Privatize marriage
I've written for PoliticsHome today about why the whole debate over same-sex marriage misses the point. Why are we even having a discussion about which groups of people should be allowed to 'marry' others, I ask, when marriage has historically been a private institution that had nothing to do with the state?
Removing the need to get a state licence for 'marriage' would allow consenting adults to sign whatever contract they want and call it marriage. People would be free to draw up contracts tailor-made for them, or to take one of the one-size-fits-all 'marriage contracts' that would inevitably be offered by private firms.
This rather simple step would make the whole marriage debate redundant. Any pair of consenting adults – gay, bisexual, straight, transsexual, or anything else – could agree to a contract that suits them and hold a marriage ceremony wherever would have them. (I say a pair, but there is no reason that three or four or more consenting adults should not be allowed to share their lives with each other in a private marriage, if they want.)
Of course, they would be free to hold whatever ceremony they wanted to around the contract signing. Marrying couples could hold unique weddings that reflected their own values and passions, instead of having to sign their contracts in a state registry office. It would be up to individual churches to decide for themselves whether or not they want to be involved – some probably would, and some probably would not.
So long as marriage is a state institution, it should be available to people in as many different kinds of relationships as possible. But there is something deeply unpleasant about a world where every kind of private relationship has to be approved in the court of public opinion before it is granted the same legal status as 'acceptable' relationships. We are fortunate to live in a fairly tolerant era where things like gay marriage are becoming accepted by the majority, but this is an insufficient safeguard.
Taking marriage out of the hands of the state would end the tyranny of the majority over people's private relationships. It's vital that we push politics out of our private lives. As I say in my post, love is too important to leave up to the state.
Cheaper drugs are a feature of legalization, not a bug
Even advocates of drug legalization concede that the move risks an increase in drug use. Milton Friedman, a passionate advocate of drug legalization, noted that a fall in price would be expected to bring about a greater level of demand. Those who advocate decriminalisation of drugs, rather than legalization, often make this point in defense of their position.
Indeed, if marijuana were legal, it might be incredibly cheap. One book estimates that a joint may be as cheap as things we commonly regard as free (such as sachets of artificial sweeteners).
In practice, the effects of drug legalization on total consumption are unknown. The Netherlands, with its liberal drug policy, provides some interesting insights, but it is impossible to say whether these would carry over in other countries. For example, adult use of marijuana in the Netherlands is about the same as in other European countries.
It is important to separate total consumption from the more important factor: the impact of legalization on addicts. A rise in non-dependent users of drugs should not be a cause for concern. If people can use drugs recreationally without feeling reliant on them, then all the better. We should embrace the different ways in which people choose to enjoy their lives. It is those who become addicted that we should be more concerned for.
By reducing the price of drugs, we can help to free the vulnerable from the costs of their addiction. It is the high prices of drugs (as a result of their legal status) which causes users to resort to crime to pay for their vice. It is these high prices, and the inelastic nature of the demand addicts have for the product, that causes users to reduce their consumption of other goods rather than of drugs. This in turn means that drug users face worsening diets and unsafe living conditions. These can be more threatening than the drugs themselves.
There are many other benefits that would follow from liberalising drug policy (such as taking the economic activity of drug distribution out of the black market), but our chief concern in considering the issue of drugs should be those most at risk. Government intervention that drives the most vulnerable to commit crime is heinous indeed. By compounding the problems of addicts with higher costs we make their position worse. Addiction need not be so devastating.
Six reasons to reject minimum alcohol pricing
The government will announce today the launch of its public consultation into minimum pricing. These consultations tend to be something of a charade—the Home Office has already said “We will introduce a minimum unit price for alcohol”—but in case you should wish to respond, here is a non-exhaustive list of reasons why minimum pricing is a terrible idea.
It is regressive
All indirect taxation is regressive, but minimum pricing is carefully calibrated to be as regressive as possible by targeting drinks that are disproportionately consumed by people on low incomes. Doctors on six figure salaries can rest assured that the champagne at the British Medical Association Christmas dinner will not be affected and the House of Commons bar will continue to be subsidised. Cheers!
Evidence is non-existent
As we reported on Monday, the excitable predictions about how many lives will be ‘saved’ by minimum pricing are based on a single computer model which uses dubious methods and false assumptions to come to a preordained conclusion. The truth is that nobody has any idea whether the policy will reduce alcohol-related harm. The only certainty is the majority of ordinary people will be out of pocket.
