Quotulatiousness

November 7, 2018

Quebec cabbies sue provincial government for declining revenues and lost capital cost due to Uber competition

Filed under: Business, Cancon, Law, Liberty — Tags: , , , , — Nicholas @ 03:00

William Watson makes the argument that it’s the ripped-off taxi customers who should be suing, not the cabbies:

There are at least two problems with the court case, one technical, one regarding fairness. The technical one: Cabbies want compensation for both declining revenue and the capital loss on their permits. But that’s double-counting. The permit is an entitlement to earn the revenues. Its value falls only because expected revenues have fallen. Give operators one or the other, if the law eventually says you must, but not both. They can have their compensation but not eat it, too.

The fairness question concerns where the taxi cartel’s surplus came from all these years, which is no mystery: It came from taxi users. But what are we, chopped liver? Why don’t we start a class action suit of our own to get back all the money ripped off from us over decades of artificially restricted taxi supply?

Basic fairness would certainly require that. Unfortunately, the law may not. The taxi drivers’ case against the government is that, despite statutes on the books about needing a taxi permit in order to provide taxi services, when Uber came along the government decided not to enforce the law. That created two classes of taxi driver: Uber drivers, whom the government turned a blind eye to, and regular taxi drivers, whom it continued to subject to close regulation. That double standard was an unfairness, yes, but a minor one compared to the long-lasting aggravated rip-off of consumers.

Bottom line: Taxi drivers lobby for and get a law allowing them to overcharge their customers. When in a bout of good policy sense (a “Taxi Spring” you might say) the government decides not to enforce it, the taxi drivers set about suing taxpayers instead. However unfair that may seem — and it’s exasperating! — I suppose, in the end, supply-and-demand must take notice of the principle of rule of law.

November 4, 2018

QotD: LEED indulgences

Filed under: Bureaucracy, Business, Environment, Government, Quotations, Religion — Tags: , — Nicholas @ 01:00

I am not religious but am fascinated by the comparisons at times between religion and environmentalism. Here is the LEED process applied to religion:

  • 1 point: Buy indulgence for $25
  • 1 point: Say 10 Our Fathers
  • 1 point: Light candle in church
  • 3 points: Behave well all the time, act charitably, never lie, etc.

It takes 3 points to get to heaven. Which path do you chose?

Warren Meyer, “When Sustainability is not Sustainable”, Coyote Blog, 2013-07-30.

November 3, 2018

“[I]t makes no sense to punish Americans with tariffs in order to convince foreign governments to stop punishing their citizens with tariffs”

Filed under: Economics, Government, Politics, USA — Tags: , , , , , — Nicholas @ 03:00

Veronique de Rugy discusses the mercantilist errors that still influence politicians and voters on free trade policies:

There are many changes to domestic policy that could help protect Americans from the predations of protectionism. For instance, when considering whether or not to grant U.S. firms “trade remedies,” such as countervailing duties, officials should have to take into account the consequences for American consumers of any tariffs they’re thinking of imposing. Policy makers aren’t currently required to do that, and one agency — the International Trade Commission—is actually forbidden from doing so.

This must change. Recent developments prove that it’s dangerous to simply assume all U.S. presidents and a critical mass of legislators will remain committed to the principles of reciprocal free trade. Buyers of imported goods or products made with imported materials — which, to be clear, is all of us — can’t depend on the economic acumen of the policy makers deciding whether or not to impose tariffs. Instead, consumer protections need to be built into the regulatory process. Because there are virtually always more workers in consuming industries downstream of the trade barrier than there are in the sector receiving the protection, a requirement to take the harm to consumers into consideration would make it very hard to impose protectionist policies.

Some free trade sympathizers have floated the possibility of Congress reclaiming its power to impose tariffs from the White House. Sen. Mike Lee (R–Utah), for instance, has introduced the Global Trade Accountability Act, which would require congressional approval for tariff increases or other “unilateral trade actions.” Unfortunately, if this otherwise well-designed bill became the law of the land, it would be akin to guarding the hen house with a hungry dog instead of a fox.

An extensive literature shows that moving tariff-setting policy away from Congress (and its parochial, locally focused interests) was a critical part of reducing protectionist influence in Washington. President Trump is terrible on this issue, but in general, a president is more likely than are members of Congress to consider the interest of the entire country — and, hence, to support broad trade liberalization.

