Thursday, July 12, 2012

Soda, Freedom, Beer, Prohibition, Carports, Slippery Slopes, and the Cuckoo's Nest

-- Posted by Neil H. Buchanan

In my latest Verdict column, I discuss the controversy over New York City Mayor Michael Bloomberg's proposed regulation of the size of soda drinks that can be sold in the city. I argue that the proposal is hardly perfect, but that it is overall a good idea. I also argue that the breathless screams of "nanny state" and all the usual "What's he gonna take away from me next?" claims -- reactions that are, of course, being stoked with big-money campaigns from the soda companies -- are based on absurd assertions about what counts as liberty and the loss thereof.

The underlying problem here is a severe public health crisis, which affects children as well as adults. As usual, however, given the current political environment, claims of slippery slopes and losses of freedom are being used as cynical ploys to defeat every effort to fight that public health problem.

As it happens, I am in New York right now, attending a tax policy conference. At last night's dinner for the economists and law professors who are participating in the conference, the subject of Bloomberg's proposal came up among a group of four of us (one other economist, and two other law professors). All three of my dinner companions were genuinely shocked when I told them my views on this issue. All three had immediately, it seemed, adopted the popular view that Bloomberg is planning to take a little bit of everyone's freedom away -- again.

After some passionate (but, happily, never heated) conversation, I had explained the point in my then-forthcoming Verdict column that limiting single soda servings to no more than 16 ounces was nothing more than a standard-issue regulation -- and one that, especially for economists and tax policy scholars, could easily be seen as a tax. It does not prohibit people from buying large quantities of soda (and does not try to), but it does raise the effective cost of doing so, both by raising the money spent on 32- or 48- or 64-ounces of soda, and by raising the transactions costs (juggling multiple cups, or making multiple trips to the concession stand).

At that point, the other economist (who had been arguing very strongly against my position) suddenly perked up and said, "Oh, I'm coming around to your position. This is no different from taxing alcohol." That is right, of course, and it makes the point that the Bloomberg proposal is categorically unexceptional. We raise the price of beer, say, both for revenue-raising and behavior-changing reasons, without violating anyone's freedom or putting ourselves on a slippery slope to being forced to eat broccoli.

As I thought about the economist's comment, I realized that it was even more apt than I had initially appreciated. We do not merely tax beer and other alcoholic beverages, after all, but we also routinely restrict the way in which they can be sold. Age limits are the most obvious of those limits, but there are plenty of others. In the 1980's, for example, the state government in Massachusetts (and, probably, many other states) responded to changing attitudes about drunk driving by banning the sale of pitchers of beer in pubs, and by eliminating two-for-the-price-of-one specials at bars. Both banned practices were linked to the underlying public health crisis, in inducing people to drink more than they would. Neither new rule actually prevented a person from drinking a full pitcher of beer, or from buying two drinks. It did, however, raise the effective price of doing so. And freedom still reigned in the land.

One of the law professors in my conversation objected that, even though Bloomberg's proposal is not categorically different from the usual run of public health-oriented legal rules, he did not like any of those rules. The soda plan might not be a new type of impingement on freedom, he said, but it was yet another in a too-long line of freedom-reducing rules.

I responded by asking what other rules he would eliminate, and which he would keep. In a kind of live-by-the-slippery-slope-die-by-the-slippery-slope argument, I asked if it was OK for government's to require manufacturers of foods to list the ingredients on labels. Clearly, the companies did not want to do so, because it took a law to force them to do so; and they must constantly be monitored to make sure that they print accurate information.

If the proposed soda rule is in the same category as all other rules restricting the packaging and marketing of products, why is it worse than any other -- given that the public health justification for the soda rule is based on extensive scientific evidence about the damage from over-consumption of high fructose corn syrup. We are not talking about adopting this new rule just for the fun of it, after all. There is a public policy goal in mind.

Turning the slippery slope back around again, the tax professor asked me if there was anything that would bother me so much that I would view it as a violation of libertarian principles. In this area of life (that is, economic regulation), I said that I am content to rely on the democratic process. He then asked, "What about Prohibition?" I told him that Prohibition was a disastrous failure as a public policy, and I am glad that it was repealed. Pressing the point, he said that he was not asking if I rejected Prohibition because of its effectiveness or ineffectiveness, but whether I had a libertarian objection to it.

I said no. The public health crisis to which Congress was responding in passing Prohibition was enormous. Alcohol is a poison, and it was destroying people's health and lives in large numbers. (Part One of Ken Burns's recent documentary on Prohibition -- a documentary in which he took the position that Prohibition was a terrible public policy failure -- was called "A Nation of Drunkards." The evidence of the disastrous effects of high levels of drinking in the US in the 18th and early 19th centuries was stunning.) If it had turned out to be a public policy success, Prohibition would have been seen as a step forward for public health. Yes, it would have changed what people do. But the existence of society does that, too, in countless ways every day.

After the dinner, I was thinking further about the question of why I was not outraged by "another limitation on people's freedom." I then remembered an arguably bad law that affects my freedom as a property owner. The house that I bought in April had a carport attached to one side, extending over the driveway to within three feet of the side property line. Although the house is in great shape, the carport was a disaster -- several pieces of old and bent sheet metal, held up by unpainted boards.

I talked to a contractor about replacing the carport with something more structurally sound and attractive. He told me that the county in which I live has a regulation affecting carports, limiting their reach to no less than seven feet from a property line. The existing carport was grandfathered, because the ordinance had been passed after the carport was built. If I wanted to improve it, the contractor told me, I would have to simply replace the existing structure, without changing its design.

