ADVERTISING AND FAST FOOD, WHAT SHOULD WE DO?
The Following Commentary was delivered by Professor Michael Meeropol over WAMC radio in February of 2006:
Advertising and Fast Food: What should we do?
I recently saw the movie Supersize Me. In it, a 30-something man decides to eat his three meals a day at McDonalds for 30 days. He gained 25 pounds, his blood pressure and cholesterol rose dramatically and his liver was seriously affected. After 22 days, his doctors told him to stop but he persisted for the full period.[1]
The film contains interviews with experts, spokespeople for the food and beverage industries, workers at fast food restaurants and public school cafeterias, persons on the street and medical personnel. At various points during the movie, we see segments of a press conference featuring the Secretary of Health and Human Services talking about increased obesity and the dangers of the rising incidence in Type 2 Diabetes.[2]
This movie intersects with economics when it examines the role of advertising as it habituates children and young people into accepting fast food consumption as normal.
McDonalds and other fast food restaurants whose food selections are heavily laden with fat and sugar (even their salads are unless you eat them without the dressings) spend hundreds of billions of dollars while advertising spending that promotes nutritional eating is in single-digit billions.[3]
According to economics textbooks advertising is a tool used by companies to compete for customers. Some advertising is informative but the goal of much advertising is to merely remind the viewer that the product is available. The general consensus within the economics profession is that advertising cannot make anyone buy a particular product. Economists argue that McDonalds, Burger King and Wendys’ advertising merely cancels itself out.[4]
A counter-argument is that the sum total of all such advertising persuades us to alter our consumption patterns – creating wants where none existed. If this is true, it makes a mockery of the economics profession’s view that the economic process is governed by what is called consumer sovereignty. If advertising can actually create wants, then in fact there is producer sovereignty.[5]
A most dramatic example of creation of wants occurred in the 1920s when public relations expert Edward Bernays developed a strategy to promote smoking among women. The tobacco companies were looking to expand their potential market to the entire population and it was Bernays’ genius that he figured out ways to create an advertising campaign that significantly increased the percentage of women who smoked. For example, Lucky Strikes were created specifically for women and touted as part of a weight reduction regimen.[6]
Today we see rising obesity and the potential for a serious epidemic of type 2 Diabetes directly linked to increases in the percentage of our meals consumed at fast food restaurants. In Supersize Me, even the spokesperson for the food and beverage industry’s trade association admits that it is “part of the problem…” [He had lost that job by the time the film was released.]
If those who see advertising as capable of creating wants (even for things that are downright harmful) are correct, then there is only one remedy, one that economists don’t particularly like but which is probably the only solution: government regulation.
For starters (and this example is presented in the film) all public schools could ban soft drink vending machines and demand that all school lunch contracts be given to companies that prepare lunches on site with emphasis on fresh vegetables and fruits.[7] If we truly want to take this seriously we should ban all fast food advertising from television and radio just as we banned cigarette advertising many years ago.[8]
It’s a matter of life and health – and the costs will be paid by all of us as taxpayers if we don’t take preventive measures now.
[1] Supersize Me, (2004) directed by Morgan Spurlock is available for rental from Netflix and no doubt other DVD rental companies as well as from many libraries. The doctor actually begins to plead with Mr. Spurlock that he is doing much more damage to his liver in a much shorter time period than he (the doctor) ever would have imagined. The doctor argues that his liver is betraying the evidence of alcohol abuse.
[2] Dr. Francine Kaufman has written a book called Diabesity: The Obesity-Diabetes Epidemic That Threatens America—And What We Must Do to Stop It (Random House, 2005 – also available as a Bantam Paperback, January 2006). “Experts now predict that more than one-third of American children born in 2000 will develop diabetes in their lifetime. Once a disease of the elderly, type 2 diabetes now strikes adults in their prime–and, increasingly, children. It has nearly doubled in the last decade. The cause? Our soaring rates of obesity.” (from a review at RandomHouse.com).
[3]The actual numbers are in the film but I didn’t write them down. I remember a ratio of something like $200 billion to $2 billion.
