Ripping the L.A. City Council a New One: A Polemic

As you all probably know by now, the Los Angeles City Council, in its infinite wisdom, has passed a one-year moratorium on the construction of fast food restaurants in a 32-square mile area in South LA.

I can’t even begin to argue why this is a ridiculous measure, but I will try.

First: what is the rationale? According to the LA Council, banning new fast food restaurants will provide more diverse food options for people living in the affected area. The thinking is that by limiting competition from fast-food restaurants, who can offer food at lower prices, sit-down restaurants will have a better chance of survival in the affected area.

According to the press release (PDF) issued by the ordinance’s sponsor:

“This ordinance is in no way attempting to tell people what to eat but rather responding to the need to attract sit-down restaurants, full service grocery stores, and healthy food alternatives. Ultimately, this ordinance is about providing choices—something that is currently lacking in our community.”

Second: the greater viability of sit-down restaurants is said to serve an important public health function: providing more nutritious food that reduce obesity, a problem especially acute in the affected area.

Now, what is wrong with those two things? For starters, everything is.

Let us examine the first point. How exactly is artificially limiting the number of restaurants in the area going to provide greater options for the residents? This is a patently false claim: the LA City Council is in fact decreasing the number of food establishments that the residents living in the affected area have to choose.

But one plausible response to my claim might be that the LA City Council is increasing the diversity of choices, not necessarily its number. After all, one can claim that an area with 5 restaurants, each of a different type, is better than an area of 10 restaurants, all of the same type. Primac facie, this is a plausible claim, but again, in this instance, it falls flat on its face: there is no reason to believe that this ordinance alone will attract more diverse type of food establishments in the area.

Why is that the case? A couple of reasons. First, there is probably a reason why the affected area has very little sit-down restaurants to begin with: namely, those kind of restaurants are not profitable in that area. If they were, they would still be there. Would they be profitable if they face less competition from fast-food restaurants? From a purely theoretical point of views: yes, they would be more viable than they were before, all other things being equal. But is this enough to get to be profitable? There is no reason to believe this, because less competition means that these kind of restaurants can offer higher prices than they would otherwise. And since this is a low-income area, there is very little reason to believe that the residents will be willing to shell out the extra money to spend on food when they have cheaper choices.

In addition, this is only a moratorium on the building of additional fast-food restaurants; it does not affect existing fast-food restaurants. Therefore, if this ordinance does attract sit-down restaurants, there is no reason to believe why the residents will choose the sit-down restaurants, which will probably have higher prices, when they could just walk next door to the McDonalds. In fact, this ordinance will make existing fast-food restaurants raise their prices because they no longer would face any new competition. In fact, in theory, existing fast-food restaurants can raise their prices until it is just below the prices offered by the sit-down restaurants, and the residents living in the neighborhood would still choose the fast food joints.

In this scenario, the people living in the affected neighborhood really doesn’t get anything beneficial: they are offered food establishments whose prices are more than they are willing to pay, they will probably pay higher prices at the food establishments that they already patronize, and they will have a less overall number of choices. In other words, this is a hugely inefficient situation.

But what about the public health rationale behind this ordinance? I will now get to that.

Notice, first of all, that I never claim that governments does not have a public health interest–this I do not deny. But to me, this ordinance goes about achieving this interest in a way that fundamentally violates people’s free choice. This law is paternalistic to the extreme: it assumes that low-income people are incapable of making free choices that realize their own good. I do not deny that in many cases, people do not realize what is good for themselves, but this is not limited to only poor people–it goes for rich and poor alike. But surely, there are also people out there, who are fully aware of the consequences of their actions, and still choose to do that very action. For example, I know what alcohol does to the body, but I choose to drink it anyways. I know that a Big Mac on McDonalds is not the healthiest food choice that I should be making, but sometimes, very rarely I’ll admit, I still eat one, knowing full well the health consequences of making such a choice.

So for the LA City Council to pass this law is to say that it completely discounts people’s ability to make free choices, no matter how badly such choices might damage them in the long run. Can the LA City Council use other means to pursue its public health objective in a non-paternalistic way? I would argue yes. First, the LA City Council can massive increase funding for education/awareness programs so that low-income people fully realize what the consequences of eating at McDonalds everyday are. But even then, some people might still choose to eat at McDonalds everyday, but by that point, it is no longer legitimate for the state to intervene.

Second, it is possible that low-income people are aware of the health risks of constantly eating at fast-food joints, but are unable to afford healthier food. But is the LA City Council ordinance really addressing this aspect of the problem? Surely it is not, because a ban on the construction of new fast-food restaurants does not by itself make healthier foods more affordable. If the LA City Council really wanted to make low-income people eat more healthily, surely it can engineer some kind of redistribution program in which low-income people are given more wealth to consume healthier foods. The details of this redistribution program need to be worked out, but in theory, this is a legitimate, non-paternalistic way of achieving publich health objectives.

In the end, the LA City Council ordinance does not really achieve anything it sets out to achieve: it decreases overall choice, it doesn’t make it any more likely that sit-down restaurants will thrive and prosper in an area whose economic situation is hostile to higher prices, and most importantly, it does not create incentives for the residents of the affected area to eat more healthily, because it does not offer increased education/awareness program, and it does not make healthy foods any more affordable.

This program won’t work because you can’t change people’s behavior so easily: just because you plant a slew of Whole Foods in an area doesn’t mean that the people living in the area will automatically shop there. And just because you take away cheeseburgers and extra-large fries doesn’t mean that people will automatically eat fat-free yogurts and arugula. In order to change behavior, you have to create incentives and match it with funds–neither of which this ordinance does.

Is reducing obesity an important and legitimate public policy objective? The answer is FUCK YES! But certainly this ordinance does nothing to realize that objective. And to top it off, it is paternalistic and discounts individual choices.

Conclusion: this is just a shitty law all around.


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