Mayor Bloomberg’s ban supersized 16 ounce servings of sugary
beverages in New York’s restaurants, street carts, movie theatres, and stadiums
has placed the issue of obesity squarely on the map.
It is as American as burgers and apple pie. Yet, Mayor Bloomberg who founded a business empire on free trade, wants to restrict the sale of sugary drinks to the public. There is a simple reason behind it: obesity costs the city billions a year in related health expenses. A better way of reducing the burden is by way of prevention.
Gary Becker of the University of Chicago, whose insights into
the rational thought processes behind addiction opened the door for others to push the
boundaries that separate economics and psychology, discusses the opposing views in this
debate:
On one side of the question are
the libertarians who argue that
individuals, in particular consumers,
should have the freedom to make their own choices unless they hurt others.
According to this view, consumers have the right to drink and eat what they
prefer, but driving while drunk should be punished because drunk drivers are
more likely to get into accidents that hurt others. One qualification is that when consumers do not have enough information
to make good decisions, governments may help in providing that information.
An example is the requirement that packaged foods show the amount of fat and
certain other ingredients they contain.
On the other side are those who
claim that many consumers are not able
to make decisions in their self-interest. These consumers, according to
this argument, can be fooled by the way choices are presented, may have limited
self-control, may rely on inefficient rules of thumb, or for other reasons make
bad choices. There is even a literature on “libertarian
paternalism”, which argues that governments “ … should attempt to steer
people’s choices in welfare-promoting directions without eliminating freedom of
choice” [emphasis mine].
To tackle obesity, there are a whole slew of policy options.
On the less interventionist side, public campaigns such as the one championed
by First Lady Michelle Obama aim to inform and advocate healthier eating habits
and lifestyle choices. Part of this includes labelling on menus that provide
the caloric content of the items served.
The problem is they do not always
work, and businesses complain that they are an additional cost burden. Some
Republicans like Sarah Palin believe that requiring such labelling is already
too intrusive much to healthy food advocate Jamie Oliver's chagrin.
It is true that the costs of information cannot be taken for
granted, but one can argue the benefits of supplying such information outweighs
whatever costs are involved. The same sort of argument is behind providing
warnings on cigarette packs or alcoholic content on liquor drink bottles. Mayor
Bloomberg’s approach however is based on the notion that people don’t always
heed such warnings.
If information and advocacy campaigns have limited success,
particularly to those who are predisposed to certain forms of behaviour (as
proven by neuroscience), the more interventionist policy tools might be called
for including imposing a combination of taxes and subsidies, regulations and
restrictions on the unwanted commodities and activities.
Becker believes that a ban on large drinks might actually
lead to the public consuming more sugary drinks rather than less. He supports
instead the idea of not serving sugary drinks to children whose discretion as
consumers can still be moulded
Suppose that drinks come only in
10 and 16-ounce sizes. If the 16-ounce
size were banned, enough consumers might substitute 2 10-ounce drinks for 1
16-ounce drink to increase total consumption of these drinks. Of course,
the drink market might respond with offering other sized drinks, but the main
point would still hold that the ban could raise consumption of sugary drinks.
Children are less likely than
adults to make an effective trade off between current pleasures and future
costs. This is a traditional reason for distinguishing between children and
adults in formulating policies. The implication in the case of sugary drinks
would be to restrict access by children to these drinks. For example, these drinks could be banned from schools and
other places where children congregate, or young persons might not be
allowed to purchase these drinks [emphasis mine].
One other approach to curbing consumption of unhealthy food
and drink is the so-called fat tax. Recent research has demonstrated that for this to work, a threshold level of 20% needs to be imposed as a tax to lower consumption among
adults. Denmark, France and Hungary already have introduced some version of a
junk-food tax or sweetended-drink tax. Twenty three states in the US including
New York have done the same.
Though the effects of this tax may be regressive as the poor
generally consume more of it as a proportion of their intake, if the tax were
used to expand health insurance coverage to the lower income classes, it might
correct the regressive nature of the tax. It would at the same time improve the fiscal positions of cash-strapped governments.
Despite what the business lobby and libertarians say, the
public cannot turn a blind eye towards the problem. With over a third of its
adult population now clinically obese, costing American taxpayers $150 billion
annually, and with 20-50% of the populations obese in countries as diverse as Kuwait, Columbia, the Philippines and China, it is high time that policymakers
focus on tackling the problem before it literally eats them out of
house and home.