[4]To take just one example, Campbell McConnell and Stanley Brue, Microeconomics, Principles, Problems and Policies, (Boston: Irwin/McGraw Hill, 1999) provides a typical “on the one hand,….on the other hand….” discussion of the two sides of the advertising debate (the kind of discussion that led former President Harry Truman to demand a “one handed economist” so he could get a straight answer to his policy questions). “Consumers need information about product characteristics and prices to make ration (efficient decisions). Advertising can be a low-cost means of providing that information … advertising is frequently associated with the introduction of new products designed to compete with existing brands … Viewed this way, advertising is an efficiency-enhancing activity.” P. 254-5. But, they go on to say, “…advertising is sometimes based on misleading and extravagant claims that confuse consumers rather than enlighten them … in some cases advertising may well persuade consumers to pay high prices for much-acclaimed but inferior products … Firms often establish substantial brand-name loyalty and thus monopoly power via their advertising …” (255). Finally, the book concludes that advertising may be self-canceling raising costs but not increasing consumption. Paul Krugman and Robin Wells in their work Microeconomics (NY: Worth Publisher, 2005) argue that “… ads can serve as indirect ‘signals’ in a world where consumers don’t have good information about products. … ads feature celebrities [because] … the fact that the … manufacturer is willing and able to pay her fee tells you that it is a major company that is likely to stand behind its product. According to this reasoning, an expensive advertisement serves to establish the quality of a firm’s products in the eyes of consumers.” (401).
[5]On consumer sovereignty see any Principles of Economics textbook. The McConnell/Brue book alluded to in note 4 defines it as: “Determination by consumers of the types and quantities of goods and services which will be produced with the scarce resources of the economy; consumer direction of production through dollar votes.” (G-3,4) The idea of “dollar votes” is that whenever a consumer buys something the dollars she/he spends on it constitutes a “vote” with producers and potential producers guiding them with positive reinforcement to produce more of that good. The idea that producers can actually “produce” customers dates back at least to the work of Thorstein Veblen. (See his The Theory of Business Enterprise [1904]). It finds excellent expression in the work of John Kenneth Galbraith. “The consumer is not sovereign if he or she is subordinate, or partly subordinate, to the will of the producer. … “Economics and the Public Purpose (Boston: Houghton Mifflin, 1973): 134. He goes on to detail the variety of ways that large industrial concerns in the US “manage” consumption both by government (military, other contracts) and by consumers. IN the latter case he notes that far from canceling itself out, advertising by competitors say in the auto industry, the beer industry and, yes, the fast food industry combines to develop a generalized view that this product in general is important: “... the aggregate of all such persuasion affirms in the most powerful possible manner that happiness is the result of the possession and use of goods and that, pro tanto, happiness will be enhanced in proportion as more goods are produced and consumer.” (140) As to the argument that advertising cancels itself out, Galbraith retorts: “Were this the case, steps would long ago have been taken to limit advertising outlays by common agreement.” (141).
[6]Edward Bernays is known for his long service in public relations (which actually was officially called “propaganda” until World War II gave that word a bad connotation because of its association with Nazi misinformation) having begun his career in Woodrow Wilson’s war cabinet and concluded it late in the 20th century. In 1928, he was recruited by the American Tobacco Company to help them increase the number of women who smoked. The green Lucky Strike package initially clashed with the clothes women were wearing so Bernays sponsored several high society events in New York City featuring green colored themes. “[He] arranged for women’s society elite to smoke Lucky Strikes in the New York City Easter Parade of 1929.” (“A Primer on Women and Tobacco: The Leading American Epidemic” Jamie P. Morano, (American Medical Student Association, Reston, VA) available at www.amsa.org/pdf/womentobaccoprimer.pdf): 4.
[7]The film presents a contrast between what we are led to believe is a “typical” high school lunchroom where there is lots of fried food available – in fact some students are seen taking nothing but French fries – with the lunch room in an Appleton, Wisconsin school which contracts with a healthy meals firm that serves no meat whatsoever and prepares every meal fresh that day emphasizing fruits and vegetables. The film notes that the cost per meal is virtually the same as the more mass produced often pre-prepared and flash frozen meals at more traditional schools. No data is presented on how many schools make a concerted effort to ban high fat, high sugar content food but it would definitely be a useful first step for State Legislatures to ban them all outright. If families want their kids to eat junk food, let them do it on their own time and their own dime. A number of state governments have taken a good step forward by making sure that all vending machines in pulbic schools dispense only juices and water and athletic drinks (with electrolytes) not soft drinks, but they could obviously go a lot further.
[8]Please note: If the economists are right that much of that advertising cancels itself out, then there actually will be no harm done to the companies at all from such a ban. However, if the opponents are correct, that all this fast food advertising habituates generation after generation to wanting and expecting to eat this food on a regular basis, then banning the advertising will be a useful part of a comprehensive program (that will need to include lots of counter-advertising just as in the anti-smoking campaigns) to begin the process of reversing the rise in obesity among our youth with the subsequent danger of a type 2 Diabetes epidemic.
