Except there is no such reliance on perfect information of all parties.
You're coming up with a scarecrow and then tearing it down and pretending it's the real thing.
The actual free market answer to these things is that if poisonous turmeric is such a big issue, it will be noticed (by some people dropping dead if nothing else) which will result in consumers prioritizing "knowing if the turmeric is poisonous", resulting in a "food safety rating industry" being created which either consumers or producers can fund in order to accurately determine the safety of the food.
We can see stuff like this happen all the time in the financial industry with ratings agencies, and we saw it prior to government based agencies that fullfil that role.
Branding was big in the 1800s as a response to precisely that sort of behavior.
Lead doesn't cause people to just "drop dead" like that. Like other heavy metals, it bioaccumulates and gradually causes harm. It is not something where people can trace their problem to one specific seller, or even turmeric specifically.
The supply and demand curve doesn't always cross with imperfect information. A lot of free market presuppositions fail actually. This is accepted by many contemporary economists. Samuel Bowles on Mindscape podcast was an interesting high level discussion
The idea of contaminated food being solved by a food safety rating industry set up to rate thousands of small South Asian market stalls for the benefit of poor and sometimes functionally illiterate customers after enough of them have traced their family members' deaths to the food supply sounds more like the sort of scenario raised to mock libertarians than 'perfect information', which is just a technical requirement for an ideally functioning market in economics (the theory that safety ratings industries can fill the gap is a theory of markets converging on consumers having all relevant information anyway)
Even if we assume safety ratings for a complex food supply chain resulting in tens of thousands of one man businesses selling to people earning a dollar a day is a massive market opportunity, brands and safety labels are trivially copied by sufficiently people selling adulterated food, so they alone fundamentally don't solve the problem. Only a government can step in and regulate that IP, and at that point they might be better off just banning the poisoning...
> We can see stuff like this happen all the time in the financial industry with ratings agencies, and we saw it prior to government based agencies that fullfil that role.
Did you just use the rating agencies as a POSITIVE example? The financial crash that partly came about because those rating agencies were 100% corrupt and didn't work at all you know...
>Except there is no such reliance on perfect information of all parties.
Exactly. The market is the decentralized method by which information is distributed.
>Straw-man
Yes, agreed. I wonder how much laissez-faire material some of these commenters have actually read. Perhaps they read from a different flavor of "market absolutism", which brings the question of unnecessary generalization.
In my reading of the Rothbardian ancap canon, insurance companies, liability for damages and private certification boards are advanced. Under this system imperfect information is taken as a given. Market participants like private food safety inspectors have an incentive to have better information than their competitors.
Contrast the above to the government regulation schemes where acceptable levels of adulterants are not necessary to report. Similarly, polluters can freely pollute within the EPA guidelines without liability. One could make the same leap of attributing "perfect information" to government regulators. If not for perfect information, how else can the FDA know the acceptable level of a contaminant?
Private regulatory and certification bodies would give consumers choices for cleaner standards than the government monopoly. I hope it goes without saying that the existence of a state backed regulatory body makes it harder for a private one to enter the market.
Finally, in response to the top level comment, it is worth noting that if a similar comment were made in favor of markets rather than regulation, one could reasonably expect it to be flagged into oblivion. Perhaps rightly so, because the topic has derailed the discussion. It speaks to the depth of the discussion when market opponents haven't even bothered to read what they are criticizing. HN isn't the place for this.
You're coming up with a scarecrow and then tearing it down and pretending it's the real thing.
The actual free market answer to these things is that if poisonous turmeric is such a big issue, it will be noticed (by some people dropping dead if nothing else) which will result in consumers prioritizing "knowing if the turmeric is poisonous", resulting in a "food safety rating industry" being created which either consumers or producers can fund in order to accurately determine the safety of the food.
We can see stuff like this happen all the time in the financial industry with ratings agencies, and we saw it prior to government based agencies that fullfil that role.
Branding was big in the 1800s as a response to precisely that sort of behavior.