Tracing consequences both seen and unseen.
Wirkman VirkkalaThe Logic of Self-Medication
Posted at 3:25 am on April 5, 2010, by Wirkman Virkkala

I may disapprove of what you take, but I’ll defend till your death your right to take it.

The same sort of values and reasoning that support the right of free speech supports, also, the right of self-medication.

Because we have had free speech rights, but have lacked the right to self-medicate, the two rights seem (to many) the most distant of cousins, if not warring foes. To most folk, the idea of self-medication? Heaven (or the state) forbid: We must always be guided by doctors, who know better!

(more…)


Filed under: Drug Policy, Nanny State
Comments: None
 

Justin M. StoddardPop the Corn Bubble Burst
Posted at 7:45 pm on March 31, 2010, by Justin M. Stoddard

When first I saw the headline “Israeli MP plans ‘popcorn law’ for movie munchers’,” I was sure the corresponding article would have something to do with either taxing or banning popcorn at movie theaters because of supposed health concerns.

It turns out, the reason given was much less nuanced and rather refreshingly honest:

Carmel Shama, from the governing Likud party, plans to bring the “popcorn law” for a vote when parliament returns from its Passover break next week, the mass-selling Yediot Aharonot newspaper reported Wednesday.

“We have to put an end to this. The public should not have to mortgage their houses for a soft drink and a snack,” Shama told the paper.

A large box of popcorn usually sells for about five dollars (four euros) at theatre concession stands, more than double what it costs at a supermarket and 10 times more than it would cost to make at home.

When I say “refreshingly honest,” I mean that there are no hidden overtones here. Carmel Shama doesn’t appear to be overly concerned with health. This doesn’t appear to be a redistribution scheme, where the proceeds from taxed popcorn would go into some government coffer. This is pure, straight-up theft.

This does raise an interesting question, however. Why is popcorn so expensive at the movie theater?

Economist Steven Landsburg isn’t so sure that it is. In chapter 16 (aptly named, “Why Popcorn Costs More at Movies”) of his book, The Armchair Economist, Steven Landsburg goes through a number of explanations for why the price of popcorn is as expensive as it is. The reasons may surprise you.

Intuitively, we would guess that the price of popcorn is high because once we enter the theater, we are a captive audience. They have, in effect, a monopoly on popcorn, since most theaters won’t allow outside food onto their premises. But, as Mr. Landsburg points out, at that point, the theater has a monopoly on pretty much everything within the sphere of its influence. There are no other restrooms, for example, other than those provided. There are no other drinking fountains or front row seats, etc… And yet, all of these conveniences come gratis with the ticket price. The reason for this is easy enough. Any ancillary charges once inside the theater would make said theater less attractive to customers. In order not to lose those customers, the theater would have to charge less for the ticket price. In essence, it’s a wash.

And so it may be for popcorn, as well. We pay higher prices for popcorn in order to pay lower prices for our tickets. But, in order to make prices attractive to all (popcorn munchers and popcorn abstainers alike), a happy medium must be found. This may be a matter of one part of the theater subsidizing another. Not everyone, after all, partakes in popcorn. They are only paying for the ticket to the movie and are therefore taking advantage of those who buy popcorn at a higher price point so ticket prices can economically be lower.

Another theory put forth by Mr. Landsburg suggests that since most movie goers go to movies in groups, it follows that some of them will want popcorn and some won’t. If a theater offers low popcorn prices and high ticket prices, those that don’t eat popcorn may not want to go. The same follows, visa-versa. The trick is to get both the popcorn and the ticket prices to a level both groups can agree upon.

This is economic theory backed up by the very theater owners that would be affected by such a law:

Yaacov Cohen, the owner of one of Israel’s largest theatre complexes, said owners made virtually no profit from ticket sales and would be hard pressed to survive if food sales were limited.

“It would destroy the entire industry,” he told Yediot.

Also, as a parting shot, it bears remembrance that those who trade $5 for a medium popcorn value the popcorn more than they do the $5. Even if said bags of popcorn sold at $100 per, the same holds true. And although the New Paternalists may have something to say about that (waiting periods for high-cost items, etc…), it is still a voluntary exchange, of nobody’s business but the two parties involved.

One last unintended consequence. Carmel Shama may well succeed in making high popcorn prices illegal. If so, people will no longer have to worry about mortgaging “their houses for a soft drink and a snack”. They’ll be doing that just to buy a ticket. Either that, or a whole lot of movie theaters will be going under.

[Cross-posted at Shrubbloggers.]


Filed under: Economic Theory, Market Efficiency, Nanny State, Unintended Consequences
Comments: 3 Comments
 

John W. PaynePrepare for Cake Prohibition
Posted at 12:04 am on March 31, 2010, by John W. Payne

A group of scientists are now claiming that fatty foods could be as addictive as so-called “hard drugs” like heroin and cocaine:

Binging on cheesecake and Ding Dongs can make you chunky – and turn you into a junkie…

Florida scientists looking into the causes of obesity let lab rats gorge round-the-clock on cake frosting and sweet treats, as well as bacon and sausage, and discovered that it triggered addiction-like responses in their brains.

