Guess what? Burgers make you fat!

A federal court has ruled against restaurants and upheld a New York City regulation requiring chains to post calorie information on their menu boards. Editors at The New York Times are predictably pleased:

The regulations apply to restaurants that are part of chains with 15 or more locations nationwide. About 10 percent of city restaurants, some 2,400, are affected. A few — including Starbucks, Quiznos, Subway, Chipotle, Auntie Anne’s, Jamba Juice and Chevys — are being responsible and voluntarily complying.

Others, like McDonald’s, Burger King, KFC, Domino’s, Pizza Hut and Taco Bell, are hold-outs. They must have missed the news that New Yorkers gained 10 million pounds over the last two years, disproportionately in poor and minority neighborhoods, where many of the 10 million chain-restaurant meals sold each month are consumed. Those neighborhoods are also where diabetes, hypertension and heart disease are at epidemic levels.

Does the weight gain have anything to do with lack of nutritional information? It’s already available if diners want it. Fast food restaurants advertise healthier options to interested customers. And really, no one orders a Big Mac thinking that it’s going to be good for them. People may be eating too much unhealthy food, but a lack of data on menu boards isn’t the cause.

This law isn’t about improving health outcomes. It’s about making city council members and other right-thinking nannies feel good about punishing fast food chains while being condescending toward the people who frequent them. Meanwhile, they will continue to dine at Mario Batali’s restaurants unmolested by the calorie counts lesser mortals need to keep them away from heavy food.

Previously:
Information wants to be free — but it’s not!

Comments

  1. D White says:

    That’s a good point, actually– this does seem to be a solid example of classist warfare. It’s highly unlikely calorie counts will be coming to Per Se anytime soon.

  2. Matt says:

    I’d never considered the classist argument. Intriguing.

    At the same time, I have personally wanted that information available in the restaurant at times, and being unable to have it quickly at hand has been a frustration. Honestly, this does remove a barrier to the information. You’re suggesting that “if people want it” they can go get it. But what’s so terrible about making it available? (If it were applied evenly across the board to every NY restaurant). Personally, I could use the “lots of fat!” reminder at restaurants from time to time. It would help me make the decisions I’d actually prefer, and not be short-sighted when I go into restaurants. How is that a bad thing?

  3. Jacob Grier says:

    Matt,

    There actually is one sensible reason to only require chains to provide the info: They can send one burger to the lab and get the calorie count for a standard item they’re selling millions of times in hundreds of stores. A single restaurant working with variable ingredients and a rotating menu wouldn’t be able to spread the cost out over so many sales.

    In any case, as I wrote in the post linked above, information isn’t free. It costs money to figure out nutritional value and costs valuable sign or menu space to post it all. As with other goods, I generally trust the businesses to figure out how much health info customers demand rather than city councils.

  4. Matt says:

    Oh come on, the cost for figuring it out can’t be that much. Any business that’s going to go under as a result of posting this information probably shouldn’t be in business at all.

    “I generally trust the businesses to figure out how much health info customers demand.”

    Why? I’ve just explained to you that I, as a citizen, would rather have the information. Why shouldn’t my demand for it be enough? Why are you trusting McDonalds to give me what is right, but not trusting me and my (quite obvious) preference? Why is McDonalds more trustworthy in this regard than their consumers? Why should we defer to the corporation?

  5. Jacob Grier says:

    It’s a cost in money and time. Some restaurants with standard fare could handle it. It’d be a large burden for places that vary their menus and use higher quality ingredients. Personally, I’d rather pay a lower price for the occasional pork belly than pay more for it and know exactly how many calories it contains. (Hint: If you eat pork belly every day, you’re going to develop a pork belly of your own.)

    And you clearly don’t demand the information, because despite what you say, you eat out regularly without it. Your own statement of preferences isn’t even trustworthy.

    If we’re going solely by what information you’d like to have, where do we stop? Calorie count? Carbs? Sugar? Origin of the meat? Species of the cow? Grains in the bun? There’s no way to know, and using the political process to find the answer is just going to lead to labeling laws that make people feel good but don’t actually influence many consumer decisions.

    For an idea of how silly legislating this kind of thing is, substitute “tacos” for “the information” in your last paragraph.

  6. RumorsDaily says:

    I know my libertarian credentials are sliding lately on a lot of fronts, but I’m in favor of this. This is a requirement that restaurants provide more information so that consumers can make more informed decisions. It’s not banning anything, it’s merely requiring proper labeling.

    More information == more informed consumers == a better functioning market == better products and happier consumers.

