Another societal mass delusion, this time about sugar

Yes, yes, we know, we’re all becoming gross lardybums because Big Food insists on feeding us masses of sugar. And there should be regulation, banning, taxation, anything, to save us from exploding as we gain ever more weight and fat as we gorge. We know this must be true because the nation’s favourite cheeky chappie, Jamie Oliver, is telling us so:

If anything, Oliver’s proposed 20% tax on sugary drinks is a pretty modest gesture (it’s hardly the end of pudding as we know it – he’s not asking for anything to be banned), but still it attracts the frothing rage of libertarians and the resistance of industry lobbyists. Oliver’s been there before, of course. But the extra twist is that this row increasingly pits parents against everyone else.

The argument for taxing or otherwise regulating the white stuff is almost always framed as saving the kiddies from an untimely death (Oliver says he was inspired by seeing his own four bombarded with fizzy-drink ads while watching telly). But what separates this war on Big Sugar from his school dinners project, or even from sin taxes on age-restricted products like booze and fags, is that there’s no way of weaning children off sugar without also affecting adult diets. And many grown-ups respond to that with all the fury of toddlers denied a biscuit.

Yet the real problem here is that absolutely none of this diagnosis is actually true. we’re not eating more than our forefathers did, we’re not even eating more sugar than our forefathers did. We are, in fact, consuming less of both than our ancestors did, even that we did ourselves only a few years ago. As Chris Snowdon has pointed out:

All the evidence indicates that per capita consumption of sugar,
salt, fat and calories has been falling in Britain for decades. Per
capita sugar consumption has fallen by 16 per cent since 1992
and per capita calorie consumption has fallen by 21 per cent
since 1974.

If calories consumed have been falling then it cannot be a rise in calories consumed that is making us all lardybuckets. If sugar consumption is down if cannot be sugar consumption which is making us all grossly fat. It must, obviously, be something else. That something else being that calories expended has fallen faster than calories consumed. Perhaps the largest influence on this has been the general introduction of full on central heating in recent decades. After all, we are mammals and the major energy use in mammals is the regulation of body temperatures.

One more little factoid on this: the current average UK diet has fewer calories than the minimum acceptable diet under WWII rationing. Quite seriously: we are gaining weight on fewer calories than our grandparents lost weight on.

And thus as a society we find ourselves in one of those madness and delusions of crowds events. These are not restricted to markets gone haywire, like the idea that American house prices could only ever rise, or that tech stocks could be day traded to a fortune. They can be rather more societal in nature: think witch burning or the much more recent Satanic abuse mythology. And we are now in the middle of another one about sugar.

It simply isn’t true that we are eating more of it, nor that we are consuming more calories in general. Thus the solution to our generally getting fatter just isn’t related to our consuming more of what we don’t in fact consume more of.

Let them in

In City AM today I have a piece on the refugee crisis, arguing that the costs that many are (understandably) worried about may not actually be a problem:

A recent study looked at the impact of Yugoslav refugees on Danish workers in the 1990s and 2000s. Because Denmark’s resettlement policy distributed these refugees across the country without respect to local labour market conditions, this is a case study in how “exogenous” immigration affects natives. . .

Instead of starting a race to the bottom, as some feared, this influx of workers allowed the Danish economy to become more complex. Adam Smith’s “division of labour” increased, as jobs became more specialised and hence more productive. . .

Crime is on people’s minds too. And it’s true that asylum seekers do seem to increase property crime rates in the places in Britain they go to, though interestingly they seem to reduce violent crime rates.

But this seems to be a consequence of the tight restrictions that effectively prohibit asylum seekers from working for at least the first 12 months that they spend in Britain. If we liberalised those rules, we could solve that problem.

It’s important to get the numbers right. The UK has accepted around 5,000 asylum applications from Syrians, not 216 as many people are claiming – that 216 is the number of Syrians we’ve actually evacuated from Syria directly. But I think there’s a strong case for letting in many more than that.