Advertising and Fast Food: What should we do?
I recently saw the movie Supersize Me. In it, a 30-something man decides to eat his three meals a day at McDonalds for 30 days. He gained 25 pounds, his blood pressure and cholesterol rose dramatically and his liver was seriously affected. After 22 days, his doctors told him to stop but he persisted for the full period.[1]
The film contains interviews with experts, spokespeople for the food and beverage industries, workers at fast food restaurants and public school cafeterias, persons on the street and medical personnel. At various points during the movie, we see segments of a press conference featuring the Secretary of Health and Human Services talking about increased obesity and the dangers of the rising incidence in Type 2 Diabetes.[2]
This movie intersects with economics when it examines the role of advertising as it habituates children and young people into accepting fast food consumption as normal.
McDonalds and other fast food restaurants whose food selections are heavily laden with fat and sugar (even their salads are unless you eat them without the dressings) spend hundreds of billions of dollars while advertising spending that promotes nutritional eating is in single-digit billions.[3]
According to economics textbooks advertising is a tool used by companies to compete for customers. Some advertising is informative but the goal of much advertising is to merely remind the viewer that the product is available. The general consensus within the economics profession is that advertising cannot make anyone buy a particular product. Economists argue that McDonalds, Burger King and Wendys’ advertising merely cancels itself out.[4]
A counter-argument is that the sum total of all such advertising persuades us to alter our consumption patterns – creating wants where none existed. If this is true, it makes a mockery of the economics profession’s view that the economic process is governed by what is called consumer sovereignty. If advertising can actually create wants, then in fact there is producer sovereignty.[5]
A most dramatic example of creation of wants occurred in the 1920s when public relations expert Edward Bernays developed a strategy to promote smoking among women. The tobacco companies were looking to expand their potential market to the entire population and it was Bernays’ genius that he figured out ways to create an advertising campaign that significantly increased the percentage of women who smoked. For example, Lucky Strikes were created specifically for women and touted as part of a weight reduction regimen.[6]
Today we see rising obesity and the potential for a serious epidemic of type 2 Diabetes directly linked to increases in the percentage of our meals consumed at fast food restaurants. In Supersize Me, even the spokesperson for the food and beverage industry’s trade association admits that it is “part of the problem…” [He had lost that job by the time the film was released.]
If those who see advertising as capable of creating wants (even for things that are downright harmful) are correct, then there is only one remedy, one that economists don’t particularly like but which is probably the only solution: government regulation.
For starters (and this example is presented in the film) all public schools could ban soft drink vending machines and demand that all school lunch contracts be given to companies that prepare lunches on site with emphasis on fresh vegetables and fruits.[7] If we truly want to take this seriously we should ban all fast food advertising from television and radio just as we banned cigarette advertising many years ago.[8]
It’s a matter of life and health – and the costs will be paid by all of us as taxpayers if we don’t take preventive measures now.
[1] Supersize Me, (2004) directed by Morgan Spurlock is available for rental from Netflix and no doubt other DVD rental companies as well as from many libraries. The doctor actually begins to plead with Mr. Spurlock that he is doing much more damage to his liver in a much shorter time period than he (the doctor) ever would have imagined. The doctor argues that his liver is betraying the evidence of alcohol abuse.
[2] Dr. Francine Kaufman has written a book called Diabesity: The Obesity-Diabetes Epidemic That Threatens America—And What We Must Do to Stop It (Random House, 2005 – also available as a Bantam Paperback, January 2006). “Experts now predict that more than one-third of American children born in 2000 will develop diabetes in their lifetime. Once a disease of the elderly, type 2 diabetes now strikes adults in their prime–and, increasingly, children. It has nearly doubled in the last decade. The cause? Our soaring rates of obesity.” (from a review at RandomHouse.com).
[3]The actual numbers are in the film but I didn’t write them down. I remember a ratio of something like $200 billion to $2 billion.
