catallaxy files

catallaxy in technical exile

Obesity as market failure?

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I think Ross Gittins has had one too many diet milkshakes. In his recent column he argues that obesity is caused by market failure, and thus government intervention is appropriate. The general thrust of the rather incoherent argument is that the ‘capitalists’ who run the food industry, are flogging their junk to people who can’t control themselves:

The capitalists are only doing what comes naturally and using all their wiles to flog their food and make a quid. But when the rest of us do what comes naturally and yield to their blandishments, the result is major social and economic dysfunction.

Why is it people can’t control themselves? Could it simply be that they are lazy? Heavens no. Gittins invents some pseduoscience to explain the predilection some show for fast-food:

Because nutrition used to be hard to come by in the forest, humans have an evolutionary predisposition to load up with all the energy and salt that comes our way.

And thus? Regulation is appropriate to protect us from ourselves.

I think it is clear that there is a time inconsistency problem in consumer preference; that is, consumers select their food based upon the short-term benefit even where the long-term costs mean that benefits will not be maximised over the longer term. My general view is that provided consumers face the correct price signals (and arguably they currently do not), they can do whatever they like – including smoking/drinking/eating themselves to an early grave. After all, this is a liberal blog!

But convincing me that regulation is appropriate to solve this problem is going to take more than Gittins’ perennial struggle with his diet:

There’s nothing like going on a diet to make you realise the world’s become a conspiracy to make us fat. It’s certainly helped me understand why so many of us have a weight problem.

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Written by Admin

June 29, 2006 at 8:58 am

Posted in Uncategorized

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