Whom would you ask in order to check if the milk you are drinking is fresh? This trivial question can be answered in multiple ways. For example, one could ask a farmer, a biologist, a chemist, or even a grandparent that lives in a rural area. One could even rest upon his or her common sense, saying that probably a (very) few days after its production, it is counter-intuitive to label anything as fresh. Nevertheless, it would have been quite eccentric for someone to turn to the Organisation of Economic Co-operation and Development (OECD) to seek advice on this question.
Still, the OECD in its latest report on the Greek economy dealt extensive with the issue of fresh milk, the regulation of which was considered to be an impediment to free competition. The main point of criticism was the Presidential Decree 113/1999 on ‘Veterinary and hygiene check of milk’, which states that the shelf-life of pasteurised (fresh) milk cannot exceed five days. Other types of milk that have been through a “high temperature pasteurisation” process can still be distributed, but cannot legally be labelled “fresh”. According to the OECD this regulation is responsible for the undeniably high prices of milk in Greece that is deemed to be the second highest in the EU. The rationale is that the five-day limit means that the milk industries rely upon domestic producers exclusively. In turn, the relative decentralisation of the milk direct production and the high costs of certain essential materials result in high costs and higher domestic prices. Since it is practically impossible to use imported milk, the prices remain relatively high due to reduced competition.
To begin with, the report of the OECD has attracted harsh criticism from a purely economic perspective (see here in Greek). First, the report totally ignores strong evidence for the existence of a possible illegal cartel between the main milk industries in Greece, especially given that the profit margin they enjoy is the highest in Europe. One could reasonably ask why any foreign companies have not grabbed the opportunity to open a local branch and freely compete with the existing milk industries. If one ignores the suspiciously cartel-like attributes of the milk market in Greece this abstinence seems inexplicable. Secondly, it is not to be forgotten that other types of milk are still available and presumably — since the 5 days restriction is not applicable there — at lower prices. That means that any customer can freely choose to buy the latter and “punish” the supposedly irrational practice of valuing freshness. Thirdly, the OECD’s argument is wholly undermined by the simple fact that “high pasteurised” milk is of an equal price, if not even more expensive, than the fresh.
It has been suggested, that this OECD suggestion in all its absurdity is in fact directly beneficial for foreign, and more specifically German, milk producers, since the removal of the time restriction is thought to facilitate milk imports and hence, international competition that is understood as the sole means to automatically bring about lower prices. Without negating this scenario, it is suggested here that there are more interesting aspects of the OECD report than its immediate goals. There are two points of this report that need closer scrutiny, beyond any economic analysis. First, the word fresh is throughout the report put between inverted commas (“fresh”), arguably in an attempt to undermine, deride and negate the very concept of “freshness”. According to the OECD this milk is not really fresh or freshness is an absurd concept anyway that distorts free competition. Secondly, references to scientific evidence that allow for or even dictate a reform of the legal regulation are at best scarce and vague. The closer the report gets to an “objective”, scientific justification of its position is when it states that the presidential decree in question “fails to take into account any progress in pasteurisation technology”.
This absence of any robust scientific evidence supporting the remarks of the OECD is in my view remarkable. Perhaps Foucault’s analysis on liberalism, neoliberalism, the market and the state in his seminal work The Birth of Biopolitics could help up to grasp the novel methodology of the OECD report. In the initial pages of the book Foucault notices a radical shift in the understanding of the market that took place in the middle of the 18th century. During the Middle Ages the market was perceived as a site of justice, but also as a site of risk and deception. Hence, the (medieval) state could and should intervene, in order to secure just prices, and prevent fraud. In Foucault’s words “the market was a site of jurisdiction.”1Michel Foucault, The Birth of Biopolitics: Lectures at the College de France 1978-1979 (Palgrave Macmillan, 2008) p. 31 In the course of the 18th century this paradigm went through a major transformation. The market was now perceived as a site were natural, spontaneous laws were in place, it was no lober a site of justice, but rather a site of truth. A good government had to respect this truth, and govern in accordance with it. It was in this context that political economy acquires unprecedented significance, since it is the discipline that informs the government on where to look in order to find out the truth. In sum, the market is elevated to a “site of veridiction,2Ibid. to a truth-setting regime. Correspondingly, public law is transformed into this mechanism that sets limits to governmental power and secures its compliance with the truth of the market. However, comprehending the truth of the market is a complicated task, requiring detailed knowledge of the social reality. In this context the main vice of the law under these conditions would not be moral defiance, but ignorance. Therefore, the legislator values and systematically utilises scientific knowledge (be it “social” or “natural” sciences), in order to grasp the truth of the market and govern without violating it.
