Can the Hair Club for Men Help Solve the Food Safety Problem?

Here’s a post I coauthored with Peter Siegelman (an economist who teaches at University of Connecticut law school) who is one of my earliest and most frequent coauthors (see, for example, here and here).

Hair ClubScreenshot from YouTube.com.

By now, virtually everyone in the country has heard that the Peanut Corporation of America knowingly shipped peanut products contaminated with salmonella bacteria, leading to the deaths of at least nine people and sickening 22,500 others. Last year, the Westland/Hallmark slaughterhouse processed meat from “downer” cattle that were too sick to stand, forcing a recall of 143 million tons of beef. President Obama has spoken of a food-safety “crisis” confronting the country, and that over-used term does not seem to be an exaggeration in this case.

So what should we do? Government inspectors are too few in number to visit all of the thousands of food preparation facilities, let alone conduct thorough inspections. Some large-scale purchasers conduct their own inspections of their suppliers, or the suppliers themselves pay for inspections, as was apparently the case in the peanut incident. But private audits have not proven to be much more effective than, say, the private credit-rating agencies that gave AAA ratings to all those mortgage-backed securities.

Maybe we should take a lesson from the 1980’s commercials for the Hair Club for Men. You may remember those cheesy ads, which concluded with the pitchman declaring that “I’m not only the Hair Club president, I’m also a client.” The right way to align the incentives of management with those of the customers, in other words, may be to make sure that the managers are customers. One way we could implement this would be to require inspectors to certify that they saw the president of the company (or perhaps the plant manager) eating a substantial helping of the product being sold. (Maybe the inspectors should be required to eat some as well!) Someone who knows that his downer-burger was made from a cow that was too sick to stand, or his salmonella-butter-and-jelly sandwich contained infested nuts, might not be so happy about his working lunch.

The idea is really an update of a very old idea. The court food taster’s job was to make sure that the food was not tainted — and the chief chef, like the C.E.O., is the perfect person to take action to make sure that a food product is safe. Managers would likely be more careful about inspecting their plant’s output if they knew they’d have to eat enough of it to make them pretty sick.

Mayor Bloomberg isn’t (to our knowledge) the president of a food company. But as mayor, he implements a version of this strategy. By riding the subway to work each day (well, at least for part of his commute), he has better incentives to make sure that the trains are clean, safe, and timely.

We routinely ask managers to hold company stock to better align their interests with the interests of shareholders. The ingestion idea is analogously a way to better align the manager’s interests with the interests of consumers.

The F.T.C. has wisely required that endorsers actually use what they endorse (you can read the regs. here). The law might do well to hear an implicit endorsement from food managers that they use and approve of their products. This would just be a default representation by a corporation — and could easily be disclaimed (say, in public filings). But consumers might legitimately worry about buying products that managers were unwilling to consume themselves. Just as “skinny cooks can’t be trusted,” we might worry about managers who aren’t willing to drink their own Kool-Aid.

Of course, this is far from a perfect solution: despite the Hair Club president’s endorsement, the product seems to have been every bit as cheesy as the ads themselves. Still, forcing managers to publicly “eat what they sell” would at least provide them with a vivid sense of the risks they are imposing on everyone else, a perspective that seems to be all too lacking these days.


Josh

This implies that the managers/officials, etc were willingly harming people. I don't know the specifics of these cases, but could it be that they simply didn't know the risk of their products at the time they shipped them?

There are diminishing returns in investigating potential harms of products, companies have to make tough decisions every day about how much they can afford to test vs other pressing expenses.

Mike B

Most food safety violations only raise the risk of contamination which itself only contains a risk of causing actual illness. For most types of violations the harm will only become apparent after the law of large numbers has been applied (and even then it usually takes improper preparation). I am sure that most CEO's would have no problem eating their product as there is a low risk of actually getting sick and they can cover up the fact of actually becoming sick.

Jason K.

