Galbraith and Keynes (left, centre) were dogmeat– until the great finance,
fuel and food crash. Kenneth Rogoff (right) says we'd better listen up now

Our news team reports. The Project Syndicate organisation is in the business of commissioning major editorials and commentaries from people considered to be among the world's leading thinkers, which then appear in nearly 500 newspapers in around 150 countries, with a combined circulation of 57 million. It is mostly concerned with politics and economics and general mastery of the universe. In February one of its most read pieces was by Kenneth Rogoff (right, above), a former chief economist at the International Monetary Fund, a chess grandmaster since his late 20s. So far it is, as far as we know, the first Project Syndicate commentary concerned with public health nutrition. Here is some of what Kenneth Rogoff said.

Coronary capitalism

'A systematic and broad failure of regulation is the elephant in the room when it comes to reforming today's Western capitalism. Yes, much has been said about the unhealthy political-regulatory-financial dynamic that led to the global economy's heart attack in 2008… But is the problem unique to the financial industry, or does it exemplify a deeper flaw in Western capitalism?

'Consider the food industry, particularly its sometimes-malign influence on nutrition and health. Obesity rates are soaring around the entire world.... According to the US Centers for Disease Control and Prevention, roughly one-third of US adults are obese… Even more shockingly, more than one in six children and adolescents are obese, a rate that has tripled since 1980.

'Of course, the problems of the food industry have been vigorously highlighted by experts on nutrition and health, including Michael Pollan… and certainly by many economists as well. And there are numerous other examples, across a wide variety of goods and services, where one could find similar issues. Here, though, I want to focus on the food industry's link to broader problems with contemporary capitalism (which has certainly facilitated the worldwide obesity explosion), and on why the US political system has devoted remarkably little attention to the issue…

'Obesity affects life expectancy in numerous ways, ranging from cardiovascular disease to some types of cancer. Moreover, obesity – certainly in its morbid manifestations – can affect quality of life. The costs are borne not only by the individual, but also by society – directly, through the health-care system, and indirectly, through lost productivity, for example, and higher transport costs (more jet fuel, larger seats, etc.)'.

Obesity boosts economic growth

He continues: 'But the obesity epidemic hardly looks like a growth killer. Highly processed corn-based food products, with lots of chemical additives, are well known to be a major driver of weight gain, but, from a conventional growth-accounting perspective, they are great stuff. Big agriculture gets paid for growing the corn (often subsidized by the government), and the food processors get paid for adding tons of chemicals to create a habit-forming – and thus irresistible – product. Along the way, scientists get paid for finding just the right mix of salt, sugar, and chemicals to make the latest instant food maximally addictive; advertisers get paid for peddling it; and, in the end, the health-care industry makes a fortune treating the disease that inevitably results.

'Coronary capitalism is fantastic for the stock market, which includes companies in all of these industries. Highly processed food is also good for jobs, including high-end employment in research, advertising, and health care.

'So, who could complain? Certainly not politicians, who get re-elected when jobs are plentiful and stock prices are up – and get donations from all of the industries that participate in the production of processed food. Indeed, in the US, politicians who dared to talk about the health, environmental, or sustainability implications of processed food would in many cases find themselves starved of campaign funds…

'If our only problems were the food industry causing physical heart attacks and the financial industry facilitating their economic equivalent, that would be bad enough. But the pathological regulatory-political-economic dynamic that characterizes these industries is far broader. We need to develop new and much better institutions to protect society's long-run interests'.

What 'development' means

'What Kenneth Rogoff is saying is not new' comments Association Council member Geoffrey Cannon. 'What's important is that it's somebody of his current eminence saying it. Until the rise of monetarism the most influential North American economist was John Kenneth Galbraith (left above) who was also a statesman. In his The Affluent Society he points out that "development" is fuelled by "more elegant cars, more exotic food, more erotic clothing, more elaborate entertainment – indeed… the entire range of sensuous, edifying, and lethal desires", all invented or amplified by advertising' .

'Further, Kenneth Rogoff's point about obesity was made by Tomas Philipson of the University of Chicago some years ago, as quoted in Paul Roberts's The End of Food: "The obesity problem is really a side-effect of things that are good for the economy… For many corporations, and even for physicians, Americans' obesity has also fattened the bottom line".' In 2006, revenue from the US obesity industries was estimated at over $US 300 billon, including over $US 130 billion for fast-food restaurants, over $US 120 billion for medical treatment, all adding up to around 3 per cent of the US annual gross domestic product'.

Association member Barry Popkin, an economist as well as a nutrition scientist, agrees: 'Kenneth Rogoff and Kenneth Galbraith point to the problems when quality of life is measured in terms of currency. Currency circulation is the name of the game, and buying and selling is the name of capitalism. Economics does not speak to equity but rather to development. And one aspect of development is increased purchases of food or drink – whether healthy or unhealthy'.

He adds: 'My favourite example is the snack. This was uncommon before the 19th century. Snacking is a creation of the modern food industries – they created the products, and marketed and created the felt need for morning, afternoon, evening, late night and even constant eating. This has created the world that has increasingly become fatter, while at the same time hundreds of millions are still hungry and undernourished'.

Geoffrey Cannon asks: 'Are leading governments now beginning to reject the mathematical modelling of monetarism, in favour of the human economics exemplified by John Maynard Keynes (centre, above), co-architect of the International Monetary Fund? One of the tenets of Keynesian economics, mainstream practically until the 1980s, is that there is all the difference in the world between money and value. Let's hope that Kenneth Rogoff's statement proves to be a tipping point'.