    I’m not a big fan of regulation generally, but I’m pretty much always ok with labeling requirements.

  7. RumorsDaily says:

    That being said, I acknowledge that if there were truly enough demand for this sort of labeling, we wouldn’t require regulation. I still think the outcome of having a better functioning market in the long run is worth the burden.

  8. Matt says:

    Your point about restaurants varying their menus and such is well taken: I acknowledge that there is the potential that this regulation could place an excessive strain on a restaurant. These are certainly the exception. They’re not a reason to invalidate the rule, but they’re a notable exception.

    Setting aside that exception, I think you’ve got a couple of other problems that you need to consider. Generally, these go to the libertarian position, and aren’t applicable to just this issue. So perhaps a larger conversation is needed, but I’m going to throw them out here anyway.

    First, and this is probably a problem of language, the word “demand” seems to create some issues. When I used it in my previous post I meant “demand” as in “to ask for peremptorily or urgently”. You used it in the “require” sense. So yes, I don’t “require” nutrition information when I eat out, but I did ask urgently for it. My challenge was for you to explain why McDonald’s preferences on the issue should trump my request.

    Second, and related, we need to make a distinction between “require” and “desire”. Just because I don’t
    “require” a product to have feature X doesn’t mean I don’t “desire” feature X. And just because I’m willing to buy a product without feature X, doesn’t mean feature X shouldn’t be required. I might be willing to buy a car that doesn’t have child safety locks, but that doesn’t mean we shouldn’t require them.

    This proves especially true when it is difficult for a consumer to educate themselves about all of the potential options available. A person can only put so much time into making a purchase – even a big one, like a car – and it is highly likely they’d overlook some important features. Regulations are essential in this way, because they help make sure people get what they really desire, above and beyond the bare minimum that they as individuals might require. In essence, the government knows best. Now, this proves true in big decisions where people are faced with too many factors, but it can also prove true in small decisions, where people don’t take the time to consider all of the information and options. “Oh, here’s McDonald’s, I’ll stop and get a quick bite”. But display the nutrition information and suddenly I might think twice. “Hmm, I don’t need all that fat. Maybe I’ll just have a salad.” These regulations are a good thing because they are a shorthand that allows people to make informed decisions when they can’t because of 1. complexity or 2. expediency.

    Third, preferences are not static. I want different things, at different times, and at differing levels. I want both a burger at a low cost and the display of nutrition information. You’re telling me there’s a trade-off, that I can only have one or the other, and that the fact that I’m not always siding with nutrition information (and therefore forgoing the burger) means I clearly don’t demand/desire nutrition information. In fact, this is not so clear at all. My conflicting preferences shift, so that at times I’ll want one more than the other. When I act on those shifted preferences I’m revealing only what I demand/desire in that particular instance. Drawing conclusions about preferences based on consumer transactions is specious at best.

    This brings me to point four: people are both consumers and citizens. As a consumer I want cheap and convienent goods and services. As a citizen I want a clean, healthy, safe society. The fact is that people have this dual personality, and they usually aren’t thinking like one when they’re acting like the other. When I’m buying a DVD player I’m generally not thinking about how wonderful it would be if everyone made a livable wage. I’m thinking “where’s the best place to get a cheap, quality DVD player?. If that leads me to Wal-Mart, then so be it.” As a consumer, I’m willing to make the trade-off of people having non-livable wages in order for me to get my DVD player. On the other hand, when I’m voting for someone who vows to increase the minimum wage, or signing a petition to increase wages, I’m thinking “livable wages are good for everyone. If that leads to price increases, then so be it.” As a citizen I’m willing to make the trade-off of higher prices so that people have livable wages. This is how people actually are.

    My question is, why in the world would you ever give the “individual as consumer” preference over the “individual as citizen”? As a citizen people are more likely to weigh consequences, look at both short and long term effects, set goals and priorities, etc. In short, when they’re making decisions as citizens, people are more likely to act rationally. When people are acting as consumers they’re narrow-minded, short-sighted, and usually duped by marketing. Are people as citizens perfect decision makers? No. But they’re a heck of a lot better than they are as consumers.

    You challenge where to draw the line on the information being revealed, where the regulations should stop, etc. These are certainly questions to be answered, but there are certainly answers to be given. I know where I’d draw the lines, other people might differ, we elect people who look into the issue, and the come to a consensus. It’s really pretty simple, and we obviously use the process all the time. You suggest that this will just lead to “feel good” laws that don’t influence decision making. I’m sure you would have said the same thing about the original nutrition label requirements. I use those all the time in my decision making. Lots of people do. I think that, generally speaking, the regulations get it right. I’ve wanted nutrition information displayed at restaurants, so that I make better educated decisions, and not the split-second decisions I frequently make. That’s the way regulations seem to be heading. It sure seems to me that this is more than a feel good regulation. I’m challenging you to back up your assertion, because it’s pretty obvious how these information requirements actually affect decision-making.