It is an interesting idea, but very easy to get around. Perhaps what is needed is more along the lines of less protection for employees of companies that produce tainted food. People are always willing to gamble that they can sneak one by if they feel that they either have no choice or have a good chance of there not being repercussions. A government policy of company wide penalties might encourage more observance amongst employees along with more whistling blowing.

Re: @1; In the peanut butter case, they are internal e-mails stating that management knew that the peanut butter was tainted, yet wanted it shipped anyway.

Ryan J

I think both Josh and Mike miss the point. It's not that we'll see CEOs get sick or that they didn't know the risks. It's that we want to know that they're fully confident in the procedures their companies use to ensure proper safety. If they are, excellent. If not, common sense says that they'll improve their standards to the point that they are confident.

Derek

In the tech industry we call it eating your own dog food. Most companies do that to test it out and find what is broke. Granted, if a web server crashed, people probably aren't going to die, but it is such a simple and elegant solution I doubt we'll see it implemented.

Ian

How many nasty products would the president of hormel have to eat in a week?

Daniel

I have been told that the software engineers who wrote the code for aircraft computers were required to be passengers on the first flight. I have a funny feeling that software was not as buggy as Windows.

Paul

In the software industry this is called "Eating your own dogfood."

Ken Davis

I've often thought that, as a condition on their licenses to operate, the owners of nuclear power plants should be required to live within a mile of the site.

Clayton

Why does the government need to do this? Isn't that just Socialism?

Lee

It is time for pundits and policy makers to take a dose of their own medicine. In addition to the disclosure from analysts and promoters they should be required to put their money where their mouth is. Remember the foremost Internet analyst?

http://www.theatlantic.com/doc/200812/blodget-wall-street

The same should be required of FDA and drug company CEO's. They should take the drugs that they promote to see if the side effects or cure is worst than the disease. How about water authority officials drinking the water that they certify as clean? Same goes for those who said that arsenic in water was safe. The EPA official who assured that air quality in Ground Zero should have been required to move her office to that location.

Chris

So should we require a vegetarian who runs a 7-11 to test out the hot dogs? That hardly seems fair.

C. Larity

Brilliant idea! On a related note, is Samuel Adams looking for a president or CEO?

travis ormsby

Ryan J,

I think Mike B actually hit the nail on the head. Let's say I change my food manufacturing process in a way that is 100% likely to increase my profits by $10 million by introducing a 0.01% chance of serious illness and death.

A simple cost/benefit analysis would suggest that I would happily munch on my tainted food unless I valued my life at more than $100 Billion. If my product reaches more than about 100,000 people, however, the chance that someone will get sick is very close to 100%. The "Hair Club" proposal is inadequate to the task of protecting my customers in this or similar scenarios.

charles

Seriously with the 300+ million people eating 3 meals per day how many are eating tainted meals? A crisis? No. Sorry.

Now to the idea: won't work, simple as that. Too easy to get around. Let's move on. Let's think more of rubber and road than pie in sky - at least beyond brainstorming.

Scooper

Alaska Airlines requires, or at least used to, the members of it's board and upper management to eat a number of airplane meals each month. I still think they have some of the best airline food in the industry.

Thomas B.

When I worked in a record store, I listened to way more music, when I worked in a library, I read way more books, when I worked in an ice cream shop, I gained a lot of weight.

Most owners of companies already consume large amounts of their own products, because a) they actually believe in their products, b) constantly thinking about something makes you use it more.

Derick Bonewitz

Does the Army still require parachute packers to jump with a randomly-selected 'chute? Knowing that procedure sure gave me more confidence when I was standing in the door looking down.

Caliphilosopher

Clayton -

Socialism is MUCH more than that. What that's called is good business, or prudent regulation.

Chris Luccy

I believe I heard that the CEO's of the Chinese airlines were required to be on a flight during the millennium New Years, just in case there was a year 2000 bug...