Considered historically, debt and fat are twin phenomena. Thirty years ago neither was a problem; today, they are two crushing burdens on the western world. Britain has a trillion pounds of debt. A quarter of our population is obese. If you were to remove the excess fat from our bloated citizens and put it on scales it would weigh about 400 million pounds. The gloomier official projections show Britain’s national debt rising until at least 2030. Over the same period the number of obese people will double to just under half the population. Obesity is responsible for over 50 illnesses including type 2 diabetes, heart disease and cancer. The burden of lard will unleash a tsunami of healthcare costs that threaten to overwhelm the NHS and hobble our debt-laden economy through sick pay and incapacity benefits.
It’s a similar story throughout much of the western world, but not in emerging markets. For instance, according to the World Health Organisation, obesity rates in China are 2.9 per cent; in India they are less than 0.7 per cent. Broadly speaking, the world can be divided in two. On one side are developed countries with corpulent consumers and over-indebted governments. On the other are virile manufacturing economies complemented by well-proportioned producers whose governments and citizens are healthily in credit.
Three years ago Eva Münster, a professor of health at the University of Mainz, set out to explore the connection between over-indebtedness and obesity. Numerous studies have shown that in western countries people from poorer backgrounds tend to be fatter: the link is so well known as to seem commonplace. But Münster discovered something else. Irrespective of ‘socio-economic status’, those in her sample of about a thousand over-indebted Germans were more than twice as likely to be obese as their fellow citizens.
The association between debt and obesity raises some intriguing questions for governments and individuals. Münster has shown a correlation; but what is the causal link? Is debt causing fat? Is fat causing debt? Or are they both the expression of some deeper malaise? If so, what does the link suggest about the failures of political economy that have allowed debt and fat to assume such woeful proportions throughout the western world?
It’s easy to see how debt could make you fat. People in debt are more likely to eat cheap, fattening food. They are also more likely to be depressed. Depressed people are more likely to comfort-eat. They are also more likely to engage in retail therapy. Equally, being fat could lead you into debt. Research shows that obese people have poorer memory, lower cognitive ability and find it harder to get a job, all of which might predispose them to debt. It might also be depressing to look in the mirror or abandon yet another failed diet. So debt and fat could be powerfully reinforcing.
Are certain personality types — reckless subprime borrowers one minute, occupants of ‘fat-friendly’ ambulances the next — driving our economy to ruin? Eva Münster didn’t have personality data in her study and told me she doesn’t wish to pursue lines of enquiry that could lead to ‘a stigmatisation of fat people’. There is, however, a psychological study directly relevant to Münster’s discovery: the celebrated ‘marshmallow test’. In this experiment, conducted by Professor Walter Mischel at Stanford University in 1968, a group of four-year-old children were each given one marshmallow but promised two if they could wait 15 minutes before eating the first one. Most of the children succumbed to temptation; a few held out and earned their reward. Mischel and his colleagues subsequently tracked the progress of these 653 individuals, now in their late forties. It emerged that the children who exercised self-restraint went on to achieve more academic success while those who capitulated were fatter and more likely to have had drug problems. In 2010 the same cohort was given fMRI scans. For the first time researchers were able to locate specific brain areas related to delayed gratification — a result which, according to lead author Dr. B.J. Casey, ‘could have major implications in the treatment of obesity and addictions’.
Could this be the key to Eva Münster’s finding? Assuming budgets are to be balanced and waistlines kept in check, eating and spending both involve deferred present gratification for future benefit. If you overeat now, in future you must eat less or take more exercise. If you overspend now, in future you must spend less or earn more. At healthy levels, fat is of course a ‘surplus’, a store of energy to fall back on in lean times. Overweight individuals — those with a body mass index of 25 or above — incur what’s known in the insurance industry as ‘mortality costs’: for every extra pound of fat they put on they are more likely to die. Debt has a similar effect on the economy. Used wisely and in moderation, it enhances growth. But when public debt rises above 90 per cent of GDP, growth slows significantly. Sooner or later a country enters a ‘debt trap’: it has to take on more debt to service interest payments on its existing debts. Likewise, obese people succumb to a ‘fat trap’ because they are likely to have increased numbers of fat cells: once grown, these cells can shrink but never die and permanently nag at the appetite.
Finally the debtor becomes insolvent and the obese person, unable to maintain the ‘interest payments’ on their fat, reaches the biological equivalent of bankruptcy: death. At this point the analogy appears to break down, because while the bankrupt leaves someone else with the bill, the obese person is both debtor and creditor and must pay the price for their greed. But just as distressed debt can be given a ‘haircut’, obese people can have their cake and eat it by resorting to surgery. NHS-funded obesity surgery has increased thirty-fold in the past ten years.
The moral psychology of debt and fat looks almost identical. What this doesn’t explain is why both have got so out of control in the past 20 to 30 years. If we look back at what inflated the credit and obesity bubbles, two common denominators are apparent. First, debt and food became significantly cheaper. An ongoing financial revolution spurred by deregulation increased the debt capacity of the economy. An agricultural revolution spurred by technological improvements and generous subsidies made food significantly cheaper in real terms: between 1974 and 2005 food prices on world markets fell by three quarters. Junk debt enabled lenders to ‘reach out to households with previously unrecognised borrowing capacities’ (as Alan Greenspan described the burgeoning world of subprime in 2004) just as the introduction of super-sized portions let fast food companies reach previously unrecognised appetites.
Financial products and food also underwent a sinister technological transformation. While financial engineers armed with algorithms and Gaussian models unleashed ‘securitisation’ on financial markets, food scientists were finessing the most ‘craveable’ combinations of salt, fat and sugar. ‘Quants’ gave us the CDO (collateralised debt obligation) squared; Japanese scientists gave us HFCS (high fructose corn syrup). In retrospect, complex derivatives and processed food are analogous products: laboratory designed, cynically contrived, too opaque to understand and ultimately disastrous for the consumer.
To return to Walter Mischel’s marshmallow test: it’s clear that these developments — the availability of cheap, technologically enhanced, aggressively marketed food and credit — greatly increased the allure of the ‘marshmallow’. But temptation involves both the object of desire and our ability to resist it: and without punishment, temptation is hard to resist. In this light, our debt and fat binges are in part both manifestations of the same underlying failure of political economy known to economists as ‘moral hazard’. Moral hazard arises when a third party bears the costs of our actions, creating an incentive to behave recklessly. The existence of banks that were ‘too big to fail’ encouraged financial speculation on a massive scale, leaving the taxpayer to pick up the bill. Likewise, the innumerable ways in which we subsidise obesity have badly skewed incentives for fat people. By implication, although our debt tragedy is now unavoidable, there is a fiscal remedy to obesity: tax the fat, re-price greed and our obese population will gradually shrink to more manageable proportions.
Our inability to resist temptation, however, cannot be attributed entirely to a failure of political economy. There is another piece to the jigsaw, less easy to measure but just as important: the moral character of peoples. Western capitalism was built on a puritan ethic of economic virtue (just as today’s Asian economic powerhouse benefits from the Confucian legacy of self-discipline). Values of thrift and hard work made for balanced budgets and respectable waistlines. Debts were honoured and mealtimes religiously observed. Bankrupts went to jail and the morbidly obese were sent to the circus. It was a mindset that emphasised the terrible power of temptation and the necessity of resisting the blandishments of Satan at all cost.
It has been superseded by an ethos that favours the quick buck, the quick snack and the quick political fix; a fat-friendly environment that fixates on the carrot but has lost sight of the stick, or lacks the confidence to use it. We seem likely, therefore, to remain mired in fat and debt until we can once again pass the marshmallow test.