    Finally, you seem to suggest (and I’ve seen this time and time again) that people should simply “vote with their pocketbook”. If I want nutrition information displayed at restaurants, I shouldn’t eat at ones that don’t display it. If I want restaurants without smoking, I shouldn’t frequent those that allow it. And so on…

    Your model of course presumes a level of efficacy that simply doesn’t play out in reality. Particularly when industry-wide practices severly limit the number of available alternatives. Exceedingly few restaurants display their nutrition information, making it nearly impossible to vote with my pocketbook. This is further complicated by my always-shifting preferences, such that even if there were nutrition-displaying alternatives available, I might really want a big mac, and so I’d go to McDonald’s despite my preference for a nutrition information display. You’ve also got to consider the effects of advertising and the nearly-impossible task of organizing a wide group of consumers. Throw in the aforementioned distinction between “require” and “desire” and it becomes obvious that even if it were a practical method for creating change, voting with the pocketbook will really only work in situations of “require”.

    All-in-all, the reality is that the “vote with the pocketbook” approach is an ineffectual illusion. It’s nothing more than a feel-good gesture that won’t accomplish anything.

  9. Jacob Grier says:

    Matt,

    It’s a bit late, so I don’t want to go too long into this, but first let me say: Thanks for the thoughtful comments. I’ve been feeling like the comment sections are a bit dead lately, and am gratified to see some substantive debate going. Really, thanks!

    To clarify the “demand” usage: I meant it in the sense that economists use it, as in you prefer something, but the amount of the thing you’ll pay for declines as its cost increases. So you have a general demand for nutritional information, but the amount you’re actually willing to pay for in time and money depends on how costly it is to acquire it. I’m also suggesting that on issues such as labeling laws or smoking bans, people often overestimate the true strength of their demands when placed into a political setting as opposed to a market one.

    As for the rest, we fundamentally disagree about this paragraph:

    “As a citizen people are more likely to weigh consequences, look at both short and long term effects, set goals and priorities, etc. In short, when they’re making decisions as citizens, people are more likely to act rationally. When people are acting as consumers they’re narrow-minded, short-sighted, and usually duped by marketing. Are people as citizens perfect decision makers? No. But they’re a heck of a lot better than they are as consumers.”

    I think it’s precisely the opposite! When people are consumers, they bear the costs and reap the benefits of their actions. When they are citizens, the costs and the benefits are widely dispersed. What is the cost of being wrong about a political issue? Given that one’s individual vote is extremely unlikely to decide the question, it’s practically zero! As citizens, we’re free to let our whims guide us and vote for whatever feels good. We’re not just rationally ignorant, we’re rationally willing to be willing to flat-out wrong. (This would be a good time to plug Bryan Caplan’s excellent book on this subject, The Myth of the Rational Voter.)

    “I think that, generally speaking, the regulations get it right. I’ve wanted nutrition information displayed at restaurants, so that I make better educated decisions, and not the split-second decisions I frequently make. That’s the way regulations seem to be heading. It sure seems to me that this is more than a feel good regulation. I’m challenging you to back up your assertion, because it’s pretty obvious how these information requirements actually affect decision-making.”

    A while ago I wrote about a study looking at how Dutch consumers, thought to be averse to genetically modified foods, reacted to the institution of labeling laws for GM products. The result? Virtually no change in consumption patterns:
    http://www.jacobgrier.com/blog/archives/769.html

    I’m not sure how well that holds across the board, but it is suggestive. A second case in point could be the beer/wine/liquor industry, which faces very odd labeling rules. Some things they can’t talk about, some things they can. Alcohol content, for example, is optional on wines, but many wineries include in recognition of consumer demand. The amount of hops in beers is also optional, but rarely seen for the same reason. And other nutritional information is explicitly prohibited, which has led to lobbying by the industry to allow it so that they can give consumers the information they desire. This strikes me as a major industry where unregulated labeling is working well, and where removing existing regulations would make it even better.

  10. Matt says:

    Glad to contribute. I’ve been meaning to go into some of these issues for a while now, but just haven’t found the time. A couple responses:

    People often overestimate the true strength of their demands when placed into a political setting as opposed to a market one.

