Thursday, July 31, 2003

Organ Nine to Five, What a Way to Make a Living

My sister Ellen, who is a pre-med student, had some interesting points to make about my post below on organ selling. She agreed to let me post them here, and I’ll intersperse my own reactions.

I haven't read the article you're talking about -- I clicked on the link but I couldn't read it because I don't have a subscription -- but I bet that what the [author] finds wrong with organ selling isn't exactly a problem with organ selling per se. If [her] arguments are on what [s]he says are moral grounds, [s]he is probably mad that people are so poor that they have to sell their organs. Whether or not that's actually the profile of people that sell their organs, [s]he probably thinks it's disgraceful that some person out there isn't getting helped by society or something enough that he doesn't find himself so strapped for money that he has to risk his health [by] giving up organs to make a buck. I don't know if I agree or disagree with that. The problem there isn't with organ selling but with other conditions that would cause someone to consider organ selling.
I think Ellen is totally correct about the sentiments behind the op-ed. And it’s indeed horrible that some people are so poor that they’d sell their organs to get ahead. But -- and this is the key point -- you don’t make those people any better off by taking options away. Preventing organ sales does nothing to improve the condition of poor people in underdeveloped countries; it just shuts down one of the possible exit routes.
Anyway, the quote [s]he used didn't support an argument against organ sales, like you said, but the guy [s]he quoted (hypothetical?) wasn't completely on the mark either. People with cirrhosis or other things wrong with their organs aren't allowed to be organ donors. Among the many tests that have to be done before the organ is transplanted, checking it for overall good health is one of them. The people who have shitty organs are the ones getting the transplants, not donating them. Stress on the body can cause damage to organs over the long term, but the things he was referring to (like car wrecks) wouldn't affect the organs too much. The reason people go into shock after a trauma is to save the vital organs, or rather, keep those organs from becoming damaged/deprived if they weren't already at the expense of everything else (b.p., temp, etc.). So the organs will nearly always come out fine. If the case is that the organs are themselves damaged in the trauma, they aren't used for transplants. Abraham or whatever his name is would probably get organs about the same in health and functions whether he got it from a gunshot victim as a voluntary seller.
Good points. However, it's not as though the organs from car wrecks and gunshot victims are going unused. There is a shortage of organs, so people take what they can get. Avraham’s medical knowledge may be deficient, but his choice to buy organs from healthy people just assures that more organs from accidental donors will be available for others.
The one thing different [between accident donors and healthy donors] is something that is actually an argument for selling, which is that type-matching might be easier with selling, because someone might offer more money if someone that matches him steps up to sell, whereas the other way has no dependence on blood type or anything like that.
That’s a new argument in favor of organ selling that I’d never heard before. Cool.
Oh yeah, I'm willing to bet that if this [author] is opposed to organ selling for the reason I said, [s]he also doesn't like egg-selling either, although not as strongly as [s]he dislikes organ-selling. [Sh]e may not even like sperm donation, but a lot of people all of a sudden change their views on that one because sperm are so easy to get while egg-harvesting can be a painful process and eggs, unlike sperm, aren't seen as "a dime a dozen." Or a dime a million. Whatever.
Great point. I don’t know if the author of that article actually opposes sperm- and egg-selling, but to be consistent she should, because some poor people do it for the money.

ADDENDUM: Ellen emailed me again (after I told her I might blog this) to make a small correction:
I don't know why I said "shock" when I referred to the body's response to trauma. Shock can be caused by trauma or by other things (septicemia, anaphylaxis...), but shock actually leads to the organ's failure. However, doctors do do all they can do to prevent this, and the organs are the last thing to go, so even someone that entered early stages of shock could probably still donate at a later date. I do know though, that the body will try to save its vital organs at the expense of things peripheral. I don't even remember if there's a term for it, but I know it happens. Think hypothermia -- people end up with frostbite because their blood was shunted to their heart/lungs/brain/etc. Provided someone doesn't end up with a [positive-feedback] shock response, the chance of sustaining noticeable organ damage because of a trauma not specifically related to that organ isn't terribly high -- not enough to worry that their organs aren't healthy enough to be transplanted. If they actually get medical attention. Still, I know I am right about the kinds of people that they let donate. People who have self-inflicted damage, people who have abormal organs, people who died because the organ in question failed...most of the people that Abraham was worried about.
I don’t think this changes any of the discussion above, but I thought I’d post it for the sake of medical correctness. Thanks to Ellen for all the useful comments.

