30 Aug Struggling with your weight? The State should help you?
The alarm blares, and you open your eyes, remembering you set it for 6:00 a.m. to catch a train today. With a slight ache in your back, you approach what feels like your daily tormentor: the bathroom scale. You step on, bracing yourself, and see the needle hover at 100 kg. You step off, look in the mirror, and a mix of sadness and melancholy colors your gaze. As you think about the suit you’ll wear to hide your belly, the question lingers: are you in control of your weight, or is something else at play?
One school of economists argues there’s no issue here. In their view, you made rational choices that led to your current weight—after all, you acted on available information.
But another school of economists, those in the behavioral camp, sees a different story. Here, we have someone grappling with an internal struggle, one they often feel they’re losing—a struggle that suggests individuals aren’t always the perfectly rational actors economic theory assumes.
Should the Government step in to regulate enticing ads for fast food, or tax high-sugar products? Or should the State leave individuals to make their own choices?
Let’s think about taxes in a broader context. You likely pay taxes in two ways: 1) through paycheck deductions and 2) through purchases, like a sugary soda. It’s easy to believe that companies like Coca-Cola pay the taxes, but in reality, they do so on behalf of consumers. So when you buy a soda, it’s a little more of your income going to the State. Add up all these instances, and you’re paying between 15% and 20% of your income in taxes, maybe more. Is that a lot? Consider it this way: if 20% of your earnings go to taxes, that’s essentially one full day of every five-day work week that goes to the State. Ever feel like skipping work one day and watching YouTube instead?
Would you want a smaller State? Less government interference? Lower or even zero taxes?
Imagine you’re an artist, living off your craft and committed to non-commercial, quality performances. Critics love your work, but the public doesn’t show up. At a café, you’re joined by a chess master, a painter, a contemporary dancer, and a symphony musician—all similarly underappreciated in the market. Would you and your friends want more State support for your work? If the public doesn’t support these cultural activities, should they be left to fade?
Next, you board a plane. But there’s only one airline, a State-run monopoly that has shut out competition. You shrug and buy your ticket. At the airport, the line is endless, the staff indifferent, and your flight is delayed by two hours. You want to complain, but your only option is to address another State-run institution. You wonder if the managers, the complaints office, and the tax office meet each afternoon, laughing at how they treat consumers.
Would you prefer private options? Is it frustrating that the State serves as both judge (customer service) and party (the airline)?
As you wait, you head to a restaurant and order your favorite grilled fish with butter and lemon. You savor it, but soon after, your stomach cramps—again. The doctor advises you to give up the dish; upstream mining has polluted the water, leaving the fish contaminated.
Do you feel the State should do something about this? Should it regulate pollution? Or are these just the realities of an unregulated market? Is this a market failure?
In considering questions like these, we can start to see where individuals end and the State might begin—and what sort of balance between freedom and protection really benefits society.
The debate over the role of the State versus the free market is ongoing and complex. Ultimately, we each desire a “tailored State” that aligns with our perspectives and interests—just as we each have our own version of how the party really went.
We value freedom but also crave protection. Today, the frontier of economic thought revolves around finding a balance in a so-called “libertarian paternalistic” State—a State that behaves like a parent who doesn’t meddle in your affairs yet offers protection, even from yourself. The challenge, however, is that our taxes fund this “parent,” and too often that “parent” is a bureaucrat who has little personal investment in our well-being.
Now, I need to wash the dishes Santi left behind—but let’s keep that between us. I want him to learn a bit more responsibility! What?
S. Mauricio Medinaceli Monrroy
August 30th, 2023
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