Friday, 31 May 2013

Introducing Lifestyle Economics

I'm off on holiday for a week, but before I do I should give you a belated introduction to Lifestyle Economics. For those who don't know, I'm now working full time at the Institute of Economics where I'm writing about all my favourite topics of drinking, smoking, food and gambling.

Recent publications include The Proof of the Pudding and The Crack Cocaine of Gambling? There will be more to come as long as there are puritans, killjoys, authoritarians and busybodies to write about. And this—cross-posted from the Lifestyle Economics webpages—is why...

If market liberals stand idly by as the state sets prices, restricts commercial speech and demonises industries (and their customers), they will stand for anything. Under the pretext of ‘public health’, basic levers of competition—price, content and marketing—are increasingly falling under state control. With the advent of minimum pricing and plain packaging, the possibility of the government dictating how much a product sells for and what it looks like has become very real.

These developments are of no little concern to free marketers and social liberals. We are told, for example, that the obesity “epidemic” requires us to accept “a more invasive role for government.” The European Union openly discusses the need for “lifestyle regulation”. When New York mayor Michael Bloomberg decided that it should be against the law to sell a pint of Coca-Cola, a professor of medicine declared that: “The trivial issues of personal freedom in this case pale before the public health and welfare exigency.” Although it is predicted that one in three children born today will live to the age of 100, we are told that our health is at risk like never before from “non-communicable diseases” caused by our lifestyles. In the face of this “crisis”, we are expected to sacrifice liberty as if we were on a war-time footing.

Some would argue that the liberties under threat are of a minor nature, or are only of concern to the industries involved. But it is not the businessman who suffers most when prices rise and choice is restricted—he may find ways of profiting from both—but the consumer. And whilst it is inevitable that when authorities infringe on liberty, they begin with products and activities which are controversial or obscure, liberals recognise that there is an important issue of principle at stake that goes far beyond the unpopular and perhaps unsavoury test case. It therefore falls to liberals to defend “trivial issues of personal freedom”. If they do so, the bigger issues of personal freedom often take care of themselves.

This is not merely a philosophical position. The hazards and failures of state paternalism can be shown empirically, and the Lifestyle Economics workstream will put hard evidence at the heart of all its publications. Even if we accept that policy should be viewed through the narrow lens of ‘public health’, many of the interventions recommended do not work on their own terms. Every man-made law must overcome the law of unintended consequences and the law of demand. Time and time again, we see well-intentioned but ill-considered policies backfire by fuelling the black market, exacerbating poverty and encouraging more harmful consumption.

Adam Smith said that he had “never known much good done by those who affected to trade for the public good”. The same might be said today of those who purport to act in the public interest today, whether they be self-appointed protectors of ‘public morality’ or those who work in that nebulous and ever expanding industry of ‘public health’ which today provides the mandate for almost limitless state interference in what we eat, whether we smoke, how much we exercise, how much television we watch, how many items of fruit and veg we eat, how many units of alcohol we drink, whether a price is too low or too high, if a packet of crisps is too large or a pack of cigarettes too colourful, or a pint glass too tall.

Free market liberals have warned of the dangers of ‘slippery slope’ regulation for many years. They argued that the treatment being meted out to smokers would one day be dished out to consumers of any product which carries a risk to health or morals, however small. “Should the State dictate how many sausage butties I have for breakfast?” one prominent doctor asked rhetorically in the Times. “Should the Health Minister be e-mailing me about my five-a-day broccoli and bananas?” His answer? “Yes and yes.” “If the advertising of tobacco can be banned because smoking harms the individual,” wrote another public health professional, “should not all advertising be much more circumscribed because the consumption it engenders harms the planet?” With fizzy drinks, ‘junk food’, alcohol, meat, cars and sugar now being lined up as “the new tobacco” we start this programme from halfway down that slippery slope. All but the most pious abstainers from vice now find themselves in the cross-hairs of some single-issue pressure group or other.

When the writer George Ade reflected on how prohibition had conquered America in the 1920s, he recalled that “the non-drinkers had been organising for fifty years and the drinkers had no organization whatsoever. They had been too busy drinking.” Ordinary consumers are often too busy to defend their lifestyles against well-organised special interest groups. Businesses often spend too much time protecting their narrow interests in the short term and fail to see the bigger picture. The Lifestyle Economics workstream aims to show that bigger picture and to reaffirm that the interests of consumers are best advanced by the provision of accurate information, low prices and a wide range of choices in a competitive marketplace.




