by Alex Tabarrok
on December 12, 2012 at 6:05 am
in Data Source, Economics, Film
A good one on the sugar quota.
And here I was, thinking it had something to do with costs in the U.S., as globally, Coke doesn’t have that much corn in it – whether in places like Brasilia, where cane sugar is cheaper, or the EU, where beet sugar (subsidised sucrose, in part to favor Sudzucker, essentlially the EU’s largest beet sucrose producer, with its headquarters nearby to SAP and Heidelberger Druck (both global leaders in their market segment)) is common.
Only America’s quotas favor corn based HFCS, ever since the days of the New Coke debacle (though that was avoidable, at least in the DC and Balitmore region, by buying kosher Coke in 6 oz bottles, back in the early 90s, back when Giant was a locally owned and fairly union friendly, grocery chain).
As it is, ice cold French Coke tastes much like the Coke of my youth, unlike German Coke, where the mineral water influence is just too obvious. As for Pepsi – nothing but disappointment, even if imported Dr. Pepper is acceptable,
Nice video. I agree with everything except the pessimistic conclusion: the only way to fix the problem is to limit government… which, if implemented, would mean we’ll just become drones to corporations more powerful than government and still have our pockets picked. (See: TBTF)
You would think that during all the conversations about the ‘fiscal cliff’ some of these subsidies would have come to the table. Stuff like sugar tariffs, ethanol subsidies, farm subsidies for rich farmers, carried interest loophole, oil company subsidies, off shore tax havens, various other loopholes for rich people but no, we never hear about them. We only hear about cutting spending on entitlements.
Admittedly, health care spending is the biggest problem, but maybe some of these smaller problems could be fixed along the way. Where are the Republicans on this? Where are the Democrats? Where is the MSM? Where is Fox? Where is the Wall Street Journal?
TBTF!! Seriously? That’s a government bailout. Corporations more powerful than government? I’m still waiting for the corporation that will come to my home and tell me I need to buy their product or they’ll imprison me.
It’s a great case on point. Banks were bailed out for fear of global economic collapse. In other words banks were more powerful than any individual government and the governments could not, would not or did not effectively regulate them. Still haven’t. In effect the governments worked for, and taxed us for, the benefit of the banks.
Remember: Privatize profits, socialize loses! Jail is for poor people!
It’s a great case in point for the opposite side of the one you are on. Isn’t that exactly a case of government being too powerful? If they could not favor special interests like banks and the sugar industry, it would not have happened.
Your argument assumes that the government is the only source of corruption. Good luck with that.
My “argument” certainly does not assume that. Please explain how my factual statement in any way is reliant on your suggestion.
Government is certainly not the only source of corruption per se, it’s just the only entity that can legally use force to compel others’ actions.
See what happens if you don’t purchase health insurance in a couple of years.
“I agree with everything except the pessimistic conclusion: the only way to fix the problem is to limit government… which, if implemented, would mean we’ll just become drones to corporations more powerful than government and still have our pockets picked.”
Yeah, just the other day I was thinking on how terrible it was when GM and Apple got together and invaded a couple of third world countries in the early 2000’s, killing 10’s of thousands in the process. And then forced us at gun point to pay for the cost of the war and the rebuilding of the countries they had invaded. It’s a darn shame we don’t have a strong government to protect us against the merciless giant corporations and their tyrannical ways.
Corporations do occasionally take over nations. More than one Latin American nation is still recovering from the effects of what is now Chiquita. And then there’s the East India Company…
If I recall, that was more about the US govt and the USMC helping out Chiquita than Chiquita doing it on their own…
But that’s the point. If the corporation can tell the government to invade, and then blame the government for invading, that’s rather disingenuous.
I think the point is SOMEONE will have an army. And how that army can be influenced is really what the division of power is all about. If a small enough group can direct the army at a whim, be it government bureaucrats, corporate executives, some high priest, or whatever, it doesn’t matter if it’s a government or corporate or ecclesiastical army–it’s scary power that can be steered against your wishes.
