Who Sorts, When No One Proves Anything?

Let’s recap where we stand. Akerlof showed what happens to a market when the buyer can’t verify quality: everything gets paid at the average price, the best leave, and only mediocrity remains. Spence showed the seller-side way out: emit a credible signal — a statement that only those telling the truth can afford to make.

But a question was left hanging at the end of the last article: what happens when the seller doesn’t signal? When signals are dead — free labels, interchangeable promises — is the buyer condemned to buy blind?

No, answers the third man of the 2001 Nobel. When the seller proves nothing, it’s the buyer who organizes the sorting. Joseph Stiglitz gave this mechanism a name: screening.

One clarification before going further. Stiglitz is a polarizing economist — his positions on globalization, international institutions, or public policy are debated, and everyone is free to think what they like about them. That is not our subject here. What we’re taking from him are two mechanisms he described with precision, mechanisms that hold regardless of what one thinks about the rest. The first is microscopic. The second is planetary.

Sorting by Deeds

Screening is the inverted signal. In Spence, the informed party (the seller, the candidate) takes the first step and emits the signal. In Stiglitz, it’s the uninformed party who designs a mechanism forcing the other to reveal themselves — not through their statements, but through their choices.

The canonical example comes from insurance. An insurer can’t know who is careful and who is reckless — and everyone claims to be careful. So instead of asking, the insurer offers a menu: an expensive policy with no deductible, a cheap one with a hefty deductible. The reckless driver, who knows they’ll have an accident, picks the first. The careful one picks the second. Each has sorted themselves, through an act that costs them something, not through a promise that costs nothing.

It’s an idea of immense reach: when words are free, make deeds speak. A well-designed screening mechanism makes lying pointless — not forbidden, pointless. Lying no longer pays off, since it’s no longer the words that get read.

Screening Is Already in Our School Cafeterias

This mechanism isn’t an abstraction: France is deploying it at scale, almost without realizing it.

The EGalim law sets targets for sustainable, quality products across institutional catering — the cafeterias of our schools, our hospitals, our public administrations. Look at what this mechanically produces: the cafeteria can no longer settle for its suppliers’ declarations. To report on its targets, it needs verifiable elements — established origins, attested qualities, documented volumes. It has become, in Stiglitz’s sense, an uninformed party designing its own sorting mechanism: prove it, or you won’t be listed.

Thousands of public buyers, purchasing millions of meals, shifting from the regime of the promise to the regime of proof: this is one of the largest screening mechanisms ever installed in a food supply chain. And it has a remarkable property — it is blind to rhetoric. The supplier who communicates well but proves nothing loses the advantage they always held over the one who does good work but communicates poorly.

The Screening That Never Happened

Let’s scale up now, because Stiglitz spent the second half of his career on the same question, asked of entire economies: what happens when markets open up to one another without any sorting mechanism?

His answer lives on in a now-famous phrase: globalization was mismanaged. His critique — which one may or may not share in its general form — is not about the opening of markets as such. It’s about opening without symmetry: rules for some, de facto exemptions for others; requirements on the inside, lighter checks at the border.

Translated into the terms of this series: food-industry globalization is an opening without screening. We opened our shelves before building the mechanism that forces whatever comes in to reveal itself. The imported product enters the European market on the strength of documents no one cross-checks, while the local producer bears very real controls. This isn’t a problem of openness. It’s a problem of sorting — exactly like an insurer who would sell the same policy to the careful and the reckless driver alike, at the same price, on the strength of a simple declaration.

The Debate We Can Finally Have

In the previous article, I promised we would come back to the questions that mass imports raise for our supply chains — and for food sovereignty. Here we are, and the detour through Stiglitz lets us frame them properly.

Yes, import volumes can be a real problem for a supply chain: whole swaths of our production — fruit, vegetables, poultry — retreat year after year in the face of products that haven’t borne the same costs. And yes, food sovereignty is a serious issue: a country that can no longer produce what it eats has handed its plate over to others.

But here is the point public debate almost always misses: sovereignty begins with information. Before deciding what to protect, develop, or leave to the market, one still has to know what’s coming in, from where, produced how. A country unable to verify what lands on its plates has already lost part of its sovereignty — however high its borders. Autarky isn’t an answer; blindness isn’t either. Between the two lies sorting: a requirement of proof that holds up against everyone, one that closes the door on no one but takes no one at their word.

That is the missing link we’re building with VeraTrace: giving buyers — cafeterias, restaurants, distributors — the screening tool they lack. A registry of those who prove, where a product’s passport states what the facts have established, not what marketing claims. The local producer gains recognition for what they actually do; the producer abroad gains the access their proof deserves; and the debate over what we want to eat can finally be held on facts.

One last question remains, and it’s an uncomfortable one: if opacity costs everyone so dearly — producers, buyers, states — why does it persist? A Chicago economist’s answer fits in three words: because it pays. To whom, and why that’s changing now — meet Ronald Coase.