The state (the whole apparatus of sovereign government) does not reach decisions randomly at some sort of ritual coin-throwing ceremony. Given its claim as an ultimate monopoly of violence and its decision-making technology—in the cases of interest here: majoritarian democracy with its problems of collective action and voters’ rational ignorance—the state will be led, as by an invisible hand, to reach certain decisions and to avoid others. Resisting these built-in biases, if anyhow possible, presumably requires the support of strong non-state institutions and, from those in power, a deep understanding of the issues and problems involved.
As liberal institutions have been undermined by a century of power aggrandizement and as few individuals (but where are they?) in the current US administration have shown any understanding of the stakes, it is not surprising that the American state is continuing its natural drift.
The latest example is the Trump administration’s expected decision to ban e-cigarette flavors, which would be a seamless extension of previous public-health tyranny. I recently reviewed the political economy of this issue in “Consumer Surplus in the FDA’s Tobacco Regulations, with Applications to Nicotine Reduction and E-Cigarette Flavors,” Reason Foundation, June 2019. Are consumers so stupid compared to voters, politicians, and bureaucrats?
The Wall Street Journal (“White House Expected to Ban Vape Flavors Except Tobacco and Menthol,” November 1, 2019) just reminded us that
Mr. Trump in September announced that the FDA would ban the sweet and fruity e-cigarette flavors that are popular with teens, leaving only those flavored like tobacco on the market.
At first sight, such a decision from the Trump administration may look surprising. In all likelihood, the third of registered voters who gave their votes to the current president contains a proportion of smokers and vapers much higher than in the general population. But authoritarian bans form the natural slope of the state. “Why not ban something?” is a deep-state reaction that Elizabeth Warren also honors: this is why she is such a good candidate for running the government. To know what the weather is really like on earth—“le vrai temps qu’il fait sur la terre,” to borrow an expression from Saint-Exupéry in Courrier Sud—I suggest that Anthony de Jasay and Bertrand de Jouvenel are required readings.
The well-wisher can find in the current US administration some exceptions to the trend, such as its defense of the Second Amendment, in words not in action (granting that judicial nominations may prove to be weighty actions, but only the future will tell), and attempts, apparently successful thus far, at reducing the net annual flow of regulations (see Clyde Wayne Crews, Ten Thousand Commandments, 2019 Edition, Competitive Enterprise Institute). But more than a new trend, these look like random variations around the secular trend.
On the specific issue of e-cigarette flavors, we may hope that Mr. Trump, in a populist revelation on the road to Damascus, will change his mind. We may hope that, like in Gustave Doré’s painting, he will confront Leviathan, instead of using it for his own personal purposes. But this is most likely wishful thinking.
READER COMMENTS
Thaomas
Nov 3 2019 at 3:01pm
I realize that Libertarians are deontologists, not utilitarians, but still size of the little triangles of consumers surplus that are reduced by a regulation ought to be at least a rough guide to the amount of freedom that is being trampled. Which leads me to wonder about how Libertarians chose which interference with markets to analyze. Immigration and trade restrictions are obviously huge issues. I’m not persuaded that the forced substitution of tobacco flavored for sweet flavored e-cigarettes are a big deal.
Mark Brady
Nov 3 2019 at 4:59pm
“I realize that Libertarians are deontologists, not utilitarians.”
Many (most?) of those who identify as libertarian/classical liberal are consequentialists, even utilitarians, not deontologists.
Pierre Lemieux
Nov 3 2019 at 6:35pm
@Mark: You are right–certainly for the “many” and perhaps for the “most” too. Some libertarians switch between the two doctrines, sometimes unconsciously. Buchanan’s approach provides a tempting reconciliation: the deontological principle lies in the (utilitarian) principle of consent. And then there is the distinction between act utilitarianism and rule utilitarianism…
Mark Z
Nov 4 2019 at 2:19pm
Im not sure whether most libertarians are consequentialist or not, but I’m not sure it matters much: the moral and analytical premises of libertarianism are somewhat related. The belief that individuals alone have the moral right and responsibility to make their own decisions tends to go have in hand with the utilitarian belief that individuals tend to be better able to make utility-maximizing decisions for themselves than governments can. Hence why people who tend to chronically make decisions adverse to their own interests – such as children or the mentally ill – are often held to be less morally responsible for their decisions and/or restricted in their freedom.
