Antibiotic Apocalypse Economics

As an economist, I will leave it to food scientists to opinion on whether eating genetically-modified fish is healthy. I will opinion as an economist that limiting consumer awareness is always bad economics.

This is, again, an issue because the FDA just set a new food-labeling precedence. The FDA has approved a genetically-modified salmon for sale to consumers. As importantly, they also ruled that the genetically-modified salmon does not have to be labeled as genetically modified or GMO. How serious could this be? Similar food policy regarding consumer awareness now holds the potential of contributing to an emerging antibiotic apocalypse.

Fish genetically modified to increase profits

The FDA’s decision on not labeling the genetically-modified fish as GMO is a question of economics. The salmon in question was not genetically modified to promote human health. It was genetically modified to accelerate fish growth. The genetically-modified salmon was modified to grow faster and larger, thus lowering the per-pound manufacturing cost of the fish. The FDA approved the sale of genetically-modified fish to promote profits.

Transparency is key to a market-based economy

Transparency is fundamental to the success of market-based economies. Consumers must be armed with the insights and information they need to make rational decisions. Transparency goes beyond price discovery. Consumers must be informed on product ingredients and supplier behaviors to optimize their procurement.

The FDA violated this economic principal. The reason for doing so on behalf of the food manufacturer is obvious. The seller of genetically-modified fish would face sales resistance if consumers knew their fish was genetically modified. To overcome consumer procurement resistance, the fish supplier would have to invest in consumer outreach campaigns to explain to consumers why they should buy their fish. The FDA eliminated this core supplier responsibility of providing consumers with the information they need to optimize their wellbeing. This advantages the fish producers by lowering their sales and marketing expenses at the cost of blinding consumers at the point of purchase.

Am I fabricating a business and public policy issue? Not according to Costco, Whole Foods, Trader Joe’s, Target and Kroger. All of these retailers have elected not to sell genetically-modified fish.

Antibiotic apocalypse

The need for full disclosure to food consumers is also not an esoteric health issue. It is an issue so serious and potentially deadly that we now stand at the cusp of an antibiotic apocalypse tied to unsustainable farming practices used in the U.S. and around the world.

A recent publication by Chinese scientists reported on finding a bacteria they labeled MCR-1. This bacteria is resistant to all known antibodies. MCR-1 is also easily shared with other bacteria enabling their mutation and the spread of antibiotic resistance. This positions MCR-1 as the foundational bacteria for an antibiotic apocalypse where humans will once again die from infections like E. coli or sexually transmitted diseases like gonorrhea.

This appears to be as scary as it sounds. Professor Timothy Walsh from University of Cardiff and a collaborator to the Chinese study says: “All the key players are now in place to make the post antibiotic world a realty. If MCR-1 becomes global, which is a case of when not if, and the gene aligns itself with other antibiotic resistance genes, which is inevitable, then we will have very likely reached the start of the post-antibiotic era.” The post-antibiotic era has also been labeled by scientists as the Antibiotic Apocalypse.

How unsustainable farming practices created the antibiotic apocalypse

Scientists point to the injection or feeding of antibodies to farm animals as the likely cause for MCR-1. MCR-1 was found in a pig that was fed antibodies. Farm animals are injected with antibodies, which are intended to protect humans from diseases, to increase the animal's health. Increasing the numbers of healthy animals making it to the slaughterhouses increases profits. It now appears to have done so at the risk of creating a global bacterial epidemic.

The lack of food packaging transparency and information enabled this unsustainable farming practice. How likely would consumers have bought meat labeled like this, “Use of antibodies in the production of this meat has the potential of creating a global antibiotic apocalypse.” The obvious answer is that the U.S. government (and the Chinese government) promoted farm profits by not informing consumers on the risk they faced from eating meat that used antibodies to optimize animal production.

Externality cost pricing and transparency are the foundation of sustainability

Free markets enable human well being. In economic theory, consumers are fully informed in a free market. There are no secrets. There is no collusions between suppliers. There is no manipulation of government policy by suppliers to advantage their profits at the expense of consumer wellbeing.

Unfettered markets do not enable consumer wellbeing. This core economic principal is as old as the cloth pin manufacturer collusion example used by Adam Smith in his book "Wealth of Nations" that is the foundation of economic thought. Unfettered markets allow suppliers to hid, distort or lie about information that is key to consumers making rational decisions that optimize their welfare. In unfettered markets companies are allowed to cheat through collusion, a lack of information and misinformation to gain profits at the expense of competitors and consumers.

Free markets are based on price discovery by consumers on the total cost of what they are buying, including externally costs like an antibiotic apocalypse tied to the sale of animals feed antibodies or global warming created by over consumption of carbon fuels and materials. Fettered markets fail to display externality costs at the point of purchase through collusion, political lobbying and misinformation. These costs are ultimately paid through human suffering and premature death.

Protect yourselves

I may be an economist but I am not an idealist. We are in an age where we are at risk from an unfettered marketplace where consumer wellbeing too often loses out to profit interests. The age of the unaware consumer has to end. It costs are now becoming obvious and significant. There are no free lunches in economics or life. Actions like those of the FDA to allow the sale of food without transparent food labeling has to end if we have any chance of avoiding a tragic milestone in human health and prosperity.

However, ultimately, awareness is the consumer’s responsibility. Fortunately, this is the information age. What we need to know to protect ourselves and our loved one is there on Google. How effective can self awareness be? I have lost 30 pounds and improved my blood test results by increasing my awareness around clean food. There are now apps like GoodGuide and the Monterey Aquarium’s Seafood Watch that can be downloaded on phones. These apps enable real time and informed decisions on sustainable food and products.

We still hold power through our procurement. Our vote at the cash register may have more immediate influence than what we do at the ballot box. If we continue to buy food based on lowest retail price we will pay for it later in terms of increased disease, weight gain, obesity and diabetes. Or we can raise our awareness to realize that what is on the food label or price sticker is not the whole story. Somberly, it is becoming frighteningly evident that what is not on the food package may be the real cost we must focus on to protect ourselves, our loved ones and the environment.

Image credit: Flickr/Joey Parsons