The Food Police (9 page)

One of the biggest problems we face when deciding what
to eat is the tough trade-off between choosing to eat something tasty (but unhealthy)
today
with the increased risk of a heart attack or weight gain at some point in the
future
. Current benefits must be weighed against future potential costs. The research in behavioral economics shows that we tend to be overly impatient. We make decisions that seem to suggest we will always plan to start a diet
tomorrow
. When tomorrow becomes today, we find ourselves in the same position, choosing to forgo the diet yet another day, telling ourselves all along that tomorrow will be the day the diet begins. It is as though our current self and future self can’t quite get along.

These kinds of findings have led behavioral economists to call for a host of paternalistic regulations to override our preferences. Nobel Prize–winner George Akerlof doesn’t even want to give us a choice in the matter. He says, “Individuals may be made better off if their options are limited and their choices constrained.”
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Writing in
Nudge
, Thaler and Sunstein say they want to give government the power to nudge us into making the decisions some bureaucrat deems desirable. They seemingly want the government to assume the power to tell restaurants how their menus should look and tell cafeterias how they should be organized. They justify their paternalism by saying that it is “quite fantastic to suggest that everyone is choosing the right diet, or a diet that is preferable to what might be produced with a few nudges.”
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A USDA report says behavioral economics “expands the array of possible ideas” for new food policies and can license the government to alter “elements of the product, such as package size and shape, the amount of variety, the number of calories, or the default options on a menu.”
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Writing for
Forbes
, Duke University
professor Dan Ariely says, “Behavioral economics could help us take steps toward designing a better world.”
¹⁰
I don’t know about you, but I’m more frightened than comforted by a psychologist confidently asserting he can
design
a better world with new regulations.

It would be absurd to assert that we never make foolish decisions that, in retrospect, we regret. But despite what we’ve been told by those Ivy Leaguers who have traversed the well-worn highway between academia and Washington, behavioral economics cannot justify the actions of the food police.

If you want a depressing afternoon, spend some time scouring the psychological and behavioral economics literature. There you will find that we are prone to a plethora of decision-making biases that are apparently limited only by the researchers’ abilities to find catchy new names for them. You might begin to wonder how it is we are even able to make it out of bed in the morning and find our way to work. If we are
truly
as irrational as the behavioralists suggest, wouldn’t they have to have some way of accounting for the success and prosperity most Americans enjoy? It is a bit odd that we are just now getting around to finding out that our decision-making abilities are so poor that new regulations are needed to improve our lot in life. If we aren’t truly more innately irrational than our grandparents, how can the case be made that there is a
new
need for paternalism?

The answer lies, in large part, in the peculiarities of the academic publishing world. We academics are rewarded for novel ideas. One cannot publish by repeating what everyone already knows. The rise in behavioral economics can be explained in large part because the field offered an alternative: a novelty. But it is important to keep in mind that what sells in academic journals does not necessarily possess real-world importance.

Consider a striking comparison. At about the same time behavioral economists were making headway arguing that people were
ir
rational, a different group of economists were arguing that animals (rats, pigeons, and pigs) were rational. Whereas leading behavioral economists wrote papers concluding that people can’t figure out how to make themselves better off, another group of economists publishing in toptier economics journals concluded that, of all things, animals can!
¹¹
The counterintuitive claims that were novel enough to fly in academic journals were that animals were rational and people were not. But no one in his right mind would claim that rats are more rational than humans, no matter what was published in peer-reviewed journals.

If the findings of behavioral economics are really as powerful and influential as claimed, then an entrepreneur should be able to profit from the mistakes consumers make. It might not be surprising, then, to learn that Richard Thaler, one of the pioneers of behavioral economics, is a partner in an asset management company that makes investments based on the premise that “[i]nvestors make mental mistakes that can cause stocks to be mispriced.”
¹²
Note that this is the same Thaler who coauthored
Nudge
, which argues for regulators
to use knowledge of decision-making biases to improve society’s welfare. It is a little unclear whether Thaler believes that our decision-making problems represent an opportunity for him to extract money from us or improve our lives, but at least we know he’s confident we often don’t choose well.

Alas, a Morningstar analyst concluded, “This mutual fund’s distinctive approach may not be enough,” in reference to one of the behavioral funds Thaler advised.
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More generally, research into dozens of mutual funds constructed to capitalize on traders’ supposed decision-making problems has concluded that “there is no conclusive evidence to suggest that these strategies outperform [a respective benchmark]”
¹⁴
and that “behavioral [economics] mutual funds are relatively synonymous with value investing and not much more.”
¹⁵
Believers in behavioral economics can put their money where their mouth is by investing in funds designed to capitalize on investors’ decision-making biases. Here’s my advice: don’t do it. And if traders with hundreds of millions of dollars on the line can’t put the behavioral economics research to work to earn a buck, what makes you think bureaucrats and politicians can?

The failure of behavioral economics to generate superior performance in consequential matters, such as making money in the stock market, has not prevented some from taking simple findings from academic experiments and drawing grandiose claims about the promise of behavioral economics for creating new regulations to improve our health.

For example, in his bestselling book
Predictably Irrational
, Dan Ariely describes some creative studies he conducted with college students and Halloween trick-or-treaters showing that choices were highly influenced (seemingly irrationally so) by
whether a chocolate was advertised as free. Based on the behavior of the preteen ghosts and goblins, Ariely concluded, “We can use FREE! to drive social policy.” He suggests, “Want people to do the right thing—in terms of getting regular colonoscopies, mammograms, cholesterol checks, diabetes checks and such? Don’t just decrease the cost (by decreasing the co-pay). Make these critical procedures FREE!”
¹⁶
Notice the statement “Want people to do the right thing”? The implicit premise is that we are either unwilling or unable to make the “right” food and health care decisions on our own. But even if we could get everyone to check his cholesterol, wouldn’t we need to know how much it costs before we could say the decision was “right”?

