Hiding value judgments behind economic rhetoric: The case of obesity
Note: Renamed this from “Discussion Thursday” as I ended up inadvertently writing a post rather than a comment …
Sorry, a bit busy to do real posts. Also wanted to get a discussion going on this excellent quote from Eric Crampton about using sugar taxes to pay for the “health care externality” from obesity/sugar consumption:
What happens then if we find that it’s those healthy exercise people who cost the system more, on the whole, because they live longer (costing the superfund) and consume health services over a longer period?
Be careful wanting to tax all the fiscal externalities. You might not like where it leads.
Let me throw up a quick first comment here 😉
He is totally right, if we are consistent and we estimate that obesity kills people more quickly leading to a lower lifetime fiscal bill, then by the same logic we are using to tax sugar we should subsidise sugar. If your argument about sugar taxes is based on these types of externalities, this becomes an empirical question – and if this is the policy line you should be comfortable with the idea that we should subsidise things that lower fiscal burdens by having people choose to die a bit earlier.
This will make a whole lot of people very very uncomfortable – I understand this, the entire language of trade-offs in terms of the length of people’s lives is an ugly one. The key point that makes it palatable is that the choice of life length vs quality is actually up to the individual here – they are choosing what to consume etc. You may well say “that is stupid, everyone wants to live longer and doesn’t know the precise impact of their consumption decisions”. I would respond to this with my witty rejoinder “no shit”. Or more seriously, I also would really like a new computer and don’t know what the precise impact of the new computer would be on my productivity, exercise routine, life choices, and wellbeing – does this imply that government needs to get involved in my choice to buy a computer?
Yes, there are cognitive issues, power imbalances, and information problems – but our policies should be based on understanding of those, not targeting “obesity” as an output. Such an output frame for considering the issue doesn’t make sense.
However, if we are going to discuss externalities, the fiscal issue is all we really have – it is a stretch to add “lost productivity” or “upset family” as an externality, as there is a “price” associated with each of these. In the first case it is your wage, in the second case it is the shadow price involved in intra-family negotiations. Neither of these are externalities and instead we would have to say there is some “power imbalance” in the relationship so that the individual can go around imposing all the costs on their employer and loved ones without cost – which is getting patently ridiculous.
But then I have to ask, why are people so much more comfortable taxing people on the basis of their sugar consumption? I fear that it sounds like you are merely “moralising” their choice based on what you subjectively view as someone else doing something right or wrong.
If that is seen as a good tack for policy, we are heading down the wrong path. And before you accuse me of saying this because I’m an economist, I’d note that this doesn’t come from my economics training – it comes from the history classes I took at the same time. The discussion of group behaviour and how groups will define their own moral value against an “other” had a strong impression on me, particularly in the race and racism course where we discussed scientific racism.
Some of the best scientists, philosophers, sociologists, statisticians, and (disappointingly) economists in the late 19th and early 20th centuries based policy recommendations on value judgments that inherently bullied minority groups, based on moral judgments that we SHOULD socially value some ideal form.
Now look, if society wants to beat up on people for smoking, drinking, and weighing too much, that is their thing. It makes me angry, but society is a lot bigger than me. However, don’t pretend you are doing so with economics, and basing it on a firm “externality” argument, if ex-ante you can’t see yourself allowing for either subsides or taxes on sugar. If their is an initial asymmetry there you are putting in an extra initial VALUE JUDGMENT(S) about obesity and people who are obese – just be honest about it 😉
Note: I am not comparing the focus on aggregates by disciplines, and the push to “target outcomes”, to the Nazi’s by discussing scientific racism – that would be patently ridiculous. I’m comparing the use of simplified rhetoric, and the willingness to ignore individual agency, some elements of value, and heterogeneity of desire, to what scientific (including social sciences) disciplines have done in the past – and the impact that had on social attitudes and societies willingness to bully minorities, and perpetuate real injustice in the name of social justice.
Our simplified (communicated) arguments form part of the understood base of knowledge for individuals who are making decisions and trying to work within their group. The more intolerance they show, the more our respective disciplines is trying to make society intolerant of difference. This point is far from ridiculous.
Excellent, full agreement from me.
Full agreement – surely there is something you can disagree on 🙂
Good! Your disgust with shonk-application of paternalist economics has made you powerful. Now, fulfil your destiny…
Hmm, none of this was anger – I just inadvertently found myself making an argument with regards to communication, and how the externality line can be abused. I would be surprised if many of the analysts who do communicate policies based on outcomes found my line of discussion aggressive – it is more supposed to be a discussion of the fine line between simplification and perpetuating/creating unhealthy biases.
The idea of externalities gets pretty abused, and I’ve been told it is a lot less natural for people to think about externalities than I’d initially assumed – as many find it hard to separate externalities from principles of “power”. I find that really interesting, and maybe one day when I have time I’ll blog about it 🙂
Disgust is different from anger.