Jon Murphy
Nov 3 2019 at 6:38pm
That doesn’t make very much sense. It would imply every time there is a decrease in supply that freedom is lost. But no such reasoning makes sense.
If a freeze in Florida killed off the orange crop and increased orange prices, consumer surplus would fall. But to call that a reduction of freedom makes no sense. There is no liberty violations, no “stuff” being messed with by the government.
The hypothetical example is not a rare case; it happens all the time. So no, using consumer surplus to measure freedom does not work at all.
You need a theory of jurisprudence.
Pierre Lemieux
Nov 3 2019 at 6:48pm
That’s a good point, @Jon. One should not read “a decrease of consumer surplus,” which is (under certain assumptions) a decrease in welfare, as “a drop in freedom.”
Thaomas
Nov 5 2019 at 5:05pm
I was referring to changes in the triangles as a result of regulation/taxes, a George Stigler analysis.
But maybe that would be a good metric for supply shocks. Say a freeze in Florida causes prices to rise by 25% but consumption hardly moves (very inelastic demand). This mean a big loss to consumers but almost all of that is just a transfer to producers. Maybe that means the economic loss from the event is not so large compared to a 25% change in price that results in a large change in the quantity demanded.
You may recall that I recommended that consumers (and ideally import substituting producers, too) show their resistance to the President’s trade wars by not changing their behavior and thereby minimizing the deadweight loss of the measures.
If you publish a paper on this, please list me a co-author or at least muse. 🙂
Jon Murphy
Nov 5 2019 at 6:17pm
Yes, I know. The supply shock example was to show why consumer surplus is a poor metric for loss of freedom. It’s like measuring one’s weight by how fast his car goes. Makes no sense.
That wouldn’t minimize the deadweight loss of the measures. Demand curves still slope downward, after all. If they are paying more for less, they are still facing a DWL (this is the problem with welfare economics as currently understood. It fails to take into account nonpecuniary costs and as such, we get sometimes silly outcomes. There was a question exactly like this, warning against Thaomas’ erroneous conclusion, on my PhD comprehensive exam).
Pierre Lemieux
Nov 3 2019 at 6:44pm
@Thaomas: On your first point (and your first sentence), see Mark’s comment and my rejoinder. I assume that you know that David Friedman defends the Marshallian utilitarian approach as a useful approximation, as you seem to think yourself. Your point is a good point to raise, though, and I am troubled by this each time I use the consumer surplus instead of Pareto improvements. On your second point, it depends on individual preferences: for some individuals, vaping provides more utility than a fishing rod bought at Wallmart. It is because individual preferences differ that markets are useful.
Mark Z
Nov 4 2019 at 2:13pm
I have to ask, so what if it’s not a big deal? The author just wrote a blog post about it, he isn’t calling for a revolution over e-cigarette flavors. It doesn’t seem like disproportionate allocation of attention at all.
I’ll also make the case that it may indeed be a big deal: to the extent that e-cigarette flavor restrictions reduce the tendency of smokers to substitute e-cigarettes for ‘analog’ cigarettes, they may cause an increase in the number of smoking related-deaths.
Thaomas
Nov 5 2019 at 6:00pm
Fair enough, the substitution could be from flavored e-cigarettes to real fags. And I’m really not criticizing Pierre for his post. I’ll admit anyway that aggregate harm is not the only reason to blog about a policy change. Topicality is a legitimate reason, too, as is the belief that it is an especially useful didactic.
Still of all the transactions made in which marginal cost does not equal marginal benefit ….
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