To maintain their food-induced highs, the rats consumed more and more fatty treats – and got obese in the process.

Well, if drug warriors were consistent we would.  I know there are groups out there calling for taxes and other legal restrictions on junk food, but I think we will be spared outright bans in this case because there is no way to easily define the potential criminals as “other.”  Unlike with drugs, which were usually criminalized for reasons of race and class, almost all of us overindulge our appetites from time to time.  And even if we do not personally engage in such behavior very often, we are undoubtedly close to people who do.
What this really shows is that there is nothing more innately harmful about cocaine and heroin than there is about ice cream and Krispy Kreme doughnuts.  The difference is in how the government treats these products.  The market for junk food is legal, so contracts are not enforced with street violence.  Prices for such goods are not driven through the roof by prohibition, encouraging users to spend all of their time securing their next fix and often turning to petty theft or worse to attain the means for it.  And most obviously, millions of sucrose addicts aren’t rotting away in a cage because of a personal vice.

So what will it be drug warriors: legal cocaine or criminalized cookies?

Cross-posted at Rough Ol’ Boy.


Filed under: Drug Policy, Nanny State
Comments: 3 Comments
 

Christine HarbinInefficaciousness: Hot New Trend?
Posted at 10:48 pm on March 30, 2010, by Christine Harbin

[NOTE: Since the original publication of this blog entry, the classification “libertarian paternalism” has been corrected to “liberal paternalism.”]

I recently had a conversation with my good friend Justin who lamented that he had received his third parking ticket this year from the city of Madison, Wisconsin for violating the alternate side parking rule. “Alternate side parking is a racket designed to part the citizens of Madison with their hard-earned cash,” he told me.

I think that Justin is onto something, and this raises an additional concern that I have about aggressive ticketing and selective taxes: liberal paternalistic policies frequently fail to accomplish their official purpose.

The parking tickets haven’t changed Justin’s behavior; he continues to park on the side of the road that is arbitrarily wrong. The city’s alternative-side parking rules are so confusing and difficult to appeal, even smart people like Justin get trapped. Of course, that’s OK with the city; they’ll receive a steady revenue stream from parking tickets.

Selective taxes on fatty food and soda are another example of liberal paternalism that doesn’t accomplish their official purpose, which is to trim waistlines in aggregate. In this example, there is not a scientific consensus on whether they will accomplish that which they allegedly intend. In a recent piece on the Huffington Post, Dr. Pamela Peeke explains how many studies that prove the contrary are being ignored.

Last September, the New England Journal of Medicine published a policy report by a group of distinguished experts that called for taxing sodas and other sugary drinks to fight obesity. The news media gave a lot of attention to the report. But last month, the press did not give much attention to a group of letters from prominent doctors published in NEJM noting that the report failed to cite any scientific evidence showing a tax would reduce the cumulative weight of Americans.

Furthermore, slapping selective taxes on soda will be inefficacious at reducing obesity because an individual’s risk of obesity is not a direct function of the amount of sugary beverages that she consumes. Dr. Peeke argues that it is the result of many factors instead — some relating to genetics, others to lifestyle choices.

Government actually has an incentive for these taxes to be inefficacious, because then it can continue to generate revenue from them. I consider this to be further evidence that the primary purpose of new taxes to raise more tax revenue to support the government’s spending habit. Just like the indoor tanning tax, selective taxes on sodas and fatty food would be a revenue generator first and a behavior deterrent second. These taxes would easily generate a considerable amount of income for state and local governments. In a previous post on Show Me Daily, I used a revenue calculator for soft drink taxes from the Rudd Center for Food Policy and Obesity at Yale University to determine that Missouri could generate $285 million in 2010 if it taxed sugar-sweetened beverages at $0.01 per ounce, or over $460 million if this tax were expanded to include diet-beverages.

[Cross-posted at Amateur Philosophy]


Filed under: Health Care, Nanny State, Taxes
Comments: 7 Comments
 

Eric D. DixonThe Knowledge Problem of New Paternalism
Posted at 4:14 pm on March 28, 2010, by Eric D. Dixon

Tom Palmer‘s book reviews are more than enough to explain why Cass Sunstein is an extraordinarily sloppy thinker, but bad ideas never die — and Sunstein’s bad ideas are plentiful. One of his pet theories, developed with Richard Thaler, is “libertarian paternalism,” which posits that central authorities can frame the choices available to people in society in such a way that “better” choices will more often be made — all without running afoul of libertarian objections to authoritarian compulsion.

David Friedman has made compelling arguments that “nudges,” attempts to establish innocuous choice architecture, would likely soon become more like shoves.

Yesterday, I discovered that economists extraordinaire Mario Rizzo and Glen Whitman (check out this nice encomium to Rizzo by Peter Boettke) had thoroughly dismantled the idea that would-be paternalists have the ability to make better utility-maximizing decisions than the aggregate population they hope to influence, let alone cement this ability in a set of public policies that would implement the benefits of their omniscience in practice. Titled “The Knowledge Problem of New Paternalism,” one additional reason it caught my eye is because they published it in the law journal of my own alma mater.

