Friday, February 08, 2008

I uneasily believe in limited government.

So I was talking to my girlfriend (let's call her "G") about all kinds of interesting things, and somehow she got to talking about her confidence in the idea that government should cap the level of salt in restaurant food, since it causes so many people obesity and heart problems, driving up healthcare costs. In short, if I believe the government ought to maximize utility, as I seem to believe, I should be in favor of this.

So is my preference for freedom in this case just an aesthetic taste? My strongest response was the society portrayed in (the shitty Wesley Snipes movie) “Demolition Man,” where the only restaurant is Taco Bell and salt is completely banned. The logic of decreasing healthcare costs would seem to lead us to that conclusion.

G responded that a Demolition Man-esque salt ban does not strike the utility maximizing balance.

My rejoinder was this: people disagree on what the utility maximizing balance is. The Center for Science in the Public Interest probably advocates a much healthier, less tasty diet than the average American prefers, and CSPI folks are precisely the type of people who like to pass government legislation telling people what the utility-maximizing balance is. Even if G believes she can decide what the utility maximizing policy looks like, she cannot expect that such a policy will be implemented. Given the messy realities of democratic politics, it may even be best for her to refrain from advocating the legislation she prefers, because it will take society down a path that she doesn’t like.

Yet she continues to advocate it.

On an even deeper level, there are people who prefer the current, overly salty food being served, as evidenced by the fact that they consume it by the bucket. Yet G would argue that there are incentives in place (artificially low prices, thanks to corn subsidies) that lead them to make a suboptimal decision.

I guess it just comes down to what extent you value people’s revealed preferences, and to what extent you believe that government can calculate a utility-maximizing level that contradicts what people claim to prefer.

Liberals tend to have faith that government can do that. Conservatives tend to believe that government can’t, and point to historical example upon historical example to show what happens when you put too much trust in government.

In the end, it is tempting to believe that government can do these things well. But perhaps a humbler, less optimistic role for government is the best we can have.

3 Comments:

Anonymous Nathan Rice said...

There's usually never a clear cut answer to these things. It's almost always best to start of a response with "well, it depends..."

In NYC they banned trans fats in the restaurants. I'm all for it.

5:50 AM  
Blogger Jack O'Connor said...

So there's definitely the general "You know it's not going to work the way you want it to work" problem. Regulatory capture, in the technical. When the ICC was created to regulate railroads, railroads themselves took advantage of ICC authority to prevent competition. Wal-Mart was a strong supporter of raising the minimum wage for the same reason: they don't pay the minimum, but their competition does. There was also a flurry of articles recently about how the trans fat bans in NYC hit small businesses much harder than large chains, because they don't have research laboratories devoted to finding compliant yet edible recipes.

That libertarian trope almost always applies, and it's not a cop-out. It's a deep-rooted bug in the economics of democratic government. But there's a slightly less general trope that's even better suited for this kind of debate, which you sort of hit on, and that's "different strokes for different folks."

Different people obviously want different levels of salt in their food. Maybe, just maybe, your girlfriend can locate the maximum on the socially-uniform-salt-content graph. Fine. But it would be preposterous to think that that "optimal uniform level" provides even close to the amount of "utility" we would get from the "true optimum" distribution, in which each individual receives his own personal optimal amount of salt. To argue for the uniform cap, then, is to suggest that the market distribution is so far from this optimum that we actually gain by choosing the guaranteed inefficiency of the uniform distribution. The libertarian argument is not that the market distribution is perfect, but rather that the encapsulated knowledge that government policies lack is worth more to us than what we lose to market inefficiency.

Also, the fact that your salty food drives up my healthcare costs is a problem with socialized medicine, not with salt. There's no reason that my choice to enjoy life should cost you just because you choose to live longer instead.

5:53 AM  
Anonymous Lotta said...

Good words.

4:35 PM  

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