    This statement of course presupposes that the market reveals true demands. Which is of course a pretty silly supposition, for a wide variety of reasons. There’s the shifting preference issue, the effects of marketing, the fact that people aren’t rational actors in the marketplace, and both the complexity and expediency issues addressed above. I think it’s a much more reliable gauge of demand to ask a person “if price isn’t a factor, what would you prefer…” At least that way we have a goal, and we understand what people actually want, not some fuzzy picture “revealed” by their market interactions.

    Of course, price is a factor; I’m no dummy. And that’s where the political process can be extremely helpful. It tempers people’s desires, aggregates them, and reveals not what is important to individuals, but rather what is important to society. So if smoke-free restaurants are something everyone wants, but no one can achieve through their individual marketplace interactions (and see all the problems with that again), the political process is the appropriate tool. Further, the political process can take into account the costs, particularly in a lobby-heavy society such as ours. Then, if there’s enough political will to overcome those costs, that shows the aggregate demand is clearly enough to overcome the aggregate cost, and therefore should lead to appropriate regulations. The great thing about the political process is that it is able to move us closer to achieving what we would want if price weren’t an issue, because it’s able to diffuse and shift the burden of
    price. Furthermore, if that burden shifts too much, the political process serves as a ready tool to help balance it out. Personally, I’d rather have the system that can get me closer to what I want if price is no issue, than the system that keeps me from that.

    When people are consumers, they bear the costs and reap the benefits of their actions. When they are citizens, the costs and the benefits are widely dispersed. What is the cost of being wrong about a political issue? Given that one’s individual vote is extremely unlikely to decide the question, it’s practically zero! As citizens, we’re free to let our whims guide us and vote for whatever feels good. We’re not just rationally ignorant, we’re rationally willing to be willing to flat-out wrong. (This would be a good time to plug Bryan Caplan’s excellent book on this subject, The Myth of the Rational Voter.)

    I’m willing to cede some ground on the idea of the rational voter; the election process is flawed, people don’t always vote in their best interests, campaigns and such can swing people’s votes in a similar way that marketing can swing their purchases, etc. However, the representative process certainly helps diminish the effect of the non-rational voter, since we make it people’s job to stop and evaluate all the costs and benefits to particular legislation, instead of just having the people vote directly. It’s still not perfect, but it’s not completely void of any rational decision making.

    Second, just because people aren’t always rational voters doesn’t mean they’re not more rational when voting than they are when purchasing. When voting people aren’t getting something immediately, they’re forced to consider both short and long term effects, their ultimate goals, the needs of others, etc. Will they always come out right? No. But with rare exception they’ll be giving more weight to their decision than they would with a regular purchase transaction. When I’m out buying a DVD player I’m not thinking about wages. When I’m promoting higher wages, I am thinking about the higher costs. People are more likely to consider cause and effect through the political process than they are through the marketplace.

    This is also a terrific place to plug Daniel Gilbert’s book Stumbling on Happiness, which reveals quite stunningly how people have no idea what will make them happy. Of course, this has ramifications for the political process and the marketplace. If people don’t know what will make them happy, then they simply can’t be rational actors. The effect in the marketplace is that, because people are bearing the costs and reaping the benefits on their own, it’s pretty much a crapshoot. On the other hand, in the political process, we have built-in safegaurds. Gilbert shows that essentially the best way to know what will make us happy is to consult with others. That’s exactly what the political process is: we’re aggregating what people think and using that to develop policy. We’re a heck of a lot more likely to end up happy, and to make better decisions, when we’re collectively making decisions.

    This is essentially the genius of the marketplace: it’s an aggregate tool that reflects the decisions of everyone. It’s a terrific tool for understanding what decisions people are actually making and how they’re actually interacting. Economics is a wonderful science for observation. However, it’s a terrible science for drawing normative conclusions. Because in the marketplace people are making a wide variety of individual, irrational decisions. Why in the world would we (ooh, alliteration!) draw conclusions from the marketplace, and presume that it’s getting things right? It’s a tool to show us how people are acting, but it simply is not a tool to show us how people should be acting.

    If we want to make more rational decisions we need to aggregate our preferences and costs, and use other people as a proxy. If we want to make less rational decisions, we need to shift burdens and rewards to individuals who are incapable of making decisions that predict what will make them happy.

    I wrote about a study looking at how Dutch consumers, thought to be averse to genetically modified foods, reacted to the institution of labeling laws for GM products. The result? Virtually no change in consumption patterns.

