Monday, March 11, 2013

Slurm: It's Highly Addictive!

Op-ed in the NY Daily News by one Marion Nestle on how Bloomberg has yet to go far enough with his big-soda ban.


Please take your time and read it carefully, because it's not quite the Thaler/Sunstein position. There's some mention of consumer irrationality, but when it comes to soda bans it's old-timey prohibitionism. "If we want Americans to be healthy, we are going to have to take actions like this - and many more - and do so soon."

"If we want Americans to be healthy." Not, "if Americans want to be healthy."

As you might expect, the externality argument appears: "Poor health is expensive for both individuals and society." As any economist will tell you, the more that costs move from the individual to society, the more we should expect to see. Demand curves do indeed slope down. I wonder if Nestle is working hard to lobby for the repeal of medical subsidies.

Much of the rest of the op-ed is vitriol hurled at soda companies (though, amazingly, none at ADM or the US sugar lobby), accusing these large firms of drumming up demand for their product when none would have otherwise existed (puzzling why kohlrabi and pomegranate juice firms have been unable to reproduce this heroic feat). Underpinning this seems to be an old-school temperance movement mien. You'll regret being a [drunk/slob/junky/fatso] later, so it's my duty to save you from yourself. Even if you don't end up regretting it, you should end up regretting it, and by socializing your health care, you can be sure I'll make it my business.

People, "public health" is not synonymous with "the health of the public". A public health problem is one that can threaten individuals' health regardless of their willingness to participate in the causal activity. Scarlet fever is a public health problem. Typhoid is a public health problem. Tuberculosis is a public health problem. Until Munger starts cramming fistfuls of ham salad down my throat against my will, the diameter of my posterior is my responsibility. Even if there are millions of people like me who have to let out our belts a notch or two once in a while, it beggars belief that advertisements are somehow coercive.

But perhaps that's too uncharitable. Perhaps there really is a tyranny of soda [pop for you weirdos]. It's not immediately clear to me that swapping one tyrant for another is necessarily an ideal move. There's a nasty utilitarian calculus problem to solve, exacerbated by the cheap talk problem and imperfect or non-monotonic discount rates. We don't know, indeed we can't know what the ideal obesity rate is without market prices. Further distortions of price information sure aren't going to help matters. Granting political elites the kinds of diktat powers enumerated in Nestle's column ends where exactly?

It's one thing to show that a particular transaction is not euvoluntary (and I'm not convinced that's been done in the case of carbonated beverages laden with high fructose corn syrup), but it's another thing entirely to show that political elites possess the wisdom to remediate troubling outcomes. And what happens as efforts prove ineffectual? Are benevolent paternalists more likely to recant or to redouble?

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Do you have suggestions on where we could find more examples of this phenomenon?