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HTLGI2013 Quack Policy

By Dave Snowden  ·  May 28, 2013  ·  Thinking events

J B White was billed as a Philosopher turned management consultant (one of several with a book to sell at this event) but his session was more pop science than anything else.  He was making the legitimate point that a lot of what is called evidence in government is nonsense but there are a lot better targets that the unit price of alcohol.  The one good thing he brought out was the substitution issue, but his wider argument of the right to enjoy was based on a primitive concept of exchange and rational decision making which to be honest was pathetic.  He really was not interested in any idea which challenged his thinking and managed his questioning accordingly.

There is a lot of nonsense in so called evidence based policy but it will be be countered by libertarian (my judgement) nonsense in response.  Becoming a duck is not the way to stop quacking.

 

MY NOTES

Looking at one piece of evidence based policy.  The phrase means if you argue with it you are a bigot which he disputes.   Minimum alcohol pricing is considered as a perfect example of evidence based policy.  Will use it as an example of where tings are wrong.  All tend to go wrong in the same way.

Scary slide - The English drink a lot

British politicians want people to drink less, would mean less absenteeism etc, etc

A 2008 scientific study claimed that a minimum price of 50p a unit would benefit society by £7.5bn

Government went with 45p.  Sheffield group assumed that alchol price goes up then demand goes down.  They worked out the price elasticity by dividing the drinking population into different groups worked consumption down and then worked out relationship toi different types of harm.  Work out how harm goes down then attach monetary value to those harms.   This is standard practice in social welfare research.  Its done by asking how much people would pay to avoid those harms or to avoid the risk.  They looked at benefits from 10p up

What is wrong?

 

  1. They forgot substitution effects, its not the only change they will find alternatives.  A black market, DIY etc (this happened in Scandinvia with people going blind etc).  They may take drugs, sniff glue etc.  So those harms have to be added in.  This was left out of the calculation.  Common appraoch in policy arguments.   Hatfield train crash resulted in speed limits to make travel safer but forgot that train trip times going longer people switch to cars which is 12 times more dangerous.  railtrack are only interested in people dying on trains etc. etc.
  2. Why did they stop at 70p, why not go to £100 the benefit would be massive?  People justify reducing the speed limit to 60, why not 5?  If you did the cost would exceed the benefit.  Cost and benefit balance?  Sheffield forgot about the costs of the policy.  People want to drink, they like being drunk so the harms of alcohol go down but so does the upside.
  3. Internal costs that is born by the person who does the thing (price, risk of cancer etc) then there is an external cost born by other people.  If I bore the external cost then I would do less etc (Bad breath on a korean delicacy).  I drive my car but do not pay cost of ecological damage.   Classic approach is to tax people by adding to the cost the external cost through tax or similar.  Anything that the Government does to push the cost up means they are doing harm (the fun).  Argument that taxing to help people overcome ignorance.  Disagrees as we may underestimate the benefit as well.  Why do they always apply the tax and not the subsidy?
  4. External costs to drinking are things like violence (10:1 ration violent crime drunk to sober) but that cost has always been internalised, you are aware of the price of violence so every drink has a probability that you will be arrested and put into prison.  You would pay a lot of avoid going to prison.  the internal costs have already been taken into account in the decision you made.   Absenteesim has already been internalised.  Health care is a factor, but alchol is already highly taxed.

It shows the benefits but ignores the costs.  'The public sector focus of NICE ecomoic evaluation excludes consideration of welfare losses (fun) arising from reduced consumption.  Hence consumer welfare analysis has not be a part of this studfy'  quoting the study here.   If we had a party focus then we would subsidise alcohol but ignore the costs.  So whole thing is a fraud/joke

Rugby injuries are OK, R V Brown 1993 gay men sadomasochism and were charged with GBH, defneded on the basis that they volunteered so Rugby and surgery would be GBH as well.  THe Judge rejected the argument on the basis that rugby and surgery have a worthy purpose you don't

QUESTIONS

 

Is there no place for morality based policy?
Says yes, for example murder where most of the internal cost is born by you.  Need to go way beyond an eye for a eye to get the external cost up

Asked about licensing hours
would not do that to protect people in the pub but possibly local residents

Good question, if you put the price up people want more of something

If something is a consumption good you want the price to decline, but a house you want it to go up.  So have to distinguish between the good.  There is also the luxury good effect.

Were the Sheffield people contrained by government policy? 
He should have asked but didnt and did does not care