    I guess I don’t think the change in consumption patterns is entirely relevant to the issue here. First, we’re talking about an awfully short time frame, and in the long-run maybe there will be changes. Second, perhaps the labelling will be a way of effectuating change. We can’t consider simply the short-term effects of these labels. I don’t know how many people used the nutrition labels on food at first, but I know a ton of people use them now. Third, and most importantly, as a result of the labels, perhaps people have made more informed decisions to eat or not eat modified foods. Just because they are purchasing as they did before doesn’t mean the information didn’t have an effect. Perhaps the effect was simply to get people to consider an issue they didn’t previously consider. In that case, people are making more informed decisions, which is a good thing, no matter whether or not the result is a different outcome. It’s certainly better to have people making more in
    formed purchases, right?

    As for the alcohol labeling: perhaps the appropriate balance has been struck here already. I’m not advocating that regulation and more information is always appropriate; it’s only appropriate when people would prefer it if cost weren’t an issue. So, for example, if cost weren’t an I would prefer it if McDonalds displayed nutrition information. I don’t have a similiar preference for alcohol. Maybe someday, if I learn more about wine, my preferences on this issue would change. I imagine that in some societies where people know more about wine, more information might be appropriate. Preferences, of course, shift from time to time. Having government keep their finger on the aggregate pulse helps us know when and what regulations we should have in place. Leaving it to the market… well, like I said before, it’s a crapshoot.

    Oh, and as another issue that I’m not really bringing up here, there’s the whole uneven playing field/classism/rich white males issue with the market… We can’t even pretend that everyone’s decisions count equally in the marketplace. At least with “one person, one vote” we can pretend that in the political process.

  11. Jacob Grier says:

    The great thing about the political process is that it is able to move us closer to achieving what we would want if price weren’t an issue, because it’s able to diffuse and shift the burden of price.

    That’s a big “we” there. What you really seem to be saying is that the political process is good for allowing a majority or a powerful interest group to force its preferences onto everyone else with little regard to costs. I don’t see that as a virtue.

    So if smoke-free restaurants are something everyone wants, but no one can achieve through their individual marketplace interactions (and see all the problems with that again), the political process is the appropriate tool. Further, the political process can take into account the costs, particularly in a lobby-heavy society such as ours. Then, if there’s enough political will to overcome those costs, that shows the aggregate demand is clearly enough to overcome the aggregate cost, and therefore should lead to appropriate regulations.

    That’s a perfect example right there. We’ve gone from a general shift toward smokefree restaurants that, while not as fast as some people liked, was (and is) clearly advancing, to a rule that absolutely screws over the minority of smokers. What’s so great about aggregate decisions?

    Gilbert shows that essentially the best way to know what will make us happy is to consult with others. That’s exactly what the political process is: we’re aggregating what people think and using that to develop policy. We’re a heck of a lot more likely to end up happy, and to make better decisions, when we’re collectively making decisions.

    I’ve read the book and I that’s a bit of a stretch of his position. He does say that we’re generally made happier by the same kinds of things, and that one of the best ways to figure out if some particular pursuit would make you happy is to talk to other people who have followed it. That’s a long way from saying that we’re all going to be made happy by aggregating our desires and seeking the same outcomes. Being a fitness nut may be great for some people, being a chubby gourmand for others. They shouldn’t have to fight in the political arena to pursue their most apt lifestyles.

    If we want to make more rational decisions we need to aggregate our preferences and costs, and use other people as a proxy. If we want to make less rational decisions, we need to shift burdens and rewards to individuals who are incapable of making decisions that predict what will make them happy.

    Shit, dude, that’s a messed up statement right there. I know I just criticized the Times editors for being elitist, but do you watch network TV? Have you been to big chain restaurants? Have you tasted Miller Light? If I had to rely on consensus decisions as to what would make me happy, I’d be one depressed dude right now. You don’t really believe this, do you?

  12. Matt says:

    Interesting, I’d blame network TV, big chain restaurants and Miller Light on the marketplace…

    On the smoking issue, I’d just say that the pendulum will probably swing back a bit, and what’s so great about aggregate decision making is that it makes more people more happy. If you don’t like the particular result, change people’s minds on the issue (and thus swing the pendulum back).

    And though I’ve taken the position here of defending regulation in it’s current form, I’m not entirely gung-ho about our system. Philosophically I’d orient myself towards smaller democratic city states (I’d say the same idea can be executed on a larger, national level, but it would require much, much more work). Basically, I’m less a supporter of the current political process than I am a detractor of the free market system. I see some fair points in your criticisms, and would certainly make more of my own. But there are other alternatives to the system we’ve got now and the ideal you’re proposing. And if I have to choose between just the two of them, I wouldn’t touch your ideal with a ten-foot pole.