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Public Debate in Seattle

Tomorrow (Friday) I will participate in a public debate at the University of Washington in Seattle. The official topic of the debate will be: "RESOLVED: The Seattle City Council's Monopolistic Policies are in the Public Interest." The actual focus of the debate will be a truly inane law (uh-oh, am I poisoning the well?) passed by the Seattle City Council that effectively gives two big firms a monopoly in construction waste hauling. Naturally, I'll be on the opposition side. Each side will consist of one student and one professional. I'll be partnered with Andrew Bailey, a Biola student, and our opponents will be Michael Howard, a UW student, and Rod McCarvel, a Seattle attorney.

Here are the details, if any readers happen to live in the area and feel like attending:
UW Seattle campus, Thompson Hall Room 101, Friday 1 August 2003, 6:00 - 7:00 pm.
A splendid time is guaranteed for all.

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Wednesday, July 30, 2003

Organ for a Livin’

I read this article about the evils of human organ sales in yesterday’s L. A. Times. I would refute the arguments – if I could find any. Unfortunately, the author just plays on morbid fears and hyperbole, with nary a trace of analysis. Ironically, the most persuasive part of the piece is a quotation that the author presents as self-evidently wrong:

Avraham, a retired lawyer in Jerusalem, explained why he went through considerable expense and danger to travel to Eastern Europe to purchase a kidney from a rural worker rather than wait in line for a cadaver organ in Israel: "Why should I have to wait years for a kidney from someone who was in a car accident, pinned under the car for many hours, then in miserable condition in the intensive care unit for days and only then, after all that trauma, have that same organ put inside me? That organ is not going to be any good! Or, even worse, I could get the organ of an elderly person, or an alcoholic, or a person who died of a stroke. It's far better to get a kidney from a healthy person who can also benefit from the money I can afford to pay."
And that’s bad because…?

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Tuesday, July 29, 2003

Terrorisks

Last night, I saw some jackass Congressman denouncing the terrorism threat-bet concept as “just plain immoral,” and Hillary Clinton called it a “futures market in death.” Now, I’m not entirely sold on the notion of ideas futures as an efficient means of assessing risks, for reasons I’ll explain below. But to condemn the program out of hand just because it sounds morbid is truly stupid. The question should be a factual one: would these betting markets in fact provide the authorities with better information about likely terrorist events without making such events more likely? If the answer is yes, then I think it would be immoral not to use them.

And it’s quite obvious that the Congressmen who’ve been criticizing the idea really don’t understand it at all. The most common charge is that it would allow terrorists to profit from their planned terrorist acts, because they could engage in a kind of insider trading. As Barbara Boxer puts it, “terrorists knowing they were planning an attack could have bet on the attack and collected a lot of money.” Hmm, let’s see how this would work. Suppose Ahmed the Terrorist is planning to blow up the Seattle Space Needle. So he does months of planning, all in secret so he won’t get caught. And then he gets the brilliant notion of making money at the same time, so he logs onto the DARPA website and buys a whole bunch of shares of “Seattle Space Needle gets blown up.” The price suddenly jumps, and the authorities immediately focus their attention on potential threats to the Space Needle, making it much more likely that Ahmed’s plot will be foiled. That’s exactly how the system is supposed to work.

The problem, as I see it, is that some terrorists won’t be as stupid as Ahmed. Instead, they will spend money with the deliberate purpose of driving up the price on other events -- ones that they have no plan to make happen -- with the intent of drawing attention away from their real plans. Or if they were really foresighted, they could start buying shares for the events they intend to make occur months in advance, and then deliberately dump their shares a little while before the plan goes into effect so that the price goes down. Or they could just buy and sell randomly, in order to create noise in the data. Would they lose money doing this? Yes, but terrorists have shown a great willingness to spend money in order to hurt people.

In short, the terrorism threat-bet plan might not work, but the critics’ criticisms are exactly backward. The problem is not that terrorists would be enabled to make money on their own criminal acts, because the very act of trying to make money on your terrorist plans is exactly what would thwart them. The problem is precisely the opposite: that terrorists might deliberately lose money in order to foil the system.

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Monday, July 28, 2003

Gay High

Somehow this strikes me as a bad idea. I’m all in favor of shielding gay students from physical and psychological abuse, of course, and maybe that alone is enough to justify the creation of a new gays-only school. But it’s a pretty damning indictment of the NYC public schools’ disciplinary system if they have to segregate people in order to protect them against violence.

