The Economics of Fast Food

How people hurt themselves
in their own self-interest

The classical free market economics story runs like this:

Premise A: People only act in their self-interest.
Premise B: People often eat fast food.
Therefore: Fast food is often in people's self-interest.

And there are situations when fast food is in a person's self-interest. But eating it daily for lunch is not one of them. Nor is continuing to eat it after it has contributed to a person's obesity. But still people eat it. And eat it. And eat it. Why?

The answer, I believe, can be summarized in a single-word revision to Premise A above: "People only act in their own felt self-interest." The implication is clear - people are sometimes wrong about what is good for them.

A reasonable assessment of the decision to eat or not eat fast food at any given time might look something like this.

Pros: It's cheap, it's fast, it tastes good, it fills you up.
Cons: It lacks many key nutrients, it causes a dangerous glycemic response, it leads to obesity and it's associated illnesses, it increases the risk of diabetes, it leads to inflated costs in the healthcare system, it contributes to the homogenization of the food industry.

Looking at this list, you might again question why people eat fast food at all. I'll offer two reasons.

First, this list only includes conscious, rational decision points, while subconscious, extra-rational decision factors are also at play. In this case, two subconscious factors weight heavily on the positive side.

1. Instinctual Desires: our bodies evolved to crave fat and sugar, since they are calorie-dense and rare in nature, but they are abundant at McDonald's - two patties worth of one and a super-sized cup of the other.
2. Marketing Impressions: advertising seeks to associate images or feelings with certain brands or products, and fast food has benefited as much from advertising as any industry. When we step up to that counter, we're not just buying a burger; we're buying a feeling that was seeded there by months of careful marketing.

Second, the Pros in the list are immediate, meaning that if I decide to eat fast food I quickly experience each of the pros - the cheapness, the quickness, the taste, the fullness - while the cons are not immediate. I don't feel the lack of nutrients right away, I don't even know what the glycemic response does feel like, and all the other ones either won't affect me for a while, or contribute to some larger problem that one meal can hardly affect one way or the other.

Our brains are not geared for long-term thinking. As best I can see it, on average we can consider about one year in advance, and after that things start to lose definition rapidly. And moreover, when we are only a small part of a much larger problem we tend to minimalize and rationalize our part in the problem. So it's okay if I take this extra long shower or use paper plates instead of flatware or buy fast food instead of cook, because in the scheme of things my choices don't mean much. But of course these problems will only be solved when each of us makes the decision to change.

In the case of fast food our natural subconscious tendencies outweigh our reason. Fast food is rarely in our self-interest, but the immediacy of the benefits, the food's appeal to our instinctual desires, and the feelings that stuck from marketing campaigns often overcome the negatives, which, though numerous, rational, and weighty, are minimalized by their lack of immediacy. So instead of doing what is in our rational self-interest, we order a combo meal.

This is where economics needs to grow the most. The model of human decision making typically employed in economic models is to a mind what a stick figure is to a man. Only as economists learn to account for this more conflicted, nuanced version of humanity will economics reach it's predictive potential.

Three Principles of Ethical Economics

As I prepared for my recent 'Discipleship Economics' workshop I tried to strain some foundational principles out of my swirl of thoughts about personal economics grounded in personal values. So far I have come up with Three Principles of Personal Economics that I hope you'll find as valuable as I have. They are all based on what I call the Transcendent Virtue: Love your neighbor as you love yourself.

1) Simplicity - Free your time, commitment, and money by limiting your personal needs and meeting them with a minimum of resources. If we ought to care for our neighbors as we do ourselves, it stands to reason that our personal economics must leave room for our neighbors. This begins with limiting how much of our resources are devoted to our own needs.

2) Generosity - Simplicity without generosity is only stinginess or laziness. If a need can be filled by giving your Time or your Commitment, that is probably the best way. Give money as an act of relationship, not in lieu of it. Money is best given within established, ongoing relationships. Generosity should be proactive: Set aside time, commitment, and money; seek out great ways to use them. The results might amaze you.

3) Ethicality - Even as you simplify your lifestyle you will continue to buy things. Many products are made using substandard ethical or environmental practices. Make a serious effort to buy only the most ethically and environmentally sound products. Remember, your neighbor is anyone that you have the opportunity to care for, and each time you make a purchase, you have the opportunity to care for the people behind your product.

(The difficulty in finding this information is why my friends and I are building WikiChoice, a web service that will give you instant access to the best consumer choices. Follow us on Twitter here.)

The Ethical Imperative

[Last minute post before the Idea Camp tomorrow. These topics are fascinating. I can't wait for the discussion]

Economics has lately been on most people's minds, and perhaps on mine more than some. Instead of the national and international economics favored by the evening news, I've been focused on personal economics - the economic decisions of individuals and families.

