Gripes of wrath rage in the US over raisin question

Raisin Cain: the US supreme court must adjudicate on the government’s cartel

Raisin Cain: the US supreme court must adjudicate on the government’s cartel

Sat, Apr 6, 2013, 06:00

There is a complex and contentious case now being heard before the US Supreme Court, and there’s a lot riding on the decision of the nine judges. Their judgment will either affirm or reverse a long-running tradition, and an entire way of life hinges on their conclusion. I’m talking, of course, about raisins.

While most “Scotus” watchers are preoccupied with the deliberations over the constitutionality of same-sex marriage, the case that has piqued my interest is considerably more esoteric – Horne vs US Department of Agriculture, a tale of humble raisin producers showing indomitable courage in the face of the power of government, which basically operates a raisin cartel. Back in 1937, at the tail end of the Depression, a New Deal scheme was introduced in an attempt to stabilise raisin prices and guarantee producers a fair price by allowing a body called the Raisin Administrative Committee to demand a portion of all the raisins produced by Californian vineyards, usually for little or no compensation, and thereby effectively control the price of raisins in the US and, to a degree, around the world.

Back in 2003, raisin producers Marvin and Laura Horne had to hand over 47 per cent of their harvest, and got nothing in return, so they decided the federal raisin heist had gone on long enough. A decade-long legal battle has ensued, with a climax before the highest court in the land - the straight- to-DVD movie will, I can only hope, be called The Raisins of Wrath.

Why do I find this case so interesting? I’m no fan of dried fruit, and find raisins loathsome – they ruin good muffins, they pollute fine breakfast cereals, they disfigure impressive wedding cakes. But they are also, let’s be honest, inherently kind of funny, from the slightly silly name to the dishevelled appearance.

And it’s even funnier that a pompously named US federal agency goes around essentially stealing huge quantities of raisins every year. When I read this in the Economist last week I was sure it was an April Fool’s joke, an absurdly exaggerated example of government meddling in the free market.

Little wonder that there are so many borderline lunatic libertarians in the US – in a world where the federal government appropriates raisins at will and imposes huge fines on recusants, it’s hardly surprising there’s such paranoia about the government coming for their guns.

The reality is that, while the sanctity of the free market is enshrined in the American psyche, the place is coming down with bizarre regulations. The economics writer Matt Yglesias makes a particular example of the barber protection racket – the abundance of state regulations in places such as Washington DC covering the hair-cutting industry. While such training and licensing regulations might prevent one or two people getting stabbed in the scalp with a badly handled scissors every year, the resulting drag on economic activity is pretty significant. Local barbers and hairdressers are protected from new competition, and prices are kept artificially high.

While all this is happening in the Land of the Free, here in “socialist” Europe, the regulations become even more Byzantine. The bureaucracy of Brussels is responsible for some real doozies. Most obviously, the price-controlling antics of the Raisin Administrative Committee looks like amateur hour compared to the far-reaching influence of the Common Agricultural Policy.

This paper’s Paris correspondent, Lara Marlowe, this week detailed the efforts of Francois Hollande to put some order on the 8,000 laws and more than 400,000 regulations that govern all sorts of activities in France. My favourite example was the specially trained “agent for local entertainment” that a small village had to hire to change light bulbs. Take that, barbers of DC.

But the most telling anecdote of crippling regulation comes from Greece. The economist Megan Greene visited Athens last year and wrote about meeting a friend in a new bookstore- cafe in the centre of town. After ordering a coffee, the waitress walked out the front door and made her way to the bar across the street. When Greene wondered what the waitress was up to, her Greek friend explained that the place couldn’t get a licence to provide coffee. But it got worse. Because it’s illegal to sell books after 6pm in Greece, Greene “was in a bookstore-café that could neither sell books nor make coffee,” she wrote.

What can we learn from these absurd regulations? I like to think of it as the harmful actions of an overly fussy referee ruining a football match by obsessing over the laws of the game rather than allowing the match to flow. But the biggest lesson is don’t try to produce raisins in California, tell fortunes in Massachusetts, change lightbulbs in France or open bookstore-cafes in Athens.