These regulations were not there to provide “safety” to consumers but rather to keep competition out of the marketplace by fiat. Rothbard states that the only meaningful definition of monopoly is an exclusive legal right granted by the state.
However, if the free-market USDA fails to stop an illness from arising, through their own inspection failures, they may lose their credibility with both consumers and the producers that pay them. Profit and loss provide greater incentives for success than a bureaucracy that theoretically cannot “go under.”
https://mises.org/wire/usdas-war-small-farms
Most students in America are introduced to the writings of Upton Sinclair. While they aren’t shown his incredible cover-up of the Holodomor or his other Soviet apologisms, they are presented with his most famous work: The Jungle. This work tells the tale of Sinclair’s investigation into the wretched working conditions of the meat-packers of its age. Between lost limbs and failed inspections, Sinclair writes about the meat being contaminated and barbarously prepared.
This tale is meant to show the supposed failures of laissez-faire capitalism, with its disregard for workers and health. Readers are supposed to walk away with a firm belief in the need for the regulation of these firms. Hurrah! Here comes the mighty state to provide safety to the masses that would otherwise be made sick by crony corporations. That’s far from the truth.
Murray Rothbard himself documents in The Progressive Era the truth of the United States Department of Agriculture (USDA) regulation. Rothbard observed that nearly every inspection passed in any form of legislature or bureaucracy was fueled by protectionism from existing firms. These regulations were not there to provide “safety” to consumers but rather to keep competition out of the marketplace by fiat. Rothbard states that the only meaningful definition of monopoly is an exclusive legal right granted by the state. Perhaps then, the only meaningful definition of so-called monopoly powers is a firm’s ability to push regulation that harms their competition through the state.
Even today, the USDA—and its regulations—threaten to crush small farmers under its heel. A small hobby farm, or even one that simply isn’t a factory farm, can hardly stand up to the regulations.
Meat processing in the United States must be done under the supervision of a USDA inspector if the goal is to sell the animal product to another person. A farmer cannot simply butcher his or her own animal, cut it into the usual meat products, and sell it at a farm stand. That would violate USDA regulations. Regardless of the ability of farmers to inspect and keep their own animals healthy or of their own skill in butchering livestock, they must have a USDA inspector to sell the product on the market.
This inspector is not provided, though, free of charge by the USDA through taxpayer dollars.
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