Is the Public Good the Same as the Sum of Private Goods?
Many conservatives like to say that we don't need government policies to promote the public good because the public good is nothing but the sum of the private good of the individual members of our society. If everyone gets what he/she wants through the free market, the welfare of the whole society is maximized, and anything that the government does can only subtract from the welfare of society.
That sounds persuasive, but is it true? If everyone gets what he/she wants, does that really mean that the welfare of the whole society is maximized? Is welfare of the whole society merely the sum welfare of its members, or does the public good of the society include things that the individual members do not include in their sense of their own wellbeing? The answer is complex because it depends on the way that the costs of individual choices are apportioned. To see why this is so, consider the case of portion sizes of meals in American restaurants.
Why Have Portion Sizes Increased So Much?
Portion sizes in restaurants in the United States have
increased greatly over my lifetime. For example, when I was in college in the 1950s, most
restaurants served hamburgers that were less than one quarter pound in size. A restaurant
that served a quarter-pound hamburger advertised that fact. Today, in contrast, a quarter-pound hamburger is considered small. We see half-pound hamburgers in
restaurants, and the portion sizes of other dishes have increased similarly.
Today, portions in American restaurants are so large that most people
cannot consume them at a single meal. Consequently, restaurants provide boxes
for their customers to use to take home the food that they have not eaten, and
we often see people leaving restaurants with such boxes.
Why have portion sizes increased so dramatically? They have increased because restaurant owners have discovered that people will pay more for large portions. People feel that they are getting a good deal if they get a lot of food for their money. At the same time, the large portions cost the restaurant owner very little more than smaller portions.
Cooking and Serving a Meal Costs Much More Than the Meal Itself
The biggest part of the cost of a restaurant meal is the
cost of cooking and serving it. The cook and the server cost much more than the food itself. The cost of cooking and serving a half-pound hamburger is the same as
the cost of cooking and serving a quarter-pound hamburger. The additional
quarter pound of meat adds very little to the cost, but customers are willing
to pay substantially more for the larger portion because they feel that they
are getting a good deal. So, people buy meals that are too large to eat and take
home the leftovers. Everyone is happy. The customers get what they see as good
deals, and the restaurant owner makes more profit. What could be better?
The Big Portions Create Costs
The fly in the ointment is that the larger portions create
costs that are not born by either the customers or the restaurant owner. They
are shared by all of the members of our society. The first such cost is
environmental. The millions of plastic foam boxes that the customers use every
day to take home the leftover food add a huge amount of non-biodegradable
trash to our landfills, and the environmental and financial cost of dealing
with that trash is not born by the restaurant owner or by the customers. It
falls on the whole society. For example, residents of my community pay a monthly fee for trash collection, and the size of that fee depends in part on the amount of trash that has to be collected.
The second cost is the cost of
excessive obesity. The large portions drive customers to eat too much, and as a
result, too many people in our society are obese. Obesity is a cause of
many chronic diseases including heart disease, diabetes and some cancers. The cost of caring for patients with such chronic diseases adds
substantially to the cost of healthcare in our country, and that additional
cost is born by all of us in the form of higher health insurance premiums.
The Restaurant Owner and the Customers Do Not See the Social Costs
The environmental cost and the healthcare cost are in a sense invisible to the restaurant owner and the customers. They bear only a tiny fraction of those costs, and in any case, there is no way for them to know the environmental cost of a single half-pound hamburger or one plastic foam box.
What is Important and How Do We Decide?
What should we do about the social cost of the large portions? I do not wish to say that restaurant owners should not serve half-pound hamburgers or that customers should not order them. Individual freedom is important. On the other hand, we have to see that the choices made here impose costs on us all, and we would be better off if we did not have to bear those costs. Clearly, maximizing the welfare of our society as a whole involves more than maximizing the benefits to the restaurant owner or to the customers. We would all be better off if we did not have to pay the fees or the health insurance costs imposed by the larger portion sizes.
Are the social costs more important than the individual benefits, or is it the other way round?
There is no simple answer to the question of the relative importance of the social costs and the individual benefits. The answer to that question is inherently political. We could, for example, forbid the use of nonbiodegradable boxes by restaurants, or we could start a campaign to shame people who take home food from restaurants. Should we do such things? There is no easy answer, but one way or another, we will decide what costs we wish to bear as a society, and we will decide what costs we will impose on the people who impose extra costs on us.
