# On the Governing of Externalities **URL:** \ **Category:** Great Debates\ **Created:** [March 28, 2018, 3:05pm UTC](https://boards.straightdope.com/t/on-the-governing-of-externalities/811354 "2018-03-28T15:05:43Z")\ **Posts on this page:** 6\ **Page:** 5
**Author:** ![WillReadmore](https://avatars.discourse-cdn.com/v4/letter/w/6f9a4e/32.png) [@WillReadmore](https://boards.straightdope.com/u/WillReadmore)\ **Post date:** [April 1, 2018, 9:41pm UTC](https://boards.straightdope.com/t/on-the-governing-of-externalities/811354/81 "2018-04-01T21:41:20Z")
> [@Measure\_for\_Measure](#): > > By way of clarification, that’s not really utilitarianism: utilitarianism doesn’t boil down to majority rule. > > Benefits of killing sheep: Meal for 2 wolves. > Costs of killing sheep. One sheep dies. > > A utilitarian framework doesn’t rely on majority rule. Costs to one party (the sheep) can easily outweigh benefits to two (the wolves). > > ## I think what you are describing is utilitarianism based upon ordinal utility. While there are [moral frameworks following such rules](https://en.wikipedia.org/wiki/Ordinal_utility) (i.e. a good portion of undergraduate welfare economics) the exercises tend to favor free markets. > > Let’s present a contrast with utilitarianism as commonly practiced. Placing a tax on cigarettes will reduce smoking by X. That will save Y lives. That’s the benefit. The costs of such a plan are shown in changes in after-tax income inequality. The reduction in economic freedom might get a mention, but it doesn’t warrant inclusion in any serious way; readers are implicitly encouraged to set it aside.\* > > I’m not saying that’s a great argument. I’m saying that the framework is common and tends to favor sheep over wolves. For better or worse. > > That said, cost benefit analysis is hardly the primary determinant of public policy. Not at all. > > - ETA: not quite. Economic freedom gets a mention when contrasting prohibition with taxes. Since this thread is on externalities perhaps it should be mentioned that the benefit of taxing cigarettes goes beyond saving the life of the potential smoker. Those costs can include healthcare (some of which is paid for by nonsmokers, especially with indigent care) and in the depreciation of every environment where it is allowed - corporate work places, public venues, etc. I think we can’t dodge the costs to individuals who are impacted by second hand smoke, either. ---
**Author:** ![eschereal](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/eschereal/32/18939_2.png) [@eschereal](https://boards.straightdope.com/u/eschereal)\ **Post date:** [April 1, 2018, 9:51pm UTC](https://boards.straightdope.com/t/on-the-governing-of-externalities/811354/82 "2018-04-01T21:51:27Z")
The current environment has driven smokers completely outside (or into their own cars and homes). People used to smoke everywhere. Restaurants, airplanes, grocery stores. There were no restrictions, other than maybe elevators, movie theaters and hospitals. It sure seems a lot nicer the way it is now. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [April 1, 2018, 10:43pm UTC](https://boards.straightdope.com/t/on-the-governing-of-externalities/811354/83 "2018-04-01T22:43:01Z")
My point is that the freedom of the smoker gets short shrift in cost/benefit analysis - though not in the setting of public policy. In the latter, majoritarian considerations dominate, IMHO. Fun fact: smoking was a net win for the tax payer. Sure Medicare had to pay for lung cancer treatments. But that’s moving end of life care forward. In fact smoking helps Medicare’s solvency (as well as that of social security), since those dying in middle age never join the program. [http://www.nber.org/chapters/c11584.pdf](http://www.nber.org/chapters/c11584.pdf) : [INDENT][INDENT] …smokers “save” the Social Security system hundreds of billions of dollars. [/INDENT][/INDENT] The preceding fun fact has nothing to do with utilitarianism though. ETA: Smoking admittedly is a poor example: it was such a huge problem that basically every angle was addressed in the literature. But for many (most?) issues, analysis begins and ends with lives gained and lost. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [April 1, 2018, 11:34pm UTC](https://boards.straightdope.com/t/on-the-governing-of-externalities/811354/84 "2018-04-01T23:34:11Z")
> [@Measure\_for\_Measure](#): > > By way of clarification, that’s not really utilitarianism: utilitarianism doesn’t boil down to majority rule. > > Benefits of killing sheep: Meal for 2 wolves. > Costs of killing sheep. One sheep dies. > > A utilitarian framework doesn’t rely on majority rule. Costs to one party (the sheep) can easily outweigh benefits to two (the wolves). It’s a simplified example, but the analogy holds. If all three are starving to death, then a utilitarian argument would say that the sheep should be sacrificed for the greater good. I’m saying that’s bad. It’s the same thing about sacrificing one child to save 100 others - also bad. > [@](#): > > Let’s present a contrast with utilitarianism as commonly practiced. Placing a tax on cigarettes will reduce smoking by X. That will save Y lives. That’s the benefit. The costs of such a plan are shown in changes in after-tax income inequality. The reduction in economic freedom might get a mention, but it doesn’t warrant inclusion in any serious way; readers are implicitly encouraged to set it aside.\* I don’t concede the example where the economic freedom or even freedom to choose is set aside, where the variables of costs and benefits are pre-defined - of course a predictable result occurs in that instance… That’s question begging. To the person who values economic freedom much greater than Y lives and other related costs that would be avoided, then the calculus changes quite a bit. I think laws that require helmets for motorcycles are a cleaner example. The costs of not wearing a helmet are primarily increased medical due to greater severity during accidents (ignoring the reduction due to increased fatalities), and lost productivity in greater clean up efforts after an accident. The benefits of not wearing a helmet are (guessing) comfort, style, cost, etc. The benefits of requiring helmets is the avoidance of those increased costs and the cost is reduction of personal freedom. I don’t ride a motorcycle and don’t ever expect to, and if I did I’d wear a helmet. I’m still opposed to laws that require them. ---
