Meat packing is the industry involved in slaughtering, processing, packaging, and distributing livestock. A review of the history of meatpacking is of interest because the mainstream account of meatpacking sanitation at the turn of the century (or, rather, the lack thereof) appears to refute the theory of free market regulation. A less-discussed claim of monopolistic practices by the "Big Four" meat packers is also relevant.
Mainstream account of History
The mainstream record of history regarding meatpacking holds that the meatpacking industry was unregulated before the passage of the Federal Meat Inspection Act, which resulted in unsanitary conditions placing the public at risk of disease. Upton Sinclair's The Jungle increased awareness of the terrible conditions in the meatpacking industry and the awakened public urged a revolted Theodore Roosevelt to pass meat inspection legislation. The large meatpackers were against the legislation and did not support the actions of Congress. Indeed, the Neill-Reynolds report confirmed the digusting picture of the meatpacking facilities and sealed the nail in the coffin, reaffirming the need for regulation and the inability of the free market to regulate itself.
An in-depth reconsideration
There are a number of factual mistakes that the mainstream record makes.
The meatpacking industry was not unregulated. At the time Sinclair's book came out, it had been inspected for more than a decade. Congressman E. D. Crumpacker of Indiana noted in testimony before the House Agriculture Committee in June 1906 that not even one of those officials "ever registered any complaint or [gave] any public information with respect to the manner of the slaughtering or preparation of meat or food products."
What is the history of federal meat inspection, then?
In 1891, the Meat Inspection Act of 1891 was passed under allegations of contaminated meat. There is no evidence, however, that tainted meat was actually a realistic reason for the adoption of the meat regulation. Gary Libecap concludes that "the record does not indicate that the incidence of diseased cattle or their consumption was very great, and there is no evidence of a major health issue at that time over beef consumption." 
Why, then, was the regulation passed?
Ernest Pasour explains
- "There is a great deal of evidence that the political impetus for the 1891 legislation was the consequence of rapidly changing economic conditions. Market dominance by Chicago meat-packers-primarily Swift, Armour, Morris, and Hammond-quickly followed the introduction of refrigeration around 1880. Refrigeration allowed for centralized, large-scale, and lower-cost slaughterhouses because of production, distribution, and transportation advantages. The four large Chicago firms accounted for about 90 percent of the cattle slaughtered in Chicago within a decade after the introduction of refrigeration.
- The Chicago packers fundamentally changed demand and supply conditions in the meatpacking industry. Small, local slaughterhouses throughout the country were rapidly displaced because they could not compete with the lower-cost Chicago packers. Local slaughter firms, in response, charged that Chicago packers used diseased cattle and that their dressed beef was unsafe. The disease issue, as bogus as it apparently was, threatened both domestic demand and export markets for U.S. meat. Cattle raisers, especially those in the midwest, backed federal meat inspection to promote demand.
- Cattle producers were also concerned about falling prices. Prices fell because the supply of cattle grew rapidly. But producers attributed the fall to their declining market power versus the Chicago packers—a charge that seemed credible because of the packers’ size and concentration. Ostensibly to deal with the largely spurious allegations of unsafe meat and collusion by the Chicago packers, cattlemen, and local packers called for federal meat inspection and antitrust legislation." 
It must be kept in mind that Upton Sinclair's novel was that - a fiction novel. Though fiction may bring truth to the public, it does not necessarily do so, and this is confirmed by an analysis of the fewer than 12 pages in his book where the meatpacking process itself is discussed. An in-depth look at history will reveal that the allegations made do not hold up. A 1906 report by the Bureau of Animal Industry refuted Sinclair’s severest allegations, characterizing them as “intentionally misleading and false,” “willful and deliberate misrepresentations of fact,” and “utter absurdity.”
Indeed, the report revealed that in some cases the very accounts proposed by Sinclair himself do not stand up to scrutiny:
- There would be meat stored in great piles in rooms; and the water from leaky roofs would drip over it, and thousands of rats would race about on it. It was too dark in these storage places to see well, but a man could run his hand over these piles of meat and sweep off handfuls of the dried dung of rats.
The report correctly notes that if the water (from condensation) was dripping on the meat, then there could have been no "dried dung of rats," as it would have been moistened.
