How Capitalism Makes You Fat
by Rick Kelo

Starvation, as it turns out, is the biggest killer of mankind over our entire 200,000 year history.  So how did this reversal between obesity and starvation happen?

It turns out that, in addition to the fact our country keeps getting richer, that individual food products keep getting cheaper.  No, not in real dollars.  We all know a McDonald’s hamburger was 15 cents back in the day, but today a double cheeseburger is $1.00.  So what?  Well 15 cents for a single hamburger in 1948 would be a cost of $1.45 today.  So the price of your hamburger has fallen 32%, and the amount of hamburger you get for that reduced price has doubled.

But that’s just one silly example, let’s look overall:

Source: USDA.gov

Graph 1

This is the share of disposable income Americas spend on food as tracked by the US Department of Agriculture.  Food has never been more affordable than today.  In fact, it’s only since the year 2000 that we have spent less than 10% of our disposable income on food.  Before that food expenditures were in the double digits as far back as we have data.

Now to one specific example: the falling price of a dozen eggs over the last 100 years.  The price data came from 1912 – 1970 came from the Census Bureau and from 1980 – present from the Bureau of Labor Statistics.  The graph connects 1970 & 1980’s data points since I couldn’t find data for that decade.  Inflation was adjusted using the official inflation calculator at BLS.gov here.

Graph 2

Graph 2

ANTI-MARKET BIAS

There is a bias called anti-market bias which states people don’t understand how the free market works so they over-estimate the bad effects of the free market, and massively under-estimate the good effects like the discipline caused by competition.

Nature is, by definition, stingy.  Every one of us would feel in our stomachs just how stingy nature is if we wandered off into the wilderness for even just one day.  It is the force of capitalism in America that has made our food cheaper and cheaper.  It’s not the glorious provision of nature; it’s more like the glorious division of labor.  It’s the incentive of the business owner to save so he has money ready to take advantage of new technologies.  It is the role of the consumer as the sovereign king of the world around him constantly demanding a lower price.

As we enjoy cheaper and more abundant food year after year I hope we remember the lessons of the 20th century.  We learned in the 20th century that the free capitalist countries had, down to every single last one, a higher standard of living than the non-competitive Marxist economies.  It was the pressure of capitalism to produce more goods, and at lower prices, that caused this.  

Still to this day some of the most widespread starvation in the world occurs in 2 of the 4 remaining communist countries: North Korea & Laos.  Then there’s the third remaining communist nation: Vietnam, which scored worse on the Global Hunger Index than most of Africa until less than 10 year ago.  China had rampant malnutrition and starvation until its very recent economic reforms & privatization in the mid-1990s.  India, a nation with socialism written into its Constitution, had some of the world’s worst starvation & malnutrition outside of Africa for most of the 20th century.  This did not improve until India abandoned the socialist economic policies that had been keeping the nation poor and starving in 1992.  The quality of life for the common man in India has begun to rapidly appreciate since those changes took effect, although there’s no doubt they have a lot of opportunity for improvement.

So, the next time your doctor tells you that your waistline should be half your height thank capitalism for making you fat.  And for making the thousands of other goods you purchase cheaper and better with each passing year.

 

“Capitalism is essentially a system of mass production for the satisfaction of the needs of the masses. It pours a horn of plenty upon the common man. It has raised the average standard of living to a height never dreamed of in earlier ages. It has made accessible to millions of people enjoyments which a few generations ago were only within the reach of a small elite.”
~ Ludwig Von Mises