Atlas Shrugged: The Mocking

Friday, November 5, 2010

Quality Control


It seems that a German chain of in-store bakery machines is being sued for deceptive advertising; their "fresh-baked rolls" are nothing of the sort. Megan McArdle just doesn't see what all the fuss is about.
I am certainly not against all false advertising statutes--the government's role in ensuring transparency is extremely important. But this seems like an egregious abuse of the statute. The bakers are not altruistically worried that consumers will be hurt by their decision; they're worried about competition cutting into their profits.

McArdle is all about free market competition. Caveat lector, suckers! If, for instance, you happened to buy a copy of The Atlantic because of its reputation for intellectually stimulating work by America's finest writers and you got Megan McArdle instead, that's just too bad. You'll know better next time.
Indeed, it's hard to see how a consumer could be hurt by this.

"Indeed" indeed. How could bakeries possibly be harmed by someone passing off lower-quality products as bakery-level quality, at a lower price?
Fresh baked bread does not have some sort of magic, hard-to-observe qualities like preventing cancer; it just tastes better. Consumers are in a very good position to observe whether the bread they buy at Aldi does, in fact, taste better; if not, they can always go back to their local bakery. What purpose, then, does suing for false advertising serve?

And if you call yourself an econoblogger but don't really blog on economics, your readers will just find another economics blogger. Getting all fussy and demanding regarding quality and truth and whatnot serves no purpose at all. And it damages reputations.
One could ask the same about France's rigid rules about regional naming, making it illegal to call anything Bordeaux unless it comes from a rigidly defined geographical area
.
One could also ask the same about Ivy League schools. Why are they so rigid about who can be called Ivy League and who couldn't? Why couldn't my large commuter state school call itself Yale but keep its much lower tuition? Anyone who looked at me would know at once if I were Yale or not Yale.
The US is not quite as bad about this sort of thing as many European companies are, but we have a fair amount of this nonsense, particularly surrounding food--so that there are strict rules, for example, about how much beef a soup must have before you can call it "beef soup with vegetables" rather than "vegetable soup with beef". Yet the amount of meat in a soup is easily observed directly by the consumer, and if they don't like it, they can always buy a different brand of soup.

It's really very simple: If you can see someone trying to rip you off, it's okay to rip you off. Which explains McArdle's belief that if she announces her husband works for a Koch she does not have a conflict of interest when she supports a Koch. Yet another jigsaw puzzle piece falls into place.
Transparency should focus on products that are costly and qualities that are hard to observe--ensuring that kosher food is actually kosher, and low-fat food is low in fat, and that the car alleged to have a v-6 engine and passenger-side airbags actually does. Quibbling over semantic labeling distinctions wastes time and energy--and worse, often serves as a forum for anti-competitive maneuvering.

McArdle just doesn't see the problem with both trading on and undercutting a brand's reputation.

Why are we not surprised?

34 comments:

Anonymous said...

It really is like shooting fish in a barrel, isn't it SoT?

-AWS

Susan of Texas said...

Yes, it sure is.

bingol said...

I'm new to this, but I'm not sure this is fair: "McArdle just doesn't see the problem with both trading on and undercutting a brand's reputation."

Maybe: "McArdle just doesn't see the problem with both trading on and undercutting a brand's reputation _if she personally doesn't buy that brand_."

Do that with something she buys, though?

Anonymous said...

"Yet the amount of meat in a soup is easily observed directly by the consumer, and if they don't like it, they can always buy a different brand of soup."

Is it really? I must admit I've never sat down and counted the amount of beef in beef soup vs. veg. with beef.

I expect my soup to work when I purchase it. Why does McArdle hate quality?

wait, don't answer that.

-AWS

Lurking Canadian said...

On the other hand, she just made a strong public statement in favour of lying to the public for money.

It's refreshing to see one piece from her in which she's so forthright about it.

DocAmazing said...

Given that truth-in-advertising is just so much silliness foisted upon us by overheated socialists, I'm investing in a thirty-pound bag of generic table salt and a pint of red dye. I'm sure McMegan will know the difference between the resulting product and pink Himalayan salt, won't she?

Anonymous said...

@DocAmazing - wonderful idea. Are there Himalayan salt regulations on the books? It would be teh awesome to see mcarglebargle come out as a big gov't liberal in such a way.

-AWS

Susan of Texas said...

She is devaluing the brand of the Atlantic, even though it could harm her eventually. McArdle favors a lot of policies that could possibly harm her or her favorite brands. But there are brands that she would not harm no matter what--her schools' reputations, the financial industry. Her loyalty is to them, not herself, which is strange. But that's how people are raised--to put obedience to others above protecting one's self.

Perhaps she just assumes that she won't be harmed by most things--she has enough money to deal with small inconveniences. But note she wants regulation for expensive or harmful situations, something that can affect even her.

Anonymous said...

"But there are brands that she would not harm no matter what--her schools' reputations, the financial industry."

SoT, do you mean they wouldn't feel the effect on their brands? Because I think she's done considerable damage to her schools' brands already.

