Friday, July 8, 2011

Making the market more free with calorie labeling

As with most things liberals want to do, conservatives oppose it and often invoke the rhetoric of tyranny in order to convince themselves and others that its a bad idea. Its no different when it comes to the requirement from the ACA that restaurants have to display how many calories their products maintain. Conservatives hate it and claim that gov't shouldn't force anyone to do anything they don't want to do. Ronald Bailey even calls it food nannyism:

The Washington Post has a nice article looking at how effective mandatory calorie labeling at restaurants is at getting customer to eat less. Short answer: Not very.

If providing unheeded information doesn't work, perhaps scaring consumers will. In light the FDA's recent imposition of graphic labels on cigarettes, Reason contributor A. Barton Hinkle recently asked in his column on Nanny State Propaganda:

How long before the government places graphic warning labels on junk food?

Not long. Nannies always know best and they never give up.

So to these people, providing information to the public is the work of the nanny state. As he even points out, people don't have to do anything with this information. The gov't isn't forcing anyone to eat certain things. Its simply telling restaurants that they have to provide information on calories. And as he also points out, people probably won't even listen.

But what is important is simply the availability of the information. In order for a market to be as free as possible consumers need as much information as they can get. For instance, they need to know the price of the product they are looking to consume so that they can compare it to other produces of the product. Does that mean that every consumer shops around and always tries to find the best price? No, but they have that information if they chose to do so.

Its the same concept here with calorie labeling. If people want to know how many calories are in a food they are looking to purchase this law allows them that opportunity. The difference here is that restaurants have a vested interest in not giving consumers that information. Its possible that if people knew that a food had a certain amount of calories they would stop buying it. Or if they found out that a food at a certain restaurant had more calories than the same food at a different restaurant they might opt for the one with fewer calories. Since restaurants don't generally want to provide the public with information that could hurt their business the gov't has to step in and force them to do so. And by doing that the consumer is provided with another tool that helps them make better decisions.

To me this highlights the problem with free market rhetoric on the right. More information is a good thing for consumers as it allows them to influence the market in the way the theory says they can. And that is important because the power of the consumer is an important stabilizer or efficiency generator in the marketplace. But consumers can't always have the information they need in order for them to influence the market. So its nice to have the gov't be able to step in and provide that information. Yet because conservatives have spun things so much they can't accept outcomes that would help strengthen the theories they claim to believe.

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