In the past, there were tales told and retold of famine caused by devastating drought or hordes of locusts that devoured the cultivated crops on which a people depended for their survival. All peoples in the past have known and lived with the dread of the curse of scarcity.
Today, there are many people living in rich countries who are plagued by the opposite problem, namely, the curse of plenty. As other writers have pointed out,[1] the great irony of this problem is that it coexists with the other ancient problem of scarcity in the world. While hundreds and hundreds of millions of people do not have enough to eat, there are roughly an equal number of people who suffer the many, and very different, health problems caused by obesity. Today, we know how to produce large quantities of food, more than enough to feed the entire human population living on the planet. But we continue to behave economically as if the threat of scarcity was ever-present.
The principle cause of the curse of plenty is unbridled price competition, which lowers the price of food and drink products to such low levels that many people consume too much of them. When the profit margin per unit of production is so low, the only way that a company can make a decent profit is by selling as many of its products as possible. This is the objective of advertising companies or a company’s marketing division: to manipulate people into eating and drinking more of their products than is good for them. In other words, unbridled price competition has transformed many inhabitants of wealthy countries into gluttons who cannot control their appetites. In many restaurants, the effect of competition has been to increase serving portions, so that people who tend to eat everything on their plate eat more than they should or more than they eat when they are at home. Thus, contrary to what the dim-witted economists constantly tell us about the virtues of price competition, unbridled price competition can have harmful effects on people’s health and the environment, not to mention the evil effects it has on the well-being of innocent farm animals like chickens, cows, and pigs.
Unbridled price competition has led food companies to conduct research in which ingredients or chemicals make people consume more of their products in order to increase or maintain their sales and stay ahead of their competitors. Hence, they have become highly adept at manipulating consumers’ tastes and preferences for their personal gain, by fabricating artificial food and drink products that are designed expressly to increase people’s consumption of them. But as food and drink companies’ sales and profits have expanded, so too have the bodies of their consumers. This is because, once one company starts using a novel ingredient or process in its products, others will copy them because of the imitative nature of human beings, until most or all of the products in a particular food or drink industry contain or use it. In addition, consumers’ tastes may change so that they prefer foods or drinks that contain the artificial ingredient. In many wealthy countries, the result has been an obesity crisis, along with all the health problems that this entails.
So what is the solution I am proposing to free us from the curse of plenty? Very simply, it is to set minimum prices below which certain foods and drinks – primarily those that fall in the categories of junk and fast foods – cannot be sold. In other words, raise the prices of these products so that people will consume less of them.
Before you react in the hysterical, knee-jerk manner that most readers of the last paragraph will probably react, consider the fact that if the prices of these products were raised, then the companies that sell them will make a higher profit per unit of production, and therefore they will have to sell fewer total units of their products in order to earn the same amount of profit. In other words, the profitability of these companies will not necessarily be adversely affected by the adoption of this proposal.
To give an example, assuming that the total amount that each person spends on these products remains fixed, a mandatory 50% increase in their price would result in a decrease in total consumption of one-third. If, for example, the unit cost of a food or drink is presently $1, the new price would be $1.50. If a person spends $300 per year on this product, then formerly one would have been able to purchase 300 units at the old price, and only 200 units at the new price, which is a decrease of 100 units, or 1/3 of the previous total annual consumption of the product.[2] At a price of $1.50, the companies would obviously make a much higher profit per unit of production, which would enable them to pay their workers and suppliers, such as farmers, higher wages or prices for their labour and inputs.
Contrary to what the economists assert, there are many cases where the price of a product or commodity is a very bad guide to deciding how one should behave and what decisions one should make. To give an example, the cheap price of eggs in countries like the United States and Canada leads many people to consume a great quantity of them on a daily basis. But what most of these egg-eaters fail to realize is that these eggs are cheap only because the living animals that produce them – namely hens – are subjected to horrific conditions, by being confined in tiny metal cages during the whole of their egg-laying lives, that no living creature should be subjected to. And of all the predatory animals on the Earth, it is only we so-called enlightened human beings that impose such horrendous suffering on our fellow living creatures, all in the name of obtaining cheap eggs, cheap dairy products, and cheap meat. Considering that many people in wealthy countries eat too much of these things – in some cases far more than is good for them – paying more for these kinds of foods would be beneficial by making people consume less of them. This course would also help to liberate these captive and frequently mistreated animals so they could lead more normal lives before they are slaughtered at the end of their artificially shortened lives to satisfy our collective gluttony.
Of course, the primary change that this proposal will have, apart from reducing consumers’ consumption of these foods and drinks, is that it will encourage many new companies to enter the field due to the higher profit margins. How this will affect the major present producers or dominant companies in the market is uncertain. But this proposal is not meant primarily to benefit the companies that produce these unhealthy foods and drinks. Rather, it is meant to benefit the many consumers who are presently being manipulated by the free market into consuming far more of these things than is good for their health, as well as the farm animals that are brutalized and mistreated by the dominant methods of industrial agricultural production.
As this consideration of the production of food and drinks in an industrialized country shows, the economists’ naive belief that the free market always produces the best outcome is complete nonsense. Left to itself, the free market can produce inefficient, wasteful, cruel, destructive, undesirable, unjust, unequal, unstable, or unhealthy outcomes, as in this case. And it is for this reason that we must free ourselves from this harmful dogma that has gained a greater and greater hold – in some cases a stranglehold – over the world’s inhabitants.
[1] For example, Raj Patel in Stuffed and Starved, and Paul Roberts in The End of Food.
[2] Assuming constant total expenditures, in order to achieve a reduction of 50% in consumption, the per unit price would have to double. Thus, if the price rose to $2, then one could only buy 150 units, which represents a 50% decrease in total annual consumption of the product.
Homo Stupidus 