-AWS

Susan of Texas said...

Ha, I forgot about the salt. I doubt she cares that expensive pink Himalayan salt is really mined from a cave in Pakistan. She is buying the myth of refined taste and exclusiveness, the actual product is much less important.

Susan of Texas said...

AWS, I doubt she thinks that she's harming them, since she is accepted by the elite, or at least the people she considers the elite.

Anonymous said...

SoT: Small anecdotal points, I know, but I do know some UPenn people who shake their heads in disgust.

-AWS

Spy Hill said...

"and that the car alleged to have a v-6 engine"

Thank you Megan, for finally exposing this fraudulent practice of automakers. I have long suspected that my Toyota only has a 4 cylinder engine, instead of the V6 indicated by the badge on the fender. If only there was some way to know for sure...

KWillow said...

"The Government" did not decide out of the blue one fine sunny afternoon to ensure "Truth In Advertising". People who were sick of being ripped off, made them do it.

And I'd bet a large sum that there were plenty of Megan-types in the groups that agitated for reform.

Downpuppy said...

I definitely have to get over to Iggy's bakery this weekend.

atat said...

"One could ask the same about France's rigid rules about regional naming, making it illegal to call anything Bordeaux unless it comes from a rigidly defined geographical area."

This single sentence provides definitive evidence that she isn't qualified to be writing about trade, economics or food. She truly has no idea what she's talking about.

Anonymous said...

Yeah, who needs truth in advertising? Who needs health standards, for that matter? If people get food poisoning because it was more profitable to use substandard storage, so be it.

I hope her Himalayan salt gives Ms. McCardle the shits, because of an above-standard amount of animal dung in it...

Clever Pseudonym said...

It just tastes better?!? Yes, Megan, that's exactly why people are willing to pay more for it. And if some greedy, lying dick comes along trying to pass off day-old bread as fresh, it's not unreasonable for a government to step in and say YOU CAN'T DO THAT.

Syz said...

Yes. Why can't everyone just buy one of everything, and then decide for themselves which bread is fresh, which beef soup has beef in it, etc?

Maybe because we are not all a bunch of pampered elitist snobs with unlimited resources? We actually need to know the value of an item before we purchase it.

On the other hand, let's reminisce about the good old days of the truly free market - when you would buy a bottle of vinegar and ... whoops! ... it is actually hydrochloric acid. Well, at least now you know to pick a different vendor. Hooray for the free market! Problem solved.

freq flag said...

Gah, yet another Invisible Hand Job from her 101 IQ.

She truly does give the word "sophomoric" a bad name.

Clever Pseudonym said...

Doc Amazing - I've written this before, but I'm telling you, if you want to make a million bucks, figure out a way to market something menial and bland to fake food snobs. Give it a fancy name and charge an arm and a leg for it. Include buzz words like virgin, organic or truffle in the product name and every phoney idiot whose only experience with cooking comes from watching cable food shows over their Sunday morning cofee will buy it. What do you say? We could all pool our resources and whip up a line of extra organic truffle virgin chutney, which will actually only be pickled relish. We'll make a fast buck and faux foodies like Megan will get to feel superior and good about themselves for their imaginary refined tastes. Everybody wins!

Anonymous said...

Come on, Clever Pseud, its done every day already. I live near a fabulous foodie joint--Formaggio, which has on its shelves the exact same spices and nuts and dried fruits that I can buy for a third to half the price a ten minute drive away in the "ethnic" foodstores in Watertown. What is "exotic" in one locale is simply, well, local in another. Yufka, labne, urfa peppers, etc...etc...etc... Just wanted to write that out because it looked so funny. Over at Whole Foods they charge 19 dollars a pound for some huge mushroom that they sell for three dollars a pound at the Super 88 chinese grocery store.

--aimai

cynic said...

Over at Whole Foods they charge 19 dollars a pound for some huge mushroom that they sell for three dollars a pound at the Super 88 chinese grocery store.

Which is true. Which is also why we reserve whole foods for real organic cheap stuff like canned tomatoes and 99c beans and organic milk... and stay away from the eddoes for 5 bucks that I can get at my local Indian store for half that.

cynic said...

.. and speaking of pink himalayan salt - I had no idea that stuff cost about 10 times ordinary table salt. It is just salt, for crying out loud - I pop them into my mouth side by side and I can't tell the difference.

bulbul said...

Our Lady of the pre-grated Parmesan,
Transparency should focus on products that are costly and qualities that are hard to observe
Translation: Quality control should only apply to expensive shit I buy based on recommendations from my snob friends.

LC,
she just made a strong public statement in favour of lying to the public for money.
Finally, eh?

Re Himalaian salt et al.: Somehow I'm reminded of that one episode of Hell's Kitchen (second half of season 7, I think) where Ramsay reheated some TV dinner and then served it to the contestants as his own creation. The contestants proceeded to kiss Ramsay's ass and praising the dish only to look like total idiots when the limey showed them the packaging.

