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Behavioral Economics
Peanut Butter and Paternalism
Fly Parts in your Peanut Butter?
Posted January 5, 2009
Ever wonder how many fly parts can safely reside in your peanut butter? The government decides, and consumers don't complain. Now consider: How many lives can be safely exposed to helmetless motorcycling? When the government decides, many complain.
On the standard story of economic decision-making, having more choices promotes our welfare, and we have the smarts to determine which choices will make our lives better. But this view has taken a beating at the hands of psychologists and behavioral economists. Often, we make better decisions when we have fewer options, a finding nicely set out in Barry Schwartz's The Paradox of Choice. Our cognitive limitations make it impossible for normal humans to be entirely self-reliant in decision-making. These limitations pose a problem when we need complex strategies to achieve our simple desires.
We need special knowledge to make sound financial, medical, and consumer judgments. But when, if ever, does an individual's cognitive imperfection become so great that the government gets to substitute its judgment for your own? Isn't that paternalism? Most philosophers define ‘paternalism' as a rule, law, or policy that is (1) imposed against your will and (2) justified solely by appeal to your own interests. In the United States, there is a strong presumption against paternalistic measures. But once we are made aware of psychological evidence of the natural limitations on our judgment, it is less clear whether many measures decried as paternalistic really are introduced against our will. In addition to wanting a daily jelly donut, you may also want to reach retirement and have more rather than less money with which to retire. Foregoing the donut and placing the proceeds in a mutual fund will assist us in achieving 2 of our 3 desires. What we need is a reasonable person to tell us how to view our will in this case. Would a reasonable person say that our will is complex, and someone who wants a jelly donut every day may want lots other things that are inconsistent with having a jelly donut every day? So, is refraining from the jelly donut against our will or not?
We can appreciate the necessity of planning and regulation by recalling our old paternalistic friend, the Food and Drug Administration. The FDA has a code that regulates, among other delectables, the rodent hair per 100 grams of peanut butter-at most, you get just one-plus a more generous 30 insect fragments. Look no further than the information on "peanut butter filth" in the FDA guidelines. It says that the following conditions, among others, warrant seizure or citation by the Division of Compliance Management and Operations.
"Filth: The peanut butter contains an average of 30 or more insect fragments per 100 grams; or The peanut butter contains an average of 1 or more rodent hairs per 100 grams."
Popcorn fanciers can relax. Even one "rodent excreta" will scuttle a popcorn haul. On the other hand, it will take at least 20 "gnawed grains" in at least half the subsamples to block its way to the market.
Governmental restrictions like these have got to have a chilling effect on entrepreneurial efforts to enter the market. Isn't this interference paternalistic? After all, isn't the FDA interfering with my god-given right to offer the public - or even explore offering - rodent-hair-ridden peanut butter, or previously knawed popcorn kernels, at bargain prices?
At the same time, who gets to set the specific limit? There is nothing biologically magical about the FDA's average limit of insect parts in your peanut butter. Shouldn't we leave it up to the consumer to decide how many bug thoraxes and legs they are willing to eat? Shouldn't we allow them to freely assume the risk of fronting the costs of marketing an "adulterated" version of peanut butter at a lower price? Then consumers - at least those with strong stomachs - could freely choose to save money on it. Consumers' health decisions should be their own. And the risks don't seem troubling in this case. As one entomologist at the University of Illinois says of such insect parts: "They're actually pretty healthy".
The government doesn't allow us to make that call, but in the case of bug parts, no one complains. Why is that? Why do we, in the U.S., reserve our criticisms of government regulation for things like motorcycle helmet laws and gun laws, but not food regulations? Government regulation of food is justified by appeal to arcane knowledge: Most citizens can't make an informed and principled judgment about the risks of eating insect parts and other contaminants. Those unscheduled ingredients produce risk of sickness and even death, and without a background in the chemical, biological, or medical sciences, those risks are difficult to calculate. After all, the ingestion of rat feces or insect parts is a complicated process, and understanding it requires specialized knowledge that few citizens have.
It is tempting to say that the difference is the obvious one of risk. Ordinary folks know the risks of helmetless motorcycling or possession of firearms. But in fact, only some do, and it is difficult to know what evidence to believe. When it comes to the risks to life that handguns pose, should we believe the National Rifle Association, or the New England Journal of Medicine? Should we listen to the National Highway Traffic Safety Association or American Bikers Aimed Toward Education (ABATE)?
Some paternalistic regulation is designed to protect children, because they are not competent yet to assess risk. But if most of this risk information is too inaccessible or complicated for otherwise competent adults to acquire and process, then minors - even those alert to risk - don't stand a chance.
However complex the calculation of risk, the protection of the nation's minors does not seem to motivate ABATE, which fought the state's recent adoption of a helmet law for riders under 18. This is puzzling, given that this age standard is used in the U.S. as a proxy for competency to vote in a national election or to fight in a war. So individuals deemed too cognitively or motivationally immature to vote in a national election of their country ARE mature enough to assess the risk of helmetless riding?
Perhaps interest groups place some cultural hot-button issues above pragmatic assessment, using morally elevated talk of rights rather than prudential talk of risks. After all, Colorado's coordinator of ABATE said "It's my body, and I should have the right to do with it as I choose." If so, then why isn't there a similarly rights-based "hands off my bug parts" food lobby?
It is not utterly impossible for a non-specialist to acquire knowledge of helmetless fatality statistics, but it isn't easy to get all such knowledge while still having a chance at a rich and full life; handling all of these decisions would soon leave us with no leisure. Feces and wings are just the beginning. Three are also pathogens and maggots.
And how many maggots can be resting comfortably in your mushrooms? For that, you will need to look at The Empathy Gap. Until then, FDA regulations provide an entrée to other issues of arcane knowledge - like the relation between paternalism and prescription drugs - when unaided judgment isn't up to the task. But that is for another day.
