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This post got seriously long, but I think it's a good one. I tried illustrating scenarios to better paint a picture.
 Originally Posted by JKDS
Im hesitant to believe the statement that the fda has cost lives. Even if true, it doesn't take into account the number of lives saved by them.
I have an n=1 that I think can exemplify the rationale for why the FDA may not be saving more lives than a competitive market for food safety would. This isn't about the FDA but the Washington State Department of Health (WSDH).
Ever since I've been an early teen, I've probably averaged 80 meals a year at small, hole-in-the-wall teriyaki joints. I love the food, but there are drawbacks. I've had food poisoning from them maybe 15 times. My friend who used to join me on occasion once got food poisoning so bad he was bed ridden for a week and it probably could have killed him. These were not fly-by-night restaurants. They were under the WSDH jurisdiction and were in well-populated commercial areas. But clearly the WSDH was not doing its job. I can extrapolate from my experience that the thousands of tiny, Asian family owned restaurants in the region were not being properly investigated and regulated by the WSDH.
Why is this important? Because the WSDH is in charge. The government stripped me and everybody else of our responsibility to ensure our own safety. The government took our taxes and fees and monopolized the food safety market, and it gave every indication that it was living up to its stated standards. We had no choice but to trust the food was safe. But clearly in my case the government was not trustworthy and I got sick many times and my friend almost died.
Contrast this to what things would look like if the government was not involved in food safety. The market would be populated with multiple food safety companies, each with their own techniques, but all with the goal of getting the customers of food companies to trust the safety of the food they brand. Instead of living in a region with just your state's health department in charge, you may see something like just three safety brands: Safe Food Inc, Eat Safe, and HealthNow. Each of these companies specializes in food safety and they set deals with food providers that allow the safety companies to monitor and manage the food handling practices so that they will put their stamp of approval on the product.
Let's say that over the course of my life, I once got sick from a Safe Food Inc branded food, or I know a guy who did, yet I haven't had any bad experiences with Eat Safe or HealthNow. In that case, when I go to a small teriyaki restaurant, I'm going to be looking for their brand. These restaurants are all over the place, sometimes two or three to a lot, so if I walk into one and I don't see an Eat Safe or HealthNow brand on their menu or window or whatever, I'll go to one that does. In the case of a private food safety market, I have reasonable choice to affect my own health, but in a monopoly I do not.
On a related but different note, this would allow for more innovation in the market and would improve quality while reducing prices. Because of price variation, where the quality of the food safety branding is reflected in the price of the food, the safety companies would be competing with each other to be most efficient. For example, let's assume the only difference between Kroger and Winco is that Kroger is branded by Eat Safe and Winco is branded by HealthNow, yet the price difference in their foods is approximately what they are today. If the perception among consumers is that they do not get sick any more often from Winco than from Kroger, they'll start flocking to Winco at the expense of Kroger simply because they'll be getting the same product for lower price. Eat Safe would be in a fight for its life to get its costs down (without disturbing quality) in order to keep Kroger as a customer.
Or if we're talking small businesses, where an owner may not pay for safety branding in the first place, it's still a viable (and sometimes necessary) strategy. Let's say you are poor and you open a small teriyaki restaurant in the cheaper part of town just across from another teriyaki restaurant, one that's branded by Eat Safe. You know that customers won't easily choose your restaurant over one that pays for Eat Safe inspections and protocols; however, you have a strategy. You already know how to not poison your customers with poorly handled food, and you make food as good as the one across the street. Your strategy is that because you're not paying for inspections and protocols, you can offer the same quality product for cheaper. Everything on your menu is $.75 cheaper. You advertise that on a sign out front, and you get the occasional customer who is willing to take the tiny risk on you because he thinks that if you're legit he'll be saving $2.25/wk. Over time you build up a customer base of people who, for whatever marginal reason, decided to eat at your restaurant despite your lack of safety branding. You're doing so well that you want to expand. You can now afford safety branding, but maybe you'll decide to run things differently because you think you can create a chain of restaurants that performs safety measures internally while creating its customer base off your impeccable record and cheaper prices. This is but one of the uncountable iterations of how a free market of food safety allows innovation that makes the world a better place.
I could go into detail regarding how things would work if you're selling snake-oil and you harm people, but this post is too long so I'll only do that if somebody wants to hear it.
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