**Author:** ![wolfpup](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wolfpup/32/10618_2.png) [@wolfpup](https://boards.straightdope.com/u/wolfpup)\ **Post date:** [April 1, 2018, 11:40pm UTC](https://boards.straightdope.com/t/on-the-governing-of-externalities/811354/85 "2018-04-01T23:40:16Z")
> [@Bone](#): > > It’s a brilliant example of governmental mission creep. Some problem presents itself and government involves itself in solving or addressing it by spending taxpayer money. And since taxpayer money is being spent, that’s justification for further involvement. This can spiral to the point where the government can force people to buy and eat broccoli in the name of health outcomes, or purchase GM cars in the name of saving the economy. > > I think it’s fair to say there isn’t a hard and fast limit, no bright line where the public good should supersede personal freedom - but the scale should be heavily and severely tilted towards personal freedom. Part of personal freedom is being comfortable with a certain level of people suffering for their poor choices. I’m as much a supporter of personal freedoms as anyone, and I basically agree with your last paragraph. What I disagree with is the first part, the “governmental mission creep” hypothesis, which is just another term for the “slippery slope” argument. Strong values enshrining personal freedoms, whether cultural and unwritten or set down in a constitution, can forestall any such slippery slopes while enabling justified government programs such as, for example, universal public health care. In can give you some good real-world examples. As you know, where I live we have universal single-payer health care, paid for by taxes, at the same cost to everyone at any given income level. The question has arisen from time to time whether there should be extra costs or limitations in the public health care system on those who (a) smoke, (b) drink excessively, or even just (c) those who live unhealthy lifestyles, according to various definitions of “unhealthy”. To conservatives and those who hold libertarian views on personal freedoms, this type of health care system would seem to be a major risk for government meddling in personal lifestyle choices, because there are major potential costs to the public purse. But like a lot of other fears promulgated by the right, it’s never happened. The answer to government involvement in those health risk factors through the health care system has always been “absolutely not” to all of them, mostly because we are, in fact, a free society, and also, as a purely pragmatic matter, because a community-rated universal health care system simply does not and cannot operate that way. Indeed it’s private and not public insurance that is so irksomely meddling, that asks you all kinds of questions about your health background to assess your risk, and might even deny your claim if they decide that you weren’t quite truthful enough. To be sure, the government has taken reasonable steps against health risks as a matter of public policy, but that’s completely independent of existing investments like the health care system. Tobacco and liquor are taxed as a disincentive to excessive consumption, advertising is banned or restricted, and ad campaigns on their risks and on the benefits of healthy lifestyles are occasionally run by public agencies. That these policies to some degree are more or less universal in most industrialized countries including the US should be evidence that it doesn’t have any association with entrenched government programs like health care. In all of these places, universal health care paid by the public or private health care paid privately, if you want to drink and smoke and eat terrible foods and lead an unhealthy sedentary lifestyle, knock yourself out – in a free society no one is going to stop you. Again, it’s actually the private systems that may ding you extra costs to reflect higher risks and thus perhaps discourage you financially – government-run public systems will do nothing at all. It’s really quite ironic where the greater freedoms lie, when you think about it. > [@septimus](#): > > I’m afraid right-wingers will turn this argument against you. That publicly-funded healthcare will be “on the hook” for unhealthy choices made by the underclass is an argument against that public funding! I’ve heard this, too, hence my points above. ---
**Author:** ![nate](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nate/32/13085_2.png) [@nate](https://boards.straightdope.com/u/nate)\ **Post date:** [April 2, 2018, 12:15am UTC](https://boards.straightdope.com/t/on-the-governing-of-externalities/811354/86 "2018-04-02T00:15:37Z")
> [@Bone](#): > > I’m not making that assumption - not sure why you think that’s a necessary element to the argument. > > And while I think a lot of useful knowledge has come from government funded studies, that doesn’t mean that without them there would be no privately funded studies. I’m not even clear how government funded studies is relevant. My post quoted your statement about drilling in your backyard affecting your neighbor’s property, and someone who consumes an unhealthy diet and needs expensive healthcare being externalities. I’m stating that we only learn about externalities through studies and those studies rarely have profit motive, and if they did you probably wouldn’t want to trust them. My statement is that we do not have perfect information and externality costs are difficult to prove and therefore, as a society, we need this information to be discovered by a those with no profit motive and the standards created from these studies enforced by a central authority. [Previous page](https://boards.straightdope.com/t/on-the-governing-of-externalities/811354.md?page=4)