Several bloggers have posted on the shift to the five-cent bag. Michael James noted: “Economic incentives like this one are often a much better way of driving behaviour than setting rules.” A post by blogger Canadian Capitalist remarked on the incentive aspect as well, plus the bonus points one gets on their President’s Choice card for each reusable bag purchased at a Loblaw store. All good stuff.

Yet, there may be another economic lesson and that is the law of unintended consequences (the main lesson in Henry Hazelitt’s book, Economics in One Lesson). It apears the push to switch shoppers to reusable bags poses health risks.

Two laboratories obtained reusable bags from shoppers leaving major grocery stores (offering each shopper a new reusable bag as replacement for their existing bag). They also asked the shoppers a series of questions about their bag, including its age, frequency of use, and whether it was ever washed. Four new bags also were tested as controls.

More than 30% of the used bags were found to have unsafe levels of bacteria. As well, yeast or mold was in 40% of them. Disposable plastic bags, by comparison, contained no evidence of bacterial contamination, mold or yeast.

It appears the dark, warm interior of a folded reusable bag is an ideal incubator for bacteria, should it acquire a small amount of water and/or food residue. A third lab assessed and confirmed the findings of the first two. More detail is available in The Grocery Bag Dilemma.

Anyways, it appears the main upshot here is that those who use reusable bags should make sure they are clean!

I wonder if Ms. Cooper and the growing chorus of similar voices are seeing all the warts of the beast they live close to and fewer of the blemishes on the beasts living further afield. While the U.S. certainly has its problems, so do other countries around the world — we perhaps don’t see them as much because of the distance and language barriers.

Take the economic miracle in China. It seems to me to be based in large part upon the suppression of market forces, which is not usually a lasting formula — especially for wrestling hegemony away from the U.S. Like Mother Nature, it’s not nice to fool with market forces. They release a lot of unintended consequences that grow and fester and eventually win out, undermining edifices built without regard for them.

Chinese exports are surging because appreciation in the Yuan has been held far below market levels by printing up scads of Yuan to buy up mountains of U.S. dollars. Supplementing this intervention are currency controls that restrict Yuan convertibility.

Any country can do this sort of thing and put up an impressive run for a time. Japan tried it in the 1980s and early 1990s. But most don’t do it, at least for very long, because it leads to an inflation problem — as highlighted by China’s current annual inflation rate near 8%. And again, this performance would look worse without market interventions: if oil prices in China weren’t subsidized below world levels, the inflation rate could be well into double-digit territory, closer to 15%.

Running the printing presses to suppress currency rates, oil prices, and other things is a recipe for galloping inflation and escalating wages, which, by raising the structure of domestic costs, eventually offsets the competitive edge due to artificially low exchange rates. And currency controls spawn black markets that in time defeat the intent of controls while having other negative side effects.