It’s just the start
Even minimum pricing’s most optimistic proponents admit that ratcheting up the price of drink is not a ‘silver bullet’. What they mean is that minimum pricing will merely be the start of a sustained temperance campaign in the mould of the anti-smoking crusade. If the medical lobby is allowed to get its hands on one of the key levers of competition (price), we can expect endless demands for the minimum unit price to move upwards. David Cameron has proposed a 40p unit price but the British Medical Association are already demanding 50p. Others want it to be 60p. Whether alcohol consumption goes up or down, you can be sure that the ‘next logical step’ will be to have a minimum price escalator. Think of the children!
And why not? The same dodgy evidence can always be used to justify higher prices. The Sheffield computer model predicts that a 40p unit price will reduce the number of alcohol-related deaths by 10 per cent. At 70p, it claims the number of alcohol-related deaths will fall by more than 60 per cent! The model doesn’t go beyond 70p, alas, but presumably once it gets to 90p all alcohol harm is abolished and at 95p the dead begin to rise from the grave. What are we waiting for?
The moral panic is bogus
Since 2004, Britain has seen the sharpest and most sustained decline in alcohol consumption since the Second World War. The statistics are striking—less than half of 16-24 year olds have had even one drink each week; the proportion of young men who ‘binge-drink’ has fallen by more than 50 per cent; overall alcohol consumption is only slightly higher than it was in 1980. These facts are rather inconvenient for nanny-staters and so they have ignored them and pressed on with a narrative of ‘booze Britain’ that makes for better headlines. Trebles all round!
It is illegal
It’s rare to find the words ‘good news’ and ‘European Union’ in the same sentence, but the good news is that minimum pricing is illegal under European Union law. Previous attempts to limit the free market in this way have been rejected by the European Courts, such as in this judgement from 1978. Referring specifically to proposals to introduce minimum pricing in the UK, the European Commission has said that they “have a problem with the compatibility of the minimum pricing plans under Community law” and that it “causes problems with the compatibility with the EU Treaty”. Several wine-growing countries have already complained that minimum pricing is anti-competitive and, although David Cameron has vowed to fight the European Commission for his right to pick our pockets, if the EU does not stand for free trade between member states it stands for nothing at all.
It won’t help pubs
Winston Churchill said that "an appeaser is one who feeds the crocodile hoping it will eat him last." A few of the pub chains have formed an unlikely, unseemly and unholy alliance with the forces of temperance in the hope that higher off trade prices will drag in some of the punters that the smoking ban drove out. This is a desperate gambit. Minimum pricing will not make beer any cheaper in pubs. It will merely make everybody a little bit poorer so they have less money to spend in pubs. On this occasion, Wetherspoons’ boss Tim Martin has called it right, saying that minimum pricing is “utter bollocks, basically.”
The minimal evidence for minimum pricing
In a new Adam Smith Institute report released today, statistician John C. Duffy and ASI fellow Christopher Snowdon assess the Sheffield Alcohol Policy Model, the basis for minimum alcohol pricing policy. Their findings are summarized here:
1. The Conservative Party and the Scottish National Party have both stated their intention of introducing a minimum floor price for alcohol, levied at around 50p per unit. Advocates of minimum pricing claim that the policy will significantly reduce alcohol consumption and the problems associated with hazardous drinking.
2. Estimates of how minimum pricing will affect health outcomes have overwhelmingly come from a single computer model—the Sheffield Alcohol Policy Model. This paper argues that the model is based on unreasonable assumptions which render its figures meaningless.
3. Amongst the problems with the Sheffield model is its false assumption that heavy drinkers are more likely to reduce their consumption of alcohol as a result of a price rise. Its calculations are based on controversial beliefs about the relationship between per capita alcohol consumption and rates of alcoholrelated harm. Its assumptions about the relationship between price and consumption have frequently been refuted by real world evidence.
4. The Sheffield model provides figures without estimates of error and ignores statistical error in the alcohol-harm relationship. Data is drawn from different populations and applied to England and Scotland as if patterns of consumption and harm are the same in all countries. When data is not available, the model resorts to what is essentially numerology. Insufficient data is provided for the model to be recreated and tested by third parties.