Totally agree that people have a damned hard time understanding externality. That’s why I spent a whole darned week on it in my policy class each year for the past several years.
I’ll be hoisting it over to SciBlogs, where I expect you won’t get a warm reception.
Ahh yes, I find hiding value judgments to be fundamentally immoral – so disgust is the right sort of term. I am sure it will be unpopular with many people – but all I’m doing is telling people to evaluate their value judgements.
If they are unwilling to do that, and instead want to go on about targeting outputs because they have close to no real understanding of policy or ethics, then that is there problem – and I have no issue with upsetting them. The actual wellbeing of people in society is more important to me than the way I bunch of people view me.
A couple of responses. Firstly, yes the issue is to some extent empirical – and I wonder if anyone has done the analysis to answer that? Also, a public health system is a bit like an insurance scheme in which we have all been compulsorily enrolled. People who do things (e.g. burn their own houses down) that increase the likelihood that they require an insurance payout are usually excluded from insurance schemes (in the private sector). We dont want to exclude people from health services, but we would like them to stop doing things (smoking or consuming sugar) that seem likely to increase their call upon those services. Banning has been tried, but does not seem to work all that well. (But I do think there is still an argument for greater restrictions on smoking due to the lack of positives associated with smoking). Sugar is a bit trickier since there are a number of rather positive things about it, but attempts should be made to try and prevent people consuming to the point the get diabetes or kidney failure. A third aspect in regards to the comparison to the healthy person versus the diabetic. One often leads a happy life and their end-time can be reasonably peaceful. The other dies a slow miserable death that puts huge strains on their families. Not too convinced by arguments about individual agency either, When kids get hooked on tobacco, etc they have become addicted before their powers of agency are fully developed.
Good points VMC! I do a response.
“Firstly, yes the issue is to some extent empirical – and I wonder if anyone has done the analysis to answer that?”
I believe there has been work, but I haven’t looked at any of it – as it isn’t my area. Would definitely love to have a peek at it one day!
“Also, a public health system is a bit like an insurance scheme in which we have all been compulsorily enrolled. People who do things (e.g. burn their own houses down) that increase the likelihood that they require an insurance payout are usually excluded from insurance schemes (in the private sector). We dont want to exclude people from health services, but we would like them to stop doing things (smoking or consuming sugar) that seem likely to increase their call upon those services.”
Indeed – having a tax as a user pays which covers those who make the “choice” of taking on the cost, rather than merely having bad luck. I think this is the best justification for an externality tax, and is the driver of why I suggested such a tax a long long time ago. I think it is a justification, with clear value judgements, but it is certainly not a slam dunk case for a tax – we still need to do measurement, and figure out whether this is actually representative of the way society views the related policies!
“Not too convinced by arguments about individual agency either, When kids get hooked on tobacco, etc they have become addicted before their powers of agency are fully developed.”
Indeed, the key thing here is that the choice is “time inconsistent”. If that is our mechanism though it doesn’t necessarily suggest tax or banning – but instead investing in schemes that help people to precommit! I hope to post on that at some point soon if I can manage to get a little bit of free time 🙂
And I think the “time inconsistent” idea does not get enough focus either, in this context. What some people call “paternalism”, could also be called “a wiser head helping you avoid pain in later life”
There are two concepts mixed together in this sentence – time inconsistency and paternalism. Time inconsistency comes from the fact people can’t commit, paternalism would be justified from the idea that someone with more life experience may have a good idea regarding what will hit the individual in the future.
The first one does get quite a lot of play, and is IMO the main justification for policy (and in turn implies different types of policy interventions). The paternalistic arm in this case can have some merit – our “knowledge” is in some sense social, so sharing it is a good idea. But it can also go too far if we confuse the fact individuals make different choices as they are different with the idea that they are making them because they “don’t understand”. This reminds me of another song!
And what a great song too. And yes, I deliberately mixed paternalism and time inconsistency because we should be concerned when young people do things now that will lead to pain in later life, and which they will regret. Although being concerned and knowing what the best course of action is, are two different matters
Agreed – great song. And useful, as it can be read both ways.
This is the difficult margin – at what point, and it what way, do individuals get responsibility over their own actions. This is a point people can disagree upon, and it is a value judgment. I have had a lot of great conversations about that issue in the past. I’d prefer having this honestly discusses, as a moral discussion of responsibility for self, rather than having people use “faux economic” language to sell their own judgement.
That was the key point in my point – we need to stop using terms like “externalities” as ex-post rationalisations of things we already support, and instead ask what value judgments they embody so that society can say whether it disagrees or not!