As I mentioned in my last post, my views on personal economics grow in the soil of my values, and the greatest value, as I see it, is the golden rule in its most positive form - love your neighbor as you love yourself. That is: give another person's needs the same consideration as your own.

It follows, then, that our personal economics must make room for other people's needs. But my observation of the American lifestyle shows me that we have trouble making room for ourselves. We carry bulging budgets, heavy with debt, obligation, and entitlement, unable to bear the weight of an outside request.

In my case, and in yours if you agree with me that empathetic love is a high value, a personal economic imperative has become clear: Simplicity.

As I prepared to write this I first tried to define for myself what the term Simplicity meant in regards to my personal economics. I have used it to describe what sort of house I wanted to live in, how many hours I wanted to work, even how many pots and pans I wanted to own. So it was hard to pin down a definition, but I think I've come close.

"Simplicity is the freeing up of your time, commitment, and money by limiting your personal needs and meeting them with a minimum of resources."

The importance is obvious - by using less of your resources on yourself, you have more to invest in others, in your neighbors as it were.

The practical ramifications of this sort of Simplicity are as difficult as they are obvious, especially for American accustomed to a self-serving consumer culture. Here are a few examples, I'm sure you can add many more:

• Don't live in the most expensive house you can afford. Choose the least expensive house that meets your needs.
• Don't trade in your used car just because the sexy new coupe is out. If it runs, keep it.
• Share and borrow things like power tools, sports equipment, even cars and computers if you can.
• Stay out of consumer debt.
• Eat out less.
• Make your own entertainment instead of buying it.
• Rethink excessive holiday gift giving.
  

The list could go on. I'd love to hear your ideas on Simplicity! Now to bed. Big day tomorrow.

Personal Economics Gone Interpersonal

As I've been working through more thoughts related to economics, I've realized that my values have deeply shaped my economic opinions, like a place's climate gives rise to its crops. So I feel that it's fair at the outset to tell you that I believe humanity's highest virtue is this: Love your neighbor as yourself.

Call it loving your neighbor, call it transcending the self, call it lovingkindness, empathy, mirror neurology; call it whatever you like. In my opinion, our ability as humans to place the needs of another person on the same level of importance and priority as our own is our highest calling.

My ideas about personal economics grow in this soil.

Posts to come include thoughts on simplicity, ethical economics, generosity, and perhaps more. Looking forward to a continued conversation.

Economics 101: Money, John Maynard Keynes, and Monty Python

In a couple weeks I'll be at the Idea Camp (you should come; it's free) facilitating a discussion about money. Now, as a caveat, it's worth saying that I don't have any right now. But what I do have are some hard-earned ideas about money, about our culture's relationship to money, and what we might do well to change about that relationship.

Over the next couple weeks I'll be working out some thoughts on this blog, so please feel free to join in the discussion and help me refine my understandings. For starters, a quick foundational discussion of values and economics.

Economics, more than being about money, is about how people make decisions. It's about how we decide what to invest our resources in -- our time, our money, our commitment, etc. The most influential economist of the last century, John Maynard Keynes, went further than to study and describe decision making, he prescribed it:

"For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight."

The foulness of which he writes is the love of money, a vice known to many as the root of all kinds of evil. Keynes prescribes a subjugation of values such as generosity to this vice for at least 100 years, after which he says society will have become so rich as to throw off such "psuedo-morals" and see "the money-motive at its true value ... a somewhat disgusting morbidity."

Keynesian policy prescription became the basis for much economic thought and policy, including Roosevelt's New Deal. I believe his moral prescription has shaped our country as well.

When John Cleese (of Monty Python fame) first came to America, he says he was struck by the unabashed pursuit of excessive wealth. The British at the time were more reserved about money, he recalls, most being satisfied with a comfortable salary for an honest day's work. But not the Americans.

Keynes' prescription has been realized, with restraint and generosity being caged to let avarice and precaution work their dark magic on our economy. What Keynes did not realize, though, is that decades of economic wizardry would see several generations brought up seeing fair treated as foul and foul as fair, seeing excess praised over simplicity and selfishness rationalized as economical. His prescription for economic growth was also one for risky cultural engineering. As Shumacher asked, How can a system founded on greed ever lead to peace?

And Keynes also seems to have failed to ask the question, Where is the rich man who says, 'I have enough'? He is rare, and often so rich as to be statistically invisible. Bill Gates might fall into this category, and perhaps Buffet and his peers, though he keeps investing. But the millionaire down the street has not stopped his pursuit of wealth, though he lives like the kings of not long ago. I myself hover around the 90th percentile in world income, but I haven't found that financial peace of mind that Keynes promised.

My economic thoughts will buck Keynes and subjugate macroeconomic concerns to personal and (I'm stretching here) universal values. Where Keynes believed that economic development would solve the values problem, I suspect that values will guide us to a more sustainable economy.