November 2, 2018

Operation Choke Point

Filed under: Bureaucracy, Business, Government, USA — Tags: , , — Nicholas @ 03:00

In Forbes, John Berlau details how expansive regulatory powers and vindictive bureaucrats make doing business in the United States less “free enterprise” and more “shame if something were to happen to it”:

Every Halloween, there exists the temptation for bloggers, pundits, and commentators to describe routine events in the news with adjectives like “scary” and “frightening.” Sensitive to sounding clichéd or inflammatory, I try usually to avoid using such terminology in my descriptions of the policy process.

Yet after reading through new documents introduced into a lawsuit stemming from the Obama administration’s “Operation Choke Point,” I find that “scary” and “frightening” actually fit. These documents show that powerful bank regulatory agencies engaged in an effort of intimidation and threats to put legal industries they dislike out of business by denying them access to the banking system.

While I am often outraged about things the government does, now I am truly scared and frightened about the ability of government bureaucrats to shut down arbitrarily whole classes of businesses they deem to be “politically incorrect.” As one who champions the FinTech sector and the benefits it can bring, I also worry that such powers may be uses to shut down innovative new industries, such as cryptocurrency, that carry some perceived or real risks.

Choke Point was a multi-agency operation in which several entities engaged in a campaign of threats and intimidation to get the banks that they regulate cut off financial services – from providing credit to maintaining deposit accounts — to certain industries regulators deemed harmful a bank’s “reputation management.” The newly released documents – introduced in two court filings in a lawsuit against Choke Point — show that the genesis of Choke Point actually predated Barack Obama’s presidency, and began when President George W. Bush was in power.

[…]

When the Obama administration came into power, the FDIC would expand the definition of “reputation risk” even further, and other federal agencies, bureaus, and departments would soon jump on the proverbial bandwagon. Much of Operation Choke point would again be accomplished by “guidance documents,” which my Competitive Enterprise Institute colleague Wayne Crews refers to as “regulatory dark matter,” since they have legal force but allow regulators to bypass the sunlight of the notice-and-comment process of a formal rule.

In 2011, an FDIC guidance document featured a chart of business categories engaged in what it called “high-risk activity.” These included “dating services,” “escort services,” “drug paraphernalia,” “Ponzi schemes,” “racist materials,” “coin dealers,” “firearm sales,” and “payday loans.” The FDIC would post this and similar lists in other guidance documents and on its web site.

A staff report of the House Government Reform and Oversight Committee puzzled over many of these categories. “FDIC provided no explanation or warrant for the designation of particular merchants as ‘high-risk,’” the report observed. “Furthermore, there is no explanation for the implicit equation of legitimate activities such as coin dealers and firearm sales with such patently illegal or offensive activities as Ponzi schemes, racist materials, and drug paraphernalia.”

October 28, 2018

QotD: Revolutionary price controls and the plight of Washington’s army at Valley Forge

Filed under: Economics, History, Quotations, USA — Tags: , , , , , , — Nicholas @ 01:00

By the end of 1775, Congress had already increased the nation’s money supply by 50 percent in less than a year, and state paper issues had already begun in New England. The Congressional Continental bills followed what was to become a sequence all too familiar in the western world: runaway inflation. As paper money issues flooded the market, the dilution of the value of each dollar caused prices in terms of paper money to increase; since this included the prices of gold, silver, and foreign currencies, the value of the paper money declined in comparison to them. As usual, rather than acknowledge the inevitability of this sequence, the partisans of inflationary policies urged further accelerated paper issues to overcome the higher prices and searched for scapegoats to blame for the price rise and depreciation. The favorite scapegoats were merchants and speculators who persisted in doing the only thing they ever do on the market: they followed the push and pull of supply and demand. In another familiar attempt to deal with the problems of inflationary intervention, they outlawed the depreciation of paper, or the rise of prices.

[…]

State and local governments presumed to know what market prices of the various commodities should be, and laid down price regulations for them. Wage rates, transportation rates, and prices of domestic and imported goods were fixed by local authorities. Refusing to accept paper, accepting them for less than par, charging higher prices than allowed, were made criminal acts, and high penalties were set: they included fines, public exposure, confiscation of goods, tarring and feathering, and banishment from the locality. Merchants were prohibited from speculating, and thereby from bringing the needed scarce goods to the public. Enforcement was imposed by zealots in local and nearby committees, in a despotic version of the revolutionary tradition of government by local committees.