    Yeah, that was a little stretch on Gilbert’s position, but just because he didn’t flesh out some of the conclusions that could be drawn from his research doesn’t mean they weren’t there to be drawn. And (in the theme of this post) more importantly than how his book supports the current political process is how it decimates the concept that we can trust the market and/or individuals to make choices.

    I see you taking issue with the current political process. That’s fine. I see you proposing an even more faulty alternative. That’s not.

  13. Chad says:

    This is an excellent discussion. You seem to be teasing out the central issue: in a world where we cannot possibly eliminate either market failure OR government failure, what approach ought we primarily trust?

    (Aside: I don’t even like using the word “failure” here, because it implies the absurd expectation that these ought to be perfect.)

    And I think the answer is, generally speaking, to trust the resiliency and the resourcefulness of the individual who is making decisions about his/her life — because if we tilt toward basing those decisions on aggregate preferences, it seems like we’re using representative democracy as a disturbingly blunt instrument with which to operate on society.

    The smoking ban really is a great example, because clearly a substantial number of people choose to smoke (~25% of Americans last I looked) and clearly a substantial number of nonsmokers choose to associate with smokers — and clearly a substantial number of restaurant owners either prefer a nonsmoking environment or believe they have (or can attract) a customer base who does. This is a case where a market can, with reasonable effectiveness, accommodate the demand (using both definitions) of smokers, nonsmokers willing to associate with smokers, and nonsmokers who don’t want to associate with smokers.

    A complete smoking ban accommodates only the demand of the last group — perhaps believing that everyone shares their preferences, perhaps just believing that ought to — to be able to go to any bar or restaurant and receive service in a smoke-free environment regardless of the opinions of the owner or the preferences of the other two groups. I think the nonsmokers have an unreasonable position, but some people obviously disagree — and the best part is that the market is particularly well suited to sort out this disagreement in a manner that’s far less insulting to the individuals involved (many of whom aren’t as skilled at navigating the politics of the “lobby-heavy society” which I would contend favors rich white males no less (and perhaps more) than the market regardless of who’s in power.

    To bring it back to information requirements, I definitely agree that more information is generally better for the decision maker, and certainly marketing impacts the decision making. But I do think requiring nutrition information is making mountains out of molehills here. Nearly all these chains have nutrition information on their websites (in spite of the absence of government requirements), there are consumer advocacy groups, and the fact of the matter is that a poll of four-year olds would show that even they know whether or not a salad is healthier than a burger. And if we’re posting nutrition information primarily so people who don’t bother to check the websites in advance, have a tendency to say “I’ll stop and get a quick bite” at a fast food chain that is so known for fatty foods they’re being targeted by activists, and want to count the incremental difference in calories or grams of fat (probably ignoring more important measures) between things that aren’t already obvious, the business costs become even more difficult to justify.

    Looking at the actual nuts and bolts, it becomes really hard to think anything other than that the nutrition information is being required so an extremely passionate group of people — mostly rich white folks with time and money to spend on activism or outright lobbying — can punish chain restaurants for the decisions they make for themselves and their children.

  14. Matt says:

    I think the answer is, generally speaking, to trust the resiliency and the resourcefulness of the individual who is making decisions about his/her life.

    To clarify: I’m not talking about market failure here (externalities, monoplies and cartels, etc.). I’m talking about the fact that the free market is completly unable to represent or obtain what will actually make people happy. For expediency’s sake, I’ll just cite to all of my above examples of how it fails.

    It seems like we’re using representative democracy as a disturbingly blunt instrument.

    Maybe in the case of smoking bans, but there are plenty of times when representative democracy is used as a very precise and delicate tool. Heck, I can think of a handful of really easy ways to temper the overly blunt smoking bans. Just because the law was used too bluntly in an instance doesn’t mean it isn’t a superior tool. Don’t blame the tool for the user’s error. Get involved on the issue, push harder for exceptions, etc. I don’t hear anyone saying “I don’t like smoking bans because I want to smoke while I eat.” And, probably more importantly, I don’t hear them saying “I understand why people want the bans, and here’s some reasonable exceptions to total bans that we should put in place to protect those who want to continue smoking…”. The same scenario plays out all over the place when you’re dealing with regulations. Instead of saying “oh no, labeling laws are going to make small restaurants go under and therefore we can’t have these regulations” we craft excep
    tions based on the size of the restaurants. It’s really not so hard.

    On the flip side, there are plenty of times when you need a blunt instrument. Environmental protection, for example. Good luck getting the marketplace to reduce such drastic externalities.