5. The model ignores the likely effects of minimum pricing on the illicit alcohol trade, it disregards the health benefits of moderate drinking and fails to take account of the secondary poverty created by regressive price rises. The decline in alcohol consumption seen in Britain in recent years has not led to the outcomes predicted by the model.
6. We conclude that predictions based on the Sheffield Alcohol Policy Model are entirely speculative and do not deserve the exalted status they have been afforded in the policy debate.
High alcohol taxes are self-defeating
Not too long ago I wrote about the HMRC's 'most wanted' tax evaders list. As I pointed out, most of the criminals concerned were being given an opportunity to exploit high rates of duty and VAT on alcohol and cigarettes by smuggling. Similarly, this very revealing programme by BBC's File on 4 traces some of the types of and scales of frauds carried out in the alcohol trade. Unfortunately, the programme focuses on the types of frauds conducted and ignores some rather more important issues.
Duty on alcohol was substantially increased by March 2008 by the then-Chancellor Alistair Darling who introduced a four year tax escalator due to last until 2014, under which the duty rate on all alcoholic drinks was set to increase by two per cent above the rate of inflation. High taxes on alcohol must be seen as a regressive tax (of about 1.6% of disposable income) on lower income groups as it constitutes a greater percentage of their disposable income than the better off. HMRC reckon that £1.2 billion a year is being 'lost' to the Treasury due to these frauds, up from £400 million in 2001, which points to a significant and growing level of criminal activity. One of the interviewed police officers investigating these frauds, however, suggests that this may be a substantial under-estimate.
Aside from the loss of revenue to the UK Treasury, it would be interesting to know how much the enforcement activities demonstrated in the programme are also costing the police and HMRC, not to mention the costs which they impose on legitimate businesses. Surely this suggests that rates of taxation have exceeded their revenue maximising point (to say nothing of their growth maximising point, although this is clearly a contentious issue where alcohol is concerned) and it is quite possible that a cut in duty would be self-funding, not only from a tax but also an enforcement perspective. Quite simply, lower rates of duty mean lower profits for smugglers and therefore less smuggling.
Contrastingly, the conclusions of Richard Bacon MP given on the programme are - given that rates of duty are unlikely to be reduced - that enforcement should be stricter, which would surely only increase the costs to the taxpayer. Mr Bacon believes that reduction in duty is unlikely because of the UK's parlous fiscal circumstances, but one wonders if this is supportable in view of the Laffer curve effects outlined above. He also suggests that the high rates of duty exist because of the desire to discourage alcohol consumption. This is contrary to evidence that alcohol consumption in the UK is actually declining, except among certain groups who are probably extremely price inelastic anyway or who, one suspects, are actually buying the smuggled booze itself! It is also the case that differential rates of VAT on off-premises versus on-premises sales are helping to encourage people to drink at home rather than in pubs. Availability of cheaper smuggled alcohol may also be a factor in this trend which has so seriously damaged the UK pub sector and is reckoned to have cost about 5,000 jobs here.
However, the programme also makes the point (which it does not go on to explore in depth) that the availability of illicit alcohol is actually pressurising legitimate retailers to drive down the price at which they sell. How much this is a factor in retailers' efforts to sell alcohol at below-cost prices and the resultant emergence of minimum unit pricing policies, which simply represent additional profits for retailers and smugglers, is hard to say. What is clear is that with alcohol, as with so many areas of public policy, government spends a great deal of money and resources attempting to correct the impact of problems is has created itself. It is also clear that rates of tax on alcohol, and much else besides, must come down - even the EU is arguing for that!
A gradual tightening
Ayn Rand’s Howard Roark succinctly summarises the only real obstacle to individual achievement in a single line: “the question isn’t who is going to let me; it’s who is going to stop me.”
Fans of Rand (and private sector workers) know that few forces in the world have more stopping power than a government. With its monopoly on violence and its ability to rewrite the rules, government possesses the power to interfere with the private lives of those who live under it even when these persons are willing to abide with the multitude of other laws, regulations and taxes, not all of them fair, to which they are subject. And in the exercise of this power it can be unfair and arbitrary; democracies and tyrannies alike have the power to reduce the efforts of a single person to nothing, to crush him utterly for any reason such a government might choose. Last month brought the news that, as has happened many times in many nations, our government has done exactly that.
