Wednesday, January 6, 2016

Is the Failure to Label Foods That are GMO Produced Fraud?

By Robert Wenzel

In response to my post, Libertarianism and GMOs, some commenters have suggested that it possibly could be fraud for a seller of GMO food not to identify the food as GMO.

A sampling:

The question for libertarians is not whether GMOs are safe or not, since everyone can make their own decision if they want to buy and eat GMO foods. The question is whether mandatory GMO labeling is a violation of the NAP. This depends on the expectations of the public. Does public expect food products to be GMO-free? If yes, then not labeling a product as including GMOs is fraud and an NAP violation. The argument can easily be made that this is the case. So, this is an issue of fraud, and if someone buys a product that includes GMOs without being informed of it, they can sue the seller for fraud.

The point everyone seems to miss is the question of fraud. Is a GMO Orange still an Orange? Wenzel talks about no labels being used, but that doesn't pertain to the current practice.

No one sells without labels in stores. They want to say "Oranges."

But if it is GMO, is it technically an orange? I say no.

Thus, the libertarian response: They can sell without a label, or they can use an accurate one. They can't use a false one.

This is an interesting question that requires further analysis. Let us begin.

Words often identify categories. They can also identify subcategories. For example, there is the word chair.

The first chair was probably a wooden chair. But the essence of a chair is not that it is wooden made. Nowadays, we have plastic chairs, leather chairs, metal chairs etc.

In the same way, there are certain  names for foods that can put them into a master category and then other words or compound words that can be considered terms that identify sub-categories. Orange would be a master category, "Florida grown orange" would be a subcategory. There is the "navel orange," the" organic grown orange," the "GMO orange," etc., all subcategories

It is difficult to see why it would be fraud to simply sell an orange with its master category name. There may be people like me who don't care if it is GMO made or not. For those that it is a concern, then they need to look more carefully at subcategories.

I am a gin drinker, more specifically I drink Bombay Sapphire gin. I consider the taste of Bombay Sapphire gin superior. But it was certainly not the first gin ever made and according to the producers web site, it is made differently than other gins:
We are passionate about producing the finest gin possible; which is why the creation of Bombay Sapphire is truly unique. Whilst ordinary gins boil their botanicals directly in the spirit to achieve their flavour, the taste of Bombay Sapphire is created through the Vapour Infusion process.
Bombay Sapphire is a subcategory of gin, made differently!  Should a bartender go to jail for serving Bombay Sapphire when a patron simply asks for gin? Of course, not. If a customer only asks for gin, it means he doesn't have a preference, (Sort of like me when it comes to GMO or non-GMO oranges.) On the other hand, I always ask for Bombay Sapphire gin. There is a big difference between that gin and others---to me. Should I be upset if at happy hour a bar serves a house gin without identifying it. Of course not!

If I am looking for a specific subcategory, well then, I should just look for that subcategory, where that subcategory is identified.

I have a friend who is allergic to peanuts. At restaurants, he always asks if certain foods are prepared with peanuts. If the waiter can't tell him, he just passes on those dishes. Should a restaurant be required to label such lifesaving information? Of course not! My friend just searches for the subcategories that he knows are safe for him.

If there is a big enough concern about an item in a product, businessmen will go out of their way to prepare a product the way the group of concerned consumers wish, Many Chinese restaurants now make clear they prepare their food without MSG. That's a subcategory of Chinese food. They would be idiots not to promote the fact. But at the same time, for someone like me who has no concerns about MSG, a Chinese restaurant that doesn't disclose beyond their major category is no big deal to me.

If someone is producing non-GMO oranges and there is a big demand for non-GMO oranges, it would make sense for that producer to label them as such. That's why the supermarket retailer, Whole Foods, labels its GMO and non-GMO foods and why Chipolte loudly announces that it serves non-GMO dishes exclusively. There is a market for identifying these subcategories and it has emerged.

Let us ponder the Latin term, caveat emptor.

The first two paragraphs in Wikipedia on the term are are instructive:
Caveat emptor /ˌkævɛɑːt ˈɛmptɔr/ is Latin for "Let the buyer beware" (from caveat, "may he beware", the subjunctive of cavere, "to beware" + emptor, "buyer"). Generally, caveat emptor is the contract law principle that controls the sale of real property after the date of closing, but may also apply to sales of other goods. The phrase caveat emptor arises from the fact that buyers typically have less information about the good or service they are purchasing, while the seller has more information. The quality of this situation is known as 'information asymmetry'. Defects in the good or service may be hidden from the buyer, and only known to the seller. 
A common way that information asymmetry between seller and buyer has been addressed is through a legally-binding warranty, such as a guarantee of satisfaction. But without such a safeguard in place the ancient rule applies, and the buyer should beware.
I can't think of a product where there might be multiple different facts that a specific buyer might want to know that other buyers don't care about at all. Should every seller be required to label every product he is selling with every possible piece of information about the product? Of course not.

It is the responsibility of the buyer to understand what he is looking for in a product  and find the sellers that are willing to disclose that information. To demand that all products be labeled with all sorts of things is absurd. To charge a seller who identifies a product only by its main category with fraud is absurd.