The right level of government will allow its citizenry enough leeway to say that the army won’t be used to oppress themselves.
Completely absurd. Corporations will have armies and go around invading third-world countries? How about we keep defense as a valid government power and get rid of favoring special interests? So bizarre to blame the corporations for trying to do what is best for them instead of the government sworn to protect the interests of the country’s people and corrupted by power.
“Getting rid of special interests” is the same thing as ensuring that a tool of power isn’t controlled by a centralized cadre.
But since you’re more interested in dismissal of arguments than noticing common ground, I’ll leave the argument ending there. Excoriate away, Cliff.
I have no idea what “‘Getting rid of special interests’ is the same thing as ensuring that a tool of power isn’t controlled by a centralized cadre” means, so I have no way of responding to it.
Did the quotas work as industrial policy? Has corn production/technology/infrastructure advanced to the point where corn is now competitive with sugar, even without the quotas?
With the talk of secession going around, I looked at the Confederate Constitution. It banned policies favoring a certain industry (at the time the NE textile industry was protected).
It certainly protected the cotton farming industry though.
The Confederacy as an examplar of “free trade.” Wow!!
‘Has corn production/technology/infrastructure advanced to the point where corn is now competitive with sugar, even without the quotas’
Nope, this being related to orbital mechanics – but the quotas were originally put in place to protect Texas and La. cane growers, and were merely later adapted in later ‘free trade’ agreements.
Coca-Cola is poison, whether made with corn syrup or sugar.
If you care about someone, don’t let them drink coke. (They’d be better off sniffing coke.)
Same goes with orange juice
Sugar is poison.
Indeed sugar is poison. Before the slaves of the Caribbean, the average person in W. Europe ate 4 # sugar a year; now, it’s up to 150 # a person a year–and only 33% of that is raw sugar, the rest is processed in food sugar or its equivalent (corn syrup). And that’s not counting natural sugar fructose found in fruits.
If sugar is poison, what isn’t poison? I’m not saying it’s good for you, but poison?
I’ll get the dreaded “Posting Too Quickly” notice for replying, but I think water is cancerous in lab rats (hence poison). if you inject water under the skin of lab animals, they will develop cancer at the point of injection, due to, it is said, the friction from the water against the tissue triggering cancer. Same theory is given for frequent sex with minor girls and also tobacco smoke / asbestos fibers in the lungs, as well as leaking silicon breast implants. A little friction is good but too much constant friction in internal tissue is bad. Does that mean you shouldn’t drink water? Of course not, but everything can be a poison in unhealthy amounts or in the wrong place (e.g., alcohol in rectum as made the rounds a few months ago).
All that poisonous sugar must have caused health and life expectancy to plummet over the past few hundred years!
Define “poison” please.
corn and porn is the new bread and circuses for the ameriroman plebes.
Would have been far more educational if the video had continued to discuss the further outcomes: how the increased price led KO and other food processors to favor HFCS (perhaps with additional help from the corn lobby) and how this has driven much of the US sugar industry out of business anyway. I suppose the postulated contribution HFCS to US obesity would be a bridge too far for this little libertarian promotional video.
Without price supports, the U.S. beet sugar industry wouldn’t even exist. It can’t compete against cheap cane sugar from the tropics. We would be better off without a beet sugar industry and the high sugar prices needed to sustain it. High sugar prices in the U.S. have driven most of the U.S. candy industry to Canada and Mexico. We’ve exchanged high-value manufacturing jobs producing finished products for low-value agricultural jobs growing sugar beets.
This is what it would have been like to save the U.S. steel industry by implementing steel price supports — it would have driven away the U.S. auto industry and other steel-consuming industries.
There’s even some anecdotal evidence that the glucose? ‘sugar’ from cane sugar is not exactly the same as the ‘sugar’ from beet sugar, and statistically causes pancreatic (?) cancer more often than some baseline.