By revoking the “very highly trusted” status of London Metropolitan university without providing for any transitional arrangements, the Home Office gives that institution’s current and future students a mere 60 days to either find an alternative sponsor or to self-deport. These are not very good options.
Those who would see themselves as members of Middle England, whether working or not, will doubtlessly be delighted by the news. In a Daily Express piece calling for further crackdowns on illegal immigration three days ago, the London Met debacle received an Express mention; and though I do not ordinarily recommend the Express to my friends and readers at the Adam Smith Institute, as it is illustrative of Middle English sentiment to foreign migration, I will make an exception on this occasion.
Adorning its article with a photograph of our deadly serious-looking Home Secretary, Theresa May, the Express trumpeted the government’s efforts to “block sham marriages,” restrict access to credit and mobile phone contracts for over-stayers, deport prisoners, capture abscondees, and track down failed asylum seekers. All of this, the Express tells us, is part of a broader initiative to reduce “net migration” to “tens of thousands” – a stupid, relative concept with no economic basis and, in any case, a move which both industry and academia have vociferously opposed.
But the relevant point for present purposes is the conflationary link, where the Express betrays that it really views all immigrants to be the same, found at the article’s very end: “no decision has been taken on whether to strip London Metropolitan University of its right to take foreign students” – legal immigrants, who jumped through all the hoops, filled in all the forms, paid the fees, and at any rate who should commence studying at London Metropolitan university in a month. As a consequence of government action, these young people will be made to suffer a serious, life-altering disruption in the course of their lives. Given competition for university places and this very late stage, without rapid government intervention to fix its own mistake, individual remedies will not be readily found.
The structure of the Express’ article reveals, and is illustrative of, the struggle for establishment that immigrants in the UK face: whether legal or illegal, well-off or poor, studious and energetic or lazy and dull, immigration is a political question, and immigrants – current and future – are the collateral which unpopular governments post to offset the risks from their other political liabilities. As a political football, therefore, all immigrants are equal and equally problematic.
Take my own case, for example. A few years ago, after finishing my undergraduate, I had planned to finish graduate school and continue my leave under the “Highly Skilled Migrant,” or the “Super-Immigrant who is rich, pays taxes, and is not entitled to benefits” visa; however, before I could do that, the regime was revoked and replaced. I joined its replacement, the “Tier 1 – post-study” visa, and jumped into “Tier 1 General” class as soon as I could.
Clearly some other people had the same idea as, shortly afterwards, “Tier 1- post study” was abolished and the income, available funds, and educational thresholds for T1General extensions were increased. When this failed to stem the tide of rich, well-educated, taxpaying people remaining the country, the income and funds criteria for extension were increased yet again, and new applications in T1 General were abolished entirely. What was once a quiet and predictable legal environment under Blair has been in complete disarray and subject to constant chance ever since there was a threatening opposition in parliament; over the course of six years, the immigration rules to which many legal immigrants have been subject have been changed, in a fundamental way, at least six times, possibly more. Each change presents new challenges, and more failed applications as migrants cannot meet the higher thresholds. And this, our government tells us, is an indication of success.
I am not alone. From my immediate circle of friends, I can think of a half-dozen examples of well-educated people on the road to success and high taxation whose lives have been hampered by the veritable orgy of recent legislative activity concerning migration. One investment banker I know decided, after a few years in exile in her home country, to return to Britain; she is now tethered to her current employment due to the abolition of T1 General, whereas if she had come but two years earlier, she would have been able to choose her employment freely. Another banker I know who was similarly tethered quit the country and returned to Texas rather than stay tied to a job she despised; still others are prevented from obtaining jobs for which they are qualified, as the administrative burden to smaller companies of complying with Tier 2 visa sponsorship is, for many, absurdly high.
Bankers, with their relatively high incomes, have it relatively easy – others are less lucky. Take, for example, the couple who had to fly abroad for a quickie wedding – planned, but two years early – in order to get around the fact that Tier 1 had tightened up. Or the self-sufficient lighting designer and AV technician who could not start his own business and legally remain after finishing an Open University course, despite having all the resources and connections to do so. Or the law graduate who, being supported by her parents, not eligible for (or taking) benefits while working as a paralegal, self-deported when she could not afford to jump into Tier 1. The young lawyer who tried to get a mortgage, but was rejected by the bank because the credit risk of a time-limited visa was too high due to the high probability of rule changes or non-renewal. The finance professional who, on account of the fact that her visa allowed her only to work in Scotland, was ordered to leave (which, being a law-abiding American, she promptly did) after being successful enough to find work in London in spite of the recession.