Anyone demanding that subcategory labels be put on products is practicing a type of central planning. They think the information is important, and thus demand that the information be made available to everyone. The true free market perspective is to allow free exchange. Someone who wants non-GMO food should simply deal with sellers who are willing to disclose such, and they should leave the rest of us the hell alone.

Robert Wenzel is Editor & Publisher at and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics


  1. Like I said in the previous post, the Non-GMO project does a good job labeling GMO free foods. The real battle should not be about labeling GMOs, but educating people about their dangers.

  2. "It is difficult to see why it would be fraud to simply sell an orange with its master category name."

    That is true, and you've made excellent examples of free market situations that plausibly show that fruit from non-GMO suppliers have an obvious marketing advantage to those interested in such, and that would naturally have them voluntarily labeling their product as "non-GMO".

    I don't think there's many self described libertarians out there for government forced labeling...but it's a good discussion to have none the less.

  3. I agree. Although I remember hearing a while back that one of the key issues with GMO labeling is not about the use of government force to compel food producers to disclose GMO in their food, but rather the use of government force to PROHIBIT producers of non-GMO food from labeling their food as GMO-free. That is not a case of fraud, but a violation of the NAP nonetheless. If a food producer wants to voluntarily disclose that their product contains no GMO, they should not be prohibited by government from doing so.

  4. Congratulations, Bob. One of your best posts recently, you really knocked it out of the park this time!

  5. Bombay Sapphire!!!!!!

    Bob, this is your best post ever!

    Oh yeah, you did pretty good with that labeling and fraud stuff, too.

  6. This goes back to my comment in that thread regarding specifications. If you specify "steel" for a part you get whatever steel the supplier has laying around they can make the part from or whatever they can purchase most cheaply. So grade is specified. There are SAE, DIN, JIS, and other bodies that define grades of steel. Every engineering material has specifications and data sheets behind it. There's no need to label anything more than what it is. The specifications say the rest. If it doesn't meet them, it is rejected. This how buyers and sellers deal with infinite possible variety.

    We largely don't have that for food because of government intervention. Government intervention that desires all of a particular crop fungible. Some players try for differentiation. There are independent organizations attempting to create grades and specifications but they are still small.

    RW's argument implies GMO to be like a low grade metal that's sold generically as steel. It doesn't meet any particular grade nor is sold as any, but it looks like steel and may even behave like some steels. GMO corn looks like corn. Behaves like corn. Buyer beware when using broad specifications.

    The government wants monopoly on grading food stuffs. The other bodies operate only as it allows them to. But with that monopoly it aims to keep the consumers of the food as ignorant of its real grade as they can get away with. If there were a free market body (or bodies) of significant scope and size it would have been petitioned long ago to have GMO grades separated and would have responded to customer demand.

    It may not be fraud at this moment not to label GMO as such but in a libertarian world selling food with no grade specified would see it treated as if it is the equivalent to scrap steel from Mexico contaminated with radioactive isotopes from junked medical equipment.

    What we shouldn't do though is pretend we live in a libertarian world, pretend we have a the finely graded choices a libertarian world would offer us. We don't. We have some choice so long as the FDA allows it and it will allow it so long as people put up a fight against the FDA's desires.

    1. Bionic likes to call this the "second best solution." In other words, given that we live in a world with a coercive entity that has a monopoly on law production: what should a libertarian support, given these constraints? We need to develop a whole theory of this. In theory, it should be simple: whatever minimizes rights violations. However, it is not simple in practice, as the whole immigration issue demonstrates. For example, how do you compare right violations with each other? I sense utility monsters over the horizon.

  7. First, let me say that I personally enjoy discussing these types of issues and Bob does a great job of dissecting them.

    We must keep in mind that certain characteristics are essential to a class. For example, a chair needs a sitting area, otherwise it is not a chair. It can, however, have four legs, three legs, or no legs at all.

    Taking your example of gin, how would you feel if you bought gin that was made without juniper berries? Would you feel defrauded? I think most gin drinkers would agree that if it wasn't made with juniper berries, it is not gin. "Made with juniper berries" would thus be an essential characteristic of gin.

    Another great example of this, which was covered by Reason, was a lawsuit at the heart of which was whether you can call something mayonnaise if it has no eggs in it. See here, for example:

    Now, I personally think mayonnnaise should have eggs in it, but this is not as clear cut as the example of gin and juniper berries. So, if 98/100 people think gin has to have juniper berries, may be 75/100 of people would think that mayo has to have eggs in it.

    That is why I said that whether or not not labeling foods as being GMO would be fraud would depend on the expectations of the consumers. How would this be determined in a libertarian society? A consumer would have to sue a seller and a judge would have to make a decision as to what a reasonable person expects. How exactly that would be determined would depend on the courts.

    Caveat emptor only takes you so far. If you take it to its extremes, then there is no fraud in a libertarian society. You bought a gold bar but the center is lead? Tough luck, caveat emptor. Most reasonable people would reject such a standard. So, where is the line? You can't deduce such a line, because it depends on the values held by the population. So I stand by my original claim that questions of fraud depend on the expectations of the average, reasonable consumer.