Price controls made matters far worse for everyone, especially the hapless Continental Army, since farmers were thereby doubly penalized: they were forced to sell supplies to the army at prices far below the market and they had to accept increasingly worthless Continentals in payment. Hence, they understandably sold their wares elsewhere; in many cases, they went “on strike” against the whole crazy-quilt system by retiring from the market altogether and raising only enough food to feed themselves and their own families. Others reverted to simple barter.

Murray N. Rothbard, Conceived In Liberty, Volume IV, 1979.

October 19, 2018

Ontario’s lack of retail cannabis stores – “What have they been smoking at Queen’s Park?”

Filed under: Bureaucracy, Business, Cancon — Tags: , , , , — Nicholas @ 03:00

In the Financial Post, William Watson points out the weirdness of Ontario’s decision to delay the opening of legal cannabis stores until next Spring:

For several years now, dozens of dispensaries have been operating quite openly. (They call themselves dispensaries to further the narrative that, like your grandmother’s rye, marijuana is for medicinal purposes.) Only now, with pot use becoming legal, are these dispensaries being shut down — although Toronto’s chief of police says not right away, as he doesn’t have [the] person power to do it all at once.

If they don’t shut down, they may forfeit their chance at a licence to sell pot legally once licensed retail operations do finally start in the province on (when else?) April 1st of next year — 166 days after legalization. Why would they not be granted a licence? Not because they trafficked in marijuana when its use was strictly illegal, if seldom prosecuted. But because they continued to traffic in marijuana after it became legal but before the government gave them a licence, an offence that will be prosecuted slowly, if at all.

Silly me. I thought marijuana legalization would simply say that after a certain date the police wouldn’t arrest you for having such-and-such an amount of marijuana in your possession. End of story.

[…]

Countrywide, as the Financial Post’s Vanmala Subramaniam recently reported, a big roadblock to timely legal supply has been the need to seal products with federal excise revenue stamps. But there’s only one supplier and the stamps come without adhesive. Stamps! In 2018!

In American movies of the 1930s and 1940s, moonshiners and bootleggers waged war against “revenuers,” federal agents charged with levying excise taxes on booze. It seems the revenuers have now taken charge of Canada’s marijuana industry. You might plausibly argue that the former illegal market operated in the interests of consumers. There seems little doubt the new legal market will operate in the interest of governments, their unions and their revenue departments.

When cops did enforce the country’s no-toking laws, they could plausibly tell themselves they were doing it to protect young people and other innocents. Now when they enforce the laws they’re doing it to protect legally privileged producers against producers who find themselves offside with often arbitrary licensing laws. Protecting kids was one thing. Protecting cartels is quite another.

October 7, 2018

A measurable positive from the USMCA process

Filed under: Cancon, Law, Liberty — Tags: , , — Nicholas @ 03:00

Michael Geist points out that one of the aspects of the son-of-NAFTA deal will be to help Canadians exercise their freedom of speech online by providing a “Safe Harbour” provision similar to the one that US law provides:

Internet free speech is not typically an issue associated with trade agreements, but a somewhat overlooked provision in the newly-minted U.S.-Mexico-Canada Agreement (USMCA) promises to safeguard freedom of expression by encouraging Internet companies to resist pressure to remove content. My Policy Options op-ed notes the USMCA’s Internet safe harbour rule – modelled on U.S. law – remedies a longstanding problem in Canada that left large Internet platforms reluctant to leave third party content such as product reviews, blog posts, and social media commentary online in the face of unsubstantiated complaints.

Once implemented, Internet companies will benefit from assurances they will not face liability for failing to take down third party content or for proactively taking action against content considered harmful or objectionable. While the safe harbour provision does not apply to intellectual property, when combined with the preservation in the deal of the USMCA protects Canada’s notice-and-notice system for copyright, whereby rights holders can file complaints over alleged infringements but there is no takedown procedure for the removal of content. Taken together, the Canadian legal framework will encourage free speech, largely looking to court orders for mandated takedowns of content or good faith efforts by platforms to address harmful content.

The absence of a Canadian safe harbour rule has meant the same companies that require court orders prior to the removal of content for claims originating in the U.S., frequently take down lawful content in Canada based on mere unproven allegations due to fears of legal liability. Further, the absence of safe harbour protections creates a disincentive for both new and established services to use Canada to store data or maintain a local presence.

