Allergy sufferers to Congress: Please stop trying to help!

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The Law of Unintended Consequences gained another data point recently. A bipartisan bill requiring products with sesame to be specially labeled has resulted in some hard tradeoffs for people with sesame allergies.

In April 2021, Congress passed the Food Allergy Safety, Treatment, Education, and Research (FASTER) Act with the goal of making life easier for people with sesame allergies to navigate packaged foods and avoid the common allergen. However, the Wall Street Journal reported this month that many companies have responded to the law by adding sesame to items that previously didn’t contain it.

Sesame is notoriously difficult to clean out of equipment, so it was easier to add it and label it than to risk liability from product cross-contamination. This results in people with sesame allergies having fewer food options. The article quotes Scott Schramm, a real-estate agent with a sesame allergy, as saying that the new law “…hurt me more than it helped me”.

This story is a classic example of the phenomenon of “what is seen and what is unseen,” described by 19th century theorist Frederic Bastiat in an essay of the same name. He notes that every law has two effects: the seen, or the immediate, intended effect of the law, and the unseen, or the unintended consequences of the law that aren’t immediately obvious.

Bastiat demonstrates this line of thinking with the example of the broken window. Suppose that a window in a shop is broken in a spectacle that attracts a crowd of onlookers. An onlooker may try to console the shopkeeper by telling him that such accidents are necessary because they keep industry going, allowing the glassmaker to make a living replacing the window. Bastiat objects to this reasoning, arguing that the onlooker is ignoring the unseen consequences of the window breaking, which is that the money the shopkeeper would have spent on something else, like shoes, now has to go to the glassmaker. As a result, the cobbler is deprived of the shopkeeper’s income, and the world is no more abundant for having had that window broken.

This concept of the seen and the unseen also applies to the sesame law. The lawmakers that wrote and passed the bill only considered the immediate, visible effect of it, which is that products containing sesame would have to be labeled, presumably making them safer for those with a sesame allergy. But they weren’t thinking ahead at the unintended, but less obvious, consequences of this law. In this case, the difficulty of guaranteeing that a product has no cross-contamination with sesame means that the law imposes a great cost on producers to do so. This meant that it was cheaper for companies to overlabel products as containing sesame than to decontaminate your production line, resulting in less options for sesame allergy sufferers.

In his 1946 book inspired by Bastiat’s essay, journalist Henry Hazlitt summarizes the “One Lesson” of economics as follows: “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

It would do our politicians good to remember this lesson every time they write a new law or regulation, and to consider both the seen and the unseen, to hopefully avoid more situations like the FASTER Act in the future.