Bureaucratic Restraint? Fat Chance
March 12, 2014
By Jayson Lusk
Back in November, the Food and Drug Administration (FDA) announced its plan to remove artificial trans fats from its list of ingredients that are Generally Recognized as Safe (GRAS)—essentially banning the ingredient. In a few weeks, the comment period on the proposal will close and the FDA will likely move to implement the policy.
Trans fats occur naturally in meat and dairy products, but their use increased when food processors in the 1950s figured out a process to hydrogenate oils—increasing shelf life and making flavors more stable—that are today used in many baking and frozen foods. The process of hydrogenation creates the trans fats, which are now the subject of concern.
The research from the medical health community does indeed suggest that excess consumption of these “synthetic” trans fats has deleterious health effects. Interestingly, however, a few studies show that “natural” trans fats from animal sources may not be as unhealthy, despite having similar chemical compositions as the “synthetic” trans fats (although this last point seems to be a subject of debate).
The question before us isn’t whether certain trans fats are unhealthy—they probably are—but rather: What is the government’s role in regulating trans fats? The move in recent years to educate the public on the scientific evidence, and even to require labeling of trans fats on nutritional facts panels, is reasonable given the established safety risks. And indeed, these efforts alone caused a significant voluntary drop in use and consumption of trans fats by food manufacturers and consumers. The trouble comes when a third party—the FDA, in this case—moves from informing the public about risks to making the decision for us. The government has moved from the role of impartial referee conveying the rules of the game to a player in the game, picking sides.
Many of the news stories surrounding the FDA announcement point to the projected number of lives saved if a ban on trans fats were implemented. But, this is misleading when discussed without context. We could save many more lives each year if the government banned driving. Many lives could also be saved if we banned alcohol and went back to prohibition. Skydiving is risky. Why not ban that, too? The reason is that many risky activities convey benefits that must also be considered.
What are the benefits from the use of trans fats in food? Taste. Mouthfeel. Cost. Improved shelf life. What would be the costs of removing trans fats? Higher food prices. Manufacturers may have to add more sugar or salt or more saturated fat to compensate for the loss of trans fats. The point is that any discussion of the benefits of a ban on trans fats must be considered in the context of the costs of the ban. The FDA has attempted to estimate some of these costs but ultimately concluded, “in many cases we have very limited data to support our rough estimates.” Moreover, they make no more than a passing attempt to estimate the costs to consumers of having to eat products they find less desirable.
Even if a ban passed a narrow cost-benefit test, we would also want to ask whether the infringement on freedom of choice can be justified on logical grounds. Stated differently, where is the market failure? Normally, economists identify market failures if there are price-altering market powers, externalities, public goods, or information asymmetries. Only the last of these has any credibility in the trans fat debate, but with the existence of labels, even that is no justification. That leaves only one primary motive for the ban: the dim view that the public is unable to properly weigh the risks themselves and is in need of paternalistic intervention. Of course, government officials typically will not come right out and tell us that their motivation is our perceived ineptitude, because we’d rightly rebel against such a condescending attitude.
It is clear that the provision of information via labels, and resulting consumer demands, induced innovation by food companies to come up with ways to do without trans fats. But, is it possible that a ban could hinder future innovation? As already mentioned, all trans fats are not created equal. Is it possible for scientists to develop new fats that convey some of the same beneficial properties as existing “synthetic” trans fats without the health risks? I don’t know. And we may never know if we institute a blanket ban.
Jayson Lusk (Ph.D., Kansas State University) is the Samuel Roberts Noble Distinguished Fellow at OCPA and Regents Professor and Willard Sparks Endowed Chair at Oklahoma State University. His new book is The Food Police: A Well-Fed Manifesto about the Politics of Your Plate (Crown Forum, 2013).