Eighty or so blog articles in, my personal political views are likely becoming quite obvious to regular readers. I do support progressive fiscal measures by governments, including an appropriate increase in the prices of unhealthy foods to pay for the spiralling health costs associated with rising rates of obesity. I also support bans on the advertising of junkfood to our children, or the sales of unhealthy foods in schools that hinder their pupils’ ability to achieve optimal intellectual and physical development. I believe strongly that big food and beverage companies, like tobacco and oil companies, should not be allowed to fund scientists who conduct “research” aiming to dispel the dangerous public health outcomes of their products and delay legislative action. I even support measures to enforce companies creating food labels that do not take a nutrition degree to decipher, nor confuse a parent into submission at the expense of their child’s health.
But despite all this, I am not anti-business. I am not anti-growth nor am I anti-capitalism. I am just pro-health and support evidence-based, progressive, sound public health policy.
Even so, time and time again when I have discussions on measures to address obesity, the nuance melts away and invariably I am taken in a direction of reasoning ‘left versus right’. Instead of talking about families, parents and kids struggling to stay healthy in an increasingly obesogenic environment, where good food is scarce and expensive, but junkfood is ubiquitous and cheap, discussions instead come to revolve around notions of personal responsibility, accusations of individual laziness, and fears of “nanny statism”.
Discussions that see the wide-reaching influences of Big Food forgotten, as we talk with fear of Big Government instead.
A frustrating and saddening digression, curbing obesity is actually not a left versus right issue. It is not about public health versus business, or doctors trying to limit the economic opportunities of entrepreneurial people.
In fact making inroads on obesity should be welcomed by the most libertarian among us – and here are three reasons why.
1. Ending a subsidy, not flogging a tax
When a product high is sugar is consumed, as a population we pay the costs for that product multiple times. We pay a fraction at the checkout, usually about $2 to $5. But we also pay later and often for generations to come – through the environmental costs that are ignored in its manufacturing, transport and recycling costs paid by local municipalities, and the health costs caused as a result of the product’s consumption and covered through insurance programs, or tax-payer-funded public health systems.
In other words, we are subsidising junk. We are intervening in the market, but in the worst way possible. The result of this market intervention is over-production, oversupply and gross market failure. All pet hates for a libertarian who would argue governments should keep a distance from ‘supply and demand’.
Imagine for a moment if tomorrow you could buy a shiny new convertible for $100 – and society will pay the rest ($500) over time. Then imagine that the actual cost to produce this car was only $300, and the rest is profit. First of all everyone would rush to buy (three), because the price is cheap and they are unlikely to factor the deferred costs to society. Then even if eventually demand slowed as people woke up to the unhealthy reality, the car company would be making so much profit that it could use clever advertising to target new, unsuspecting markets.
The result is many more cars than we need and a huge cost to society, that we never saw coming – and a market that has failed.
With this in mind, when we talk about adding a small cost to the sale price of an unhealthy product like sugary drinks, we’re not actually talking about adding a tax. We’re not actually talking about adding anything at all. We are simply calling for true pricing. We’re building some of the hidden or deferred costs into the cost at sale – giving the consumer a chance to make an informed decision based on the real and whole cost of what they are buying.
2. Obesity is bad for business
For a market to function well, one needs a healthy, internationally-competitive population able to work, innovate and adapt – particularly during working-age. Any health challenge, but particularly one which affects a population over a long period, costs large quantities to manage and affects a growing proportion of the working-age population, is very bad news for an economy.
Obesity ticks all these boxes. Bad for productivity, economic development, and business on every scale, obesity has serious direct and indirection, micro and macro-economic consequences.
A recent study from Australia estimated the direct costs of obesity at AU$3.8 billion each year, including the costs of associated comorbidities such as diabetes, heart disease and cancer. The indirect costs totalled a massive AU$4.6 billion. With respect to quality of life impacts, obesity contributed to 258,573 disability adjusted life years (DALYs) in 2011-2012 (days lost of productive work, not just days lost of life, or healthy life), and had an associated economic cost of AU$47.4 billion.