It is important to note some of the other popular allegations:
- as for the other men, who worked in tank rooms full of steam, and in some of which there were open vats near the level of the floor, their peculiar trouble was that they fell into the vats; and when they were fished out, there was never enough of them left to be worth exhibiting, – sometimes they would be overlooked for days, till all but the bones of them had gone out to the world as Durham's Pure Leaf Lard!
The report notes that after careful consideration there had been discovered only one man falling into a vat. The body was promptly recovered and buried.
It is interesting that some two million visitors came to tour the stockyards and packinghouses of Chicago every year, yet it took a novel by an anti-capitalist ideologue to unveil the real conditions to the American public.
Gabriel Kolko, himself a socialist writing on the collusion of big business and government in periods of supposed laissez-faire, assails Neill and Reynolds as “two inexperienced Washington bureaucrats who freely admitted they knew nothing” of the meatpacking process. Indeed, Neill was an economist with no technical knowledge of the packing industry and Reynolds was a civil service lawyer. Neither had been exposed to the mass slaughtering of a packinghouse and were sensitive middle-class individuals. Their own subsequent testimony revealed that they had gone to Chicago with the intention of finding fault with industry practices so as to get a new inspection law passed.
The mainstream account goes on to allege that, of course, big meatpackers were like typical capitalists greatly displeased with the meat legislation. However, as is often done in libertarian critiques, and as supported by socialistic historian Gabriel Kolko, government meat regulation may be more appropriately viewed through the lens of big business turning government to its side.
The big packers were actually enthusiastically in favor of the regulation. At a government meeting with the large packers, the packers responded to the regulatory proposition with loud applause and praised as a "a wise law" which must be enforced universally and uniformly.
The packers had lobbied for regulation of the industry for decades.. The book by Sinclair gave them an opportunity to get their bill passed through the Congress at last. There were a few reasons for the meatpackers to want government regulation:
1) Government inspection increases operating costs - Though this seems counter-productive, imposing a large fixed cost on competitors is advantageous to big businesses, because it establishes market barriers that prevent new players from entering the market, thus helping the large trusts gain a larger market share (perhaps this was in retaliation against antitrust claims made by smaller, local meatpackers against the trust, which were proven false as well).. The imposition of a fixed cost is significant because entry into the market had in fact been relatively easy without many barriers.
2) Stamp of approval to overcome European embargo of meat - The sensationalized allegations in The Jungle resulted in a drop of meat exports to Europe by half due to European government seizing on the opportunity to pass protectionist bans on American meat under the guise of "diseased meat."  The large packers were troubled by this, as they did not want to lose the foreign markets. To circumvent this measure and combat claims of the European governments, the meatpackers wanted a government stamp of approval that would signal safe meat and hence tear down European barriers to meat importation from America.
Congressional hearings during the administration of Theodore Roosevelt revealed that "the big Chicago packers wanted more meat inspection both to bring the small packers under control and to aid them in their position in the export trade." 
Sinclair ultimately opposed the meatpacking legislation, having seen it for what it was - a boon for the big packers which hampered competition and the market.
Sinclair was a socialist who sought to spread his political message through his novel. Of course, this hardly renders factual allegations moot, as any man with a sane brain may record facts. However, after the above rebukes of the meatpacking myth, his novel must be resigned to simply being a fiction novel and an exaggeration of conditions to spread a message. Sinclair reveals that the novel was designed "to drive home to the dullest reader" the point that the destruction of the Rudkus family was "the inevitable and demonstrable consequence of an economic system". "I believe in the Socialist movement" vowed Sinclair, and "if I did not, I should never have written The Jungle".
The case for the veracity of Sinclair diminishes when it surfaces that Sinclair only visited the meatpacking plants thrice - one an "ordinary" guided tour, the second with a correspondent for the British medical journal, the Lancet, and on "the third and last trip, I was in the wake of a lawyer who had been brought up in the Packingtown district". Sinclair says "I really paid very little attention to the meat question while I was in Chicago".