Tuesday, 28 May 2013

In a hole, Ireland keeps digging

It appears that Irish politicians are (yet again) lining up to be guinea pigs for one of tobacco control's back-of-a-fag-packet ideas. I've written a blog post at the IEA about Ireland's dismal record of failure at the hands of bone-headed anti-smoking zealots. Here's a taster...

Grandstanding politicians and headline-grabbing legislation are no guarantee of successful outcomes. Years of slavishly following the 'neo-prohibitionist' model of public health—which ignores the reasons why people smoke in favour of an obsesive focus on petty bans and restrictions—have conspicuously failed to have an impact on the smoking rate. To continue down the path of extremism in the light of this fact suggests the same cognitive dissonance that was displayed last week by Welsh anti-smoking campaigners who complained that smoking prevalence had barely fallen despite the most aggressive wave of tobacco control legislation in the country's history.


Do go read the rest.



Monday, 27 May 2013

Sweden: An apology

A message of apology from The Guardian:

In recent years this newspaper, along with the entire British left, may have given the impression that we viewed Sweden as a peaceful, egalitarian paradise which should be emulated by politicians around the world. Articles such as 'These riots would have never happened in Sweden', 'Everyone trusts each other in Sweden' and 'Swedish socialism is the way to get out of recession' may have unwittingly given readers the impression that we thought that the Swedish model of high taxation and cradle-to-grave welfare provision had produced the most harmonious and socially cohesive nation in the world.

We now realise, in the light of recent events, that there is no truth in any of the above. With Stockholm going up in flames and hordes of angry youths smashing everything in sight for seven days and nights, we would like to assure readers that Sweden is, in fact, a neo-liberal hellhole where pictures of Milton Friedman hang from every town hall and plutocrats rub the faces of the poor in the dirt. Contrary to what some may have inferred from our many articles on the subject, Sweden is actually a racist, intolerant and desperately unequal failed state run by right-wing ideologues which suffers from endemic police brutality. The recent riots were the inevitable consequence of the low-tax, low-spend free market fundamentalism with which we have always associated Sweden.

We are happy to set the record straight and apologise for any confusion. We trust that more recent, hastily written articles such as 'Right wing Sweden gets it comeuppance' and 'We always said this would happen' will cover our arse and reassure readers that we have always seen this country as an accident waiting to happen. With regards to articles published prior to last week, we would like to issue a mass clarification: when we wrote 'Sweden', we meant 'Norway'. Or, if it kicks off in Norway, 'Finland'.




The Murphmeister joins the chorus blaming inequality for the riots


That Swedish inequality in full




Saturday, 25 May 2013

Don't let them eat cake!



I have a new IEA publication out today: The Proof of the Pudding: Denmark's Fat Tax Fiasco (free download). Lobbyists for sin taxes on food and drink don't like to talk about what happened in Denmark. Rather like communism, their policies only work in theory and it is considered unfair to point to countries where they have been tried and failed. Nevertheless, the best natural experiment to date took place in Denmark. It was an economic and political failure for reasons that could easily have been foreseen. The Proof and the Pudding looks at exactly what happened.

I've written a blog post about this for the IEA. This is a taster...

Despite the unambiguous results of this natural experiment, public health campaigners in the UK continue to lobby for similar policies. Just four days after the Danes announced the abolition of the fat tax, the National Heart Forum called on the government to introduce a tax on foods that are high in salt, sugar and fat. Two months later, a coalition of 61 organisations demanded a 20p per litre tax on sugar-sweetened beverages (or - as they call them - ‘mini-health timebombs’). Most recently, the Academy of Medical Royal Colleges called for a 20 per cent tax on the same soft drinks. The Academy sheepishly mentioned that Denmark had experimented with ‘a slightly broader plan’, but did not acknowledge that the experiment had ended, let alone explain why.

The ‘evidence-based policy’ of these groups takes no account of what actually happens when their policies are tested in the real world. Concerns about job losses and the cost of living seem to be of no interest to them. Perhaps this is because they do not have to stand for re-election. For politicians, however, Denmark’s fat tax fiasco is a valuable reminder of how economically inefficient, regressive and unpopular such policies are. Denmark has since announced that it will abolish its hated fizzy drinks tax and is cutting beer duty for the same reason it dropped the fat tax - to ‘promote growth and employment’. Politicians should take heed of this real world evidence rather than listen to single issue campaigners and their optimistic computer models.

