The sale of foods that increase disease and the resulting use of medical services to treat that disease result in economic growth, increased employment and elevated stock prices.
This article by Harvard economics and public policy professor Kenneth Rogoff, a former International Monetary Fund chief economist, helps to explain the contradictions. At a minimum, it raises the right questions. It’s very difficult to arrive at the right answers without first asking the right questions.
Can we all agree that something is profoundly wrong with a calculus that judges poor health outcomes to be socially beneficial based on non-holistic economic reasoning that ignores all personal and social costs?
… I want to focus on the food industry’s link to broader problems with contemporary capitalism (which has certainly facilitated the worldwide obesity explosion), and on why the US political system has devoted remarkably little attention to the issue (though First Lady Michelle Obama has made important efforts to raise awareness).
Obesity affects life expectancy in numerous ways, ranging from cardiovascular disease to some types of cancer. Moreover, obesity – certainly in its morbid manifestations – can affect quality of life. The costs are borne not only by the individual, but also by society – directly, through the healthcare system, and indirectly, through lost productivity, for example, and higher transport costs (more jet fuel, larger seats, etc).
But the obesity epidemic hardly looks like a growth killer. Highly processed corn-based food products, with lots of chemical additives, are well known to be a major driver of weight gain, but, from a conventional growth-accounting perspective, they are great stuff. Big agriculture gets paid for growing the corn (often subsidised by the government), and the food processors get paid for adding tonnes of chemicals to create a habit-forming – and thus irresistible – product. Along the way, scientists get paid for finding just the right mix of salt, sugar and chemicals to make the latest instant food maximally addictive; advertisers get paid for peddling it; and, in the end, the healthcare industry makes a fortune treating the disease that inevitably results.
Coronary capitalism is fantastic for the stock market, which includes companies in all of these industries. Highly processed food is also good for jobs, including high-end employment in research, advertising and healthcare.