In addition, the existence of a school for gays will bolster the bigoted belief that gays are so different from the rest of us that they need to be quarantined. And it makes it even more likely that young people in their crucial bigotry-forming years won’t be exposed to any real live gay people. I realize transferring will be voluntary, but that won’t challenge the impression that is created in the minds of students. The option will soon become an expectation on the part of bigoted students. “Why don’t you go to Gay High, queer!” will be the new taunt of choice.

Furthermore (and here’s where I might hack some people off), I think it’s unwise for kids to categorize their sexuality at such a young age. High school students are bubbling cauldrons of hormones, fears, anxieties, and sudden impulses. They may not really know what their actual orientation is until years later. Yes, I’m sure that lots of gay people realize their orientation with great certitude early in life (many have told me so). But there have to be many others who do not; I’m betting that women are overrepresented in this category. In the narrow environment of a single-orientation school, students with second thoughts may feel trapped by rash decisions made early on. Worse yet, they might even feel pressure to conform, since a choice to go straight means having to switch schools.

On the upside, I can’t wait to hear what the school’s mascot is.

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Friday, July 25, 2003

Shocker

It turns out that a dish of three scoops of ice cream covered with whipped cream, hot fudge topping, nuts, sprinkles, and a cherry actually has lots of calories and fat in it. I'm glad they did a scientific study to figure that one out for us.

Read Jacob Sullum's excellent article on the highly annoying Center for Science in the Public Interest. I remember the days when CSPI was actually doing something useful, like telling us that Chinese food might not be as healthy as you thought, despite all those veggies. But I stopped listening about the time they helpfully informed us that Mexican food is not so healthy, either. As one columnist (can't remember who -- Tony Kornheiser maybe) put it, "If something fried is bad for you, how can something refried be good for you?"

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Brights Out

Despite my sympathy with Daniel Dennett’s desire to raise the profile of atheists and agnostics in this country, I have to agree with Julian (read the comments box), and some other commentators, that Dennett’s choice of labels – “brights” – is pretentious and silly. (Not to mention that it opens the door to calling agnostics “Light Brights.”) But what other term would be appropriate?

I was pondering that question last night, when I caught my first episode of “Queer Eye for the Straight Guy” (which has many of the same annoying qualities as TLC’s “What Not To Wear” – maybe more on that later). And then it hit me: why not follow the strategy of homosexuals and other marginalized groups who have taken derogatory names for themselves and co-opted them as signs of pride?

Thus my proposal: atheists and agnostics should henceforth be known as “heretics.”

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Thursday, July 24, 2003

Politics as Spectator Sport

Once you realize that the typical person has pretty much zero marginal impact on politics, and once you admit to yourself that you are in fact a typical person, it becomes a lot easier to view politics as essentially a form of entertainment. And California is a state known for its fabulously successful entertainment industry. Think of the Davis recall as the latest in reality television.

During the whole Lewinsky drama, many people criticized Kenneth Starr for spending $40 million (or whatever it was) to carry out a vendetta against the president. Put that way, it does sound pretty bad. But then again, the National Endowment for the Arts has an $80 million yearly budget, and it’s never provided me anywhere near as much entertainment as Kenneth Starr did.

So now, opponents of the Davis recall are protesting the $35 million that it will cost to have an election. Below, Mike offers a sensible defense of that expense on grounds of improving democracy and such; but I’m willing to make a defense on the basis of pure entertainment value. Boy, it sure will be mighty fun to watch Davis squirm! As an added bonus, we might even end up with the Governator in charge. And as per usual, the West Coast provides amusement for the rest of the country.

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Suffrage vs. Suffering in CA

There is almost a unanimous consensus that the petition to have a recall election against Gray Davis is dangerously misguided. Some might see the convergence of normally fractious voices of the citizens’ intelligentsia (AKA blogosphere) as proof that this is, in fact, a really bad idea. I, on the other hand, see this is an opportunity for an exercise in contrarian thinking.

The argument is that this election is (a) expensive (b) destabilizing and (c) not likely to lead to better government for the Golden State.

It is impossible to argue that this election will not be expensive if you think $35 million is real money and not chump change. But if you believe that this election could in fact buy better, more responsible government for California, then $35 million isn’t so much. Hell, it’s less than 1/1000th of the state’s $38 billion deficit.

So the question, then, is whether this can produce better policy in the short-term (i.e., over the next four years) and/or whether this might produce improved long-term governance through structural adjustment.

