Saturday, December 30, 2006

Policy, analogies, and fluid concepts

Here's the story: as the whole world knows by now, "New York bans most trans fat in Restaurants" (from the New York Times, login required). Subsequently, Ampersand pointed out that

Banning trans fats in restaurants, but not in grocery stores, doesn’t make sense. I guess the supermarket lobby is more powerful than the fast-food and donut lobby.

to which Free Exchange replied:

I'd guess that it has more to do with public choice theory than ardent lobbying. Since national food producers are unlikely to reformulate their entire line for the benefit of a few million New Yorkers, a trans-fat ban would sweep large categories of food off the supermarket shelves, in a way that would be directly and obviously attributable to the ban (since they would disappear from every supermarket shelf at once). Banning them in restraurants, on the other hand, will merely make some of the food taste worse, other of the food more expensive, and so forth, in a thoroughly idiosyncratic way. Consumers are unlikely to connect thousands of subtles shift in their local restaurant fare to the ban, as they surely would of glazed donut holes suddenly vanished from the shelves of the city.

True, a sudden disappearance of such poison delicious food from shelves would at first get New Yorkers on the road craving for their finger foods, with a potential subsequent backlash against the policy.

However, it seems that a proper reading of "Fluid concepts and creative analogies" might be of value here. Psychologically, it surely feels that we have static concepts, such as restaurant or supermarket, both used and contrasted against each other in this case. In real life, however, things get much more messy than that. So what is perhaps missing from this debate is the fact that there is a concept which, for this particular context, fits right in between supermarkets and restaurants: restaurant chains.

Restaurant chains fall prey to the ban, and also to the supermarket consequences.

Consider how McDonald's or Papa Johns might respond. Their whole supply chain breathes transaturated fats, so a change in the whole supply chain meets unbearable costs. On the other hand, getting out of a market such as New York also seems to be unbearable (not to mention that the decision might be distributed across a large number of franchise owners, wikipedia-style). Another possibility is that New York Big Macs will be steeply more costly than those 40km away.

Either way, the point is, concepts are fluid, all-singing all-dancing entities that swing according to the tune of the moment. The ease with which we ignore this makes such dichotomies such as "why restaurants and no supermarkets?" sound closer to reality than they really are. This is ignored in many economic and policy discussions, and is a point to which we will return in due course.