TOMORROW: an experiment

A Past Quickly Gone

For thousands of years people farmed as much land as they and their families could acquire and manage. Acres and acres, but small by today's standards of industrial farms. They plowed, planted, tended and harvested. Over and over. Every season. Perhaps they had livestock as well, and knew which part of the year their herds would mate, and when the young would be born. Every year.

Before that they hunted for their food and found wild, edible plants. Food was a daily struggle and a daily accomplishment. Each day brought new hunger and new satisfaction. Perhaps some plants would last a week, maybe two, but planning ahead was of little use. Those that survived had to focus on their present.

Those days were simple. Minimal planning, some hard work, and your family would eat. And that was, for the vast majority, the best that could be done. For thousands upon thousands of years the human species has lived this simple, predictable life. But today something new is happening. It started with the Industrial Revolution and was accelerated by World War II. Suddenly we could do better than eating. Suddenly we could have comfort, even luxury. And we got them through a manufacturing boom.

Coal and oil provided cheap power, and technology improved upon itself at a surprising rate. Long distance freight leveraged these two advances and suddenly the whole world's resources were at the fingertips of those with the aptitude to take them. And the resources proved more abundant than we could have hoped. Manufacturing soared.

Like Grabbing a Passing Rocket

Fast forward to today.

In the last sixty years we have used more of the earth's resources than in all of human history before that. If you can spare a moment, please read that again. Things are so different now that we use in one year what used to take thousands of years to deplete. And the pace of our resource consumption is increasing.

Our lives look very different now, and nowhere more different then in how we interact with the planet. We are separated from the earth in every way possible. We pave it over and dam it up. We filter it and gate it off. We don't grow, hunt, harvest, or gather anything from the earth. We get it from the store.

But for the first time in the history of our species we are having a lasting impact on the earth as a whole, and it's not a good one. Deforestation, strip mining, species extinction, and polluted air and water are some of the signs of our impact. Other more controversial consequences of our collective lifestyle like global warming seem more probable each day. And most of these have become serious problems in the same 60 years during which we've drained our world's resources.

As we pull back and see this picture as a whole - the long, steady ascent through stone, bronze, and iron ages, all conducted with relatively little impact on the planet as a whole; then the short, frenetic burst of the last 200 years, and the staggering trajectory of the last 60 years - we start to see a compelling picture. The pace of change is like going for a long jog and then grabbing hold of a passing rocket.

If that long, steady ascent was a line the length of a football field, whose height represents the use of resources, it would slowly, from one goal line to the other, rise to about a foot off the ground. The last sixty years is so small in comparison to human history that it would not reach a single inch into the end zone, but our resource consumption is so rapid it would soar a mile into the sky! Being able to visualize history in this way, and to see the staggering ways we're changing our own lives and the environments around us in such a short time, leads me to a rather unnerving conclusion.

A Triple Blind Experiment

In the scope of history, our current way of life is no more than an experiment - one that might succeed, but might fail. The unnerving part is that almost no one is thinking about it this way. Instead we are reshaping the world and our interaction with it such that we depend on the success of the experiment for our survival. It seems that we are all running as rats in the maze and no one has stood up to act as scientist.

There is, I believe, reason for such myopia. Humans are not built for the long view. The many millennia of seasonal and annual repetition selected for those people who were able to focus their attention best on the short term. Hunt today, plant tomorrow, harvest in the summer. There was little thought of next year, none of next century.

But now as a race of hunters, gatherers and farmers we are facing problems of centuries. Resource depletion, environmental destruction, even national debts are not problems that the changing of the seasons will solve, but we seem to keep waiting for them to just go away, like the snow in spring.

I am not suggesting the imminent doom of mankind. I believe as much as anyone in our ability to learn and adapt. What I am suggesting is that this is a new epoch in which a more focused vision for what we must learn and how we must adapt is needed, because the world is changing a thousand times faster than it ever has.

We are building Western society on a hypothesis. That hypothesis is that all of this cataclysmic change in the ways we live and how we use the precious resources we have will be sustainable: for the next generation, for their children, and beyond. We seem to assume that since it has worked for the last sixty years, it will work for the next thousand. But there are precious few if any voices that are able to tell us if our gamble is paying off, if the experiment is working. Or not.

The 10,000 Year Clock

Two days ago I watched a TEDtalk by Stewart Brand. He showed a project that he and some friends are working on: a clock that will run for 10,000 years. The clock is a project of The Long Now Foundation, a non-profit designed to encourage long-term thinking, and when it is done it will ring a different tune with its 10 bells every day for 10,000 years.

They chose 10,000 years because it's "about how long humans have had a stable climate and technological progression." They start by looking to the past because we can see it - there are books and pictures and artifacts. But then they did the brave and difficult thing of engaging with the future. They dared to ask what the world might be like in 10,000 years, and if they could build something to survive the interim. And now they are building it.

