Last December the European Commission released a green paper on obesity [pdf], in which it promoted healthy foods and physical activity. According to the Commission 14 million Europeans are obese. “It is estimated,” says the green paper, “that in the European Union obesity accounts for up to 7% of health care costs.” Areas for action include consumer information, consumer education, and a focus on children and young people. While the Commission claims it would prefer self-regulation from industry, it has also made it clear that if necessary it will consider “other options,” i.e. regulatory steps. Such steps might include government or EU sponsored propaganda, mandatory labelling about the “threats” of “junk food,” bans on advertising, or limiting the availability of snacks and drinks in vending machines (as a few member states already do in schools).

It is ironic that, beyond health reasons, there is a clear concern about the future of the European welfare state. In fact, the green paper puts an emphasis on cost containment that can hardly have anything to do with consumer protection. One has the distinct feeling that health is just a Trojan horse to cover more prosaic goals. Alas, the crisis of the so-called European social model, as Dr Wilfried Prewo has shown [pdf], goes beyond supposedly unhealthy lifestyles, including the use of fatty foods, carbonated drinks, cigarettes, and a lack of physical activity. “Social security plans are, by and large, not insurance systems,” writes Prewo. “The contribution or premium is not actuarially calculated [...] This gives rise to the moral hazard: the insured individual exploits the system by extracting as many benefits as possible, since the costs that he inflicts on the community of the insured are only insignificantly borne by himself because premiums increase for everybody.” In other words, Europeans correctly understand that national health services will take care of them, no matter what they make of their lives. Thus they pay comparatively less attention to their lifestyle because they know they will not have to bear the monetary costs of treatment.

The Commission is well aware of the moral hazard problem, so it wants to address it by making unhealthy habits socially inconvenient (through aid and propaganda or mandatory labelling), more costly (through ad hoc taxes) or even illegal. For example, advertising for tobacco and medicinal drugs is banned, and smoking in public places is often illegal. (Smoking may damage your health, and so may taking too many medicines. Moreover medicines are often partly or totally paid for by national health systems, and there is a widespread, though questionable belief [pdf], that more advertising would result in more consumption and more costs to the state). Now it is the turn of “junk food”’.

Despite a somewhat wary attitude of the Commission, the industry knows well that the public’s awareness of health consequences relating to their lifestyles is high – people want to know more about what they eat. It is no surprise then that this demand creates an interested audience: for example, during the Winter Olympics in Torino, Italy, McDonald’s released a new packaging for their products, featuring the kind of nutritional information that customers seek. After all, it is a firm’s job to do precisely what consumers want. As long as people ask for more information, they will get more information. On the other hand, if people do not care about nutritional information they will keep ignoring it even if some EU directive or national regulation makes it compulsory for restaurants to run labels. You can force a firm to disclose nutritional facts, but you cannot force customers to read them.

Nevertheless, the Commission believes that full information to consumers is a primary target. In so doing it assumes that consumers are a bunch of stupid, ignorant people just waiting for anybody to cheat them. According to the Green paper, “Consumer policy aims to empower people to make informed choices regarding their diet,” as if people are not able to understand that one does not live by hamburgers alone. Yet that is precisely the assumption under which the Commission pleads for “a regulation to harmonize the rules on health claims. This includes the principle of setting nutrient profiles, in order to prevent foods high in certain nutrients (such as salt, fat, saturated fat and sugars) making claims about their potential nutrition or health benefits. The Commission is also considering amendments to the current rules on nutrition labelling.”

The opinion that the Commission has of people’s ability to understand is even worse when you get to advertising: “As far as advertising and marketing is concerned, it has to be ensured that consumers are not misled, and that especially the credulity and lacking media literacy of vulnerable consumers and, in particular children, are not exploited. This regards in particular advertising for foods high in fat, salt and sugars, such as energy-dense snacks and sugar-sweetened soft drinks, and the marketing of such products in schools. Industry self regulation could be the means of choice in this field, as it has a number of advantages over regulation in terms of speed and flexibility. However, other options would need to be considered should self-regulation fail to deliver satisfactory results.”

Here again, European policy-makers seem to endorse the idea that normal people are so stupid that they would eat or drink anything so long as as a beautiful girl on TV suggests they do; but the same persons are smart enough to read carefully small, technical inscriptions concerning nutrients on the labels of food and drink. Finally, behind the request for stricter rules is the belief that corporate people are a bunch of bad guys, as opposed to well-intentioned bureaucrats, who spend all their time looking for ways to cheat you. However, whatever the Commission writes, obesity is not a problem that further regulation can solve, even when one assumes that it is a social, as opposed to an individual, problem to begin with.

Nor can mandatory advertising – whether or not consumers read it – address the moral hazard. The Commission had better focus on real solutions to real problems. Blaming industry is not a shortcut to welfare state reform. On the contrary, an exaggerated emphasis on the industry’s responsibility might turn into a reform lockout, as policy-makers might not realize that cost containment is not achieved through a wider knowledge of the nutritional facts of hamburgers.