Posted by on November 27, 2019 3:22 pm
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By Jason Peirce, George Mason University


As our gross domestic product has risen, so has our body-mass index. This is not a coincidence but is instead a logical consequence of free markets. Our dietary preferences that evolved to prevent starvation are now promoting obesity and its related diseases. The market magic that efficiently supplies what we demand fails when our preferences are systematically unwise. Since markets are unlikely to self-correct when it comes to obesity, dietary reform may require government involvement.


Obesity is a growing public health concern. Since the 1970’s, the rate of adult obesity has more than doubled, and the rate of child obesity has more than tripled. Today about 2 in 5 U.S. adults are obese, and almost 1 in 5 U.S. children are obese. Obesity raises the risk of several conditions including diabetes, hypertension, cancer, heart disease, and premature death. Social stigma associates obesity with undesirable traits like impulsivity, laziness, and incompetence. The economic effects include lower wages and more unemployment for obese workers, as well as surging demand for health care services. Given these physical, social, and economic costs of obesity, I suggest that the obesity epidemic is a market failure and potentially invites government intervention.


Some people cast aside the market failure label by suggesting that people are merely fulfilling their dietary preferences. The problem with this rational choice approach is that is assumes people’s preferences are attuned to their well-being. In the case of nutrition, this assumption is clearly untrue. Our dietary preferences evolved at a time when calories were scarce and uncertain.


In such a world, caloric density was a reliable marker for quality, and overeating was prudent when possible. This is no longer the case. As the neurobiologist Stephan Guyenet writes in The Hungry Brain, “while a calorie-seeking brain is an asset when calories are hard to come by, it’s a liability when we’re drowning in food.”


In economic terms, overeating calorie-dense food is ecologically rational, meaning it’s adaptive in some contexts but irrational in others. In evolutionary terms, there is a mismatch between the ancestral environment where our dietary preferences evolved and our current food environment. This disconnect suggests that the obesity epidemic is not rational but is instead a product of our maladaptive propensity to over-consume.


Others accept that our dietary preferences may be outdated but believe that markets self-correct. Might the $66 billion weight-loss industry offset the obesogenic effect of dietary mismatch? Probably not. According to an NIH-funded study on obesity, “trying to go on a diet or recommending that someone go on a diet generally does not work well in the long term.”


This is a feature of our biology which worked in the past to retain calories during bouts of fasting and scarcity. Dr. Guyenet writes that when we attempt weight loss, “the brain curtails the activity of the sympathetic nervous system and reduces thyroid hormone levels, both of which slow the metabolic rate… the brain ramps up hunger and increases the response to food cues that signal high-calorie, high-reward foods.”


In sum, our biology evolved to resist dieting. It is no wonder these attempts so often fail when surrounded by a marketplace of cheap dietary thrills and temptations. Thus, in addition to our dietary preferences, we have an internal weight control algorithm that prevents the obesogenic marketplace from self-correcting.


There is no guarantee that government actors have the information or incentives to act rightly, but there are reasonable steps they could take if they had the political will.


First, federal budgets could restore nutrition funding as a priority to keep up with the rising prevalence of diet-related diseases. Recent rigorous clinical trials have shown that an ultra-processed diet causes overeating, and that weight loss is equally achievable on either low-carb or low-fat diets. Such findings are crucial for educating consumers and crafting sound policy.


Second, the government could tax unhealthy food options and perhaps subsidize healthier choices. The ‘unhealthiness’ measure could be informed by quality studies to include more than just sugar, and the tax revenues could be rebated or spent in a progressive manner.


Third, the government could limit advertising of hyperpalatable foods and drinks, especially to children who are more impressionable. This could be complemented with nationwide counter marketing to recalibrate citizens’ dietary preferences in a healthier direction. These three steps may seem wishful, but the success of federal anti-tobacco interventions shows that real progress can be made if the populace and the politicians get on board.


For all their virtues, free markets are unlikely to cure this crisis of their own making. They are incentivized to seduce our outdated dietary instincts instead of serving the better angels of our palate. Free markets enrich, but they also engorge, and we should consider sensible government intervention to remedy the obesity crisis.


Jason Peirce is an M.A. student in Economics at George Mason University.