Many perspectives, 1 simple etiquette

Hate Excessive Consumer Regulations and Lobbying? Blame Margarine

Author: David Yee
Created: 07 December, 2016
Updated: 17 October, 2022
5 min read

Margarine? Really?

That plastic-like stuff that's supposed to taste like butter, but barely looks like it, definitely doesn't smell like it, and has a vague hint of butter flavor that contrary to the marketing you'd never 'believe' it was butter.

But the 19th century debate of the chemist over the cow creating our food became the gateway to the federal government's ever expanding role into regulating the economy, imposing national product standards, and (to some) stripping the Tenth Amendment of its intent in leaving it up to the states to govern.

Like many food inventions, including modern canning, the creation of margarine was a call from the French government to create a butter-like substance that could be stored and transported easily for military use. Napoleon III offered a substantial cash prize for anyone who could create a cheap replacement for butter -- and French chemist Hippolyte Mège-Mouriès took up the challenge and created what we now call margarine.

Originally, margarine was made from waste materials from the beef slaughterhouses, primarily some of the hard fats -- which were then treated with an acid to form a 'spreadable' product.

While the product fit the design parameters set by Napoleon III, it really didn't take off in consumer demand for another 15 years. But when it did, it created the first 'foodie' debate in Congress, complete with the half-truths, over-the-top 'scientific evidence,' and horror stories we'd expect from a modern discussion on GMOs or glycophosphates -- complete with powerful lobbying groups whispering in the ears of congressional leaders to sway the votes in their direction.

By today's standards, this seems like an everyday occurrence at our nation's capital, but Congress had never before taken it upon itself to regulate a product in all stages of the product cycle  -- manufacturing, transporting, wholesaling, and retailing.

And many representatives and senators knew they were out in uncharted territory, calling for the Congress to reign in this new regulatory craze and federalism bonanza.

But the end result was the Oleomargarine Act of 1886 -- our nation's first in a long succession of regulations of products and interstate commerce.

Powerful Lobbying Forces Kept Farmer's Interests Above the Chemist's ... for a while.

The dairy industry was outright horrified when margarine's popularity began to take off.  It was a cheap product, had a longer shelf life, and in certain instances (like baked goods with longer intended shelf lives) was a superior product.

They couldn't fight the battle in the marketplace that had already been lost by consumer demand, so they turned to lobbying Congress to protect their traditional interests from a 'sketchy' new product.

While Upton Sinclair is usually remembered as the first to have an exposé on the grotesque nature of America's meatpacking industry, the dairy industry actually used much of the same imagery during their lobbying campaign two decades earlier to try to stop margarine's popularity from gaining ground.

And to an extent, they had a point. The new margarine product was originally made from what was considered waste material by the slaughterhouses -- the image of creating food from 'trash' was a powerful campaign.

The campaign worked, and Congress imposed hefty taxes on the manufacturing ($600/yr), wholesaling ($480/yr), retailing ($48/yr), and sale (2 cents/pound) of margarine; instituted federal regulations on how margarine was to be packaged, with large fines for non-compliance. Lawmakers also aggressively placed tariffs on imported margarine, pricing it out of reach for most consumers, and created a new office within the Treasury Department to ensure the food quality and tax compliance of the new product and laws.

By today's standards, this might seem tame -- but this was a huge leap in federalism and national control of the economy. Possibly more important, it set a precedent of consumer lobbying swaying legislation in favor of one product over another, a practice that has snowballed into a standard cost of doing business in many industries.

If ever there were a 'slippery slope' argument to be employed, this act is a prime example. Within a year of its passing, Congress delved further into controlling the economy with the first Interstate Commerce Act -- the federal government's role in the national economy became permanently enshrined through the legislative process.

2016 and Beyond

The Oleomargarine Act set into motion a system of national control, backroom lobbying deals, legislative favoritism, and overwhelmingly burdensome network of bureaucracies -- all of which plague our modern legislative process.

Lobbying has become one of the most profitable business activities, with studies showing a return of $220 for each dollar spent on lobbying.

And while many lawmakers and various political ilks have 'answers' to these problems, ranging from life-time bans on lobbying for lawmakers to deregulating the entire economy, there isn't a simple answer to the process that has politically evolved over the past 130 years.

Our modern lawmakers need to learn two lessons from the Oleomargarine Act of 1886.

First, that once they start implementing new regulations, they're married to the process -- it just compounds and builds upon itself in wild and unpredictable ways.

Second, and most importantly, when our lawmakers start caving to the pressures of lobbyists, the losers are free competition, the consumers, international trade, and the political process.

Our modern lawmakers need this history lesson, to understand how we got to where we are and demonstrate the serious consequences of a government that can be bought by the best lobbying.

Because that it the real issue -- when lobbyists and regulations reign supreme, the consumer is merely a slave to the highest bidder.

Photo Credit: Radu Bercan / Shutterstock.com

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