Downpuppy said...

Once again, remembering the rule "Megan McArdle is Always Wrong" led to something good. A lovely ramble over to Iggys & on the Belmont Bike Trail, & the sticky bun is the best thing I've eaten all year.

Anonymous said...

Iggys! Next you'll say you are having your morning coffee at the Hi Rise.

aimai

Aimai said...

All joking about great local foods aside I went over and read the actual Megan piece and some of the comments. Man her commenters are stupid. Reading them is like eavesdropping on what the Bull thinks in the bullfight: every time is a surprise to them and each move is a potential moment to score a victory. They come in and say "Wow! weird! a Red Cape! and look at that guy in the funny suit. Bet he'll be surprised when I charge him!" Her commenters eagerly seize the bait and discuss her "point" and its novelty and originality without grasping that its the same point she makes every time: corporations can do no wrong. Don't try to oppose your puny consumer interests to the monetary interests of your betters.

Anyway, here's my post:

It may have escaped the geniuses here but there is very good historical reason why we have food regulations and truth in advertising regulations *specifically* of canned foods like beef soup: because the quality of the materials is not evident through the packaging. During the Civil War the needs of the troops were met by novel means like canned foods. One of the typical disasters was the purchasing of substandard/corrupted foodstuffs which, when served to the troops, proved inedible or deadly or both.

The same thing was going on as farming families moved full time into the city and were forced to purchase ready made versions of foods that they had previously made at home (including milk, beer, butter, bread, crackers etc...) The entire field of "home economics" grew up around the novel necessity of training "home scientists" to be able to assay the quality of the materials and foods they were purchasing in the face of a chaotic market situation: multiple producers, fly by night producers, potentially toxic substances.

Mass production of food, mass marketing of food, mass distribution of food and the separation of the producer from the consumer (and the modern citizen consumer who does not produce the food he or she eats) results in a potential public health diaster where food production and marketing are not clearly regulated as to content and safety.

Megan's argument is that only things that she consumes should have any kind of regulatory protection. Other people can simply keep assaying the market performing blind taste tests (since the text of the ingredients list can tell them nothing) until they find something they believe to be wholesome. The whole discussion on Megan's part is as trivial as it is moronic. There are reasons there are laws relating to the exact nature of the thing you are buying. We need transparency and honesty to have a working market. To deny this or to go out of your way to make fun of a perfectly reasonable excercise of consumer suspicion is simply absurd. But that's our Megan. Half way around the world is not too far to go when she thinks the rights of a supermarket chain are being violated on behalf of a mere consumer.

aimai

Aimai said...

oops. sorry! Susan, delete the last two comments. The system told me the first comment was too long and it wouldn't print.

aimai

Clever Pseudonym said...

Oh, I'm aware it happens every day, aimai, which is exactly why I know how easy it is to pull it off. There's a luxury grocery store around here called Bristol Farms, where, like Whole Foods, everything costs three times as much just because of the ZIP code and supposed "atmosphere." I selectively shop there, because sometimes they do stock some higher quality items and have a much wider cheese selection, things like that. But there are people who do all their shopping there, probably to make themselves feel special and classy. It's a dumb waste.

I think one of the funniest things I've ever witnessed was the uproar over "truffle oil," which really isn't anything more than olive oil with a very minor amount of a single chemical found in truffles. Very few varieties of the stuff contain any actual truffles. On one side, you had the wannabe foodies like Megan eating the stuff up to congratulate themselves on their refined palates. On the other side, you had the insufferable snobs who were outraged that a product could be marketed with the word "truffle" without actually containing any truffles. Truffles are expensive and exclusive and not any old schmuck should be able to have a bottle marked with that word in their kitchen. I just stood in the middle and laughed at it all.

Lurking Canadian said...

I think I'd be outraged, too, if people were selling something called "truffle oil" that had no actual truffles in it. Not because I'm an insufferable snob, or even because I care a whit about who eats truffles (I'm pretty sure I never have), but just because I don't think vendors should be able to lie about what is in the bottle.

If they were calling it "truffle-flavoured oil" or "truffle-infused oil" or something, I might not have a problem with it.

Clever Pseudonym said...

It's actually got a small percentage of a chemical found in truffles, so I'm guessing that's how they get away with marketing it with the word "truffle." But that is a good point, LC.

Susan of Texas said...

McArdle would say that is fine, since you can see by looking at the oil that there's no truffle bits.

Aimai said...

Well, there's a long and more or less honorable history of marketing "truffle flavored oil" or "oil with truffles" with various substances in place of the key ingredient. In Dorothy Sayer's Murder Must Advertise Lord Peter Wimsey advises his sister never to buy anything made "with" something but only if it is made "from" something--in that case pear juice--because advertisers meant that something made "with" pear was made with a tiny amount of pear but something made "from" pear was made with a substantial amount of pear. Twas ever thus. I avoid "flavored with" stuff in general. I'm happy to water stuff down myself but I'm damned if I'll pay someone else to do it for me.

aimai