Meddling With Our Health

Modernity is full of “crises.” “Economic crisis,” “midlife crisis,” and even “environmental crisis” are just some of the terms thrown around so often nowadays that they have become part of everyday life. A prominent domestic “crisis” America faces today is the obesity crisis.

The statistics are frightening. A recent Harvard study shows that 34 percent of adult Americans are clinically obese, and apparently it’s socially contagious; the fatter your friends, the fatter you’re likely to be. I can already hear the echoes of “crisis!” from the offices of physicians everywhere. Their plea has been answered because the state is now tackling this “crisis” head-on. The Obama administration has created a “Task Force on Childhood Obesity,” which allocated $400 million to “healthy food retailers” and other pro-health institutions. This Saturday, the New York Times unveiled one of the early results of this ambitious enterprise: the promotion of cheese consumption.

Dairy Management, a subsidiary of the Department of Agriculture, contributed $12 million last year toward a marketing campaign with Domino’s Pizza, promoting a line of pizza at the national fast food chain with “40 percent more cheese.” The presumable motive behind this campaign was to promote American intake of calcium. The results of the campaign were encouraging; the sale of the extra-cheesy pizza grew by double digits. However, a closer look at the promoted product revealed an embarrassing flaw in this endeavor: a single slice of this specialty pizza contained two-thirds of the daily recommended amount of saturated fat, a prime factor in heart disease and, of course, obesity.

Libertarians will cry foul at this train-wreck, using it as an example of a utopian project gone amuck as another reason why government spending should be cut. Their small-government pathos would argue for a trimming of programs such as this one to save taxpayers’ money. Dairy Management, which derives most of its budget from a small tax on the dairy industry, nevertheless receives a few million from the federal government each year. However, their budget doesn’t even amount to chump change compared to the federal government’s $1.4 trillion deficit in 2010; a thousand Dairy Managements would still not make a sizeable dent in the deficit. Money is not the problem.

One could argue that governments are inherently inefficient, but unlike institutions in a command economy, taxes and subsidies merely regulate the market so that it accounts for positive and negative externalities. Taxes that create negative externalities (Pigovian) on pollution and state subsidies of education are universally accepted as legitimate, even in the politically center-right (relative to Europe) United States. If more oversight is invested in this program, it will no doubt overcome this mishap and effectively reduce obesity in the future. This minor bureaucratic miscalculation doesn’t get to the crux of the issue, which is whether governments should have the ability to manage our consumption patterns through taxes and subsidies.

The primary justification for Pigovian taxes is that the market consumption of a certain good has social costs that aren’t accounted for in the market price, inviting state intervention to adjust the equilibrium through a tax or subsidy so that the true cost and benefit of a good is accounted for. The most prominent example of this is the gasoline tax, which accounts for the environmental pollution of carbon dioxide emissions and the spatial pollution of traffic. Under this model of just taxation and subsidization, however, obesity would fall out of the scope of state regulation, because the consumption of obesity-inducing goods incurs only harms for the individual, not the people around him or her.

If anything, the net social effect of obesity may indeed be positive. Since the clinically obese die younger on average due to the fact that they are more prone to heart attacks and other cardiovascular problems, they lessen the strain on social insurance programs like Social Security and Medicare. While this analysis may seem heartless, it follows the logic of modern economics perfectly; the social externality calculation for the market incidence of obesity-causing goods is probably positive. The heart of the issue involves political philosophy, not economics. The person who consumes fried butter (yes, it does exist) and Twinkies imposes only a negative externality on the future version of himself, not others. The obesity “crisis” raises questions of whether the state has the obligation to protect us from ourselves.

If the answer is yes, the conclusion leads down a slippery slope that has no end. If we can subsidize products that reduce obesity, subsidizing spinach no doubt comes next. On the flip side, taxation of fried foods and chocolate follows. Eventually, the state will be taxing frivolous reality television while subsidizing the History Channel, taxing vampire novels and Insane Clown Posse while subsidizing serious literature and Mahler. (Before someone screams “value judgment!”, ask yourself, who are you to judge that a longer life is preferable to a shorter one?) Perhaps one day there will be a tax on prolonged sitting, which has been scientifically linked to higher rates to disease. In that case, I hope you’re reading this standing up somewhere.

Yichao Hao is a first-year economics major. He can be reached at haoy1@uci.edu.