March 23, 2019

IT'S IMPOSSIBLE TO OVERSTATE DEFLATION:

NOTHING FAILS LIKE SUCCESS (Dwight R. Lee, 3/20/19, Intercollegiate Review)

Ironically, one reason for the problem of obesity is that most agricultural jobs have been eliminated in response to market incentives. Private-sector entrepreneurs and firms have found profit in developing ways to grow more food at less cost by substituting capital and chemicals for farm labor. The result is more food grown on less land by fewer workers. Tens of millions of agricultural workers have been released to innovate new products, improve old products, and expand the production of both in jobs that are far more interesting, safe, and productive than the ones they replaced. Increasing agricultural productivity, along with the general increase in wealth, clearly allowed people to purchase more calories in fresher, more nutritious, and tastier foods for steadily decreasing amounts of labor.

Possibly even more important than the declining cost of purchasing food has been the declining cost of converting it into tasty meals. Preparing foods for consumption used to be a laborious and time-consuming chore, one performed primarily by women. As market incentives generated technological advances and more productive employment opportunities for women, businesses found it increasingly attractive to introduce products and services that reduced the time and drudgery of preparing meals in the home, as well as doing household chores in general. Shopping for food became more convenient as grocery stores became bigger with larger varieties of food, as well as many other household products, under one roof. Appliances for storing and cooking foods became bigger, less troublesome (self-defrosting refrigerators), and faster (microwave ovens). A larger variety of prepared foods are now available for home consumption. And eating out, which used to be a luxury, is now a common occurrence, with options available for every taste and budget.

Given that people evolved to avoid starvation, not obesity, it is difficult for many of us to avoid gaining weight when surrounded by an abundance of convenient, low-cost, and tasty food. Our natural ­response when food is available is to store as many calories in our fat cells as possible to sustain us until the next successful hunt. Of course, the next successful "hunt" ­almost always occurs three times a day, not to mention those trips to a vending machine. Couple this with the sedentary jobs that economic progress has allowed us to substitute for physically ­demanding ones, and it is hardly surprising that a large percentage of the population has become overweight or obese.

Until quite recently, being significantly overweight was considered a personal problem, if a problem at all. An overweight adult was assumed competent to evaluate the personal costs and benefits of eating more than was consistent with his recommended weight, and he could alter (or not alter) ­caloric intake accordingly. I remember a talk in the 1970s at the University of Colorado by Israel Kirzner in which he pointed out that the market is often criticized for giving people what they want. Kirzner ­defended the market against this criticism by saying it is analogous to blaming the waiter for obesity. I was impressed at the time with how effective this argument was. I fear it would be less effective today.

Increasingly it is not those who are overweight who are seen as responsible for their condition. They are more likely to be considered the victims of "waiters" in the form of those who are responding to consumer demand by making more and tastier food conveniently available at ever-lower real prices. Instead of seeing this as a significant victory in the battle against poverty and hunger, we hear from trial lawyers, health officials, and other politically influential activists that it is a national crisis requiring immediate government action. [...]

MEDICAL CARE

Unfortunately, the obesity "crisis" is only one of many examples of the success of markets and freedom being widely, and effectively, portrayed as failures demanding more government controls over our economic choices. Consider the innovations in medical care that have extended our lives and improved their quality into the older ages we are now more likely to achieve. This is clearly a triumph of the innovation and entrepreneurship made possible by the incentives and freedom of market economies--an improvement in our well-being over the last century that is unprecedented in human history and which holds out the promise of continued improvement. But the public hears much more about problems resulting from this triumph than about its enormous benefits. The constant refrain is that the high cost of medical care is a failure of markets, which has become a serious problem--­indeed, another national crisis--demanding a government remedy.

In fact, the cost of medical care is ­greatly overstated. Instead of increasing the cost of medical care, improvements in medical technologies have actually ­reduced that cost and reduced it considerably. In the 1960s the cost of heart-­bypass surgery needed to save your life was ­infinite--­unavailable at any price. The same is true of many other procedures, medicines, and diag­nostic equipment that improve and prolong the lives of untold millions ­today, including the poor. People are confusing the increasing amount being spent on medical care with the costs of that care when claiming that medical costs are higher today than ever. People are spending more on medical care because the success of markets and freedom has increased their wealth and made medical care worth more than ever. No sensible person would argue that transportation costs are higher now than ever, even though we spend a far higher percentage of our income on transportation than in the past. The reason we are spending more is that transportation costs have decreased so much over the past century that today almost everyone in market-based economies can routinely ­afford travel options that were available to only the very rich a few decades ago, and available to no one a little over a hundred years ago, with all those ­options safer, faster, and more reliable than ever before.

Posted by at March 23, 2019 12:00 AM

  

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