Agreed
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I’l put my hand up to disagree 😉
The ultimate goal in life – the meaning of life, if you like – is not personal fiscal neutrality at the macro level. Governments may like that idea, but that’s a different kettle of fish to addressing ‘ills’ like obesity. And addressing obesity is not, in my view, driven by intolerance of an ‘other’, but by the genuine concern of health professionals, the experts, towards people’s wellbeing. And that wellbeing won’t necessarily be found in the consumer/producer surplus segments of a supply and demand graph.
If a fiscal implication of people living longer, healthier lives is negative i.e. net fiscal cost, which I don’t believe would be supported by the facts, then a government can move to mitigate that ‘negative’ externality directly – compulsory savings to fund self-sufficient superannuation, raising the retirement age, campaigning against age discrimination in the workforce, etc etc. All of which will, of course, raise other issues, at which point society will be called upon to decide its priorities, the trade offs, as Matt correctly likes to remind us of. But those who successfully battle obesity, for example, will live life more happily and more productively, thus contributing to overall welfare and probably paying more in taxes than if they remained obese.
The example is a little mischievous, really, because one of the frustrations of the medical profession is the money poured into keeping these people unhealthily alive, rather than solving the health problem in the first place.
This exact same debate arose in the battle against tobacco, and tobacco lost (in most of the developed world, anyway).
All that said, I generally don’t think taxes to discourage obesity is necessarily the answer, as it victimises the poorest, who are the most likely to fall prey to rubbish food. We could look at the causes of the obesity epidemic and address that. For example, we could have the food equivalent of the FDA and just simply not allow manufacturers to supply desperately unhealthy food products to the market – the visible fist of government.
Now I’ll slope of back to my collective….
“I’l put my hand up to disagree ;-)”
Good good!
“The ultimate goal in life – the meaning of life, if you like – is not personal fiscal neutrality at the macro level. ”
As a starting point, my entire post is about wellbeing – and how ignoring elements of individual choice and agency undermines the idea that we are targeting wellbeing. At no point did I mention fiscal neutrality. So this is a bit beside the point 😉
However, the “externality” is about the fiscal point – as there is no other “external” wellbeing argument that is valid. That is the point I make when ruling out lost productivity etc.
“The example is a little mischievous, really, because one of the frustrations of the medical profession is the money poured into keeping these people unhealthily alive, rather than solving the health problem in the first place.”
Here is the problem. Health professionals viewing individual choice as a problem that needs to be solved rather than as the result of individual choices – wellbeing isn’t about “not being obese”, it is about so much more than that. We can live a shorter, fatter, life and be happier because we get to eat things we like – or even get “addicted” to things (if they are increasing the marginal benefit of future consumption).
The problem is that they are using the term “wellbeing” but only measuring PART of wellbeing.
And yes tobacco lost, and we punish people who want to smoke heavily because they don’t fit into our ideal. I don’t see this as a good thing, I see it as relatively disgusting.
Your argument in the comment seems to be “health professional can choose a happier life for you than you can”. This is no doubt the same argument many health professionals use. That is the explicit value judgment that needs to be made – and it is one I intrinsically, and totally, disagree with.
As challenging as always, Matt!
If you don’t mind, Matt, having got my first stage III economics paper out of my hair this morning (and it seemed to go pretty well, all things considered 😉 ) I’d like to take this a little further.
I’m interested in how you differentiate between your support for a carbon tax and your ‘disgust’ at the Pigouvian taxes on tobacco products.
To channel your comment on tobacco, “we punish people who want to emit CO2 heavily because they don’t fit into our ideal.”
I look forward to your comments.
“All that said, I generally don’t think taxes to discourage obesity is necessarily the answer, as it victimises the poorest, who are the most likely to fall prey to rubbish food. We could look at the causes of the obesity epidemic and address that. For example, we could have the food equivalent of the FDA and just simply not allow manufacturers to supply desperately unhealthy food products to the market – the visible fist of government.”
This really is a value judgement. Poor people will ‘fall prey’ to rubbish food and so must be protected from themselves. Very paternalistic and condescending I would argue, effectively implying that they are poor and stupid. And to protect them we will restrict choice by removing unhealthy food. But what is unhealthy food? Surely the issue is total energy issue? I would be reasonably confident that I can get fat by over-eating any food, healthy food included. Everything in moderation.
So maybe we could reduce obesity by some amount by restricting availability, but at the cost of personal choice. I like the occasional burger, and I am not obese so why should I have my choice restricted? Maybe because I am educated and not poor I would get access to an ‘elite’ burger store, maybe we could have vouchers for people that could be trusted or allocate them on the basis of BMI?
And once we have partially solved that ‘problem’ what shall we move onto next?
Tobacco, tick, sugar, tick, alcohol, tick, too much TV, tick, too much time in the sun, tick, not enough physical activity, tick.
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