A New York City billionaire advocated the of ban an unhealthy product. His name was John D. Rockefeller Jr., and the product was alcohol. He spent approximately $350,000 ($8,000,000 today) to support the passage of the 18th Amendment. Then, just 12 years later, he called for repeal. In 1932, in an open letter to Columbia University President Nicholas Butler, Mr. Rockefeller wrote “many of our best citizens, piqued at what they regarded as an infringement on their private rights, have openly and unabashedly disregarded the Eighteenth Amendment.” While well intentioned, the prohibition violated personal freedom, led to the rise in organized crime, and failed to promote sobriety.
Mayor Michael Bloomberg could learn from Mr. Rockefeller’s prohibition mistake when crafting regulations to promote public health. Last October, Mayor Bloomberg pushed a mandate to limit the size of sugary, soda drinks, served in New York City, to 16 ounces. The plan went through the New York City Board of Health, without a city council vote. The purpose was to help reduce obesity and diabetes, a worthy goal, but it was full of loopholes and would have failed to reduce sugar consumption. The law was struck down the by the courts before going into effect, and failed in appeal.
Obesity and diabetes are serious issues contributing to the rising health care costs in America. If everyone ate healthy, exercised, and refrained from smoking, there would be no health crisis. We should applaud the forward thinking of Mayor Bloomberg, however we should not stand for arbitrary bans that limit our freedom as consumers, without effectively promoting the goal. Bans rarely work. During the prohibition, alcohol consumption in New York City actually increased. In protest of the ban, consumers might order two smaller sodas, possibly leading to an increase in soda consumption. But when given a choice, under the right incentives, many will choose appropriately. As Milton Friedman would say, “people respond to incentives.”
Laws that encourage healthy choices would be far more effective. As a rule, if you want less of something you tax it. After prohibition, alcohol became a regulated market to tax and reduced consumption. Soda is cheap, but it doesn’t have to be because government has the power to tax, increasing consumer cost. Soda, and more specifically sugar, should be taxed, just as liquor is taxed by alcohol content. Sumptuary taxes help pay for the negative external costs of harmful products, often borne by the public. They also encourage limited consumption, and the search for substitutes, which the natural products industry developing.
I became involved with this industry in 2010 when I started Quit Tea LLC, with the idea of providing a healthy alternative to smokers. People want to be healthy, but often lack good options. With sugar, as with smoking, there are few desirable, healthy alternatives readily available. However, if you walk down the aisles of a Natural Products Expo, you will see future of sugar reduction. There are many low or no sugar products that taste good, and healthy, natural sweeteners and sugar alternatives like stevia, agave, monk fruit, xylitol, and erythritol. Honest Tea is one company that has led the campaign for sugar reduction, which, ironically, because of their 16.9 ounce bottle size, would have been prohibited under Bloomberg’s soda limit. The intention of the large soda ban are legitimate, but it is innovations in the natural products industry that will lead to a healthier future.
Still in favor of the goals of the temperance movement, John D. Rockefeller Jr. also wrote that many “would willingly favor its repeal were some alternative method that gave promise of better results offered as a substitute,” and that he would continue the “support of practical measures for the promotion of genuine temperance.” We have our practical measures and good alternatives. Instead of forcing through futile bans, Mayor Bloomberg should pursue legislation that will incentivize New Yorkers to make healthy decisions.