Socialization and social comity

President William Howard Taft

The CDC has spoken and we are fat. The worst state, Mississippi, has an obesity rate of 35%. Massachusetts, the third best, has nothing to brag about with nearly one out of four citizens tipping the scales at “unhealthy.” This 2011 study was based on self-reporting and people tend to gild the lily. Another more rigorous report which involved weighing participants estimates that 36% of all Americans are overweight.  We are in the midst of a true epidemic.

Obesity is serious because it increases the incidence of diabetes, heart disease, cancer, and stroke among other ailments. Quality of life is worsened and mortality rate increased. Obesity results in significantly elevated health care costs.  And while it is easy to make rationalizations, obesity is a choice. What and how much we put in our mouths, whether and how frequently we exercise; these are personal choices.

We hear the term “socialization” tossed about frequently. By this, we don’t mean the process of making your puppy play well with others, but rather, the spreading of risks and costs across a large group of people.

It is a familiar concept.  One common example of socializing risk is automobile insurance.  Every driver (at least in Massachusetts) is required to carry automobile insurance.  In a given period, not everyone will have an accident, but everyone pays premiums.  The unlucky few who actually suffer a loss are compensated from the pool.

But this is not, in itself, socialization of risk.  If a 19-year-old from Roxbury paid a premium based on his actual risk of loss, it might be $10,000 per year.  Meanwhile, a 50-year-old woman in rural western Massachusetts might pay only $400.  But that’s not how we do it.  The state, in its wisdom, has deemed that we should all pay more so that the young scofflaw in Roxbury pays less.  This is true socialization of risk, the salient point being that it is actuarially unfair. (Unfair in that the woman from western Mass, along with most of us, pay more than we should while the young man pays far less than he should). This leveling of risk premium removes from the young man in Roxbury the incentive to drive exceedingly carefully.

In other words, socialization of risk distorts our decision making process and leads to more risky behavior (because risk, and hence cost to the individual, is subsidized).  It is always true that to get less of something, tax it; to get more, subsidize it. Subsidizing risky behavior is a sure fire way to get more.

Any form of national health care is another variety of risk socialization. Our increasingly socialized health care system does not charge premiums based on risk factors.  For instance, an inveterate rock climber does not pay higher health insurance premiums than you do, but she takes much greater risks.  Likewise, a motorcycle racer, skier, pilot, scuba diver, or lumberjack do not pay higher premiums than you do.  Health risks are subsidized.

It was different in an earlier era.

William Howard Taft, our 27th president, served from 1909-1913.  He was morbidly obese, suffered from high blood pressure, severe sleep apnea, and died of a heart attack. But at that time, each was responsible for his own behaviors and the resultant consequences. Taft ate richly and drank to excess, did not exercise, packed on the pounds, and suffered poor health as a result. But no one had to pay Taft’s physician except Taft.

In this day of increasingly socialized medicine, where poor personal choices engender no individual costs but burden the public fisc, it is difficult to observe such profligacy without comment, or at least smoldering resentment.  Socialization is making us downright rude.

But government, which is adept in creating such a mess, can further intervene. A recent article in The Telegraph (London) offered such a solution:

“Ridiculing someone as 'fat' or 'obese' could become a hate crime under an idea being floated by a group of MPs and a leading charity.”

This is a solution of sorts.