Tuesday, August 15, 2006

The Shortest Distance Between Two Complaints

Here’s the first sentence from a Yahoo/AFP news report:
The world now has more overweight people than hungry ones...
Hey, that’s fantastic! A cause for celebration! We’re on our way to conquering world hunger and starvation! Oh, wait:
...and governments should design economic strategies to influence national diets, a conference of international experts have heard.
Wow, that was fast. It took less than one sentence to get from victory to hand-wringing to paternalism.

Seriously, you’d think we could take just one moment to savor the fact that capitalism and technology are gradually eliminating famine and malnutrition. But the tone of the entire article is negative and, of course, paternalistic. Among the experts’ suggestions quoted in the article:
Food prices could be used to manipulate people's diets and tilt them towards healthier options, [Prof. Barry Popkin] suggested.

"For instance, if we charge money for every calorie of soft drink and fruit drink that was consumed, people would consume less of it.

"If we subsidise fruit and vegetable production, people would consume more of it and we would have a healthier diet."
Nothing in the article challenges the significance of the obesity problem, asks whether manipulating people’s dietary choices is a proper role for government, or questions the efficacy of the proposed policies. Surprisingly, there is one proposal for deregulation:
While a direct tax on food in the US to reduce obesity would not be politically acceptable, agricultural subsidies which resulted in cheap food could be reduced.
Boy, wouldn’t that be nice. The problem is that most agricultural subsidies aren’t outright payments per unit of output – which would indeed lower prices for consumers – but instead programs to raise prices, such as price supports coupled with government purchases of the resulting surplus, or tariff barriers designed to keep out cheap foreign foodstuffs. I suppose Popkin would like to keep those agricultural policies in place, and fortunately for him – but unfortunately for the rest of us – doing so is politically feasible, thanks to the powerful agricultural lobby.

3 comments:

Steven Bass said...

"For instance, if we charge money for every calorie of soft drink and fruit drink that was consumed, people would consume less of it."

The overall message may be wrong, but at least they understand that demand curves slope downward.

JohnDewey said...

Glen Whitman: "whether manipulating people’s dietary choices is a proper role for government"

I would prefer that government not engage in such manipulation. But is it possible that government action can help people eat well?

As I diabetic, I find the nutritional content data on food packaging to be extremely valuable. Absent government requirement for such information, I'm not sure food companies would provide it - at least not in the detail I need to manage my diet.

Do such goverment-imposed information requirements constitute interference in free markets?

I'm guessing that the costs to provide such information are passed on to all consumers. So perhaps those consumers who have no need for nutritional content data are subsidizing those of us who do.

Any opinion on this from a free market economist?

Glen Whitman said...

Steven -- yes, small blessings. But I wonder if they notice the downward-sloping demand curve elsewhere? Given that rates of heart disease have actually gone down dramatically, due to improvements in medicine, the true cost of being overweight has gone down as well. So we should expect more people to be overweight, even holding food prices constant!

JohnDewey -- I have no strong objection to regulations that require labeling, because they don't actually interfere with consumer choices or second-guess their preferences. They probably raise costs, but not substantially, and probably not on the margin (the cost of generating the relevant information is fixed with respect to quantity of output). However, I think it's also true that markets provide information when enough people want it. Consider, for instance, the entirely voluntary certification of food products as kosher: the little "K" on food labels. In fact, there's even product differentiation: the "U" also designates kosher foods, but for a different (I think more orthodox) definition of kosher. The K and U certifications are provided, I believe, by two different Jewish standard-setting groups.