Please do go read the rest here. The full report is here.






Friday, 24 May 2013

Non-story of the day

From the Guardian:

Alcohol advertising on television to be reviewed

Ofcom has ordered a review into whether to cut the amount of alcohol advertising on TV, after finding that large numbers of children are tuning into shows such as The X Factor and Britain's Got Talent, which are aimed at more adult audiences and could potentially carry alcohol ads under existing rules.


OMG! Children are seeing alcohol advertisements on The X Factor and Britain's Got Talent!

Ofcom also found that the viewing habits of children have changed, with much of the television being watched by under-18s aimed at adult audiences.

Yes indeed. The X Factor and Britain's Got Talent are the best examples of this. Something must be done.

For example, Ofcom research shows he most watched shows among four- to nine-year-olds is Britain's Got Talent and The X Factor, which under existing TV ad rules can run alcohol ads.

Kids are watching booze ads on The X Factor and Britain's Got Talent! Won't someone please think of the children?

However, a spokeswoman for the shows pointed out that while they are allowed to carry alcohol advertising under existing rules, neither does.

Oh.

Sounds like self-regulation is working just fine, but let's not allow that to spoil a good story.

Science versus public health

Back in January, I wrote about the research that shows that being overweight does not increase mortality risk and may reduce it. This has been shown many times and a large meta-analysis of 97 studies, put together by Katherine Flegal et al. and published in JAMA, appeared to confirmed it.

Cue panic from the public health lobby who feared that the 'obesity epidemic' and all its limitless possibilities for social engineering were in jeoprady. In an astonishing outburst against a fellow academic, the longtime foe of 'Big Food', Dr Walter Willett, said:

"This study is really a pile of rubbish and no one should waste their time reading it."

As I said at the time...

How heartening it is to see the spirit of intellectual enquiry thriving at the Harvard School of Public Health. Perhaps Dr Willett and his friends will make a bonfire out of copies of the Journal of the American Medical Association and dance around it.

Willett and friends did not quite build a bonfire but, as Nature reports this week, they did go to the effort of organising a kangaroo court at which Flegal was tried for her crimes against public health hysteria.

Willett later organized the Harvard symposium—where speakers lined up to critique Flegal's study—to counteract that coverage and highlight what he and his colleagues saw as problems with the paper.


The problem for the Willetts of the world is that Flegal's study was pretty sound and a growing number of non-fanatical scientists are coming to accept that being overweight is not a serious health problem. There are potential confounders, including the fact that smokers tend to weigh less than nonsmokers, but—as with the 'sick quitter hypothesis' and alcohol consumption—the theory has stood up to every challenge and remains robust.

More and more studies show that being overweight does not always shorten life — but some public-health researchers would rather not talk about them.

...the most contentious part of the debate is not about the science per se, but how to talk about it. Public-health experts, including Willett, have spent decades emphasizing the risks of carrying excess weight.

Studies such as Flegal's are dangerous, Willett says, because they could confuse the public and doctors, and undermine public policies to curb rising obesity rates.

“There is going to be some percentage of physicians who will not counsel an overweight patient because of this,” he says. Worse, he says, these findings can be hijacked by powerful special-interest groups, such as the soft-drink and food lobbies, to influence policy-makers.

Just take that in for a moment. What kind of scientist talks like this? The truth will undermine our political activity! The food industry will use scientific facts to oppose us! Too bad, Walter. Policy is supposed to be based on the facts, remember?

But many scientists say that they are uncomfortable with the idea of hiding or dismissing data — especially findings that have been replicated in many studies — for the sake of a simpler message.

That's reassuring, up to a point. It's kind of worrying that a scientific journal needs to point that out to its readers, but that's what thirty years of 'public health' research has done to science. And I'd be more reassured if it said "most scientists" rather than "many scientists".

Willett says that he is also concerned that obesity-paradox studies could undermine people's trust in science. “You hear it so often, people say: 'I read something one month and then a couple of months later I hear the opposite. Scientists just can't get it right',” he says.

