A few years ago, I was at my local supermarket and I noticed something peculiar. There were two maple syrup products available, both about the same size, but one was $1.89 and the other was $8.99. How could such a price disparity between two “identical” products exist? Upon a closer look, the cheaper “syrup” was not syrup at all, but rather an engineered soup of chemicals that imitated maple syrup. This discovery led to some startling revelations about the nature of profit and food, and its effects on society.
Profit Distortion
The core mandate of a corporation is to grow that profit every year. This open-ended growth mandate seeks to pump up the share price so that shareholders are rewarded for their investment. While there is nothing wrong inherently wrong with this, humans can only eat so much food and the global population can only grow so fast. How can a food producer grow profits every quarter when food demand is naturally limited?
To solve this, producers need to increase the amount of food you buy beyond your biological needs, and/or increase the profit margins on the products they sell.
To get you to buy more, producers have figured out how to tap into your biological hunger mechanisms. In the last century, food has become plentiful for many, but our bodies are not wired to handle food abundance, they are wired for scarcity. This creates an opportunity for sales.
Our brains naturally seek out energy/calorie dense foods, particular those heavy in carbohydrates and sugar. This would have been advantageous when we were hunter gathers, but today it is a liability. Food producers know this, intentionally adding sugar, or in many cases, cheaper high fructose corn syrup, to trigger our brains into eating and craving more.
The shift toward high carb/sugary foods also plays well into profit margins. Carb/sugar-heavy products, like cereal, sodas, chips, bread…etc store well on shelves and don’t need refrigeration. Producers favor foods that are easily stored, transported, and handled by machine, because this makes them more profitable than other products.
The markets are working as they should, encouraging growth, innovation, and profit. But they do so at a social and environmental cost. A cost that we neglect at our own peril.
Quantity VS Quality
Our diets are shifting towards that which is most profitable. The result is reduced food quality and diversity. We have lost 75 percent of plant genetic diversity since 1900. We have a greater quantity of food, but we consume far fewer types of foods than our ancestors did, this is not optimal for our health.
We are also losing quality. Cattle, poultry, and farm-raised fish are now fed the cheapest foodstuffs with less diversity than their natural diets require. As a consequence, our meat/milk/eggs are less nutritious now than they were a few generations ago.
As previously noted, profit motive has discouraged the production of nutritious foods and in favor of sugar/carbohydrates, often in the form of food substitutes (like fake maple syrup.) One such consequence is that omega-3 fatty acids, vitamins, and minerals, are all essential to our health, are increasingly absent from our supermarket shelves and our diets.
In his book, In Defense of Food, author Michael Pollen explains that the qualities that make these nutrients good for our health, also make them good for other lifeforms, such as insects and bacteria. This fact limits shelf life and transportation options. Therefore, nutritious food cannot survive on store shelves or be transported as easily are as their non-nutritious counterparts. This makes them prohibitively expensive to sell, or not worthwhile to sell at all.
Furthermore, even our ‘healthy’ food options are falling victim to blind profiteering. Factory farming techniques are pushing out more and more produce every year, but the nutritional content of this produce has fallen drastically over the past century:
A Kushi Institute analysis of nutrient data from 1975 to 1997 found that average calcium levels in 12 fresh vegetables dropped 27 percent; iron levels 37 percent; vitamin A levels 21 percent, and vitamin C levels 30 percent.
The inevitable consequence of profit distortion is greater quantity, poorer nutrition, and less diversity of food. And even if you try to eat healthy, you have to consume more calories to get the same amount of nutrients than your ancestors did. And therein lies the answer to the developed world’s growing obesity and chronic illness crisis.
Consequences and Solutions
We now live in a world where food is cheap and plentiful, yet our people are overweight and chronically malnourished. Our brains are continuously telling us to eat in the pursuit of missing nutrients and/or sugar cravings. We get too many calories, but not enough nutrition. This is great for food produces, who are selling more and more profitable product, but it does so at the expense of our health.
The consequence is a growing epidemic of obesity. In America alone, the social costs of obesity as estimated to exceed $1 Trillion. More worryingly, obesity is strong correlated with many other afflictions, including heart disease, cancer, atopic diseases, arthritis, tooth decay, and diabetes.
Virtually all modern chronic diseases can trace their roots to too many calories and poor nutrition. In short, your supermarket is causing us to die earlier and live less healthful lives in the meantime.
Externalities
This is not to place blame on the food industry, but rather a recognition of the limits of pure markets. The food industry’s profits are no longer driven by (forgive the pun) organic “growth” but by the externalization of its costs onto consumers in the form of chronic illnesses.
This is a classic example of negative externalities in the market. Where the market creates a negative externality, it is the responsibility and duty of the government to internalize that externality through rational taxation policy. Pigouvian taxes are the solution. For example, the government could levy an added sweetener tax to internalize the costs of obesity onto the producers themselves.
Such a tax could equalize the cost of real and fake maple syrup, making the real option a no-brainer for the consumer. The tax would push food producers back toward healthy options and onto a path of true growth. Such a tax avoids heavy-handed regulation that stifles jobs and innovation. It preserves the market, but also ensures socially optimal growth.
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