capitalism

Capitalism: that ingenious system for mobilizing people to create value and advance our civilization. Without it, most of us would still be peasants slaving away on subsistence farms. But capitalism has its problems, mainly 1) extreme wealth disparities and 2) huge externalities (costs to society not reflected in the selling price of goods and services).

Most countries have the first issue under reasonable control via tax brackets that take a much larger fraction of income from high earners. For example, in the US, the top 1% pays a 6x higher tax rate than the bottom 50%, contributing 38.5% of total income tax revenue.

It’s the second point that really drives me up the wall — not only because of its terrible effects on society but also because it’s theoretically so simple to fix.

I used to think that climate change was the worst consequence of our failure to fix capitalism. Now, I think it’s addictive food. Here’s why…

Our Primitive Food Cravings

Humans evolved over 200 millennia in a harsh world of great scarcity. Feeding ourselves in this environment required tremendous effort, sacrifice, and risk. That’s where our enormous food cravings come from — those with the strongest drive to face these daily ordeals were the ones who survived.

Then, over the last century or so, everything changed. Science, fossil fuels, and capitalism joined forces to produce an abundance of food that could be conveniently collected in supermarkets with almost no risk or effort.

At first, this was great. The fraction of the population that needed to work in agriculture dropped from more than half to only a few percent, freeing up a tremendous amount of human potential for pursuing higher purposes.

But before long, it became clear that we had a serious problem: Our primitive food cravings caused us to gorge ourselves on this newfound abundance. And the result looked like this:

It’s hard to fully comprehend the power of these primitive cravings. Just think about it: Being obese sucks! Every physical action gets harder, self-esteem plummets, productivity declines, food and medical costs rise, and life expectancy drops. And yet, despite all these huge incentives to maintain a healthy weight, the trends keep marching relentlessly upwards.

This is not natural. Humans may have strong food cravings, but we have similarly strong drives to survive, improve our lives, and be accepted and respected by the tribe. Something’s seriously wrong here.

How Capitalism Corrupted Food

Raw capitalism cares only about profit. Whatever happens to the customer and society after the sale is made is of no consequence.

In the food industry, this creates a massive incentive to design products that send our primitive food cravings into overdrive. Yes, highly addictive food may be terrible for individual and societal health, but it’s great for profits.

Here are the 18 most addictive foods that emerged from all this profit-maximizing innovation:

1. Pizza
2. Chocolate
3. Chips
4. Cookies
5. Ice cream
6. French fries
7. Cheeseburgers
8. Soda (not diet)
9. Cake
10. Cheese
11. Bacon
12. Fried chicken
13. Rolls (plain)
14. Popcorn (buttered)
15. Breakfast cereal
16. Gummy candy
17. Steak
18. Muffins

Notice the common thread? High concentrations of refined sugar, saturated fat, and sodium. These are the elements that send our 200-millennia-old food cravings into a mindless frenzy. And capitalism has incentivized the food industry to exploit these binge-instincts to the max.

But the creation of these foods is not enough. No, to further boost profits, they must be made available in ways that maximize desire and stimulate impulse buying. Here, we have three main avenues:

1. Supermarket checkout aisles lined with colorful addictive treats
2. Fast food restaurants placed on popular routes
3. Rapid food delivery services

That’s how we ended up in a world that surrounds us with easily accessible food designed for maximum addiction. It’s totally unnatural, and it’s the leading cause of the global obesity epidemic.

Where Are the Nutrients?

To make matters worse, another common theme in the list of addictive foods given above is their shamefully low micronutrient content.

The human body needs a wide range of vitamins and minerals to function optimally. A deficiency in any of these essential micronutrients can cause serious health issues.

Also, nutrient deficiency could be a big part of the reason why our food cravings are all out of whack. For example, this study found very encouraging effects of a high-nutrient-density diet on reducing food cravings.

So, to recap, unbridled capitalism incentivizes the industry to design food for overeating with no regard for nutritional value. This creates entire societies that are overfed and undernourished.

Excessive body mass from consuming too many calories is the most visible consequence of this sad situation. But nutrient deficiency is shortening and diluting billions of lives behind the scenes.

The Costs to Society

In 2014, obesity cost the world about $2 trillion per year, accounting for lost productivity, direct healthcare costs, and the cost of weight management. Given the trends shown above, this number is around $2.5 trillion today.

We can add to that the cost of producing and distributing all the extra food required to keep about 2.5 billion people overweight. Reaching the obesity threshold requires about 20% more food intake than maintaining a healthy weight. 20% of the average American food expense for 2.5 billion people amounts to another $1.3 trillion.

The economic burden of broad micronutrient deficiency is unknown at present. As a rough estimate, we can note that the average employee takes about 10 sick days per year. In addition, many still come to work when they are sick. Thus, conservatively, illness costs us about 5% of GDP or $6.5 trillion per year. And that’s not even counting the long-term effects on degenerative diseases.

How much of this can be avoided by eradicating our broad micronutrient deficiency? That’s highly debatable, but my own experience shows that it can be brought to zero. Even if nutrient-dense diets can only halve this number, it still represents a massive win.

In comparison, our 37 billion tonnes of annual CO2 emissions costs us $1.85 trillion if we consider a fair CO2 cost of $50/tonne. This is less than half of what obesity costs us and probably less than a quarter of what we pay for letting capitalism freely create addictive nutrient-free food.

The Ridiculously Simple Solution

Like climate change, the fix to capitalism’s incredibly destructive food failure is straightforward: internalize these massive externalities.

In this case, the metric that should be used to update the prices of different foods is nutrient density. Food with little nutritional value and lots of calories (like our list above) should become more expensive, whereas food with lots of nutrients and fewer calories should get cheaper.

Yes, there is substantial uncertainty on how large these adjustments should be, but even if we take only half of the median scientific estimate, it will still have a hugely positive effect on consumer behavior.

But of course, we run into the same problem as we do with a CO2 tax: many powerful players will lose big when we make it more costly to keep destroying the health of billions with nutrient-free calorie-bombs. We might also see protests in the streets when chocolate doubles in price.

That’s why we shouldn’t expect empty-calorie sin-taxes anytime soon. But we still have our free will, so we can always fix capitalism for ourselves.

Create Your Own Economic Incentive

I believe that all those lucky enough to be born into prosperity have a moral obligation to give to charity. Blind luck at the lottery of birth is the single biggest reason why you’re living in material comfort today, and it’s only right to share some of this good fortune with those who were not as lucky.

Once you accept this moral responsibility, you can employ it as a powerful tool to build better habits. It’s simple: Draw up a formal contract with yourself, specifying how much you’ll give to charity whenever you buy empty calories. One hour’s wages is a good starting price point for these donations.

I’ve used this method for a long time to maximize the quality of my diet and control several other bad habits. It’s very simple and extremely effective.

Give it a try! You can always specify that your contract can be adjusted each month to avoid any risk of bankrupting yourself 🙂