Why Is There Corn in Your Coke?

Coca-cola used to be made with real sugar, but in 1984 the makers of the soft drink replaced sugar with corn syrup. Why did this happen? Part of the reason is because corn syrup became less expensive than sugar. In fact, sugar is nearly twice as expensive in America as in the rest of the world. In this video, Professor Diana Thomas explains why.

United States laws actually limit the amount of sugar imported each year. This limit causes the price of sugar to rise. Such a quota is meant to increase profits of domestic sugar producers and to protect them from foreign competition. The cost to Americans of this quota is a staggering $3 billion each year, in the form of higher prices for sugar and sugar products. But since the cost is split among all citizens, it isn’t worth it to the average American to complain.

In contrast, sugar producers are much in favor of this policy. From 1980 to 1998, each U.S. sugar farmer earned approximately $3 million extra each year because of the quota. The farmers profit generously from this quota, while consumers are made worse off.

How can we prevent some groups of taking advantage of others through laws like sugar quotas? One solution would be to limit what government can do.

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