In another set of experiments, Ariely shows how college students reacted to different opportunities to set class project deadlines. Then, without showing that regular people will respond to health care interventions in the same way that students responded to assignment deadlines, he makes the leap to conclude, “Think how many serious health problems could be caught if they were diagnosed early. Think how much cost could be cut from health-care spending … So how do we fix the problem? Well, we could have a dictatorial solution, in which the state (in the Orwellian sense) would dictate our regular checkups. That approach worked well with my students.” While Ariely explicitly recognizes the heavy-handedness of his proposal, he goes on to defend it by encouraging us to “think of the other dictates that society imposes on us for our own good.”
¹⁷

Ariely is a first-rate scholar and perhaps we should cut him some slack for trying to publicize his research, but when the
elite turn around and use the same book as “scientific evidence” to support new paternalistic food and health regulations, surely we must take pause.

Even some leading behavioral economists agree that the government will be unable to use the findings of behavioral economics to substantively impact the nation’s health. George Loewenstein, a prominent behavioral economist and professor at Carnegie Mellon University, surprised many people when he wrote an op-ed for the
New York Times
admitting that behavioral economics cannot reverse the rise in obesity. He said, “For all of its insights, behavioral economics alone is not a viable alternative to the kinds of far-reaching policies we need to tackle our nation’s challenges.”
¹⁸
It seems Loewenstein believes some type of regulation is needed to “correct” our food choices, but the findings of behavioral economics lack the oomph to nudge people in the right direction.

I have a confession to make. I’m a paternalist. With two elementary school-aged children at home, I don’t have much choice, unless I’m willing to let the Wii run 24-7 and allow my kids’ teeth to rot from Pop-Tarts and Twizzlers. Yep, I think I know more about what will affect my kids’ future happiness than they do, and I exercise my parental authority to make it happen. Although I’m a paternalist with my kids, few would say that makes me an elitist. Why? Because, as Bill Cosby used to say about his children, “I brought you into this world and I can take you out of it.”

Whether by law or by social custom, I have a nearly universally agreed-upon right to be master of my children (at
least within some reasonably wide legal boundaries). But since when did Richard Thaler or Cass Sunstein or Dan Ariely or any number of the other folks who apparently think they know what is better for me gain the right to make choices on my behalf? When did I become someone else’s responsibility? Assuming the right to care for someone when they haven’t asked for it is only slightly shy of tyranny.

When paternalistic policies are advocated on regular people such as you and me, it becomes clear that the food elite seek to impose their particular notion of morality on others. By trying to supplant each of our own individual decisions, made in different contexts with our own insights into the options facing us, with a uniform plan of what they believe we should choose, the food police reveal the height of their elitism.

For example, many of the food police want to follow the example of the European Union and ban ranchers and farmers from using growth hormones in dairy and beef cattle production. “Good for them,” you might say. After all, aren’t these added hormones the cause of the declining age of puberty among American girls? Hardly.
¹⁹
For those folks who want to avoid added hormones in meat and milk, they are free to pay higher food prices for the organic varieties.
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The rest of us can take comfort in knowing that fears over the cost-saving technology are vastly overblown.

A one-pound burger from a steer administered growth hormones has about 3 nanograms more estrogen (the primary hormone compound used to promote growth) than cattle who have never received the added hormones (a nanogram is one billionth of a gram). Yet the same amount of raw cabbage contains 10,896 nanograms of estrogen, and the same amount
of soybean oil contains almost 1 million nanograms of estrogen! A birth control pill has many thousands of times more estrogen than that contained in a serving of beef.
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You might still want to eschew burgers from cattle fed growth hormones, but clearly it would help to have a bit of perspective.

Rather than letting each of us weigh the evidence and decide if the extra cost of organic beef is worth the minuscule increase in risk, the food police want to make the choice for us. Here is the irony. The behavioral economists have told us for years that humans make mistakes by exaggerating the importance of low-probability risks.
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Yet I have not seen a single behavioral economist use this insight to tell the food police to relax and put their fears about growth hormones, genetically modified food, or pesticides into perspective. Instead, we see the behavioral economists partner with the food police to advocate policies
they
want even if it means ignoring the implications of their own research. The truth is that the many millions of decisions we shoppers make at the grocery store every day reveal that we’ve decided it simply isn’t worth exploding the grocery bill to have beef from cattle that haven’t been given added growth hormones. The food police have determined that all these decisions are wrong, and they have no justification for the conclusion except their own desire to remake the world as they want it.

If we no longer use an individual’s choices to define what is or is not “good,” then whose do we use? Many behavioral economists attempt to skirt this subtle but critically important point. In
Nudge
, Thaler and Sunstein call for paternalistic policies “to influence choices in a way that makes choosers better off, as judged by themselves.” Is this not a
logical inconsistency? If people’s preferences are incoherent, as Thaler and Sunstein argue they often are, then people cannot “judge for themselves.” Thus, the elite seek to replace each individual’s judgment of the “good” with their own. Paternalists aim to remake the world
as they want it
—a world that differs from the one people have actually created through their own individual actions. According to Kerry Smith, a leading environmental economist and member of the National Academy of Sciences, this is “simply an effort by one group to convince others they are really the ‘smart folks’ and should make decisions for others in the truly important, complex situations.”
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