I think that there’s a chance that the answer to both is possibly “yes.” But first, let’s note that there’s a huge positive externality for the rest of the country, regardless of the outcome. This is one of those “federalist moments” during which a single state really serves as a “laboratory of democracy” by trying something completely different from what is policy in other states. California’s groundbreaking Proposition 13 worked in this way when it showed the way to cap taxes is through tax and expenditure limitation (TEL) legislation.

But that, of course, reduces Californians to the role of guinea pigs, which is something that they might not be happy about.

Here are two reasons why Gray Davis’s recall might help California in the long- and short term. Let’s take the short term first. Davis’s replacement will have a mandate to save California from its budget crisis. Anything that makes the fiduciary relationship between citizen and public servant more explicit is to be lauded. If the Davis replacement can convincingly assert that their primary motivation is to get California on firm fiscal footing so that the government and state can recover its normality, the citizens will be able to buttress their support for making the hard choices (spending cuts) needed to overcome the current fiasco.

Next, and more importantly, are the doomsday predictions that this undermines the essential stability and orderliness of regular elections. It might be noted that regular elections give politicians the chance to do both (a) what is necessary but unpopular (early in the term) and (b) what the people demand (towards election time). But why must we assume that this irregular recall function will be abused by Golden State voters? Californians are currently getting an object lesson in how expensive, complicated, and time consuming this process is. Perhaps they will not take so lightly the prospect of recall elections in the future. Maybe this will be a sort of “emergency exit” to be used during special occasions of democratic failure rather than a vehicle for the whimsical ambitions of those who are out of power. The truth is that, as of now, we just don’t know.

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Tuesday, July 22, 2003

Please Don’t Ask Me, I Might Say Yes

Tyler Cowen raises an interesting question vis-à-vis the national Do Not Call list, inadvertently making me realize that the Do Not Call issue is actually related to my current research.

Tyler observes that some people who register on the DNC list might be protecting themselves from, well, themselves. They are afraid that if telemarketers call them, they might actually be tempted to buy stuff they don’t really need. Like Ulysses, they tie themselves to the mast to restrain their future, more impulsive, selves.

As it happens, my primary research project at the moment is economic models of internal conflict – specifically, meta-preferences and multiple selves. Tyler’s own research on the topic has been useful to me in forming my perspective on the matter. And he repeats his most significant point in his post on telemarketers: “Why should we assume that the rational controlling self is the only one who counts (do you really want a life devoid of spontaneity?)? Why should our government be in the business of altering this balance in one direction or the other?” In other words, if we really do have multiple selves with conflicting interests, there is no particular reason to have institutions that favor one self over another.

Tyler suggests that these considerations might force libertarians who support the DNC list to support a variety of non-libertarian policies: “How many of you out there will be consistent? How about a government list for people who do not want to be allowed into casinos? Do not want to be allowed to buy cigarettes at the local 7-11? Do not want to be allowed to order dessert?” In short, are we willing to embrace a variety policies designed to protect people, not from each other, but from themselves?

But this argument only works *if* protecting people against themselves was the justification for the DNC list. That is not, in fact, the justification that libertarians (like Julian and me) offered in defense of the list. The main argument was that the DNC list is functionally equivalent to a “no trespassing” or “no soliciting” sign on one’s front lawn, and thus a simple application of property rights. Now, it’s certainly possible that I put a “no trespassing” sign on my lawn because I fear that Jehovah’s Witnesses might actually be successful in converting me, and therefore my rational self has chosen to constrain my spiritual self. But privileging rational selves over spiritual selves is not the usual justification offered in favor of protecting property rights in land. It just happens that some property owners might use it for that purpose.

And notice that a pure defense-of-property-rights position would not obligate libertarians supporters of the DNC list to support any of the other policies that Tyler cites. In the case of the DNC list, others are prohibited from entering my property. In the case of a no-casino-entry list, others are prohibited from letting me enter their property, even if they want me to and I (apparently) want to.

Admittedly, the discussion gets a bit dicier if we delve into the reasons why we support private property rights in the first place. Consequentialist libertarians like me will often justify private property on grounds that it minimizes externality problems by concentrating the costs and benefits of resource use on an individual. The problem is that if we regard an individual as having multiple selves, then the actions of one self may create externalities (or as some analysts call them, “internalities”) on the other selves. The question, then, is what kind of property rights structure -- if any -- would best allow the multiple selves to cooperate for greatest mutual gain, and whether government policies can or should be evaluated on the basis of how they affect that structure. That’s one of the tricky questions I’m grappling with now, and I don’t have a good answer yet. (At this point, I might still come down on the side of “multiple selves” being a pointless concept, albeit a decent premise for a sit-com -- remember “Herman’s Head”?)