(Last time I went poking around the archives of BYU’s scholarly journals, incidentally, I stumbled across this gem from 1976, which provides the interesting bit of trivia that Milton Friedman and Dallin H. Oaks had been friendly colleagues during their mutual time in Chicago.)

At any rate, Rizzo and Whitman give “libertarian paternalism” the full Hayekian analysis, concluding:

In principle, we can embrace the idea of making people better off according to their own true preferences. That goal cannot be made operational in practice without access to information that policymakers do not, will not, and often cannot possess. Yet policymakers have to make policy on the basis of something, and so they will appeal to their own preferences, the preferences of self-appointed experts, or the (alleged) preferences of the public at large. They cannot implement people’s “true” preferences, but they can implement what they believe are the “right” ones, and the new paternalist paradigm will provide the intellectual cover to do so.

It’s an excellent piece, worthy of a full, careful read.

[Cross-posted at Shrubbloggers.]


Filed under: Economic Theory, Nanny State, Regulation
Comments: 3 Comments
 

Christine HarbinThe Indoor Tanning Tax: Behavior Deterrent or Revenue Generator?
Posted at 10:40 am on March 27, 2010, by Christine Harbin

The 10% tax on indoor tanning services is the government’s latest effort to save us from ourselves. From an article on CNNmoney:

An indoor tanning tax will therefore “serve as a signal from the federal government to young people that indoor tanning is dangerous and should be avoided,” said Dr. William James, president of the [American Academy of Dermatology].

This tax represents an unfortunate and disturbing trend in public policy: it’s disguised as a means to “nudge” people into improved behavior, but its primary purpose is to provide an additional revenue stream. This 10% tax on indoor tanning will generate a considerable amount of money: $2.7 billion over ten years. How could a politician resist? State and local governments are facing large deficits, and they are understandably trying to account for their expenses. Government wants individuals to stop their bad habits, but not completely, because then it will generate no revenue from them. If all Americans switched to spray tanners and vitamin D pills as a consequence of this tax, then Congress would have something else to exploit tax.

Moreover, these selective sales taxes assume that the government/”choice architect” actually knows what the “right” choice is for other individuals. Whether something is healthy is subjective; it depends on who you ask and when. Some herald indoor tanning as healthy because it is a source for vitamin D; others say that it is unhealthy because it increases an individual’s risk of melanoma. Also, government is notoriously swayed by the interests of lobbying groups instead of the interests of their constituents — corn syrup is not very nutritious, but it certainly secures a significant amount of assistance from the U.S. government.

I don’t know who to believe — the rent-seeking lobbyist trying to save his industry from an imminent leftward shift of the demand curve, or the U.S. senators who just want my tax money to fund their pet projects to please their constituents to secure their re-election. I’ve made the decision that the risks associated with indoor tanning outweigh the benefits for me personally, and I know that other individuals may come to a different conclusion in their cost-benefit analysis. As a libertarian, I disagree that it should be the role of government to tell individuals how to behave.


Filed under: Health Care, Nanny State, Taxes
Comments: 9 Comments
 

Justin M. StoddardWe Are All Children, Now
Posted at 12:46 pm on March 24, 2010, by Justin M. Stoddard

Like I said yesterday, when everybody is responsible for everybody else, the logical outcome is, well, this:

Proposal to ban toys in unhealthy kids’ meals

“One in three kids are overweight or are obese, and we’re finding out more and more that if you’re obese as a child, you’re going to have health problems your entire life,” said Yeager.

In an effort to combat the nation’s epidemic of childhood obesity, Supervisor Yeager is proposing Santa Clara County create an ordinance regulating fast food restaurants’ ability to offer toys or other incentives with kids’ meals.

“Ten out of 12 meals that are associated with the promotional toys are the high-caloric, high-fat, high-sodium meals,” said Yeager.

No empirical scientific data is alluded to. We are to take it at face value that giving toys away with children’s fast food meals is…bad. According to Mr. Yeager, it’s bad because these meals are “high-caloric, high-fat, high-sodium meals.”

Here’s a list of proposed questions for Mr. Yeager:

-What scientific studies have been conducted proving a correlation between fast-food toys and childhood obesity?

-If no scientific studies have been conducted, are we just talking about a feel-good, anecdotal trope, here?

-What experience to you have, personally, with the science of nutrition and obesity?

-What other items that are ‘bad for you’ are you willing to ban?

-Do you feel you have a right in assisting me in determining the choices I make for my children?

-If yes, why?

-Do you lay awake at night, fists clenched, with the knowledge that somewhere, somebody is enjoying themselves beyond your scope of control? (My apologies to H.L. Mencken).

The article ends thusly:

Supervisor Yeager expects such a public health ordinance banning fast-food toy incentives could draw a challenge from the California Restaurant Association, but that it would legally fall under the health and safety codes.

If it is passed, this would be the first such legislation in the nation.

It will be the first, but it most assuredly will not be the last. We are all children, now.

[Cross-posted at Shrubbloggers.]


Filed under: Health Care, Nanny State, Unintended Consequences
Comments: None
 

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Henry Hazlitt"[T]he whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
Henry Hazlitt, Economics in One Lesson
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