Many people believe that the reason the U.S. and much of the western world has an obesity crisis is because people are just disgraceful. They have no self-control. They are unable to prevent themselves from shoving Twinkies into their mouths and watching tv all day. It is believed that Capitalism has created a society with cheap and unhealthy food and a bunch of sluggish fat people. What is the solution? …Of course we need the almighty government and our wise overlords to save us from ourselves.
I believe that this is completely untrue. The reason there is an obesity crisis is not because of the people. It’s not even because of easy accessibility to unhealthy food and a trend towards a more sedentary lifestyle. The reason there is an obesity crisis is because of the government. Now the socialists reading are going to be skeptical. “You Libertarians always blame everything on the government. If it rains it must be the government’s fault.” Alright. Alright. Granted, but just hear me out.
The true reason that there is an obesity epidemic can be explained by understanding the praxeological concept of time preference. In case you don’t know, praxeology is a deductive science. It is the study of human action(human decision-making). Time preference is the degree of discounting made for current consumption relative to future consumption. It is deduced, through praxeology, that humans distinguish between time periods in relation to satisfying wants. What encourages humans to save is an interest rate. If they delay consumption they will get to consume more in the future. If you have a very high degree of time preference, you need to consume immediately, and you are only capable of delaying consumption if you are rewarded with a very high interest rate. On the other hand, someone with a low degree of time preference, is capable of delaying consumption fairly easily and does not require a very high interest rate.
Once you understand the concept of time preference you can understand how the government has taken many actions to increase societies degree of time preference. The government has created social security(also known as the pension plan or a ponzi scheme) to prevent people from saving for retirement. The government has created employment insurance so people don’t save in case they lose their job. The government constantly rewards spending and punishes savings. The most significant way they do this is through ultra low interest rates, set by the central banks. Money is printed by central banks that push down interest rates and create inflation. If prices are rising that devalues savings, and if interest rates are low you are not incentivized to save because you do not get a high return. By encouraging a high degree of time preference, we have created a society that prefers current satisfaction, eating unhealthy food, to future satisfaction, the health consequences of eating healthy food. Furthermore, let’s say the interest rate is 30%. It’s very very high so everyone saves and by saving it prevents them from consuming. As you start to lower interest rates people are now forced to spend money. You can either save or spend and savings is dependent on the interest rate. As interest rates fall it forces people to stop saving which forces them to spend. Considering how in America no one saves they have very little money which means they are forced to spend on inexpensive short-term consumption goods. Consumption goods are the kind of goods that you see in the malls such as clothing and, more importantly, food. It is possible that people with high degrees of time preference choose to buy television sets or refrigerators but those things have very steep marginal utility curves. Food and clothing, and other consumption goods, have a very flat marginal utility curve. You can consume more and more and your satisfaction will continue to rise. Of course it is true that Americans do own too many television sets, or other luxury items, but it is capped because of the steep marginal utility curve. American consumers have on average 29 pairs of shoes and they all own too much clothing. Consumers clearly purchase too much food as well. The American society is filled with a very child-like population. Children are always concerned with immediate gratification. This is why they are always screaming for CANDY! Similarly, the adults within this society are very child-like. They consume unhealthy food. They ingest alcohol and drug-like substances. And they buy everything that catches their eye and never consider saving any of their money for the future.
It can be argued that the higher degree of time preference has only negligibly increased unhealthy eating and that people would still eat at restaurants just as much if interest rates were higher because it’s a small part their income. I don’t think that is true. If you think of 3 meals a day for 10$ each. That is 30$ times 365 days which comes up to almost 11,000$ a year. That’s a huge amount of money for most people.
Many will argue that the reason people are eating unhealthy food is because of evil corporations like McDonalds. My response: McDonalds doesn’t make people fat. Fat people make McDonalds. Companies cater to consumers. Consumers decide exactly what type of food the companies produce.
Others will argue that we are wealthier today and so we can afford to buy more food and work less. Also we have computers so people are more sedentary. Although, in the 1950’s people had televisions and people were arguably wealthier than today and yet there was not an obesity epidemic. The obesity epidemic is a recent phenomenon and it is clearly correlated with the recent increase in the degree of time preference. As the government has discouraged savings they have encouraged the consumption of food and thereby have created the obesity crisis.
Many governments try to prevent obesity by banning fast food restaurants or creating health organizations. They try to regulate and ban trans fats or limit the amount of sodium etc. They assault our liberties in the name of safety. But as Jefferson and Franklin have said “Any society that would give up a little liberty to gain a little security will deserve neither and lose both.” Governments always create problems and then call it a market failure. Then they use it as a justification for why they must interfere within the economy and rob us of our freedom.