    1. Agreed. Opinion polls show 90% of the public want GMO food labelled as such.

    2. In a libertarian community, would the law require that cigarettes be sold with a warning that they cause cancer? None of us know - we can only speculate. I think the law would require this. Otherwise the retailer and manufacturer are at risk of a bankruptcy causing lawsuit.

      How a lib society would deal with a product known to cause harm is a more relevant analogy than the Bombay gin red herring.

  8. The Gin analogy doesn't make much sense to me. Gin is just neutral grain spirits flavored with juniper berries. RW falling hard for Bombay Sapphire's marketing gimmick doesn't really address the issue at hand. The Government tells alcohol producers what they can and can't label as gin based on certain characteristics -

    The same is true for Bourbon, Tequila and Champagne. If Bombay Sapphire did not distill neutral grain spirits with juniper then it could not be called Gin. This is based on pre-labeling regulations social norms and protectionism (for Bourbon, Tequila and Champagne anyway). The social norm for food is NON GMO because duh.

    Let's set the fraud issue aside. I think under NAP cigarette companies are obligated to state that their product can harm you. The same for alcohol companies. It may be the same for GMOs according to many people who research this stuff (just search If this is true, GMOs should label themselves as such and carry a health risk warning.

    I think this is an example of application of the Typhoid Mary issue Dr. Block has taken up.

    "My thought immediately went to Typhoid Mary an asymptomatic carrier of this dread disease. She was not a criminal, even though she spread typhoid to others. She lacked mens rea or a guilty conscience. She didn't even realize she was doing so; she didn't think she even had the disease since she was asymptomatic. But, she had to be stopped, by compulsion if necessary, because she was infecting innocent people. So when asked for my view on compulsory vaccinations against diseases of this sort, my answer was in the positive: they were justified."

    I think we can apply this to our situation by saying the compulsion of labeling products that can harm consumers is justified. Yes, by all means, consumers should be able to choose to purchase and use products that may harm them. But they should also be made aware of their choices.

    I think if we accept these two concepts - the social norm is NON GMO and compulsory labeling of harmful products is just - then it's clear that libertarians should have no qualms in supporting government enforced GMO labeling.

  9. If GMO food was safe, Monsanto etc wouldn't be paying millions to defeat State labelling laws. They would be happy to put 'GMO' on the food, as a sort of certificate of quality.

  10. How do you drink your gin Robert?

  11. Lets be fair with what we are talking about here - Food with small pockets of poison and extra doses of poison sprayed on it that would kill normal food AND is genetically dominate over normal food. So dominate that if the wind blows it into my field it breeds with my crop and takes over. And if all that wasn't bad enough, it does not produce seed for replanting.

    How is such a thing handled in a free market? In my opinion? It wouldn't exist outside isolated areas for fear of property damage and long term health effects of consumption. Comparisons with Gin and Furniture are as weak as the "science" supporting GMOs written by the very companies who seek approval.

  12. First up, in my jurisdiction GMO companies are lobbying to make it illegal to label non-GMO products "non-GMO". So we are not even on the level of talking about 'voluntary labeling'.

    RW, explain if you will how GMO would be allowed in a libertarian society without the state as the protecting and enforcing agent. For example, if your GMO pollutes my organic fields, why should I pay you money for the 'privilege' of using your patented GMO product? My organic business is destroyed, and you 'own' the product growing in my field. How would that even be possible?

    The libertarian movement is suffering from this kind of 'theoretical libertarianism' autism. From wacky open borders advocates, to advocates of 'libertarian slavery' like Walter Block, to GMO advocacy without taking into account the actual context of how GMO is being produced TODAY makes libertarianism intolerable to a normal person.

  13. While you argue the 'The true free market perspective,' that is the ideal, yet that is not the world we live in. Companies who produce products are already required to include all sorts of info on their labels, so with that being the fact, why not require actually accurate labels? You would like it if no labels were required at all, and let the market dictate. However, the gov and food industry has certainly never argued that. SO that being the case, why not require their cherished labels to be accurate about such a basic info as whether or not a product has gmo?

    1. Well said! Labels are already required, no one is asking for anything new just to enforce the current rules and laws already on the books. Whether they are justified in a free society is another debate altogether. Which, in a free society, they would barely exist at all for obvious reasons. 1) They don't produce seeds for replanting 2) Possible dangerous long term health effects 3) Can take over your neighbors organics and cause litigation 4) Excessive pesticide usage can contaminate waterways 5) 1-4 would render them too costly to use over organics without govt subsidies

      Simply put, the debate over GMO wouldn't exist without govt support.

    2. Right. This is the core of the problem when it comes to 'libertarians' as opposed to 'libertarianism' Correctly understood, GMO couldn't exist in a libertarian society the way that it is currently produced.

    3. Whatever the 'libertarian' principle, if there is a toxin in my food I should be informed. Not to do so is fraud.
      Just read Dr. Mercola's interview with Dr. Jonathan Latham, a GMO virologist.
      Would anyone buy from these GMO companies if informed?

    4. Of course RW would just say "don't buy GMO". Cross contamination means that you won't even have that choice in the future. This is libertarianism for some planet that is not planet earth.