Peter Ubel

Last summer, New York City made a great stride toward promoting public health, by requiring chain restaurants to prominently publish calorie counts alongside their menus. This type of regulation holds the promise of improving people’s eating habits, without restricting their freedom to order whatever they want.

Theoretically, this new regulation should help consumers make better choices: they should eat fewer big Macs and more Asian chicken salads. Indeed, proponents of free markets, who normally oppose government regulation, should celebrate New York City’s new policy, because, by requiring restaurants to inform consumers about their purchases, the city has moved the restaurant business closer to Adam Smith’s ideal of a free market-one where savvy and educated consumers choose among available goods based on their cost and benefits.

As a physician who conducts research in behavioral economics, however, I am concerned that this policy won’t accomplish its goals, because it should be simple for restaurants to make their offerings attractive to even the most calorie conscious consumer.

How will they do this? By creating new items on the menu that make everything else look healthy by comparison.

When people evaluate consumer goods, they usually need some context in which to judge relevant attributes of competing products. What counts as an expensive DVD player? Best way for me to tell is by looking at other DVD players. And what counts as a low-calorie meal? Easiest way to tell is to see how many calories are in other meals.

If I was a restaurant owner and wanted to keep selling a popular high calorie sandwich to New Yorkers, I would place two new items on my menu, each with 50% more calories than the old sandwich. Maybe add on a couple slices of bacon, or a fried egg . . . anything Homer Simpson would like on his sandwich.

I expect that very few customers would thrill at the idea of these new “heart attacks on a bun.” Most will recoil. But that’s ok, because my goal would not be to attract customers to these new sandwiches. Instead I would use these new sandwiches to make my old ones look better. You see, my customer’s eyes will soon wander toward other items on the menu, and what used to be the highest calorie sandwiches will now look like veritable health-food snacks!

I have no idea whether any restaurants will employ this psychological technique. I do know that companies often make high-priced products, deluxe car models for example, in large part to sell their midrange products.

More importantly, my example highlights the kind of unconscious behaviors that could reduce the impact of New York City’s new regulations.

I hope that I am wrong, and that restaurant goers begin eating more healthfully in response to the calorie information now available to them. But if they don’t, I expect New York City will need to go further, to persuade people to eat better food.

Helping consumers make good choices often means we need to do more than simply inform them.

To read my other blogs, and to learn about my book Free Market Madness: Why Human Nature is at Odds with Economics-and Why it Matters , check out my website at: http://www.peterubel.com/.

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Studying economics in college at the dawn of the Reagan presidency, I learned about the wonders of free-markets. The invisible hand of the market, I read, guarantees that thousands upon thousands of people–each with unique desires, abilities and values–mesh together, thereby able to achieve the balance of work and leisure, and of material and spiritual wealth, that they strive for in their lives.

In the long run, I was told, market imperfections correct themselves- eventually risky speculation is punished, foolish commercial enterprises fail, and the stock market sets the right price for company shares.

Unfortunately, to paraphrase John Maynard Keynes, in the long run we’re all dead, and some of us don’t want to wait that long for the market to correct itself.

Belief in free-markets has long been tied to unjustified faith in human rationality. But human nature is a surprising mixture of rationality and irrationality, and policies that don’t recognize the fullness of human nature are doomed to fail.

Consider the “rational” lenders who become so enthusiastic about risky mortgages. At the same time that the mathematical parts of their brains were calculating the risks of sub prime mortgages, more primitive parts of their brains were at work. Behavioral scientists, for instance, have discovered that testosterone fuels risky decision making. What happens when you mix testosterone with a young Wall Street investment banker, striving for dominance in his field and pursuing a huge year-end bonus? Is it any surprise that this male dominated industry made such poor decisions?

To make matters worse, when men win at things, like basketball games or risky investments, their testosterone levels rise even further. Not hard to imagine a vicious cycle here, a culture of risk fueled in part by hormones and reinforced when early risks are rewarded.

People can’t stop being human. We humans can’t ignore that our advanced centers of reasoning lie on top of primitive brain structures, ones we share with reptiles and chimpanzees.

To reduce the chance of future economic crises, we need sensible and careful government regulations that temper our more animal instincts. If such regulations had been in place in the last decade, we might have dissuaded more people from taking out unnecessarily risky mortgages, and we might have avoided our current economic crisis.

To read more of my blogs, and to learn more about my new book, Free Market Madness, check out my personal website: http://www.peterubel.com

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Hiking in Switzerland several years ago, I came across a trail that seemed to dead-end at a farmer’s gate. I looked around for a way to avoid the property, but there was none. Instead, the trail continued through the middle of the farm. I walked through the gate, side-stepping some livestock in the way (and side-stepping even more livestock manure!), until I exited the farm through another gate, back out to public property.

What a wonderfully un-American attitude towards property rights. And towards walking. The Swiss have created a culture of walking. I wonder if we can use some of the Obama stimulus money to begin transforming our culture in similar ways.

Compare my experience in Switzerland to the typical visit to the suburbs. No sidewalks on the street. No grocery stores or shops within walking distance. That doesn’t promote a culture of physical activity.