The execution of the project is astounding; it captured my imagination for the last two days. They are building a monument-sized clock that uses only bronze-age materials - the world's largest binary computer - and embedding it inside a mountain in Nevada. They are making it into a site of pilgrimage, trying to inspire people to think 10,000 years ahead, or at least a couple hundred. In shaping the experience, one of the designers outlined the "7 Stages of a Mythic Journey" and they are creating the journey with myth in mind. It's a broad, synthetic, creative, idealistic endeavor, and I'm all for it.

Voices from 29,000 ft, and Beyond

The 10,000 year clock and The Long Now Foundation reminded me of something I've been thinking about for the last year or so. We need someone, a number of people, to monitor the experiment that is modern Western society. The difficulty is that the experiment is not happening in one university, or one field of study, or on one continent. The experiment is messy amalgamation of millions of different players and ideas, building upon each other in real time on all sides of the globe.

What we need is a new field of study that is purely synthetic - a discipline that is a mixing pot for all other disciplines, so that they might be stirred together and the temperature of the whole can be taken. This is the one that must guide us.

Bristish Economist E. F. Schumacher, in his book Small is Beautiful: Economics as if People Mattered, argues that society has become far too dependent on Economics for guidance, bowing before the almighty dollar in hopes that if everyone acts selfishly, everyone will gain and eventually find comfort, and then, peace. But he states rather intuitively that no system built upon greed will ever lead to peace, for where is the rich man who says, 'I have enough'?

Schumacher also critiques education, stating that we have built institutions that teach us the tools to create anything, but fail to teach the values that ought to guide creation. This, I think, gets to the point. There is no vision for societal progress, only a thousands mashups of technological innovations, all drawing from and competing for the limited resources of the world.

With our newfound ability to affect the world as a whole, there must be some attempt at synthetic vision and guidance. It must take into account human need and equality, enviornmental sustainability, resource renewability, economics, politics, faith and religion, even, as the 10,000-year clock shows, storytelling and myth. It's practitioners must take a higher, broader view of the world, standing as if on Everest's 29,000 ft. peak, looking out across the whole of the world. And they must look at the long-term, understanding that we do care about the longevity of our planet and its eventual sustenance of our children and their children and beyond, though often we don't think, act, or even vote that way.

In Herman Hesse's Demian the title character talks about the changing of the age, saying that most people will not be ready for the tumult. But that some will step forward, selected by the chance of nature, "Not as leaders and lawgivers - we won't be there to see the new laws - but rather as those who are willing, as men who are ready to go forth and stand prepared wherever fate may need them."

The age is certainly changing, and we need those few that nature has endowed with the unique ability to see the long view. These voices must be cultivated and amplified, speaking from their lofty perspective to guide us in this grand experiment.

Deep Economy: Growth and Decline in America

[Thoughts from, about, and inspired by the book Deep Economy, by Bill McKibben. Stats cited are from that book.]

Since 1951, GDP per capita in America has tripled. That is, for every person in America, there is three times as much economic activity as there was 50 or so years ago. We own twice as many cars, on average, and new homes today are double the size they were in 1970. So why are we getting less happy?

Once a year for quite a while now the National Opinion Research Council has asked Americans whether, on the whole, the are very happy, pretty happy, or not too happy. Since the early 1950s the percentage of people who counted themselves "very happy" has steadily dropped.

This is one of three findings that McKibben cites as proof that economic growth is not as beneficial as we've come to believe. The other two: one, although the economy has ballooned since WWII, many people's real income and wealth has dropped, and financial disparity has risen sharply, which is to say, the gap between the rich and the rest of grown; and two, earth's natural resources cannot sustain unlimited growth. In fact, if China's growth stays on the current pace, by 2031 (only 23 years from now) China alone will consume 99 million barrels of oil per day. To put that in perspective, that's 20 million more barrels per day than the entire world uses now. That's just one example.

I believe that one of the major theses of this book will be that happiness and satisfaction require only a minimum of financial resources, but are inextricably linked to community. And that by pursuing this "Economy of Community," as I've put it, many other problems can be abated. It's an exciting book - I highly recommend picking it up soon, and discussing it with me!

Hail to the Thief, Again

Everyone's favorite band to claim to like is giving us all more reason to claim to like them. Radiohead's next album, In Rainbows, which will be available October 10, will be released for download on their website. The price? You choose. Any price will do, according to Radiohead, including $0.00.

In a tip of the hat to the music sharing community, the band, whose contract with EMI has lapsed, is testing the power of the internet media revolution, and the good will of its fans. What price will you choose?

That's the question keeping media companies up at night, as all media becomes downloadable, shareable, free. What price will consumers choose? Only Radiohead may know.

from BBC News