But even if multiple selves are real, and even if government policies do affect the balance of power among them, it doesn’t follow that the DNC list is undesirable (or unlibertarian). In the status quo ante, a person’s multiple selves existed within a de facto property rights regime. A change in policy made on other grounds arguably changes that regime. But if Tyler’s right that there’s no particular reason to favor the long-run self over the impulsive self, it’s also true that there’s no reason to do the reverse, either. And in that case, the multiple selves issue provides us with no grounds to prefer either the status quo ante or the new policy, and thus we focus on the other pros and cons of the policy.

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Monday, July 21, 2003

Granny You Can Drive My Car

According to an L.A. Times article, drivers over 75 are responsible for 11% of traffic fatalities in New Hampshire, as compared to 13% nationwide. The difference is attributed to the NH law that requires drivers over the age of 70 to pass driving tests in order to renew their licenses. Eugene points out three major problems with this analysis; I wish to point out two more.

First, neither the 11% nor the 13% figure means anything without a comparison statistic -- specifically, the percentage of all drivers who are over the age of 70. If that figure were significantly smaller than the numbers above, we could conclude that older drivers are in fact more dangerous than others; but if that figure were significantly larger, we could conclude that they are actually less dangerous. So what’s the real figure? I don’t have numbers for drivers, but as a proxy, look at this page with age figures for the U.S. in 2001. After excluding the age groups in which no one can legally drive, people over 70 constitute 11.7% of the remaining population. Hmm… seems pretty close to the 11% and 13% figures. Now, my figures shouldn’t be taken too seriously, because it’s possible that lots of older people are choosing not to drive or are unable to drive, and thus their representation in the driving population could differ from their representation in the population as a whole. But the figures are certainly close enough to give us pause.

[UPDATE: Eugene summarizes a study with more specific figures on the accident frequencies of different demographic groups. The bottom line is that, on average, people over 70 aren't the safest age group of drivers out there, but they're not the most dangerous either. They are safer drivers than teenagers and often safer drivers than people in their 20s.]

Second, a tougher licensing standard applied to any demographic group would reduce the percentage of traffic fatalities attributable to that group, whether or not that group is more dangerous than the general public. What if, for example, we passed a law saying that all Jews had to pass driving tests to renew their licenses (while non-Jews could renew automatically)? Then some Jewish drivers would be weeded from the driving pool, and as a result, the percentage of traffic fatalities attributable to Jews would probably fall. This would be true even if the driving tests were totally uncorrelated to driving competence, simply because they would reduce the total number of Jews on the road. But that would in no way indicate that Jews are less safe drivers than the rest of us. Substitute any other group for Jews and you’d get similar results.

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Turnabout Is Fair Play

The ever-hilarious Dan Savage, author of the Savage Love sex advice column (warning: contains sexually explicit content, so be caref… hey, come back here!) is doing an excellent job of spreading the use of “santorum” as the term for an anal-sex-related phenomenon of which Sen. Rick Santorum would certainly disapprove. C’mon everyone, do your part: this is a meme worth propagating.

There is one minor problem, though: there are other people out there with the name Santorum who might not deserve this kind of rough treatment. But when one of Savage’s readers pointed this out, Savage shot her down:

Sorry, SINMLN, but innocent people named Santorum will just have to deal, just like guys named Dick and girls named Peg and people named Lewinsky. If other folks named Santorum are angry, well, they should direct their anger at the jackass senator himself. He brought santorum down on all their heads, not me.
Well put. But is what’s sauce for the goose also sauce for the gander? Another reader tries to play turnabout:
I've got a great idea, Dan. Now that your readers have successfully coined the term "santorum," why don't they co-opt the name of another hatemonger? After being fired from his MSNBC talk show for telling a gay caller that he should "get AIDS and die, you pig" and "go eat a sausage and choke on it," shock jock Michael Savage certainly deserves to have his name immortalized as an offensive sex act. As for all the innocent people named Savage out there, they'll just have to deal with it, won't they?
D’oh. But Dan cleverly worms his way out, observing that “savage” already has a (more positive) sexual connotation. Lucky for him, else he might have been hoist by his own petard.

