Monday, 30 May 2016

Bad Ideas Lead To Wrong Conclusions

A new EU law has just come into effect telling tobacco companies they must sell cigarettes with restricted branding as well as containing images highlighting the damaging effects of smoking. Alas, we're getting rather used to these laws, but some people seem to be getting used to them a bit too keenly.

Discussing this issue earlier today on the radio, The Guardian's Zoe Williams made the obvious point that the more undesirable things we make illegal the better society will be. Like many observations of this kind, though, it may be obvious but it's also bonkers. It's one thing to not mind a law on cigarette packaging that tries to reduce the number of smokers - let's face it, it's not the worst law of the land. But it's quite another to say that the more undesirable things we make illegal the better society will be - which is, alas, a sentiment shared by many EU officials.

It's a slippery slope, because crime, like most things, involves a trade-off where if you get more of one thing you get less of other things. Deterrence and punishment are good things, but they don't come for free, therefore it is possible to have them in excess. Crime would be a lot lower if every road in the UK had its own designated police squad, but no one thinks that's a price worth paying.

If you make something illegal you automatically impose a cost on society - and that cost is borne by everyone involved in deterrence and prevention, but also in a small part by victims of other crimes too (the additional resources used preventing or punishing some crimes come at the cost of preventing or stopping other crimes).

Naturally the cost of catching criminals increases when there are lots of offenders, so when you decide to make something illegal you will find that if it is common it is going to be costly. Therefore calling something a crime means it ought to be efficient in terms of prevention and punishment. A crime that produces a net cost to society of £3 per person is not worth preventing if it costs £7 per person to enforce it.

A long standing debate has been about drug-legalisation. Increased enforcement of drug crimes raises the cost of taking drugs, but also the cost of dealing with drug users. It also raises the street price of drugs too, because if buying and selling drugs is a crime it increases the risk for both parties. Because drug demand is usually inelastic there will be increased crime for the purposes of buying drugs too.

Given that both drug sellers and drug buyers do not have the option of calling the police when deals go bad or when there is violence or theft associated with the transactions (drug gangs defending turf, extorting money from weak buyers, etc), there is naturally a lot of extra crime associated with drugs that wouldn't be there if it were legal, which increases drug prices too. And if there is inelasticity of demand then those increased prices won't decrease demand all that much.

Whichever way you cut the cloth, it just isn't the case that the more undesirable things we make illegal the better society will be. As I explained in this Blog post, some of the things people trivialise as simply 'undesirable' are things that millions of people can quite easily enjoy in moderation, whereas as we've seen above (plus with countless other examples I could give) many laws are just too costly to enforce and administer, and many are too oppressive to our liberties to contemplate.