Brian Albrecht on Weight Loss Drugs

National Review – ICLE Chief Economist Brian Albrecht was quoted by National Review in a story about the emergence of weight-loss drugs like Ozempic and Wegovy. You can read full piece here.

In his article, Barro counters the fear that these treatments might suppress too much demand than would be healthy for the economy. I think he’s right to. And Brian Albrecht also has little time for such concerns. Writing for Economic Forces, Albrecht (who has also written for Capital Matters) warns, essentially, that a variant of the broken-window fallacy might be taking root. This fallacy was highlighted and then demolished by the 19th-century French economist Frédéric Bastiat in That Which We See and That Which We Do Not See. Dominic Pino looked at this topic in some detail here, but to, put it simply, Bastiat rebutted the argument that a broken window can somehow be good for the economy:

…Albrecht suspects a not dissimilar fallacy may be being generated by the spectacle of businesses threatened by weight-busting drugs. But like the Daily Telegraph’s Matthew Lynn, he can envisage the winners too. Yes, the makers of fizzy drinks, fast food, and cigarettes may face problems…

…And so (to put this very crudely) the money that would have gone to Pepsi’s shareholders and employees, now goes to Novo’s. Ignoring for a moment that Novo is (mainly) in Denmark, how much difference does that make? “The money”, argues Albrecht, “will likely be spent on similar things, and the ripple effects through the economy will be largely unchanged.”