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Friday, July 18, 2003

Dreaming On

Any post ( “California Dreaming”, below ) that begins with a joke about Canada and ends with a surfing reference probably shouldn’t be taken too seriously. And yet, I think I have a point. If we think about bad local government as a tax on the citizenry, the magnitude of this tax is small relative to other things that determine the quality of life. Which is why I suggested that political theory, in the pragmatic sense of how to design a government so that it functions well, seems not to be a major concern. Of course, government design ties into the bigger question of political theory: what should be the purview of government? As Mike correctly points out, the world has had some bad experiences with crazy political theories (and individuals), but the national debate is not whether we should turn the US into North Korea, it’s whether we should turn it into Canada.

Now, this could matter. GDP per capita in Canada is substantially less than in the United States (take this kind of data with a grain of salt, but it is fine for rough comparisons). And in part, this gap is due to differences in government policies. But let’s not get carried away about how bad it is. I would be happy living in Canada, and indeed, if Vancouver had Los Angeles’s weather, I would prefer it. Of course, this is personal preference - my version of the good life includes sun and the ocean - others may prefer wilderness, or traditional big cities, or whatever, but in any case, it is rarely differences in governments that drives us.

Maybe people in California care less than elsewhere (I know people in DC do care, but I’ve lived inside the Beltway, and its not like anywhere else). I really think that these issues rationally do not matter much for the average person (and since we are writing about this for fun, we are definitely not average). A policy that wastes 50 billion dollars per year still only moves us only a fraction of the way to Canada and can be made up with less than 1% growth in GDP per capita. Of course, there is no reason to do bad policies, and there is the whole Everett Dirkson thing, but I’m not surprised that people do not get excited about political issues.

Oh, and I had some other comments, but the weather is too nice and I think I’ll go to the beach :)

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The Wages of Sin Are Death, Prison, and Taxes

Mark Kleiman (here, here, and here) and Juan Non-Volokh (here and here) have been having a polite debate on the subject of alcohol taxation. Click the links to read Iain Murray's and Stuart Buck's comments on the same topic.

Mark’s main point is that alcohol consumption creates a variety of negative externalities, such as drunk driving accidents, increased public health costs, criminality, and so on, and a tax would internalize the externality. His back-of-the-envelope calculations indicate that each beer consumed creates external costs of about $1. Juan replies by emphasizing that a tax would fall on all consumers of alcohol, not just the minority of abusers who create the vast majority of the social ills associated with alcohol (a harm Mark concedes but considers justified on net). Juan also observes that alcohol consumption can also create health benefits in terms of preventing heart disease, and some of that beneficial consumption would be deterred by a tax.

All of this is fine, but I think there’s a point that both Mark and Juan have given inadequate attention. Taxes are by no means the only way to internalize externalities. There are both civil and criminal punishments for the ill effects of drunk driving and other criminal behavior. If you actually cause harm to another person or property, you can be sued in civil court. If you get caught driving drunk, you can lose your license and go to jail. If you’re still allowed to keep your license, your insurance premiums will assuredly rise. Note that all of these types of punishment are focused on the real abusers, not the responsible drinkers. All of these facts indicate that if the external cost of a drink is $1 (Mark’s estimate), the optimal tax would have to be less than $1. To figure out how much less, we would need to calculate the expected dollar value to the consumer of the potential punishments that would result from the marginal drink. And don’t forget that taxes on alcohol already equal about 25% of the net-of-tax value per gallon (the average price per gallon of malt beverage is about $1). So we’re already about 25% of the way to Mark’s estimated external cost, without even having taken into account non-tax punishments.

Mark could still be right about the optimal tax needing to be raised (though not by the whole $1 per drink). The answer depends on two main things: first, the expected dollar-value of jail time, loss of license, and other non-tax punishments; and second, whether you’re willing to assume all policies other than the tax rate remain fixed. If the size of non-tax punishments is increased, the optimal tax will naturally decrease. And keep in mind that some of the “external” costs that Mark cites are not inherently external, such as the public health costs in socialized healthcare systems (like Medicare, Medicaid, and public ERs). As frequent readers of this blog will know, this is one of my hobby horses: when you socialize health costs, you create a political incentive for the regulation and taxation of personal lifestyle choices. Alcohol is but one example; others include eating fatty foods, engaging in high-impact sports, and being sexually promiscuous. Would we also support placing excise taxes on these other activities, which unlike alcohol currently are either untaxed or taxed at the same rate as everything else?

Oh, one other thing: the strategy of setting a tax equal to the marginal external cost only makes sense if the market is actually a competitive one in other respects, so that the price of the product is relatively close to its marginal cost of production. But in the case of alcohol, a slew of state and federal rules protect wholesalers from competition (and the laws also prevent suppliers and retailers from dealing directly with each other -- alcohol products must go through the wholesale sector). As a result, there is good reason to believe that alcohol prices are already a good bit higher than marginal cost of production.

