Duct Tape Economics vs. True Capitalism: Time To Rethink How We Measure Value

I am a fitness enthusiast and love to eat healthy. Seeing non-stop ads and articles pushing weight-loss drugs on the public makes for a stark contrast with basic staples like eggs. It creates a good showdown between two products on opposite ends of the intrinsic value spectrum.

How do we value and price eggs?

Eggs, along with milk, are the most basic products consumed by nearly every human across all cultures throughout their lifetime and nearly every single day. Here are some interesting data points about chicken eggs in the United States:

• When was the product launched? Thousands of years ago.
• How much positive value does the product create? It’s a daily staple that can account for ~8% of daily food intake (2 eggs).
• How much value outflow does the product cause to a user? Little to none.
• How much overall value must we attribute to this product in terms of solving our real-world problems? Very high!

Looking at basic utility, would we not expect the egg industry to command significant total sales revenue? I was surprised to find out how small it really is. At an average baseline price of ~$0.25 per egg, total egg sales in the United States were only $23B (with total US production around 93 billion eggs). Statista reports a total US egg market that is even lower, at $17B.

Now, let’s contrast eggs with a completely different category, weight-loss drugs, to highlight the distorted incentives in our economy. If something feels fundamentally “off” about how we value products, there’s a reason for it.

Weight-loss drugs, which I see marketed as “diabetes medication,” have become a massive market phenomenon. I don’t have any personal experience with the product. I want to focus on two simpler questions.

How do weight-loss drugs compare in total sales?

The stock market has been hyping up total sales of these drugs to exceed $100 billion. Total annual sales in the United States for only four weight-loss drugs already reached ~$26B, which is higher than total US egg sales at a $0.25 per egg price.

What is Duct Tape Economics?

Weight-loss drugs are marketed as lifesaving. Let’s ask some rational questions about that claim. A basic problem-solving tool is the Five Whys. Let’s ask some why questions:

1. Why are lives at risk? Lives are at risk because obesity and overweight conditions lead to other health complications that reduce life expectancy.
2. Why are obesity and overweight conditions a problem? It has been documented for decades that obesity is increasing in Western economies due to poor food choices and health habits.
3. Why are poor food choices and health habits a problem in most economies? People spend more money if they get takeout, keep eating food they don’t need, or drive a car instead of walking or standing on a public train or bus.
4. Why do we want people to spend more money even if it makes them unhealthier? Spending more money makes the economy “bigger,” even if the spending is unnecessary or harmful.

We didn’t even get to the fifth Why, but that's the real economy we live in. I call it Duct Tape Economics in Congruence. Mistaking it for Capitalism distracts us from harnessing its true power: efficient value creation.

Duct Tape Economics is “An economic ecosystem that encourages trade that addresses symptoms of problems, as opposed to the root causes of problems.” – Congruence: The Playmaker’s Guide to High Value Companies

If we encourage overconsumption of unhealthy and fattening foods on one side and offer expensive, dependency-creating weight-loss drugs on the other side, we are not really solving a “problem.” We are conveniently addressing a symptom we created through other non-value-creating behaviors.

There is no evidence that weight-loss drugs solve root causes of any problems and may even prove to cause more harm than good over time. The only “problem” they solve is managing the symptoms of other incongruences created by our misconception of “value.” A burger chain might sell an “extra value pack” that includes fries and a soda, but is that truly extra “value” if it causes health problems?

To understand this incentive problem, we have to internalize the difference between Duct Tape Economics and true Capitalism: one incentivizes an escalating cycle of symptom-solving spending, while the other allocates capital to real, intrinsic value. Until we embrace that difference, we cannot complain when intrinsic value-generating businesses struggle at the expense of spurious value creators and symptom solvers.