The desire to walk, or to exercise in any manner, is not just a function of individual choice. It is also a desire that is strongly influenced by one’s surroundings. A study in Salt Lake City recently showed that people who live in older neighborhoods are thinner than those who live in newer neighborhoods, a thinness partly attributable to their greater tendency to walk.

We Americans are unlikely to cede property rights to local fitness enthusiasts any time soon. We won’t be opening up our gates to walkers and bikers either.

But because of the Obama stimulus bill, many local governments are looking for shovel-ready construction projects. I hope that in doing so, they look for ways to design neighborhoods that promote physical activity.

The free market, left to its own devices, doesn’t necessarily consider what kind of neighborhoods promote our best interests. We are our neighborhoods. Our culture begins at home.

With intelligent regulations, such as thoughtful neighborhood zoning, we can influence our ability and willingness to engage in healthy activities like biking and walking. We owe it to ourselves to create healthy neighborhoods.

To read more of my blogs, and to learn more about my new book, Free Market Madness, check out my personal website: http://www.peterubel.com

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Quick: What do you get when you mix a Nobel Prize winner with a MacArthur genius?

You get this: “The claims of some heavy drinkers and smokers that they want to but cannot end their addictions seem to us no different from the claims of single persons that they want to but are unable to marry or from the claims of disorganized persons that they want to become better organized.”

Yes, Gary Becker and Kevin Murphy, in the rich tradition of University of Chicago Economics, believe that much-if not most-of human behavior can best be understood by assuming that people are behaving rationally, to maximize their best interests.

Unemployment? A rational choice according to another Chicagoan, Nobel winner Robert Lucas: “To explain why people allocate to unemployment, we need to [know] why they prefer it to all other activities.”

Addiction? Also a rational choice. Thus, even though many addicts are miserable, this misery doesn’t mean that their use of heroin or crack is irrational. As Becker and Murphy put it: “People often become addicted precisely because they are unhappy. However, they would be even more unhappy if they were prevented from consuming the addictive goods.”

Why should any of us care that a particular school of economic thought considers human beings to be largely rational? Because this same school of thought has, by no coincidence, been home to some of the most prominent libertarian thinkers of the last century-people like Friedrich Hayek and Milton Friedman, men whose ideas have influenced politicians around the world. Convinced that people are largely rational, these influential thinkers have argues that we should severely limit the scope of government and rely on the power of free markets to maximize people’s best interests. After all, if people are largely rational-if they know what’s in their best interests and possess the willpower to act upon this knowledge-then the best any government can do is to step aside, and let them pursue the good life.

As a physician trained in behavioral economics, I cannot reconcile either my clinical experience or my research findings with a view of addiction as being completely rational. True: if the price of heroin rises dramatically, people will use less heroin. Some people won’t take up the habit. Some hard core addicts will try to cut down their use, or will switch to other drugs. In other words, there is some rationality to the behavior of drug addicts. But as readers of this website no doubt recognize, there is also some desperately irrational behavior contributing to the actions of drug addicts.

Why does this matter? Simple. The more convinced we are that human beings behave in ways that promote their own best interests, the less we should look to the government to protect our interests. If crack makes people happy, we should allow people to use it. No rules, no regulations.

If people want to take out mortgages that are beyond their means, and if lenders want to give them such mortgages, the government should step out of the way and let the market place punish anyone that makes bad decisions.

If a twenty-year-old doesn’t want to buy health or disability insurance, and experiences a crippling automobile accident, we should step aside and let her experience the consequences of her decision.

But if you, like me, believe that human nature is a mixture of rational and irrational forces-if you recognize that we consumers are often prey to manipulation by people who know our weaknesses-then you will be open to exploring ways the government can help us make wiser decisions.

Trust me; I’m not talking about big brother. I’m ecstatic to have grown up in the USA rather than the USSR (okay, my wife disputes that “grown up” part!).

But cigarette taxes? Free market enthusiasts think they are a bad idea. Tax dollars to help drug addicts go through rehab? Market evangelists don’t to approve of that either, especially if, as Becker and Murphy say, crack is making these people happier. Government dollars spent on anti-obesity programs? Why do that when, according to some Chicago-based scholars, the term “overweight” is a misnomer, since people have rationally decided how much they want to eat and exercise. In this world of perfect rationality, no one is overweight, because everybody has achieved their ideal body mass.

We need to be very careful about adding any layer of government bureaucracy to our lives. But we should be equally careful about stripping away government regulations, when such regulations promote our best interests. Our policies need to recognize that we humans aren’t always as rational and strong willed as we’d like to be.

To learn more about my new book, Free Market Madness, check out my website: http://www.peterubel.com/.

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Not long before the presidential election, the Wall Street Journal editorial page warned its readers about what it called the attack of the killer Oreos. You have to admit it’s a pretty sensational image — of an Oreo silently stalking its prey, leaping upon an unsuspecting consumer. In fact, this is exactly the kind of image Journal editorialists wanted people to think about when voting in November. “One of the things at stake in this election,” the Journal reminded us, “is who will run agencies like the FCC, which have enormous discretionary power.” And an Obama administration, we were warned, will interfere with companies’ abilities to market their products to us, and our children.

