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Monday, March 26, 2007

Trans-Fat ban

The March 22, 2007 edition of the Washington Post has an article by Steve Hendrix and Lisa Rein regarding the possible ban on Trans-fats in restaurants.
Several issues arise in the article, but the very last sentence got me thinking. “Ideally the FDA would use its authority to rid artificial trans-fat across the nation … in the public interest.” Sounds like the negative externality argument is being wielded for a reason as to why government intervention is warranted. Of course I am now a Eubanks prodigy – an externality cynic! The argument is not valid. If indeed there are costs associated with consumption of Trans-fats, the costs are captured by the market. The violation of personal liberty is also glaring.
Also, “… as legislators consider outright bans, companies are rushing voluntarily to declare themselves trans-fat-free.” If they know, and following the ’success’ of the no-smoking ban why wouldn’t they, that trans-fats will be banned they are still having their hands forced into making a decision that, based on economic efficiency, is not warranted. Seems similar to what occurs when government announces they will instigate eminent domain. Individuals’ decisions are altered under the threat of government force in the foreseeable future. Coercion no matter how you slice it. This may indeed seem like a voluntary change by restaurants, but upon further investigation it is clear it is not.
There is an attempt to provide incentives for restaurants to adopt more trans-fat-free foods. Participating restaurants will have state-issued decals which they would display in their windows. What an incentive!
Unfortunately there are not “enough suitable alternatives yet.” Indeed, a spokesman for the Restaurant Association of Maryland stated that due to the sufficient alternatives a complete ban may cause him to switch back to using butter – not good for cholesterol levels. Many may classify this as a negative externality associated with mandating trans-fat-free establishments, but again it is not.
“To be totally trans-fat free is almost going to be humanly impossible.” So why bother? I think I need some pie!

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