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October 11, 2008

Toxic Products

In an interesting juxtaposition, accounts of “toxic products” sold by two highly competitive economies are very much in the news. One refers to the sub-prime mortgages that were sold by American lenders to home owners and other borrowers during an interval of rapidly rising real estate prices. They were then subdivided, spread among complicated derivatives, and sold to large investors, including overseas banks. The current global financial crisis was triggered when individual borrowers around the US began defaulting on their mortgages, ultimately producing a generalized loss of confidence in global financial markets similar to the one that led to the Great Depression of the Thirties.

The other toxic product is melamine, a complex synthetic chemical, once thought to have potential use as a fertilizer because of its high nitrogen content, but subsequently found unsuitable for consumption for a variety of reasons, most of which were related to its toxicity. Nevertheless, because it had proven very useful in a number of commercial processes, it had become a fungible commodity and was produced in large amounts. 

Starting in 2007, China, which had accumulated large surpluses, was identified as the source of melamine introduced into pet food products, apparently to increase their nitrogen content (and thus their commercial  value) on standard tests for protein that rely on nitrogen content. The problem has since been compounded by the discovery of melamine in food products intended for human consumption and being sold both overseas and in China.

The attendant publicity has produced a panic among all consumers of Asian food products. It will apparently require newer, more complex tests for nitrogen content in food to identify and exclude those products adulterated with melamine. In the meantime, confidence in any processed foods from China will be affected, and no one knows how long it will take to be restored.

What the two examples clearly have in common is a pervasive tendency of humans to cheat in order to gain commercial advantage, a tendency that, once acknowledged as a species characteristic, can be readily identified throughout recorded history.

The problem thus really boils down to a straightforward question: how do we protect ourselves against our own dishonesty?

Doctor Tom

Posted by tjeffo at October 11, 2008 05:28 PM