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Friday, January 17, 2003

Nicholas responds to my post below about cheap food, in part by quoting The Road to Wigan Pier. He also asks in the comments if I consider the social costs of an ill-nourished populace. It's not that I have not considered this, but the externalities caused by malunitrition in a developed country are, well, limited; the people who suffer most are the malnourished poor themselves. My post was really directed at those who think that people cannot choose to be malnourished, and the attitude that would lead a person to consider a policy intervention to correct this, (such as a tax on cheap, fatty food) as being beneficial for the poor.

Poverty is a multidimensional problem, to be sure, but it's primary cause is a lack of income; malnutrition is more symptomatic in nature, and efforts aimed at tackling that is in isolation could end up exacerbating the problem of poverty. In the context of the present discussion, this is illustrated by indifference curve analysis. Click here and scroll down to the last graphic. The gist of it is this: given existing preference, an increase in the price of a normal good reduces income. By and lage, the food that the poor in developed socieites at are what economists refer to as inferior goods--as income increases, consumption falls. Thi includes the same fatty food that consumer activists rail against.

In the long run, the best way of dealing with poverty is to raise incomes--lack of income restricts the choices one can make. This is incredibly difficult, and there are no straight-line answers to the problem, but paternalism is not a good way to start--ultimately, I think, individuals know what's best for themselves, and suffer most from the consequences of thir own actions. Poor people suffer enough indignities in life, and a decent first principle in dealing with their condition is by treating their decision-making with respect, however one disapproves of its consequences.