A brief endorsement of ‘Markets for Managers’

I’m often asked by people who are just getting interested in economics what they should read. There is no shortage of good ‘pop economics’ books to recommend to them: Freakonomics is the most famous and The Armchair Economist is enjoyably contrarian, but for my money The Undercover Economist is the most interesting.

But none of these teach you the sort of economics you’d learn if you studied economics at a university. And that’s where Anthony J Evans’s Markets for Managers comes in. It’s aimed at ‘managers’, by which Evans means people who make strategic decisions for their firm, and makes the case that managers who understand the principles of economics will have an advantage over their rivals. But in explaining those principles Evans inadvertently gives an introduction to anyone who wants to learn about them.

The ‘applied economics’ method that Evans uses is extremely readable. If, like me, you prefer to learn by applying abstract ideas to reality, Evans’s approach is ideal. And for British audiences there is something quite nice about reading examples applied to Fernando Torres rather than basketball players I’ve never heard of. What’s most impressive about the book is that Evans even covers the drier parts of economics, like international trade and macroeconomic policy, that the ‘pop economics’ books don’t bother with.

Evans is a Senior Fellow of the ASI and can claim to be one of the UK’s only “Austrian school” economists, and these perspectives do shine through, though not to the detriment of the economics being discussed. What he’s done with Markets for Managers is to give a clear, interesting and comprehensive primer in economics as it’s taught in the classroom. No doubt many managers would benefit from reading it but even more so I find myself recommending it to university students who are not studying economics. For historians and political science students especially, the boot-camp in economics it gives might well give a surprising new way of understanding their own fields.

Markets for Managers at Amazon.co.uk

Markets for Managers at Amazon.com

So that’s the end of minimum pricing on booze then

Ever since the idea was first put forward we, along with others, have been saying that minimum pricing for booze would fall afoul of the law. And we were right:

Nicola Sturgeon’s plans to fix a minimum price for alcohol has suffered a huge blow after the European court’s top lawyer ruled it would infringe EU law on free trade.

In a formal opinion on Sturgeon’s flagship policy, the advocate general to the European court of justice, Yves Bot, has said fixing a legal price for all alcoholic drinks could only be justified to protect public health if no other mechanism, such as tax increases, could be found.

Bot’s opinion is expected to mean a final defeat for the Scottish government’s efforts to be the first in Europe to introduce minimum pricing – supported by leading figures in the medical profession and the police, after several years of legal battles.

Over and above the obvious illegality of the proposal the thing we couldn’t get our heads around was the mind gargling stupidity of the idea. We don’t accept the idea that boozers don’t cover their costs currently but imagine, for a moment, that we do. Why, as a solution, would you boost the profit margins of producers with a minimum price rather than raise the prices with more taxation? We have not been able to find anyone who can explain this to us.

All we’re left with is the rather uncharitable opinion that some people wanted nice jobs as campaigners but wanted to make sure that they campaigned for something silly that quite obviously would never happen. Nothing, other than sheer raging stupidity, makes sense as an explanation to us.

Economic development can have some old, old, roots

An interesting little piece of research showing just quite how old some of the roots of economic prosperity can be. And shown using the most modern technology as well.

For some years now economists have been measuring economic development by the amount of light that can be seen in satellite photographs of an area. For one of the very first things people seem to do, as soon as they can, is to light up that bulb rather than curse against the darkness. The technique has been used to estimate African GDP growth for example, coming to much more cheering results than the official figures would have us believe. And here it’s used to measure quite how old some of the roots of successful development might be:

In ancient times, the area of contemporary
Germany was divided into a Roman and non-Roman part. The study uses this
division to test whether the formerly Roman part of Germany show a higher nightlight
luminosity than the non-Roman part. This is done by using the Limes wall
as geographical discontinuity in a regression discontinuity design framework. The
results indicate that economic development—as measured by luminosity—is indeed
significantly and robustly larger in the formerly Roman parts of Germany.
The study identifies the persistence of the Roman road network until the present
as an important factor causing this development advantage of the formerly Roman
part of Germany both by fostering city growth and by allowing for a denser road
network.

It’s a very interesting little piece of work.