Beet sugar and cane sugar are both sucrose, a disaccharide. White sugar from either source is identical. Glucose and fructose are monosaccharides. A mixture of glucose and fructose, for example from using enzymes to split sucrose, is called invert sugar.
Sucrose will set up into a solid but invert sugars do not, which is why sucrose must be used for making most types of candy. Both sucrose and invert sugar are sweet, so either one can be used for soft drinks. The soft drink lobby has a powerful lobby, so they were able to carve out an exception in sugar price supports for invert sugar. That’s why high fructose corn syrup is used in the U.S. for soft drinks. The candy industry was composed of a larger number of smaller businesses that was too disorganized for similar treatment, so they got screwed.
Thanks Mark–I learned about invert sugar. Here is the link I was referring to earlier. http://www.foodconsumer.org/newsite/2/Cancer/fructose_pancreatic_cancer_0501120636.html Tuesday May 1, 2012 (foodconsumer.org) — A review article in Annals of Oncology suggests that eating too much fructose may drastically increase risk of developing pancreatic cancer, one of most lethal malignancies…. Fructose is found high in high fructose corn syrup, which is commonly used in processed food and beverages or soda.
“Cane and beet share the same chemistry but act differently in the kitchen”
From the article:
“It’s true that both kinds are sucrose, but only 99.95 percent, and that minuscule 0.05 percent — made up of trace differences in minerals and proteins — can have an effect.”
No claims are made as to health effects:
All this article shows is the importance of randomized, double-blind trials. If you already know what you expect to find, there are many ways to fool yourself into finding it.
Anything that increases the price of sugar may be lead utility gains for the consumer. Sugar is way too cheap! However, directly taxing everything that looks like sugar may be a more efficient way to raise revenue and discourage consumption than placing quotas on particular products. Great charts, by the way.
The obvious solution is to pay corn growers to limit the supply of corn.
interesting problem. coca cola can’t sell coke with cane sugar ever at higher prices because it would signal customers the existence of 1st (cane sugar) & 2nd class (hfcs) products. they just silently add cheaper fructose. silently = not used for marketing purposes.
is there a niche market for sugar cane sweetened beverages?
Are you not familiar with imported Mexican Coke? It’s increasingly common even in mainstream grocery stores.
prepare to have your mind blown: http://www.jarritos.com/
easily the most accessible niche market sugar cane sweetened beverage.
Hansen’s Soda, at least on the West Coast, although it might be available nationwide. Very good, especially the root beer and berries & cream flavors. Twice as expensive as regular Coke, though.
Hansen’s makes a big deal about their sodas containing only cane sugar, and using only natural fruit juices as flavorings. Hilariously, though, their other main product? Monster Brand Energy Drinks.
love me some hansens..cream soda in particular
Pepsi ran an ad campaign for their cane sugar “Pepsi throwback” back in 2009. I never heard how that went for them.
They still sell Throwback, though at a premium price compared to regular Pepsi products. It was launched as a limited time promotion, but the response from consumers convinced Pepsi to keep making it. Having bought Mexican Pepsi for $3 a bottle in the past, I’m a big fan of having Throwback available in most every store.
The interesting thing about Throwback is that Coke has not answered it in the marketplace. Typically the soda giants go one-for-one in new products, but no sign of cane-sugar Come produced in the US as yet. I suspect the cause is Coke’s well-publicized claims that there’s no difference. Oh well, I’m happy to buy the made-in-Mexico stuff at Costco.
The concentrated versus diffuse interests explanation has too many holes in it to be a satisfactory explanation. First Alex and Tyler are even a more concentrated interest than sugar growers are. So why haven’t they been able to extract an extra half million from the federal government (it would be a lot less than 1 penny per family). On the other side of the concentrated sugar growers are the more concentrated buyers of sugar: bakeries (including Hostess) and soft drink manufacturers (including Pepsi). So why don’t they get their way by bringing their cost of buying sugar down. More generally, there are many concentrated interests that have not only not gained advantage from the government but have actually been hurt. It looks like the Bush Tax cuts will be eliminated for the very wealthy but not for the majority.
