A Public Option for Food
What if the government provided a “public option” for food, in the way the government provides the same for medical services, competing with private industry?
August 24, 2009
Fred Foldvary, Ph.D.
Economist

An important element of proposed changes in the US federal medical care policy has been a “public option,” a government-run medical plan that would compete with private medical services. What has not been discussed is a similar “public option” for food. Food is even more important than medicine, so if a public option would improve medical services, why would it not also do so for food?

Imagine that a public food option is indeed being examined and even tried out. In this imagination, I contacted the chief of the White House Task Force on a Public Option for Food, WHTFPOF. Here is the conversation I had with the head of WHTFPOF, Ima Tyrant, whom you may recall was previously the assistant to the Drug Czar for federal territory when the government attempted to ban catnip as an addictive drug.

Fred Foldvary: This is really a government-run food plan, so why call it “public”? Why not call it more clearly and honestly a “government option” for the provision of food, and for medicine?

Ima Tyrant: “For the same reason we use ‘public library’ and ‘public school’ rather than ‘governmental library’ and ‘governmental school’. They serve the public.

FF: But private enterprise also serves the public. “Public” also means people.

IT: Well, government is the “public sector.” That’s what economists call it.

FF. Private enterprise has its own competition. Firms compete with one another. So why do we need government to compete? Also, government imposes costs and restrictions on private enterprise, while a public option for medical or food services would not be taxed nor subject to regulation by state governments.

IT: Yes, and the point is to make these services available at lower costs, so what’s wrong with that?

FF: Why not just eliminate the government-imposed costs on private firms? Eliminate taxes on goods and profits, restrictions preventing firms from operating in other states, lawsuits that impose costs on innocent defendants, and a tax system that makes medical services tied to employment?

IT: Special interests prevent such reforms. Also, there are 50 state governments that regulate the insurance and food industries. With a federal plan, the advantage is that the states cannot regulate a federal agency.

FF: There is talk about the public option being cooperatives. But the boards of the co-ops would be appointed by government, and the rules and decisions would be set by government. They would not really be member controlled. Why call these “cooperatives”?

IT: For the same reason we call it a “public” rather than government option.

FF: Advocates claim that the government option would control costs, but the experience in Massachusetts and foreign countries is that costs do go up unless there is strict rationing.

IT: But the market also rations, by price. Rationing by quantity is more just, because rationing by money favors the rich.

FF: Why not just give the poor vouchers they can use for private medical services, just as government gives food coupons to the poor?

IT: For the same reason we do not give the poor education vouchers, but instead, directly provide the education. We need to control the quality and contents.

FF: Government supermarkets would be cheaper for customers, but only because government subsidizes it. Private groceries would shut down, and government would then control what people eat. And the governmental choices would not necessarily be healthy.

IT: We would have government nutritionists deciding what is healthy, based on science, rather than letting ignorant consumers buy mostly junk food.

FF: But in reality, big agriculture, such as the meat and dairy industries, would influence the “public option” for food, and the public would still eat unhealthy meat loaded with bad chemicals. And government food stores would not stock much organically grown food, which would have a higher cost. You will deprive the public of their free choices!

IT: Well, we don’t let the public smoke marijuana or shop naked. Society does not really want free choices. As for chemicals in food, we can’t go back to the past. Today’s large populations require industrial food production.

FF: This government food option will stifle changes in diets that would also reduce medical costs.

IT: Time’s up, sorry, I need to go to a committee meeting to make sure that the WHTFPOF board is demographically diversified. See, we are already starting out superior to the undiversified boards of the private firms. Who says private enterprise is better?

Find Out More.
Inside information on economics, society, nature, and technology.
Fred Foldvary, Ph.D.
Economist

FRED E. FOLDVARY, Ph.D., is an economist and has been writing weekly editorials for Progress.org since 1997. Foldvary's commentaries are well respected for their currency, sound logic, wit, and consistent devotion to human freedom. He received his B.A. in economics from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University. He has taught economics at Virginia Tech, John F. Kennedy University, Santa Clara University, and currently teaches at San Jose State University.

Foldvary is the author of The Soul of LibertyPublic Goods and Private Communities, and Dictionary of Free Market Economics. He edited and contributed to Beyond Neoclassical Economics and, with Dan Klein, The Half-Life of Policy Rationales. Foldvary's areas of research include public finance, governance, ethical philosophy, and land economics.

Foldvary is notably known for going on record in the American Journal of Economics and Sociology in 1997 to predict the exact timing of the 2008 economic depression—eleven years before the event occurred. He was able to do so due to his extensive knowledge of the real-estate cycle.