When I contacted the county permits office, however, the story was even less appealing. They told me that any change in the carport -- including even simply replacing decaying wood or damaged sheet metal, would constitute a change in the structure, bringing it under the purview of the 7-foot rule.

That rule seemed stupid to me, because it encourages people to hold onto eyesores, rather than improving the neighborhood. On the other hand, it does have the effect of preventing grandfathered items from being renewed in perpetuity. Between those competing goals, I might have gone in the opposite direction from the rule the county adopted, but I cannot say that my instinct is surely better. Most importantly, the law does limit my freedom as a property owner.

Even though I might think it is a dumb law (or, at least, one with perverse consequences), this does not strike me as a profound violation of my freedom that augurs the end of liberty as we know it. I know that there are those who take an extreme view that would reject all property restrictions -- nuisance regulations, zoning, and so on. Again, however, even with a much less pressing public policy rationale than fighting obesity, the ability of governments to pass such laws seems to me to be simply part of our recognition that living in society involves living by rules -- rules that are sometimes bad ideas, but that were passed through appropriately democratic procedures.

Still, I thought, none of this explains why I appear to have such a bland view of the slippery slope to tyranny. Maybe, a few years down the road, I will look back at the Bloomberg soda proposal as a moment when I should have said, "Enough!" Maybe the right way to think about each rule is not in isolation, but in the aggregate. At that point, however, Milos Forman reminded me why the wails about creeping socialism are misplaced.

Forman, who directed "One Flew Over the Cuckoo's Nest" and "Amadeus" (among many other great films), published an op-ed in yesterday's New York Times. Having lived for decades under the Soviet-backed regime in Czechoslovakia, Forman reminded readers that socialist regimes were not merely big governments with lots of rules, but a system of unearned privilege, enforced by a brutal regime. I know tyrants, Forman was saying, and Obama's no tyrant.

But are Obama and Bloomberg merely stalking horses for the complete tyranny to come? The two tyrannical regimes that rightly hold our historical attention are the Soviet Union and Nazi Germany. It is striking that neither of these regimes snuck up on people. There was no slippery slope to Leninism or Stalinism, and no slow crawl to National Socialism. Both systems advertised their freedom-killing plans loudly. They did not call their plans freedom-killing, of course, but they certainly were not coy about what they were doing.

The idea that we might wake up one day under neo-fascist rule, because we allowed soda sizes to be regulated, thus seems even more absurd in this light. Bad laws are sometimes passed. Sometimes they are repealed, and sometimes not. The important brake against loss of freedom is not preventing the government from legislating in entire categories of economic life, but simply to make sure that the political system is healthy enough to allow us to change course, when necessary.

Under such a regime, I will lose a lot of the time. But that is fine. If people do not want to take steps that would spare children from the ravages of obesity, then that is a tragedy. If they do, however, then they are not taking the next fateful step toward an Orwellian nightmare.

5 comments:

Eric said...

Interesting post and I disagree with little in it on principle except that the link between drinking large bottles of soda and obesity is tenuous at best so the move would seem to be more political than anything else. If the issue is quantity of sugar then I would assume consuming 96 oz size diet beverages would be exempt but juices like apple juice which have little nutritional benefit but lots of sugar would not. And why not insist on regulating the size of doughnuts? or limiting the length of cab rides since we know that exercise might do more to address obesity. Or portions of meals? Buffet ban, anyone? Legislation as a sop or palliative seems to make little sense.

Joe said...

Diet soda is not covered by the ban. Apple juice does have some nutritional value. There is not a ready supply of really large apple juices at movie theaters so the need to address it isn't there. Likewise, really big donuts aren't being sold at most theaters either.

I have no idea what practical way there is to limit cab rides and the issue here is not to address every single possible thing that might cause obesity, but a specific thing that can realistically be targeted and affects a lot more people, particularly children (who go to movies much more than they use cabs).

Yes, public health policy is a question of the possible. So, we have food standards, but do not try for perfection, since it's just not practicably possible.

The comment therefore doesn't seem to actually address how laws actually are made. The burden of proof demanded would potentially knock down a lot more than this.

CJColucci said...

I eat more often than I should at a burget joint that offers both 20-oz and 12-oz sodas, which you fill up yourself at the machine -- with free refills whichever size you buy. I realized that buying the larger soda is a waste of money since I'm going to refill anyway. After I realized this, I've noticed others doing the same wasteful thing. Is there a ragtional economic explanation for this?

Neil H. Buchanan said...

Thanks to Joe for his arguments, which I find completely convincing.

In response to CJCollucci's question, the cynical answer is that there is ALWAYS a "rational economic explanation" for any behavior -- because one can always find a "rational" ex post explanation for any seemingly senseless act.

In this case, I think the standard rational-actor justification would be along the lines of either "bounded rationality" (i.e., it's too much bother to think through all of the choices with which we're faced), or an appeal to "transactions costs." On the latter, one can say (utterly tautologically, of course) that the "cost" of getting up from the table and refilling one's soda is evidently higher for those supposedly irrational consumers who buy the larger size.

That's not actually a scientific explanation, but we economists can sure make it sound like one!

Joe said...

The rational economic explanation to the question posed might be that people don't expect they will need to refill the 20oz but 12oz is small enough* that might so they just get the bigger one with the assumption they won't get up. Though they might. The price differential isn't enough for them to care -- if they cared about the price, they wouldn't be buying fast food anyways.

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* for me personally, 12oz is often enough but I can often drink more. 20oz would be along the outer margins. I realize others regularly drink larger and I have myself at times.