Thursday, April 18, 2013

Two excursions in rational thinking

Yesterday as I was driving to an appointment I heard an interview with a "food economist" and professor who has just written a book called the Food Police which begins to poke holes in attempts to heavily regulate what we are allowed to consume.   The professor, Jason Lusk, argues that many of the distinctions which some people in society hold as almost religious tenets are mostly nonsense.  At the same time he argues that some of the policy ideas that are advanced are downright silly (for example the 16 oz soda ban sought by the NYC mayor - which might induce consumers to either buy more of smaller sizes or substitute even higher sugared beverages).

In the interview he took on things like "organic" food and produce.   My daughter and I have had a long running discussion about whether organic food is better.   As Professor Lusk argues we literally choose our poisons - many organic products are controlled with bug inhibitors like sulfur or copper which may be as toxic as some of the phosphates.   As I have thought about it, these issues should come down to personal tastes.  My daughter and her husband choose to pay a premium for the type of food they purchase (they use a chain called Whole Foods which has all sorts of products that may be less available in a regular grocery but are also slightly more expensive).  

About the only concession my wife and I  have made to this movement is to purchase some vegetables from a co-op which produces organic groceries and delivers (called Farm Fresh to You).   We pay a slight premium for this bundle of fruits and vegetables we get every other week and I have three responses to the service.   First, the produce we get is often the babies of the litter - a lot of the fruit is undersized and it is a bit more perishable than we would get in a local grocery.   Second, the variety of vegetables we get is interesting - we've gotten some great things like radishes or fennel that we would not normally include in our diet.   Third, many of the vegetables we get are far superior to what we could get at our local grocery - the carrots are very tasty, for example.   On the whole this service is worthwhile.   But from my perspective, it is a matter of personal choice.  Like in any other consumer choices, it is a matter of preference.   We should not inhibit the ability of consumers to make choices but we also should not invoke food theology just because we think our choices are better.

Then we get to a second topic, divestment.   A couple of small lefty colleges in the Northeast and one in the west, have chosen to divest their endowments of companies that produce fossil fuels.   But now larger places like Brown are considering joining the movement.   The colleges that have voted to divest have so far had puny endowments.   The president of one of the places to divest (fewer than 600 students) called the divestment movement "a continuing freight train" -what bunk.  Hopefully, this college president will assure that the "freight train" is run using environmentally friendly fuels.   I do not think he got his own joke - but then zealots never do.   Divestment movements have had a mixed bag.   TIAA has a "socially responsible" fund for those people who want their retirement portfolios to be politically correct and the best evidence is that those funds have done modestly poorer than a more diversified set of investments.   The most recent divestment movements - to eliminate investments in places like the Sudan - have had little effect because not many US companies invest in the Sudan.   But the elimination of fossil fuel companies from allowable endowment opportunities could produce profound consequences.

Colleges are easy targets for the politically correct.  Some have spent inordinate amounts of money getting to what are called LEED standards.   Others have tried to construct buildings in a cost effective (that recognizes immediate and long term costs) manner and have refused to follow the dictates of the ideologues.   Some colleges have chosen to restrict their endowments based on sound investment policy while others have chosen to bracket their investment options based on the cause of the moment.   The job of a college trustee is to make sound long term decisions for their institutions.   This "freight train" is not one of those.

No comments: