Ken Rogoff on “Coronary Capitalism” in the food industry

The bad food industry and big pharma are killing us, literally.  People are desperate for affordable drugs, but the vast majority would not need drugs at all if they ate healthy foods in appropriate quantities.  Harvard economics professor Ken Rogoff (co-author of ‘This time is different’ on the credit crisis) offers us an important reminder on the bad economics of allowing the food industry to freely poison our population.  A few big players make big profits while we, the tax payers and society as a whole, are left to bear the crippling costs of a population who are physically handicapped and slowly destroyed by the food they are ingesting.

Of course individuals and parents need to take much more responsibility and care in the food they are “using”. But at the same time, as a civil society, we see fit to regulate and control the sale and use of other addictive, harmful substances like drugs, cigarettes and alcohol. It is not ok to offer cigarettes to our children, why is it ok to feed them poisonous food?  Why are we allowing (even tax-subsidizing) poisonous and addictive food to be freely marketed and inflicted on children and adults across the board? When I see everyday that about half of the people around me are literally eating themselves to death, I see them as similar to other drug addicts.  They might as well have needles dangling from their arms.  And yet there is an attitude today that this type of self-destruction is a personal choice beyond the concerns of the state.  It is impolite to mention.

The fact is that the societal cost of all this is enormous and the health care system in its current form cannot bear it.  The economics of our current attitudes and ideas about food are simply not sustainable.

Here is Rogoff:

“A systematic and broad failure of regulation is the elephant in the room when it comes to reforming today’s Western capitalism. Yes, much has been said about the unhealthy political-regulatory-financial dynamic that led to the global economy’s heart attack in 2008 (initiating what Carmen Reinhart and I call “The Second Great Contraction”). But is the problem unique to the financial industry, or does it exemplify a deeper flaw in Western capitalism?

Consider the food industry, particularly its sometimes-malign influence on nutrition and health. Obesity rates are soaring around the entire world, though, among large countries, the problem is perhaps most severe in the United States. According the US Centers for Disease Control and Prevention, roughly one-third of US adults are obese (indicated by a body mass index above 30). Even more shockingly, more than one in six children and adolescents are obese, a rate that has tripled since 1980”.

See the whole article: Coronary Capitalism.

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7 Responses to Ken Rogoff on “Coronary Capitalism” in the food industry

  1. Robert says:

    This is nonsense. Check out the life expectancy data in the former Soviet Union. They had a very regulated economy. It seems that we need ever more regulation and law in place of common sense and rule of law based on property rights and individual freedom. Do you really believe that ever move government will improve living standards and rule of law? Where is the proof? Please give us some examples.

  2. so many it is tedious to even offer a list: abolishing slavery and then segregation, child labor laws, seatbelts, smoking in public places, smoking in cars withe children in the back seat, air-spraying of DTs, the vote for women and aboriginal people…

  3. JW says:

    We need simple but effective rules or regulations. We need untouchable guardians to monitor and enforce these rules. Unrealistic expectation? Until then, wash your fruits and vegetables, try to stay away from process foods (no matter how tasty they are), move to an area offers the best air/water quality but still close to work. Most important of all, relax and try not to drive yourself or your love ones crazy. My 2 cents. Thanks for sharing your thoughts. JW, Vancouver

  4. Alex says:

    Good TED presentation of the subject here:

  5. dave says:

    From the conference board of Canada.”Controlling the growth in overall program spending hinges on the province’s ability to control health‑care costs, since health‑care spending consumes approximately 43 cents of every dollar collected in revenue”.

    Not sure what the solution is but clearly health care spending is completely out of control at least in Ontario and probably elsewhere in north america.

  6. Joseph B says:

    Ms. Park wrote: “Harvard economics professor Ken Rogoff offers us an important reminder on the bad economics of allowing the food industry to freely poison our population. A few big players make big profits while we, the tax payers and society as a whole, are left to bear the crippling costs of a population who are physically handicapped and slowly destroyed by the food they are ingesting.”

    Bad economics indeed! This touches upon a very fundamental matter. Cost/price is supposed to be the information mechanism of capitalism, helping to determine the most efficient allocation of resources and helping with other important decisions. However, in practice under the current economic system, the price very often does not reflect the TRUE FULL COST of the economic activity.

    If we had to pay the true full cost of many things it would likely be a very different reality indeed, and probably a much less economically and socially dysfunctional one at that. The food (particularly the junk food) industry is just the tip of the iceberg. What would be the price of a box of sugar laden cereal if the cost of widespread obesity and the concomitant burden on the healthcare system were factored into it.

    What would be the price of gasoline if the cost of pollution, as well as the portion of the cost of the US military needed to ensure that the oil continues to flow from unstable regions of the world, was factored into the price. You would also probably have to factor in the cost of the homeland security apparatus needed to guard against reprisals from foreigners who feel aggrieved from such military interventions in their homelands.

    What would be the price of a movie, a tv cable subscription, a videogame, an internet subscription, if the costs of the “dumbing down” of vast swaths of the population was factored into it. You would probably also have to factor in the costs due to the loss of productivity from these distractions.

    What would be the true cost of cheap imports if you factor in the cost of pollution from manufacturing in countries that do not have reasonable environmental regulations. Or if you factor in the cost of high levels of domestic unemployment (and concomitant poverty, crime, drug abuse, etc.) due to companies relocating/outsourcing production to countries that do not observe human rights or enforce reasonable labour safety standards and rights; or that do not have a reasonable civilized social safety net to support.

    There are countless other examples. Of course, it begs the question, so how do you quantify and factor in these other environmental/social,/etc costs into the prices of various economic products/activities? After all, academics have developed all types of arcane and elaborate theories, models, and methods to determine difficult to quantify measures such as GDP, stock price alpha/beta, etc.

    However, the real questions should be, “why is an effort not even being made or why is this not being seriously considered?”, because one way or another these costs are being borne anyway. Obviously there is no political will to do so. Powerful and politically influential vested interests benefit from privatizing profits while socializing the worst aspects of the costs of the things they peddle.

    Moreover, many people are also either distracted by the entertainment and/or political propaganda industry and are unaware, or do not care about these costs because they may not be immediate and are put off into the future through indebtedness etc. Consequently, as these unaccounted for costs multiply over time, at some point there will very likely be an economic and/or environmental and/or social reckoning.

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