[Note: the statistics I’ve cited here all came from my head, as a result of some research I did about a year ago. They do have original sources, of course, which I could track down if I had to, but I’m too lazy to do it right now.]

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Thursday, July 17, 2003

Your Money and Your Life

Julian has an excellent article on the valuation of life up at Reason, with some further ruminations on the subject posted on his personal blog. I have just a couple of comments.

First, as a political matter, I wonder if the EPA’s short-lived plan to discount the value of life for the elderly (for purposes of doing cost-benefit calculations) would have met less opposition if it hadn’t adopted such a sharply discontinuous value of life function. According to Julian, the EPA placed a value of $2.3 on the life of someone over 70, versus a value of $3.7 on the life of someone younger. Well, it’s not like something magical happens at the age of 70. They could just as well have adopted a “years of life saved” metric, without even having to refer to particular lives. The value of your total remaining years of life would consequently decline as you got older, simply because you have fewer of potential years remaining. I wonder why they chose to look at two arbitrarily defined blocks (over 70 and under 70) instead?

Second, in the discussion on his personal blog, Julian takes on the notion of valuing a life by finding out how much money one would accept to avoid a risk. In his example, if someone would take $5K to accept a one in 1000 chance of death, you might think we could just multiply $5K by 1000 to find that the value of life is $5 million. Julian argues that this approach is mistaken because “the function is non-linear, and … asymptotic to infinity as probability approaches one and time-to-demise approaches zero. (In other words, there's no amount you'd take to be killed with certainty five seconds from now.)”

This is all perfectly correct, and it explains why we wouldn’t let a potential murderer just pay a fee of $5 million for the privilege of killing his lover. But it seems to me that, when we’re talking about environmental regulations, product liability, and so on, that the logic works just fine, because we aren’t talking about a certainty of death for any particular individual. We cannot identify in advance the specific person killed by a certain increment of pollution, or saved by the EPA regulation (or liability rule) that prevents that pollution. We only know the specific person after the fact, and sometimes not even then (because we don’t know which death was the marginal death). So in cases like these, it seems perfectly appropriate to value lives in the manner described, because for each individual we are talking about a small risk of death rather than a certainty. One odd implication of this approach, though, is that there may be many different values of life depending on the size and context of the risk. The value of life would presumably be much, much larger for a one in 100 chance of death than for a one in 1000 chance of death. Perhaps it is misleading to call this a “value of life” at all, and we should call it a risk premium instead. But at the aggregrate level, it comes out in the wash: counting $5K one thousand times is functionally equivalent to count $5 million just once.

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Contrarian Thought for the Day

The erudite, ever-feisty, eminently readable John Derbyshire on colonialism.

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Wednesday, July 16, 2003

Living Libertarian

I sympathize with both Mike and Jim (see the two posts below). I posit that the seeming conflict between their views actually represents a dualism inherent in libertarianism. On the one hand, libertarians tend to be among the most political people you’ll ever meet. They have some of the most definite and vociferous political opinions around, and often as not, they won’t shut up about them. They realize, with Mike, that political institutions make a difference. On the other hand, the substantive content of libertarian belief is that most people should not have to be political. If government would just restrain itself to a narrow set of vital but manageable tasks, regular people could stop thinking about politics and instead focus their energies on the things that really matter in life, like running their businesses, raising their children, and, as Jim indicates, sipping cocktails and watching the surf roll in.

Sometimes I will meet a person who is apathetic about politics, who has very few opinions about politics aside from a good dose of cynicism, but who is just trying to make his own life – and the lives of those around him – better. And I think to myself, “That's libertarianism lived, not argued.”

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Californians Love Political Theory

In the post below, Jim Dow claims below that Californians--actually, he says "most people"--don't care about political theory. I don't think that he could be more wrong. Californians may not realize that they care about political theory but they do (at least if they care about maintaining their "Californian" lifestyle).

I spent a not-insignificant amount of time studying political theory specifically and so I may be biased, but let me try and justify why I think political theory is really important. I went to school expecting to study politics but not necessarily theory. Actually, I didn't even really know what theory was. But after taking some introductory classes and talking to some professors I respected, I knew that this was the interesting part of politics, the "head" of the political science.

