Zookeepers Unite Against Behavioral Economics

Loewenstein and Ubel take aim at the jungle. They believe “behavioral economics,” in which you actually watch what people do, is a threat to their trade.

“For all its insights, behavioral economics alone is not a viable alternative to the kinds of far-reaching policies we need to tackle our challenges,” they write.

What sort of ‘far-reaching policies?’

Well, to give you an idea. The feds came to the conclusion that it was not a good idea to let people get so fat. What to do about it?

“The fashionable response,” say the two, “based on the belief that better information can lead to better behavior, is to influence consumers through things like calorie labeling.”

But the latest studies show that “it has little impact.” In other words, people don’t seem to care. But instead of letting fully informed people make their own decisions about how fat they will be, the zookeepers want to decide for them.

The problem is that food is too cheap, they conclude. So “we need to consider taxes on unhealthful foods.”

But “an over-reliance on behavioral economics is not limited to health care,” they point out. Take energy consumption. The two note that merely telling drivers how much gas they’re burning is not enough. The real problem is that “gas is still relatively cheap. An increase in the gas tax that made the price of gas reflect its true cost [what?] would be…far more effective.”

Deconstruction: The two academics are closed-minded, meddling bumblers. Obviously, the fat person chooses to be fat and the gas-guzzler chooses to guzzle gas. Both of them have their eyes wide open. Loewenstein and Ubel merely want to substitute their own tastes and judgments for those of the native fauna. They’re the zookeepers, after all.

Bill Bonner
for The Daily Reckoning