I could go on. What is clear from my view in the trenches is that the government’s obsessive tinkering with the rules is hugely disruptive and damaging to business and individual lives, and it must end.
It pains me greatly to have to hyperlink again to the website of the Express, doubly so as the article concerned features Tory MP Douglas Carswell – one of my favourites – arguing in favour of further tightening, in this case by “[insisting] on medical insurance” for all incoming migrants. For certain sorts of immigrants this is a proposal I would support (there are some stories I would like to tell to support this point which, for a number of reasons, I cannot). What is not made clear is whether the enterprising young things – the university students who are destined to pay taxes and NI and work in banks and law firms, for newspapers and insurance companies, in your productive industries as well as in enterprises of our own – would have to buy independent insurance, too.
If this were the case, I should object, since including bright and promising migrants in such a proposal would be, in economic terms, a silly thing to do. Tighten the noose if you wish, but this is the 21st century and we are young, we are hungry and we are mobile. If this country tries to stop us, there are plenty of others that won’t.
Ayn Rand’s Howard Roark succinctly summarises the only real obstacle to individual achievement in a single line: “the question isn’t who is going to let me; it’s who is going to stop me.”
Fans of Rand (and private sector workers) know that few forces in the world have more stopping power than a government. With its monopoly on violence and its ability to rewrite the rules, government possesses the power to interfere with the private lives of those who live under it even when these persons are willing to abide with the multitude of other laws, regulations and taxes, not all of them fair, to which they are subject. And in the exercise of this power it can be unfair and arbitrary; democracies and tyrannies alike have the power to reduce the efforts of a single person to nothing, to crush him utterly for any reason such a government might choose. Last month brought the news that, as has happened many times in many nations, our government has done exactly that.
By revoking the “very highly trusted” status of London Metropolitan university without providing for any transitional arrangements, the Home Office gives that institution’s current and future students a mere 60 days to either find an alternative sponsor or to self-deport. These are not very good options.
Don't budge against nudge
Last night I debated at the first Sp!ked Drinks event about 'nudge' policy. Here is what I prepared for my opening statement against 'nudging'. It's worth bearing in mind that this is an attack on nudge policy as it has been promoted and implemented by governments, not necessarily on the book by Sunstein and Thaler.
Nudging is a new way of talking about an old idea: that people do not act in ways that are best for them, and should be helped along by their betters.
Understandably, this is a popular idea – most of us think that other people are very stupid, and people drawn to politics often think they have the right ideas for other people.
Many people like the idea of nudging because it isn’t as extreme as old-fashioned paternalism – they don’t want to force you not to eat so much, they just want to move chocolate oranges away from the checkout counter.
But seemingly-small nudges can have big implications about how we view the individual’s relationship with the world. Making organ donation the default means that your body by default belongs to the state or to society, not to yourself. Making military service something we have to opt out of would do the same thing.
Nudging food companies into cutting salt or sugar input is not benign at all. Companies who comply with government do so because if they don’t, a much less voluntary approach will come sooner or later. Government may nudge softly but it always carries a big stick.
Much of the argument for Nudging comes from a misunderstanding of why people are libertarians.
If you have built your models of the world around a wealth-maximising homo economicus, nudging is a godsend. The model of economics that is based on all-seeing wealth-maximisers is a very silly one.
If you thought that that was the best or indeed only argument for leaving people be, you would indeed be quite excited by Nudging after you had discovered how silly your views of human beings were. Here we can use the wisdom of government to correct the folly of man.
But the chief problem with government intervention in our lives – whether it is Nudging or direct paternalism – is not that it interferes with homo economicus, but that government is usually a lot worse than we are at knowing what is good for us.
This is true on two levels.
The first is that government can be very ignorant of the consequences of its actions, and what makes government different from private action is that it is a collective approach.
A government nudge to do something will necessarily affect everybody, so if it makes a mistake, the problem will be compounded across society.
