Asymmetrical information: yes, we have no bananas by mattsteinglass
September 11, 2007, 5:13 pm
Filed under: China, Health, Media

Most people in the U.S. are still operating with a worldview that divides political and economic systems into the state-centered versus the free-market. Hopefully, this summer’s cascade of disastrous news about unsafe Chinese-manufactured products will help people understand what an inadequate framework that is for thinking about modern political economy. In any reasonably complex economy, state structures are critical to lay the groundwork for the market. One of the most critical functions of state regulatory agencies is to establish trustworthy information about products. Without such a reliable official voice, the market is suffused in a fog of unreliable and opaque claims; every single purchase becomes as perilous and exhausting as buying a used car, and consumers retreat into a paranoid crouch of helpless anxiety.

Witness yesterday’s great piece in the Washington Post. It starts out as a run-of-the-mill piece about electronic censorship and monitoring in China; but as it looks more closely at what’s being censored, the story gets weirder and more interesting.

From spring well into the summer, southern China’s banana farmers faced a crisis they could not understand. From cellphone to cellphone, a text-message rumor had swept the country saying that Chinese bananas carried an infection called “Panama virus” that could cause cancer. As a result, consumers everywhere were leery, and bananas piled up unsold.

Distraught agriculture officials knew of no such problem with Chinese bananas. Eager to restore the market, they called in the Public Security Ministry’s electronic censors to find out where the rumor originated. From message to message, the monitors traced it back through thousands of cellphone connections.

After weeks of sleuthing, they discovered the first message had been sent by a woman in Nanning, capital of Guangxi province just northwest of Vietnam. Because she lived in a major banana-growing region, they surmised the woman might have been seeking to inflict harm on a local businessman or farmer.

But after tracking her down and interrogating her, Nanning police said she explained that she was only passing along what she had read in an article in China Daily, the government’s main English-language newspaper. Beijing police launched an investigation at the newspaper’s head office in the capital. The article in question was indeed about bananas and it did mention cancer, they found, but the writer had said nothing about bananas causing cancer.

After further interrogation, China Daily editors said, Nanning police discovered the woman was reading the paper as a way to improve her English — which was still shaky — and she had misunderstood the article.

Obviously this kind of samizdat mass hysteria is produced, in part, by government censorship: when people don’t trust the government, they become more susceptible to crazy rumors.  But it’s also caused by the chaos and governmental inertia of a top-down, non-democratic society. Reliable regulatory authorities, answerable to the voters, are an indispensable part of the modern economy. Without them, we are constantly afraid that our food is poisoning us, and vulnerable to the next rumor about killer bananas.


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