If the current economic crisis has taught us anything, it is that unfettered markets are not the godsend that libertarians would have us believe. Our current economic mess is due, in no small part, to deregulation gone wild.

It is no surprise that the Wall Street Journal opposes the idea of regulating advertisement of junk food to kids. So even as companies find more ways to saturate our brains with images of their products — paying TV shows to incorporate their products into plot lines for example — free market evangelists remain unconcerned. As our children become increasingly obese with each passing year, these people can’t understand why some of us would like to protect our children from things like junk food advertising.

Behind the Journal’s view is a belief that humans are immune to any negative consequences of advertising:

Viewers already understand exactly what’s going on when a TV character flaunts a name brand,” they opined, “and that awareness is the best defense against whatever ‘manipulation’ is going on.”

In making this statement, Journal editorialists are flaunting their ignorance of human nature. As a physician, I have spent my clinical time caring for patients — smokers, overeaters, under-exercisers — who have been harmed by many of the products that these kind of libertarians would want us to free from regulation. As a behavioral scientist, I have studied how easy it can be to unconsciously influence people’s behavior. As the father of 8 and 10 year-old boys, I have yearned for a government that is willing to step in, when necessary, to protect my kids from the harmfulness of our excessive consumerism.

We live in a market-oriented economy. But a sensible society will recognize when the market needs to be reigned in.

Peter Ubel is Professor of Medicine at the University of Michigan and author of Free Market Madness: Why Economics is at Odds with Human Nature–and Why it Matters (Harvard Business Press, January 2009). To learn more, visit http://www.peterubel.com/

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American soldiers have been fighting in Iraq and Afghanistan for over four years now. Tragically, some have returned home in coffins. But because of advances in military medicine, many more have come home alive but wounded, with embedded shrapnel and missing limbs serving as permanent reminders of their time serving our country. What will their lives be like?

Last time we were caught in a brutal battle like this, our wounded soldiers were returning from Vietnam, reentering a country that was polarized over the direction the war was taking. In our popular imaginations, wounded Vietnam Veterans are forlorn creatures, shunned by their country and mired in mental health clinic appointments receiving care for post traumatic stress disorder (PTSD).

With such an image in mind, it is easy to imagine new Veterans returning from the Middle East and facing even worse fates. Their level of stress in Iraq and Afghanistan easily matches that of most soldiers in Vietnam: wondering, at all times, whom they can trust; whether that Iraqi police car is really an insurgent vehicle; whether that innocent looking family is harboring a cache of weapons.

And the wounds, the physical wounds, that current Veterans must learn to live with are more severe than the wounds that Vietnam Vets had to live with. We can keep soldiers alive now whose wounds would have been fatal 30 years ago, meaning that many survivors are left to cope with unprecedented disabilities.

So how will they cope emotionally, with their return to civilian life and their entry into the world of disability?

I have been practicing medicine within the VA system for over a decade. So far, I have taken care of only a few Iraq and Afghanistan Veterans, none of whom have had serious physical injuries. But I’ve taken care of dozens of Vietnam Veterans, and although a number of them struggle with PTSD, the vast majority are happy. Amazingly happy in fact. A typical patient of mine might have emphysema, diabetes, hypertension, a touch of congestive heart failure, and chronic pain from a wartime wound. Most of us probably imagine that a miserable list of health problems like this would make us . . . miserable! But that is not what I see in my clinic. Instead, the vast majority of my patients are thriving despite their health problems.

How can that be?

I was so intrigued by the amazing emotional resilience of my patients that I began doing research on happiness and illness. The result is my new book, You’re Stronger than You Think, in which I write about five people who experience serious illness and disability and manage to thrive. I weave their stories together with discussions of the science of emotional resilience. I try to show why people systematically underestimate their emotional resilience, imagining that difficult circumstances would lead to misery, when in fact most people thrive in the face of adversity. But enough of the shameless plug. If you want to check out the first chapter of my book, click on PeterUbel.com.

So what can returning soldiers expect? Like I said before: their wounds are more severe than their Vietnam colleagues. But the country supports them in a way that they did not support Vietnam Veterans. Back in the time of the Vietnam War, many people opposed to the war blamed the soldiers in part for what was going on. Now, even the most strident anti-war activists recognize that what is good or bad about this war is a result of decisions made by people in the White House and the Pentagon, not a result of decisions made by most of the 19 year-olds enlisted in the armed forces.

Eventually, most Vietnam Veterans recovered, emotionally, from their wartime wounds and wartime experiences. Some still haven’t recovered, unfortunately, converging on our PTSD clinics every week, the shattered remnants of the young men they used to be.

We can expect most new Veterans to thrive, too. We can also expect a certain number of them to suffer from chronic PTSD. But hopefully, with a more supportive country to return to, there will be even fewer who suffer long-term emotional damage from their wartime wounds than there were after the Vietnam War.

Now let’s hope that we can get the rest of our soldiers back here soon, with as few physical and emotional wounds as possible.

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