[4]To take just one example, Campbell McConnell and Stanley Brue, Microeconomics, Principles, Problems and Policies, (Boston: Irwin/McGraw Hill, 1999) provides a typical “on the one hand,….on the other hand….” discussion of the two sides of the advertising debate (the kind of discussion that led former President Harry Truman to demand a “one handed economist” so he could get a straight answer to his policy questions). “Consumers need information about product characteristics and prices to make ration (efficient decisions). Advertising can be a low-cost means of providing that information … advertising is frequently associated with the introduction of new products designed to compete with existing brands … Viewed this way, advertising is an efficiency-enhancing activity.” P. 254-5. But, they go on to say, “…advertising is sometimes based on misleading and extravagant claims that confuse consumers rather than enlighten them … in some cases advertising may well persuade consumers to pay high prices for much-acclaimed but inferior products … Firms often establish substantial brand-name loyalty and thus monopoly power via their advertising …” (255). Finally, the book concludes that advertising may be self-canceling raising costs but not increasing consumption. Paul Krugman and Robin Wells in their work Microeconomics (NY: Worth Publisher, 2005) argue that “… ads can serve as indirect ‘signals’ in a world where consumers don’t have good information about products. … ads feature celebrities [because] … the fact that the … manufacturer is willing and able to pay her fee tells you that it is a major company that is likely to stand behind its product. According to this reasoning, an expensive advertisement serves to establish the quality of a firm’s products in the eyes of consumers.” (401).
[5]On consumer sovereignty see any Principles of Economics textbook. The McConnell/Brue book alluded to in note 4 defines it as: “Determination by consumers of the types and quantities of goods and services which will be produced with the scarce resources of the economy; consumer direction of production through dollar votes.” (G-3,4) The idea of “dollar votes” is that whenever a consumer buys something the dollars she/he spends on it constitutes a “vote” with producers and potential producers guiding them with positive reinforcement to produce more of that good. The idea that producers can actually “produce” customers dates back at least to the work of Thorstein Veblen. (See his The Theory of Business Enterprise [1904]). It finds excellent expression in the work of John Kenneth Galbraith. “The consumer is not sovereign if he or she is subordinate, or partly subordinate, to the will of the producer. … “Economics and the Public Purpose (Boston: Houghton Mifflin, 1973): 134. He goes on to detail the variety of ways that large industrial concerns in the US “manage” consumption both by government (military, other contracts) and by consumers. IN the latter case he notes that far from canceling itself out, advertising by competitors say in the auto industry, the beer industry and, yes, the fast food industry combines to develop a generalized view that this product in general is important: “... the aggregate of all such persuasion affirms in the most powerful possible manner that happiness is the result of the possession and use of goods and that, pro tanto, happiness will be enhanced in proportion as more goods are produced and consumer.” (140) As to the argument that advertising cancels itself out, Galbraith retorts: “Were this the case, steps would long ago have been taken to limit advertising outlays by common agreement.” (141).
[6]Edward Bernays is known for his long service in public relations (which actually was officially called “propaganda” until World War II gave that word a bad connotation because of its association with Nazi misinformation) having begun his career in Woodrow Wilson’s war cabinet and concluded it late in the 20th century. In 1928, he was recruited by the American Tobacco Company to help them increase the number of women who smoked. The green Lucky Strike package initially clashed with the clothes women were wearing so Bernays sponsored several high society events in New York City featuring green colored themes. “[He] arranged for women’s society elite to smoke Lucky Strikes in the New York City Easter Parade of 1929.” (“A Primer on Women and Tobacco: The Leading American Epidemic” Jamie P. Morano, (American Medical Student Association, Reston, VA) available at www.amsa.org/pdf/womentobaccoprimer.pdf): 4.
[7]The film presents a contrast between what we are led to believe is a “typical” high school lunchroom where there is lots of fried food available – in fact some students are seen taking nothing but French fries – with the lunch room in an Appleton, Wisconsin school which contracts with a healthy meals firm that serves no meat whatsoever and prepares every meal fresh that day emphasizing fruits and vegetables. The film notes that the cost per meal is virtually the same as the more mass produced often pre-prepared and flash frozen meals at more traditional schools. No data is presented on how many schools make a concerted effort to ban high fat, high sugar content food but it would definitely be a useful first step for State Legislatures to ban them all outright. If families want their kids to eat junk food, let them do it on their own time and their own dime. A number of state governments have taken a good step forward by making sure that all vending machines in pulbic schools dispense only juices and water and athletic drinks (with electrolytes) not soft drinks, but they could obviously go a lot further.
[8]Please note: If the economists are right that much of that advertising cancels itself out, then there actually will be no harm done to the companies at all from such a ban. However, if the opponents are correct, that all this fast food advertising habituates generation after generation to wanting and expecting to eat this food on a regular basis, then banning the advertising will be a useful part of a comprehensive program (that will need to include lots of counter-advertising just as in the anti-smoking campaigns) to begin the process of reversing the rise in obesity among our youth with the subsequent danger of a type 2 Diabetes epidemic.
posted by WNECONOMICS at 11:41 AM
0 Comments:
Post a Comment
<< Home