Published on 18 Mar 2015
Ever wonder why pharmaceuticals are so expensive? In this video, we show how low elasticity of demand results in monopoly markups. This is especially the case with goods that involve the “you can’t take it with you” effect (for example, people with serious medical conditions are relatively insensitive to the price of life-saving drugs) and the “other people’s money” effect (if third parties pay for the medicine, people are less sensitive to price).
March 19, 2016
The Monopoly Markup
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QotD: Dieting as a substitute religion
A current New York Times news story, What If It’s All Been A Big Fat Lie, entertainingly chronicles the discovery that low-fat diets are bad for people. More specifically, that the substitution of carbohydrates like bread and pasta and potatoes for meat that we’ve all had urged on us since the early 1980s is probably the cause of the modern epidemic of obesity and the sharp rise in diabetes incidence.
I have long believed that most of the healthy-eating advice we get is stone crazy, and the story does tend to confirm it. One of my reasons for believing this is touched on in the article; what we’re told is good for us doesn’t match what humans “in the wild” (during the 99% of our species history that predated agriculture) ate. The diet our bodies evolved to process doesn’t include things like large amounts of milled grain or other starches. Our hunter-gatherer ancestors ate wild vegetables (especially tubers) and meat whenever they could get it.
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But the evolutionary analysis only tells us what we probably should be eating. It doesn’t explain how the modern diet has come to be as severely messed up as it is — nor why the advice we’ve been getting on healthy eating over the last twenty years has been not merely bad but perversely wrong.
The answer is, I think, implicit in the fact that “health food” has a strong tendency to be bland, fibrous, and nasty — a kind of filboid studge that we have to work at convincing ourselves we like rather than actually liking. Which is, if you think about it, nuts. Human food tropisms represent two million years of selective knowledge about what’s good for our bodies. Eating a lot of what we don’t like is far more likely to be a mistake than eating things we do like, even to excess.
Why do we tend to treat our natural cravings for red meat and fat as sins, then? Notice the similarity between the rhetoric of diet books and religious evangelism and you have your answer. Dietary mortification of the flesh has become a kind of secular asceticism, a way for wealthy white people with guilt feelings about their affluence to demonstrate virtue and expiate their imagined transgressions.
Once you realize that dieting is a religion, the irrationality and mutual contradictions become easier to understand. It’s not about what’s actually good for you, it’s about suffering and self-denial and the state of your soul. People who constantly break and re-adopt diets are experiencing exactly the same cycle of secondary rewards as the sinner who repeatedly backslides and reforms.
This model explains the social fact that the modern flavor of “health”-based dietary piety is most likely to be found in people who don’t have the same psychological needs satisfied by an actual religion. Quick now: who’s more likely to be a vegetarian or profess a horror of “junk food” — a conservative Christian heartlander or a secular politically-correct leftist from the urban coasts?
Eric S. Raymond, “Diet Considered as a Bad Religion”, Armed and Dangerous, 2002-07-17.
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