions in the Chicago meat-packing plants.
Unfortunately for the myth, the drive for federal meat inspection actually began more than two decades earlier and was launched mainly by the big meat packers themselves. The spur was the urge to penetrate the European market for meat, something which the large meat packers thought could be done if the government would certify the quality of meat and thereby make American meat more highly rated abroad. Not coincidentally, as in all Colbertist mercantilist legislation over the centuries, a governmentally-coerced upgrading of quality would serve to cartelize — to lower production, restrict competition, and raise prices to the consumers. It, furthermore, socializes the cost of inspection to satisfy consumers, by placing the burden upon the taxpayers instead of on the producers themselves.
More specifically, the meat packers were concerned to with combating the restrictionist legislation of European countries, which, in the late 1870s and early 1880s, began to prohibit the import of American meat. The excuse was to safeguard the European consumer against purportedly diseased meat; the probable major reason was to act as a protectionist device for European meat production.
Partly at the behest of the major meat packers, Chicago and other cities imposed and then strengthened a system of meat inspection, and the Secretary of the Treasury, on his own and without Congressional authorization, set up an inspection organization to certify exported cattle as free of pleuropneumonia in 1881. Finally, after Germany prohibited the importation of American pork, ostensibly because of the problem of disease, Congress, responding to the pressure of the large meatpackers, reacted in May 1884 by establishing a Bureau of Animal Industry within the Department of Agriculture “to prevent the exportation of diseased cattle” and to try to eliminate contagious diseases among domesticated animals.
But this was not enough, and the Department of Agriculture kept agitating for additional federal regulation to improve meat exports. Then, in response to the hog cholera epidemic in the United States in 1889, Congress, again pressured by the big meat packers, passed a law in the summer of 1890 compelling the inspection of all meat intended for export. But the European governments, claiming to be unsatisfied because live animals at the time of slaughter remained uninspected, continued their prohibitions of American meat. As a result, Congress, in March 1891, passed the first important compulsory federal meat inspection law in American history. The Act provided that all live animals must be inspected, and it managed to cover most animals passing through interstate commerce. Every meat packer involved in any way whatever in export had to be inspected in detail by the Department of Agriculture, and violations were punishable by imprisonment as well as fine.
This rigid inspection law satisfied European medicine, and European countries swiftly removed their prohibition on American pork. But the European meat packers were upset in proportion as their physicians were satisfied. Quickly, the European packers began discovering ever higher “standards” of health — at least as applied to imported meat — and European governments responded by reimposing import restrictions. The American meat industry felt it had no other choice but escalating its own compulsory inspection — as the minuet of ever higher and hypocritical standards continued. The Department of Agriculture inspected more and more meat and maintained dozens of inspection stations. In 1895, the department was able to get Congress to strengthen meat inspection enforcement. By 1904, the Bureau of Animal Industry was inspecting 73% of the entire U.S. beef kill.
The big problem for the large packers was their smaller competitors, who were able to avoid government inspection. This meant that their smaller rivals were outside the attempted cartelization and benefited by the advantage of being able to ship uninspected meat. To succeed, the cartel had to be extended to, and imposed upon, the small packers.
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From Mises.org, here.