Once again, too bad. Zealots decide what to believe early in life and then stick to it regardless of the facts. Scientists don't (or, as Nature says, "many scientists" don't). As Keynes said, when the facts change, I change my mind. Are we supposed to seal the scientific consensus of 1990 in concrete just so you could fight your childish battle with the soda industry?

“We see that time and time again being exploited, by the soda industry, in the case of obesity, or by the oil industry, in the case of global warming.”

Boo-hoo.

Be under no illusions about what these people are up to. They are prepared to defame academics and misrepresent data in a conscious bid to mislead politicians and manipulate the public. They are not just prepared to do this, they have already done so.

This is the problem with mixing science and politics and it is endemic in the sordid oxymoron of 'public health'. Science wants to inform. Public health wants to manipulate, control and socially engineer. The two aims are incompatible. Public healthists believe they are fighting a war, and truth is always the first casualty.

I recommend reading the Nature article in full as well as the accompanying editorial. It gives an insight into how laughable is the idea of evidence-based public health policy.




Thursday, 23 May 2013

The curse of The Spirit Level strikes again

In August 2011, there were three nights of rioting in London with cars set alight, police officers attacked and shops looted. It was triggered when the police shot a man dead in Tottenham but rapidly became a riot for its own sake as it spread to other UK cities.

This orgy of disorder gave every chin-stroking intellectual an opportunity to speculate about its "root causes". Whatever they blamed—bad parenting, "austerity", poor education, unemployment, 13 years of Labour misrule, one year of Tory misrule or Mrs. Thatcher—the "root cause" was invariably the thing that the intellectual had been warning about for years.

For Wilkinson and Pickett, authors of The Spirit Level, that thing was income inequality...

The poison of inequality was behind last summer's riots

A year on from the riots, the government is still failing to identify their underlying causes

... But how does this social poison work? It makes some people look as if they are worth much more than others – not just a little bit more, but anything from supremely important to almost worthless.

Wilko and Pilko said that some CEOs are paid 300 times more than junior employees and that this creates "fears of inadequacy" which lead to violence. It is, therefore, impossible for Britain "to tackle the social ills contributing to the riots without reducing inequality."

Basically, antisocial societies cause antisocial behaviour. Greater inequality weakens community life, trust gives way to status competition, family life suffers, children grow up prepared for a dog-eat-dog world, class divisions and prejudices are strengthened and social mobility slows.

If only we lived in an egalitarian paradise like Sweden, this sort of thing wouldn't happen, eh?

From the BBC...

Riots grip Stockholm suburbs after police shooting

Rioters have lit fires and stoned emergency services in the suburbs of Stockholm for the third night in a row after a man was shot dead by police.

Incidents were reported in at least nine suburbs of the Swedish capital and police made eight arrests.

On Sunday night, more than 100 cars were set alight, Swedish media report.



... On Tuesday night, cars were torched in western and southern Stockholm, and stones were thrown at police officers and firefighters. One area affected, Rinkeby, saw similar rioting in 2010.

Kjell Lindgren of the Stockholm police told Aftonbladet newspaper that the unrest had spread from the original rioting in Husby.

"It feels like people are taking the opportunity in other areas because of the attention given to Husby," he said.

Earlier on Tuesday, Prime Minister Reinfeldt said: "We've had two nights with great unrest, damage, and an intimidating atmosphere in Husby and there is a risk it will continue."

And, alas, this carbon copy of the London riots has continued...

Stockholm restaurant torched as riots spread

A fourth night of unprecedented riots in Stockholm has seen unrest spread, with a restaurant and up to 40 cars burnt, police told the BBC.

... The Stockholm police spokesman said rioting had occurred in both deprived parts of the city and parts that would be considered "normal".

"My colleagues say the people on the streets are a mixture of every kind of people you can think of," he added.

"We have got Swedes, we have got very young people, we have got people aged 30 to 35. You can't define them as a group.

"We don't know why they are doing this. There is no answer to it."

Swedish sociologists are no doubt already claiming that this could have been averted by higher taxes and more generous welfare payments.


UPDATE

I have no idea who or what "community activists" are but they're blaming it on inequality already...

...community activists blamed high youth unemployment and recent cuts to public services in Husby and the other affected areas.

"This is the kind of reaction when there isn't equality between people, which is the case in Sweden," said Rami al-Khamisi, a law student and founder of Megafonen, a community rights organisation.