    Though there are problems with the political process, at least it can actually have an effect. Anyone who thinks we can get routinely get change through the marketplace is fooling themselves.

    As for the nutrition information… it isn’t just about knowing what is healthier, it’s about having that information presented to you at a meaningful time. I know McDonalds is full of fat, but I’m not thinking about that when I stop for a quick bite. Having the nutrition information displayed is a terrific reminder to think about all of the information before making my decision, and can serve as a shorthanded message of what I’ve thought about it in the past, allowing greater consistency in my preferences.

  15. Jacob Grier says:

    Don’t blame the tool for the user’s error. Get involved on the issue, push harder for exceptions, etc. I don’t hear anyone saying “I don’t like smoking bans because I want to smoke while I eat.” And, probably more importantly, I don’t hear them saying “I understand why people want the bans, and here’s some reasonable exceptions to total bans that we should put in place to protect those who want to continue smoking…”.

    Actually, in the case of DC at least, that’s completely false. People were advocating for a compromise bill, and one was even introduced by Councilwoman Carol Schwartz. It was unceremoniously ignored by the elitist council members who were more interested in imposing their will onto the city than in improving health or giving people the kind of bars and restaurants they want. Please don’t blame the extremely active opposition for the majority’s excess.

    You’re advocating the kind of society where people must be constantly fighting each other to keep their preferred lifestyles from being put under assault by an interfering government. And if they can’t muster the lobbying strength, then I guess they’re screwed. No thanks, I don’t see the appeal.

  16. Chad says:

    To cite a few nontrivial examples of the market making people happy: refrigerators, microwaves, central heat and cooling, cars, computers, businesses that sell complete meals for $5 meals. There are already over 2 billion mobile phone subscriptions in the world! One of the most market-friendly countries, with the highest number of greedy rich white people both in number and in percentage, seems to consistently produce affordable innovations that — while not themselves the source of happiness — help create the space required to discover happiness.

    Granted, as was pointed out, the literature tells us that people look to others to help understand what makes them happy. If this is true, it seems as though we would want to preserve the maximum possible amount of opportunity for people to experiment with a variety of preferences, and then watch the pendelum of preferences swing. Blanket regulations on a community of any size restricts the ability to experiment; they force value judgments onto the citizenry.

    McDonalds may be a monstrosity that serves crappy food, but faster restaurants, cheaper restaurants, and healthier restaurants all emerged precisely because some people decided they weren’t happy with what McDonalds was offering — and McDonalds even has a line of salads now in an attempt to win those people back. Miller Lite sucks and nearly everyone knows it, but microbreweries are enjoying a renaissance because many people are willing to pay more for the happiness derived from consuming better beer. (And, by the way, it has taken 75 years for microbreweries to recover from their complete obliteration as a result of a really big misunderstanding of aggregate preferences and costs.)

    By the way, even if it is objectively false that consumers of Miller Lite are expressing their “correct” preferences, it is a total misrepresentation of the political process to argue that banning Miller Lite represents a successful aggregation of preferences and costs. Why are lobbyists more influential than activists? Because it’s easier for small groups of people to sway individual politicians than for large groups of people to sway voting blocs. And even if a particular vote were an accurate representation of aggregate preferences — not that I’m sure how we would ever tell — the devil’s still in the details, and we just put the details in the hands of a bunch of 20-something aides who are either career idealists or whose goal is to protect the interests of their boss in order to ensure professional advancement.

    There’s a reason the target demographics for any election are students, retirees, and married women: they’re the only people whose opportunity costs are low enough that they can (or will) spare an hour to vote! The voluntary actions of people or groups is the best weapon for average people to get their preferences heard; the political process is for relatively wealthy people who have decided they can predict aggregate happiness. Any person with enough money or time can make a difference, but at least one is required and both are usually necessary. (Intelligence helps, but it is clearly not a requirement.)

    Returning to the nutrition facts issue, you seem extremely certain in your belief that intervention on a massive scale — and yes, even if the law is minor the change is massive (public advocacy, lobbying groups, city council meetings, laws being drafted, media reports, transition costs, not to mention the very real penalties that very real people wil incur for noncompliance) — is justified here. However, your evidence that regulation is superior to the market in this case appears to be that you just know that individuals would be happier if the particular information you’d like to see could be displayed at no direct cost to you. (Aside: why always the stick instead of the carrot — what about a tax break for every business that posts health information?)

    Consumer demand led to a website with nutrition facts, healthier menu options, and a wide array of alternate choices, but you don’t see any reason for people to take responsibility for their own decisions to pick that restaurant to “stop for a quick bite” because they simply don’t know much about what makes them happy. This strikes me as an obvious fallacy rooted in the belief that individuals are weak and in need of protection — ironically, by the wealthiest and most powerful among us.

