(What did happen in the U.S. at the turn of the century?) Exactly what's happening in China: people were diluting milk but they didn't have melanin at that time so they were just diluting it and babies were sick and dying. They were diluting it with water so the babies were getting sick from lack of nutrition. (How bad was the scare?) Bad enough that milk laws and food and drug laws were passed around the turn of the century. (Was there enough of a public outcry?) Yes, a huge public outcry. But it took Upton Sinclair and his book, The Jungle, to get national laws passed. (Is the motivation for the current China scandal the same?) This is about entrepreneurs doing whatever they can do to make money: rapid capitalism with little oversight. The solution is simple: China has to get its food safety act under control. (Is there anything the Chinese government can learn from the U.S.'s history in this regard?) Yes, they can learn that national food regulation and safety is absolutely essential and you can't count on companies to do this voluntarily. (This can't be new news to the Chinese government.) No, but it's a struggle because they're starting from scratch in a country that's much bigger than ours.
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