On Jan 3rd of this year the article "Overfat and Underfat: New Terms and Definitions Long Overdue" (doi.org/10.3389/fpubh.2016.00279) was published. As usual, the Mainstream Media ignored it (with a few minor exceptions). Yet, this is an article that is worth exploring not because of the new hypothesis and theory it presents, but because of the puzzling question whether or not Libertarianism and Austrian Economics versus Government Action would be different in this area.

THE SUMMARY

The article proposes a new cycle of Overfat and Underfart processes which is interesting. However, the most revolutionary proposal (and one that we, personally, find appealing) is that anywhere between 62-76% of the world population are Overfat. Take a look at the graph below:

UNDERLAYING IDEAS

Now we have to ask what are the "standard" expectations under democratic political systems so that we may then compare those expectations against data.

Socialized Medicine and Obesity

Within the current systems of government (i.e. socialism) several governments implemented so-called Universal Health Care system, its main characteristic being that medically necessary health care is "free" (i.e. paid by other people). As this service is free and it is implemented for the "good of society", this implies two things:

1. Overweight people would obtain the necessary medical treatments to revert to a Normal Fat state.
2. The state, having taken over the responsibility for societal medical wellbeing, would implement the necessary campaigns to ensure people do not become Overfat in the first place.

This would be so, precisely because there is no economic impediment for this to happen and governments make the assumption that people are not -entirely- stupid. Thus, people have no reason not to take better care of themselves. As a consequence, we should see a lower percentage of Overfat people in countries with socialized medicine than in countries with private medicine.

Free Market Medicine (Private Medicine)

The current socialist view on private medicine would, on the other hand, dictate that as medicine must now be paid for by the people from their own pocket, a great deal of people would not have access to the means to treat their Overfat condition. On the same token, private medicine would have no incentive to create and deliver preventative campaigns for the reduction of fat levels, as such campaigns would go against their bottom line (i.e. less Overfat people means less profits). Therefore, we should see an increase in the percentage of Overfat peolpe in private medicine-driven countries when compared to countries with socialized medicine.

THE DATA

As our time is limited (and let's never forget that we are lazy), we cobbled together two key pieces of information for countries around the world. They are:

• The average BMI (Body Mass Index) per country. This index is a not-so-great fat-level indicator, but it is the best we currently have (data sourced from the CIA FactBook - ironic, isn't it?).
• The Index of Economic Freedom from the Heritage Foundation (based on measures of Property Rights, Freedom from Corruption, Fiscal Freedom, Government Spending, Business Freedom, Labour Freedom and several others). Not a great index but a good-enough proxy for the level of market freeness in different countries.

We then proceeded to separate the countries into two groups, the first one with heavily socialized medicine and the second with light or no socialized medicine.

THE BMI RESULTS

We calculated the average BMI and their respective Standard Deviations for both groups. The results are:

• Average BMI for countries with socialized medicine:               24% +/- 4.5%
• Average BMI for countries without socialized medicine:          15.5% +/- 10%

THE CORRELATION RESULTS

We then decided to plot both sets of data for each country group to investigate if there is any correlation. We removed a minor number of outliers which were tiny in terms of world population but were skewing the plot. We then drew a linear regression line (in black) alongside with its parameters. The results can be seen below:

 

COMMENTARY

Disclaimer

Yes, we know. The numbers we are using are not perfect. The statistical analyses we are using are rough and basic at best. Yes, yes, yes. Look, we know that none of these objects are pristine, pure or definitive. We get that. That's not the point. The point is to see if we can extract some sort of high-level conclusion, however tentative it may be. Got that? Gooood!

Average BMI

Hummm… strange… countries with socialized medicine are doing about 33% worse than countries without socialized medicine. That's right. In countries with socialized medicine people are about 33% fatter than in countries without socialized medicine!!!

How could it be?

Simple, the logic outlined in the Underlying Ideas section (above) is deeply flawed. The correct assessment is as follows:

In countries with socialized medicine there is no penalty for becoming Overfat as medicine is "free". As there is no penalty, there is no need to exercise personal responsibility or restraint and therefore people are then "free" to indulge in overeating. In other words, people do not care or care far less about becoming ill due to an Overfat condition (see for example Moral Hazard For The Masses).

In countries without socialized medicine there is a significant economic penalty for becoming sick, including Overfat. There is therefore a strong incentive for people to exercise personal responsibility and restraint. In other words, people care a great deal about not becoming ill due to an Overfat condition because the cost of all treatments will come out of their pocket.

Correlation

Definition of R²: In statistics, the coefficient of determination, denoted R² or r² and pronounced "R squared", is a number that indicates the proportion of the variance in the dependent variable that is predictable from the independent variable. In other words, it gives us the percentage of actual data points that we can predict using a linear regression equation represented with the black line in the graphs above. This number can only go between ZERO (no predictive ability whatsoever) and 1 (total predictive ability).

In countries with socialized medicine there is no correlation between their Economic Freedom Index and the BMI (i.e. the R square value is almost ZERO). What this means is that the entirety of the socialized medicine processes with all their rules, regulations and overspending, is utterly unrelated to free market action when it comes to Overfat conditions. Which means that whatever happens in socialized medicine systems in this area is entirely due to pure government action. In other words, whatever happens is 100% government's fault. This is quite an expensive waste of resources and your tax money to "achieve" a 33% worse result than free markets!

In countries without socialized medicine, there is a meaningful (albeit low) correlation level where R² is about 0.2 (or 20%). Furthermore, this correlation is positive with the increase of the Economic Freedom Index (i.e. the increase of market freeness). What this means is that the freer the market, the fatter the people.

But wait a minute! This seems to contradict our corrected logic above. Shouldn't the percentage of fatness be decreasing with market freeness? Not necessarily. For one thing, we must remember that although in countries without socialized medicine there are no massive country-wide health facilities, there is still a fair amount of subsidies and government intervention in health care. Therefore the medical cost of being Overfat is not as high as it could be in a pure free market and therefore personal restraint and responsibility is not as high as in pure free markets.

Secondly, this seems to be absolutely correct as the freer the market the more food there is! Thus, it is to be expected that the correlation be positive as the freer the market the less people are starving to death.

In third place, we must not forget that although the correlation is positive, the average BMI index is still about 33% lower than in countries with socialized medicine.

Lastly, we must not forget that the freer the market, the lower the government expenditure, which translates in lower taxes. In other words, we get all the benefits for free, and this time it is a true "free" as no other people are paying for it!

CONCLUSION

We have analyzed the operation of the free market in medical healthcare versus socialized medicine for the Overfat condition. The high-level conclusion we sought is in. The free market wins hands down. Not only it forces us to be more responsible, but it generates far better results to very little or no cost to us. Socialized medicine systems on the other hand, accomplish very little at great expense to our pockets.

And so, you have a decision to make. You can either choose to get Overfat and hope for the best that current medicine will be able to do something meaningful for you while exploiting your fellow citizens… or… you can take matters in your own hand, be careful with what you eat and have a healthier and longer life without exploiting your fellow citizens.

Your options.

Now would be a good time to decide. Just one thing, if you choose to disregard these results, when the time comes to treat your Overfat condition, don't expect our tax money to help you; you will be on your own!

Note: please see the Glossary if you are unfamiliar with certain words.