  17. Matt says:

    Chad –

    What in the hell are you talking about? Nowhere have I advocated some sort of ban on scientific progress. Nowhere I proposed some sort of marxist society where production is determined by the government. Nowhere have I even hinted that people shouldn’t be allowed to buy what they want. Hell, I’ve said essentially said that even in those situations where we’re requiring/banning something we should narrowly craft those regulations so that people are still given as much individual freedom as possible.

    All I’m saying is that drawing normative conclusions from economic analysis is a foolish proposition. The idea that what people purchase reflects their demands/desires is not an accurate premise.

    Let’s summarize the reasons why:
    People function as both consumers and citizens, and want different things in each of those roles. Preferences aren’t static. Consumers usually don’t act rationally. Consumers frequently don’t have enough information to make informed decisions. Consumers frequently are making decisions too trivial to be worth much thought. Frequently there aren’t meaningful options available for consumers. Consumers get duped by marketing. It’s nearly impossible to organize consumers to promote change. Voting with the pocketbook can only work in situations of “require” not “desire”. Consumers don’t consider policy effects, but people making policy consider effects on consumers. And last, but not least, people are incapable of predicting what will make them happy.

    Those are just some of the reasons I’ve fleshed out in this discussion. I’m sure if I actually worked with these issues there would be plenty of other reasons. So all-in-all, we can explain what people are doing by using economics. But we can’t even begin to use that information to suggest what they should be doing.

  18. Jacob Grier says:

    Chad’s comments are a direct response to this paragraph of yours:

    To clarify: I’m not talking about market failure here (externalities, monoplies and cartels, etc.). I’m talking about the fact that the free market is completly unable to represent or obtain what will actually make people happy.

    And he’s right, the market does this all the time! Not literally all the time, but it does work remarkably well at improving the condition of people’s lives and delivering an incredible variety of goods and services. This is a wonderful thing. We can debate about whether a little more nutritional information would be better or not, but if you really mean what you said there I have no idea how we could even begin to speak on a common ground.

    Honestly, I don’t think you really believe that people can’t generally figure out which consumption decisions will make them happy. Does going to baseball games make you happy? Or watching one on TV, or with friends in a bar? You know it does. You write about it all the time. You know, from experience, that if you go to a baseball game this summer you will probably enjoy it. You are not unique in this ability to try things out and discover that you like them.

    All of which just brings us back to the issue of when we should interfere with people’s pursuit of their individual desires. Because I have a basic respect for people’s autonomy, I would do so only very reluctantly, and there is no real or imagined system of politics that I would trust to make such decisions responsibly. Better to be hands off except when there is a truly compelling reason to intervene.

  19. Matt says:

    Ok, there may have been a little hyperbole there. Yes, the market, when it comes to delivering goods and services, can be an effective tool. It does a wonderful job of getting those items/services into the hands of the people who will use them (and enjoy them). For consumption decisions, the market can work.

    But we’re not talking about the delivery function of the market here. We’re not talking about consumption functions. We’re talking about normative decision-making. We’re talking about policy. The Libertarian position is that the market accurately reveals preferences and therefore we should avoid making regulations.

    My point has been that the market is utterly useless when it comes to policy. Just because I’m purchasing something doesn’t mean I don’t prefer different policies. Just because I’m buying a Big Mac doesn’t mean I don’t want nutrition information. Just because I’m buying a DVD player at Wal-Mart doesn’t mean I don’t want higher wages. Just because I’m going to smoking restaurants doesn’t mean I don’t want non-smoking options. The market, for all of the reasons listed above, is incapable of setting the balance on these issues. The market isn’t accurately revealing my preferences. The Libertarian position is making a tremendously false assumption when it says that my purchases reveal preferences.

    Economics can tell you what I am purchasing in the current environment. It cannot tell you what I really want to purchase, what my actual preferences are. It cannot tell you about whether I would choose an option that isn’t currently available in the market, or what I would choose if I made every decision rationally, or what I would choose if I had more information. It can’t even tell you what I would choose 9 times out of 10. It can only tell you what I did choose, not why I chose it.

    You wrote that the question is when we should interfere with people’s pursuit of their individual desires. I’m telling you that regulations aren’t an interference with desires, they’re a truer pursuit of our goals. I too respect people’s autonomy, and that’s why I trust their legislative decision making more than their impulsive, non-educated, marketing-influenced, option-limited, short-sighted purchase decisions.

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