Furthermore, even socialists themselves rejected Sinclair's work as no more than fiction. Ralph Chaplin, a socialist who grew up in the vicinity of the yards and packinghouses and was living there when the novel appeared said of The Jungle, "I thought it a very inaccurate picture of the stockyards district which I knew so well." Gabriel Kolko, another socialist, dismisses Sinclair and his claims as propagandist.
Consequences of the regulation
The Federal Meat Inspection Act required USDA meat inspectors to be in place during working hours at all meatpacking plants and other facilities. The "poke-and-sniff" method very ably describes the approach inspectors employed to determine whether a given piece of meat was safe. Poke-and-sniff often entailed having an inspector "poke" a piece of meat with a rod and "sniff" the rod to determine, in the inspector’s opinion, whether the meat contained pathogens.
The most frequent criticism lobbed against the poke-and-sniff method—indeed the justification for dispensing with it in favor of the more modern Hazard Analysis and Critical Control Points (HACCP) approach—is that it was an ineffective means of detecting pathogens in food. This is because bacteria, even when legion, are microscopic. They are not visible to the naked eye, and can be odorless. Contaminated meat inspected in a slaughterhouse becomes more likely to display evidence of pathogens the more time passes and the closer it gets to the consumer—as in a butcher shop, a restaurant, or the home.
Under poke-and-sniff, if a piece of meat was in fact tainted but the inspector’s eyes or nose could not detect the contamination after he poked the meat, the inspector would again use his hands or the same rod to poke the next piece of meat, and the next, and so on. In this way, USDA inspectors undoubtedly transmitted harmful bacteria from one contaminated piece of meat to other uncontaminated pieces in untold quantities and, consequently, were directly responsible for sickening untold numbers of Americans by their actions. Poke-and-sniff was, incredibly, a centerpiece of the USDA’s meat inspection program until the late 1990s. In terms of its sheer efficiency at transmitting pathogens from infected meat to clean meat, it was nearly the ideal device. Add to this the fact that the USDA’s own inspectors were critical of the inspection regime from the start, and that the USDA abdicated its inspection role at hundreds of meat processors for nearly three decades, and it becomes quite apparent that instead of making food safer, poke-and-sniff made food and consumers less safe.
- "The rise of the Chicago packers and the origins of meat inspection and antitrust."LIBECAP, G. D. (1992), THE RISE OF THE CHICAGO PACKERS and THE ORIGINS OF MEAT INSPECTION and ANTITRUST. Economic Inquiry, 30: 242–262. doi: 10.1111/j.1465-7295.1992.tb01656.x
- Ernest C. Pasour Jr. "We Can Do Better than Government Inspection of Meat " The Freeman, May 1, 1998,
- Lawrence W. Reed "Ideas and Consequences: Of Meat and Myth", The Freeman, November 1994, Volume: 44, Issue: 11. Referenced 2011-12-01.
- Committee on Agriculture. "Hearings before the Committee on Agriculture ... on the so-called "Beveridge amendment" to the agricultural appropriation bill (H.R. 18537) as passed by the Senate, May 25, 1906: to which are added various documents bearing upon the "Beveridge amendment." 59th Congress, 1st session", United States Congress (a Google Books page, no preview), G.P.O., 1906. Referenced 2011-12-01.
- michaelsuede. "Meat Packers Rape You – And You Love It", Libertarian News, September 17, 2010. Referenced 2011-12-01.
- Gabriel Kolko. "The triumph of conservatism: a re-interpretation of American history, 1900-1916" (Google Books preview, pdf of the chapter), Meat Inspection: Theory and Reality, 1963. Referenced 2011-12-01.
- Louise Carroll Wade. "The Problem with Classroom Use of Upton Sinclair's The Jungle" (pdf, summary), American Studies, Vol. 32, No. 2: Fall 1991. Referenced 2011-01-12.
- Baylen J. Linnekin. The Food-Safety Fallacy: More Regulation Doesn't Necessarily Make Food Safer (pdf), Northeastern University Law Journal, vol. 4, no. 1, Spring 2012. Referenced 2014-11-06.
- Theodore Roosevelt: Master Reformer (audio; part from 46:00 onward) by Murray N. Rothbard, from The American Economy and the End of Laissez-Faire: 1870 to World War II
- "Of Meat and Myth" by Lawrence W. Reed, February 2002 (YouTube)