I agree w/ WD40. One would think that the big corporate sugar consumers would have a stake in this. (I’ve had sugared soft drinks and they are better than HFCS ones.) Their products would be better or cheaper.
One explanation may be that the sugar lobby has a small list of congressional favorites — there’s no need to buy off the entire Congress — just ones on strategic committees. This core group (sometimes designated by a “caucus” designation) carries water for the corporate interest group during Congressional negotiation sessions. When it comes time to cutting up the federal pie, one caucus says to the other — “support my pork and I’ll support yours.” Buying off specific members can sometimes accomplish a goal if that member is powerful enough. Okay, so there’s vote bargaining going on. What is probably happening ultimately is that Coke and Pepsi have bigger fish to fry and concentrate their lobbying efforts on other items. Individual corporations or industries often have a list of desires, but they are ranked in importance. Sorry about all the food metaphors.
There are limits to everything. The “concentrated buyers” have been addressed above. It’s hard to get the government to just give your group billions out of nowhere. You need to have some political protection to rely on, like “saving jobs”. This is pretty standard favoring producers over consumers, right?
I know this now, but as a child i always wondered why coca-cola tasted better in Mexico. Surprisingly, someone did a taste test (don;t know the details, this is just food for thought) and people found no difference between American and Mexican coca-cola!
I can always tell the difference, btw in several european countries Coca Cola uses beet sugar. I really dislike the taste of this product, but I know several people who prefer it. There is no doubt it tastes different.
Also between beet and cane sugar, the difference is not in the sugars, it is in the contaminants. No refined sugar product is refined perfectly, so cane products are distinguishable from beet products. Anyone who says they can’t tell is just not experienced enough. After all many people can’t distinguish between arabica and robusta coffees.
can’t distinguish between arabica and robusta coffees,,,, thats actually impossible
The difference in the amount of caffeine is noticeable, though.
‘it is in the contaminants’
You just might to want to reconsider expressing your point just that way.
And you didn’t mention water at all – one major difference between French Coke (which is acceptable to my Virginia upbringing) and German Coke is that German Coke uses German style Sprudel for its water.
Utah state. Very nice. Almost as good as whatever hellhole Alex was forced to teach before Tyler could rescue him back to GMU.
A lot of us have to do time in the trenches before we get out. My Dad spent a year in Youngstown between getting his doctorate at Brown and his first gig at Mount Holyoke. I think it is arguable that a Logan is preferable to that.
I remember when banning/limiting cane sugar imports was fighting the dirty commies and overthrowing Fidel.
Fidel has not been overthrown so we can’t allow cane sugar imports.
Sugar import restrictions date from 1789 in the US. They existed long before Communism or Fidel Castro.
I believe that the 1700s era restrictions were of an abolitionist bent. Maple syrup was seen as a morally superior sweetener because it was made with the labor of free men; like a much more meaningful version of today’s “fair trade coffee.”
“Concentrated benefits and dispersed cost” is just another right wing ideological slogan. The concentrated benefits of labor unions and the dispersed cost of their products doesn’t stop government from attracts on organized labor. Just ask your local teacher.
Another example of how restricting trade just hurts us overall, and that doesn’t even count the fact that corn syrup is like poison.
Reagan did something bad? No way.
One of the most interesting videos. it´s amazing how this people play with our health
No, sugar and corn syrup are not “like poison”. Anyone who believes that nannyist BS should be reading consumerfreedom.com.
In California you can often find sugared Coke on food trucks, especially those operated by Mexicans. It’s made in Mexico, I don’t know who does the importing or whether it’s legal.
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