External influences such as air pollution are often cited as examples of problems that can be effectively addressed by public policy. However, in the real world, two factors externality The following points should be emphasized as justifications for regulation:
- transaction costs
- motivated reasoning
Recent articles by Geoffrey Kabat reason magazine It helps explain both of these issues. In 2003, Kabat and James Engstrom published a study showing that second-hand smoke had no statistically significant effect on mortality. According to Kabat, the response to their paper is a classic example of motivated reasoning.
Because the conclusion overturned long-held common sense, State and local prohibitions Our research on smoking in public places understandably generated controversy in the public health community. But the ferocity of attacks on us on the pages of medical journals, even as we are convinced that our research must be wrong, usually provides concrete evidence of a fatal error. by critics who could not, and vividly illustrates what can happen when policy preferences change. Arguments over the status of doctrine override rational scientific debate. . . .
Exposure to ETS is known to cause eye and throat irritation and worsen existing respiratory illnesses. Moreover, it is simply unpleasant for many people (including me). However, evaluating claims that ETS is potentially lethal requires a sober examination of the available scientific evidence.
Another example of motivated reasoning is that smokers pay higher taxes due to public health spending, ignoring the countervailing fact that smokers live much shorter lives and thus collect less public pensions. It happens when people complain that something happens. There are good reasons to be annoyed by smoking, but increased financial costs are not among them.
Kabat points out that new scientific research has come to much the same conclusions regarding second-hand smoke.
a recent research American Cancer Society (ACS) researchers make that point by showing that, contrary to what critics claim, the cancer risk posed by ETS is likely negligible. The authors present their shocking results without mentioning them, but they encourage anti-smoking activists and public health officials to revisit a debate that has long been mistakenly considered settled. This may reflect that they are passive.
Another problem with second-hand smoke legislation is that it ignores the issue of transaction costs. Ronald Coase We show that public policies to address externalities are only necessary when negotiating a private solution to a problem involves high transaction costs. Second-hand smoke is a problem almost exclusively in indoor environments. This means that the owner of the property where smoking is occurring can most easily address the problem.
Governments can regulate second-hand smoke in government buildings, and private owners can regulate second-hand smoke in privately owned buildings. There is no clear basis for the government to regulate activities on private land. Property owners already have an incentive to regulate second-hand smoke whenever the benefits outweigh the costs.
This does not deny the existence of externalities that reflect market failures. I support a carbon tax to combat global warming. But we see many examples of ambitious reasoning even on this issue that cannot be easily addressed by the private sector. Proponents of “degrowth” appear to be motivated by a distaste for modern industrial society, and use global warming as an excuse to push for a return to a simpler past. A carbon tax is not an attractive solution for those with such an agenda, as it would allow society to deal with global warming without giving up all modern conveniences. For some degrowth advocates, the efficiency of carbon taxes is a bug, not a feature.
