China’s Fettered State-Capitalism puts Poisonous Gutter Oil on Store Shelves

Posted by PITHOCRATES - January 11th, 2014

Week in Review

There’s a myth in America that if we don’t have government food inspectors that evil corporations will sell poisonous food to unsuspecting Americans.  As if people will keep buying from a food manufacturer who has a reputation of poisoning their customers.  They won’t.  For every food brand has a competitor just waiting to take their business away.  Which they will do if the people believe they sell a higher quality product.  So there is a huge incentive to sell people nothing but the best and safest food they can.  For without government limiting a business’ competition it is only their good name that keeps customers coming back.  Unlike in China (see Ten jailed for producing, selling ‘gutter oil’ posted 1/7/2014 on China Daily USA).

A man was given a suspended death sentence and two others life in jail for producing and selling poisonous food, a court in east China ruled on Tuesday…

In 2006, they began to produce “gutter oil”, which refers to oil illegally made by reprocessing waste oil or even leftovers from restaurants. It was then marketed and re-used as cooking oil.

They then sold the “gutter oil” to 17 edible oil dealers in Shandong and Shanxi provinces, with a sales value of 52.4 million yuan…

China has been clamping down on “gutter oil” as part of its food safety efforts. The oil, which contains carcinogenic substances, is dangerous if consumed.

This is what happens when you fetter unfettered capitalism.  And transform it into state-capitalism.  Or a planned economy.  Where the government picks winners and losers.  Favoring their friends.  And hurting their competition.  Such as by limiting competition to protect their friend.  Giving them a state-enforced monopoly.  The only way a monopoly can exist.

Without competition you can sell crap and the people have little choice but to buy it.  Which is why a lot of businesses in a planned economy like China do things like this.  Because they can get rich.  Until someone catches them.  Because without unfettered capitalism other competitors can’t enter the market to keep them honest.  Leaving you to rely on a bloated, ponderous and often corrupt public sector to police that planned economy.  And because they aren’t that good you get people trying to sell gutter oil in China.  While food manufacturers police themselves in the United States.  Because they know their brand is not the only brand on supermarket shelves.

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