This modality of governance was not unique to the domestic realm. International law and international institutions rapidly moved from the “justice” model, to the “scientific” one. At least since the time of the League of Nations scientific committees were systematically established in order to inform and assist international governance. Dianne Otto has summarised this arrangement in relation to the UN as follows:
The Economic and Social Council enjoys the broad brief to study and report on (read sociologize and supervise) international economic, social, cultural, educational, health and related matters (article 62(1)). Member states are able to set up global specialized agencies (read centralize expert knowledge) covering a similar range of fields (article 57(1)).3Dianne Otto “Subalternity and International Law: the Problems of Global Community and the Incommensurability of Difference”5 Social and Legal Studies 337.
It is argued, therefore, that the absence of any reference to biology or chemistry on a topic that for the legislator of the 20th century would have perceived a problem of “public health” necessitates some further inquiry. It is possible that after the rise and the fall of the Keynesian governmentality, the neoliberal model of governance and legality reaches its apogee in the aftermath of the 2008 crisis. If we read the OECD report closely, we could conclude that nowadays the market is not just a site of truth. It has been transformed to the sole site of truth. If the slogan of 18th century liberalism was that the market is governed by true, natural law, and the purpose of the mid-20th century Keynesianism was to mitigate the most extreme social consequences of this otherwise true regime, contemporary neoliberalism claims that there is no truth outside the market. Political economy — or rather a certain version of it — aspires to be elevated to the unique and only truth — setting regime. Accordingly, law can be nothing but the reflection of this undisputable truth. If according to Foucault post-war Western Germany was unique in the sense that it was a state failed by history and (re)legitimised through the market, we might now be experiencing the universalisation of this paradigm. Political economy is elevated to the legitimising power not only of the state, but also of all other aspiring truth-regimes.
It is still unknown what will be the response of the domestic legislator to the guidelines of the OECD. Whereas the abandonment of the “fresh” label seems unlikely, the significant prolongation of the day-limit is seriously considered. If either happens, then it would not constitute a wild analogy to compare contemporary neoliberal economics to medieval theology. Every kind of knowledge and legislation is validated uniquely through them and no truth is conceivable outside their framework. The consequences for such a paradigmatic shift for law and legality, but also for our conception of the public space, politics and even science will be deep and, in my view, devastating.
Ntina Tzouvala is a PhD candidate and part-time staff at Durham Law School
- 1Michel Foucault, The Birth of Biopolitics: Lectures at the College de France 1978-1979 (Palgrave Macmillan, 2008) p. 31
- 2Ibid.
- 3Dianne Otto “Subalternity and International Law: the Problems of Global Community and the Incommensurability of Difference”5 Social and Legal Studies 337.
Very interesting comment.
I agree with you to the extent that there’s no mentioning of the likely milk cartel whatsoever, even though there are very clear indications for that (Tsakistara et al., 2008: ‘Analysis of Greek milk market’).
However, it’s for a fact that Greek milk producers are small and fragmented (no scalability), technologically lacking behind and imports for an essential raw material like animal feed necessary.
All aspects mentioned above, though not all mentioned in the OECD report, lead to consumer prices, which are far off what they should be for a staple for the end-customer.
As I understand, the OECD recommends best-practices for the respective industry and above all for the consumer; especially in the Greek example.
While a potential cartel is not as easily identifiable, benchmarking to other regulatoy frameworks is much easier and common practice in Europe.
I don’t see the problem in the OECD highlighting potential areas for improvement. After all, the European Union is a single market with a great number of different regulations and rules; so the case for the milk market. Greece doesn’t have to reinvent the wheel, but for the consumers to afford milk again, benchmarking and learning from others makes a lot of sense to me.
A little side note: You have this very bizarre situation that Greek producers import milk and sell them under their exact same brand and design along their own production, fooling the consumers into believing they actually drink Greek milk. It is reality, Greece is not self-sufficient in the milk supply, why stick to old laws, which harm consumers in the end…?
I would smell the milk.
From the latest news (mid-July 2015) the entire Eurozone, formerly known as the European Union, appears to operate on the principle of market veridiction. Strangely enough, this veridiction must be retrospective: it must be proved that the European banks that lent money to Greece made good loans, so the entire Greek economy must be reshaped in order to make those loans payable (theoretically at least). Those are the terms of the latest bailout agreement, and in fact, they have been the terms all along. The institutional structure for imposing this form of law is the Eurogroup, which itself has no legal status. The terms have been set by a purely technocratic body specializing in economics.
Yet there is more. The driving force in the imposition of this new law of market veridiction has arguably been the German finance minister Wolfgang Schauble. He is the Dr Strangelove of our times. To make the Euromarket operate perfectly he proposes the expulsion of Greece from the single currency, despite the severe social dislocation, potential violence and refugeee crises that would surely ensue. The terms of the Eurogroup settlement are such that Greece will likely be unable to abide them, so there will be an exit. In Schauble’s eyes, the retrospective proof of market perfection has already failed. It is by destroying the European Union as we knew it that he wants to ensure the market discipline necessary for the future perfection of a new Eurozone, where technocratic neoliberal economics will reign supreme.
Alas, the devastating consequences of which you warned are upon us.