Chip Taylor

Government: The Other Big Business

Like, "Got Milk?" and "Pork: The Other White Meat," "Beef: It's What's for Dinner" is under legal attack from producers who don't want to pay for the generic advertising programs:

The Supreme Court agreed on Monday to decide the constitutionality of a 1985 federal law that requires beef producers to pay into a fund that supports generic promotion campaigns to encourage more beef consumption. The case is an appeal by the Bush administration and a group of Nebraska cattle producers from a ruling last July by the federal appeals court in St. Louis that declared that the program amounted to compelled speech, unconstitutional under the First Amendment.

The industry groups have a collective action problem. The benefits of the advertising program are non-excludable; even if a beef producer doesn't pay, she can still benefit from the advertising. So, if the beef producer group can't force beef producers to pay for a share of the advertising, everyone is likely to free ride and they will have no money to pay for the program.

Since the beef producer group doesn't have police powers and can't legally force the individual producers to pay, they turn to a group that does and can -- the federal government. Who has obliged them, by essentially turning a private industrial promotion program into a government service forced on those who don't want it.

The question of whether this is a private or government program is at issue in the beef case:

As a matter of First Amendment doctrine, the most interesting aspect of the new case is a question that the earlier decisions did not directly address: whether the speech at issue is private speech, as the dissenting beef producers maintain, or government speech, as the administration asserts. Under the administration's argument, there is nothing remarkable, or unconstitutional, about citizens being required to pay for a particular government program, whether or not they agree with its message.

My take: Just because a group has a collective action problem, doesn't necessarily mean there is a role for government in forcing the collective action. After all, what are the consequences for the beef industry if they can't force individual producers to pay for the collective advertising? Individual beef producers will have to do their own individual marketing. Is that so bad?