People live in different ways in different countries in a large measure because of politics. Why should we suppose that life on one side of the Baja peninsula (in California) is so different than life on the other side (in Mexico)? Is it because of the genetic make-up of the people? We know too much science to believe that. Is it because of pre-existing cultural conditions? Perhaps there is some of that. Do natural resources and geographic circumstances make a difference? Sure. But much of the difference can be attributed to the laws and institutions that exist on different sides of the border. And while not all of that is attributable to planning, deliberation, and public reasoning--some of it is spontaneous--much of it is attributable to paths that we have taken consciously. So politics matters. What governs politics? Political theory, of course. While political philosophy may be more rigorous, it is too abstract and rigid to carry into the process of formulation. Political theory discusses what we want from society, defines our vision of the good life, makes claims about what human beings are like, and tries to delineate our obligations to one another. It also does 1,001 other things.

Why is life so much different in North Korea than in South? In the former East Germany than in former West Germany? In South Africa vs. Zimbabwe?

Our instinct might be to turn towards institutions, laws, cultural norms, natural resources, geographic situation, historical records--anything that we can touch.

But we ought to focus our attention elsewhere, turning our gaze somewhat higher. What motivates men to govern each other in such-and-such a way? What is their organizing principle? Do they believe in laws that apply equally to all or do they believe in commands given by rulers to subservients? Do they value individuals? Do they value groups? Which groups are valuable to them? Do they have an organic or a positivist vision of the state? Do they even believe in states or do they believe in the unity of their ethnicity or fellow religious believers?

Political theory studies their beliefs, which in turn governs their political actions which, for better or worse, provides the framework for their society in which to flourish or whither.

To answer Jim's final (and probably rhetorical) question: I hear that the weather's great in Cuba but I still wouldn't want to live there.

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Tuesday, July 15, 2003

California Dreaming

The joke about Canada goes like this: Canada could have had American ingenuity, French culture and English government, but instead it ended up with English ingenuity, American culture and French government. I was thinking about this as I was sitting in a restaurant on the beach in Los Angeles. California has managed to combine the French version of the good life (sitting outside in a café drinking wine) with American ingenuity (computers, biotech, entertainment). But somehow we haven’t managed to get the third part right. Not only did we not get English government, we ended up with Italian government!

But if you could only get two right, I think we picked the right two. Which is maybe why most people don’t really care about political theories. Libertarian, communitarian, goofytarian; how can it matter when the sun is shining and the surf is high?

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Monday, July 14, 2003

Revelation Rumination

What is the difference between an atheist and an agnostic? The simple answer is that the atheist denies the existence God, whereas the agnostic neither denies nor affirms the existence of God. But the line between these two is not so easily drawn. Consider the “spectrum of non-belief,” which measures the percent likelihood that one assigns to the non-existence of God. Someone with a score of 0% is a true believer in God. Someone with a score of 100% would clearly be an atheist. But what interval on this spectrum corresponds to the agnostics? Where are the dividing lines?

Interestingly, I’ve found that self-identifying atheists and agnostics both draw the lines so as to maximize the size of their own group. Thus, atheists tell me than any score of greater than 50% qualifies you as an atheist, because you think it’s more likely than not that God doesn’t exist. Meanwhile, agnostics tell me that any score less than 100% (and greater than either 0% or 50% -- I haven’t quizzed them on that end of the spectrum) qualifies you as an agnostic, because you place some probability, however small, on the possibility of God existing. Since I’m at about the 99.99%mark, I would meet both definitions, thereby qualifying as both an atheist and an agnostic.

My friend Bob proposes a sensible rule: you are an atheist if the possibility of God’s existence doesn’t actually affect your life in any concrete way. In other words, if you received definitive proof of God’s non-existence tomorrow, would your behavior change? In my case, the answer is no, because my behavior is unaffected by that 0.01% chance. But even this rule is subject to quibbling. For me, the main reason my behavior wouldn’t change is that the probability is just too small. But we can imagine other reasons for God’s possible existence not affecting you. For instance, you might think that theological ethics and secular ethics make identical demands, and so even a large change in your score on the non-belief spectrum wouldn’t make a difference. Or you might observe (correctly, I think) that believing God might exist is a far cry from knowing what he wants from you, and thus your behavior must still be guided by secular reasoning. And both of these reasons for your behavior being unaffected by the possibility of God are perfectly consistent with agnosticism or even theism.

Incidentally, here’s a great article by Daniel Dennett on defending the rights of agnostics and atheists, whom he refers to collectively as “brights.” Thanks to Radley for the pointer.

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