There are countless examples of seemingly-good government nudges that have turned out to have very bad unintended consequences:
Bicycle helmet laws and ‘nudging’ public information initiatives that seemed like a no-brainer have resulted in more deaths, possibly because drivers act more recklessly and fewer cyclists take to the roads.
The food pyramid that was used to ‘nudge’ people into eating right advised people to eat between six and eleven servings of bread, pasta, cereal and rice a day, things we now think may make us fatter and less healthy.
After the Potters Bar train crash, trains were slowed down to a crawl in some areas to avoid more crashes. The unintended consequence was that more people took to the roads to get to work on time – and driving is significantly more fatal than train-riding. By trying to make trains safer the government almost certainly caused more people to be maimed in car accidents.
Bank regulation in the 1990s and 2000s that was intended to make banks act prudently drove them to take on much of what was then thought of as the safest debt – mortgages, government bonds, and triple-A rated securities.
The list goes on.
Government and the experts it listens to are no less at risk of making errors than ordinary people. When government makes certain ‘good things’ a matter of policy, one mistake can have society-wide consequences. Governments are blind to individual circumstances.
The second meaning of the idea that the government doesn’t know what’s good for us is that there is no objective standard of what is good for us.
Some of us choose to act in ways that other people regard as being very silly. Some of us like to smoke, because we judge the pleasure we take from smoking to outweigh the costs of doing so. Some of us may not care about the down-sides as much as others do – hence, some people smoke, and others do not.
Many fat people do not care that they’re fat, especially when it comes as a consequence of being able to enjoy their favourite foods whenever they want. Like beauty, what I find pleasurable may be repugnant to you. What’s fun is subjective.
It hardly needs to be said that ‘living longer’ is just one criterion of many that people value. When we try to nudge people into behaving in certain ways, we necessarily try to define other people’s idea of a good time.
So we are pushed into drinking less, eating better, cycling everywhere and giving up smoking altogether. Wholesome activities are promoted. Healthy sports are encouraged, promiscuous sex and watching pornography are discouraged.
Why? What is the objective standard by which these things are deemed good and bad? There isn’t one. Or, rather, the standard is the policy-makers' own preferences. Any nudge will end up being a promotion of policy-makers' preferences onto other people. In a word: paternalism.
Nobody other than ourselves can know exactly how much pleasure we take from doing something. This is, fundamentally, the problem with all paternalism, including nudging.
Nudging is just a new term for the old idea that our rulers know what’s good for us. The chief argument for libertarianism is not that people are wealth-maximising machines. It is that nobody knows better than I do what makes me happy.
The fizzy drink tax Fanta-sy
Tucked away in the twenty-third page of the Liberal Democrat party conference agenda is a proposal to look into “fiscal measures such as the taxation of heavily sugared drinks”. This follows a recent post by two advocates of such a policy at LSE Politics and Policy which is also fairly alarming. Once again, the political classes have found an issue where they feel other people just don’t know best, and need the government to fix it. The ‘solution’ is to make us pay more for things we enjoy. They tell us that this is certainly not prohibition — even the most hardened opponents of fizzy drinks are wary of the word. But they do seem to realise that what they are calling for is starkly illiberal.
Bizarrely, this is not a call for a tax on sugar in all forms, but only sugary drinks. It is a very strange kind of paternalism that does not mind what you consume, if only you consume it in a state-approved fashion. Proponents of the measure suggest that there is something different about these products — that people do not realise that what they are doing is bad for them. It is hard to imagine that this is true. We are already bombarded with warnings that fizzy drinks are bad for us, and fat-shaming is alarmingly prevalent in modern society. Labels stating the sugar content of these products are already clear and obvious to those concerned. The simple fact is that some people just like fizzy drinks, even if they make them fat.
It is however by no means certain that the science on sugar is settled. The debate in the world of nutritionists is very much alive. The reality is that we can not be sure why people are getting heavier. Some research states that “Numerous clinical studies have shown that sugar-containing liquids, when consumed in place of usual meals, can lead to a significant and sustained weight loss”. When scientists are not sure that fizzy drinks are ‘the problem’, how can politicians be so certain?
If someone is overweight, that is an issue for them, and not for the Liberal Democrats. We should of course welcome research that shows those who want to lose weight how to do so effectively, but it is unlikely that this will come from government. Diversity in approaches to diet and exercise is far more likely to result in the development of effective strategies than by government constraining us all down a set path.