The Internet safe harbour approach originates from the earliest days of the commercial Internet. In 1996, the United States enacted the Communications Decency Act, legislation designed to address two emerging concerns: the online availability of obscene materials and the liability of Internet services for hosting third party content. The U.S. Supreme Court struck down the obscenity provisions on constitutional grounds, but the safe harbour remained intact and quickly emerged as a cornerstone of U.S. Internet policy.

September 29, 2018

The Ontario government’s amazingly sensible approach to legal cannabis

Filed under: Business, Cancon, Law, Liberty — Tags: , , , , — Nicholas @ 03:00

Chris Selley expresses what a lot of surprised people must be feeling after Premier Doug Ford’s government introduced startlingly mature and sensible rules for the distribution and sale of cannabis products in the province after the federal government’s legalization is enacted:

The Ontario government tabled its cannabis retail framework in the legislature on Thursday, and it only further repudiates the Frightened Communist model envisioned by the Liberals. The government will sell pot online, as before, and will maintain a monopoly on wholesaling. But the rest will be up to the private sector, under the control of the Alcohol and Gaming Commission. As it stands, there won’t even be a cap on the number of licences; a government official said Thursday they expect 500 to 1,000 applications right off the bat.

In response, OPSEU president Smokey Thomas beamed out a furious press release on behalf of his spurned members — er, sorry, on behalf of Ontario’s “municipalities and communities.”

“Unlimited stores and unlimited places to smoke will cause unlimited problems,” Thomas averred. “It’s outrageous. We’re going to become the wild west of cannabis and Sheriff Doug Ford is going to skip town, leaving communities and municipalities holding the dime bag.”

Thomas predicted Premier Ford would hand out retail pot licences to “Conservative insiders” and “corporate donors.” (Corporate donations are illegal.) He accused Ford of funnelling what by rights should be public profits into “private pockets.”

“If Ontario’s finances are truly as bad as Ford wants us to believe, why is he giving away the millions, maybe even billions, in revenue we’d get if cannabis sales were public?” he asked.

Does the government make money on cigarettes? On alcohol sold in bars and restaurants, at privately run LCBO agency stores and, of late, in supermarkets? Of course it does. Scads of it.

So it’s all quite ridiculous, as OPSEU press releases tend to be. But Thomas is not wrong when he argues the new approach is remarkably permissive. Perhaps most notably, whereas the Liberals’ proposed rules banned using marijuana in public, the PCs’ would allow you to smoke or vape it anywhere you can tobacco (though not in cars or boats). But it’s far less permissive than one might expect in other ways as well.

September 28, 2018

Ontario government lays out the path to a fully legal cannabis market

Filed under: Business, Cancon, Law — Tags: , , — Nicholas @ 03:00

There is going to be a gap between the federal legalization date next month and the beginning of legal sales from brick-and-mortar stores in Ontario in April:

With the legalization of recreational marijuana around the corner, the Ontario government has finally answered some of the most burning questions about where residents can officially buy and smoke pot.

A day before new pot legislation is set to be tabled, The PC government announced earlier today that starting Oct. 17, weed will be up for sale at private retail pot shops by April next year.

Doing away with the cap on the number of licensed cannabis stores in the province, the government is officially taking a free-market approach to what would previously have been an LCBO monopoly under the Liberal provincial government.

[…]

Until April, cannabis will be sold exclusively online, distributed through federal wholesalers and the government’s Ontario Cannabis Store.

The Alcohol and Gaming Commission of Ontario will be in charge of regulating the marketplace, including granting and revoking pot shop licenses.

Store owners will need to apply for a retail-operator license as well as a retail store authorization for every location they open, which will be limited to a set number, to prevent possible over-expansion, Walmart-style.

There will also be restrictions for federal cannabis growers, who will only be able to hold “a single retail license at a single production site located in Ontario,” said Ontario Attorney General Caroline Mulroney.

All currently existing pot stores who continuing to operate illegally after Oct. 17 will lose their right to ever apply for a license in the future, as will stores who have a history of dealing with organized crime and providing pot to minors.

Ontario’s new government agency, the Ontario Cannabis Retail Corp., will be in charge of handling online cannabis sales as well as wholesaling to private stores, who will potentially run the gamut from local pot shops to huge cannabis corporations.

There will be a minimum distance requirement between pot shops and schools set up in the future.

Any Ontario municipalities who don’t want pot shops on their turf — like Norfolk County in Southwestern Ontario, the first to vote no on cannabis storefronts — will have to opt out officially by Jan. 22, 2019, which they were previously barred from doing.

September 27, 2018

Revising the accredited investor rules

Filed under: Economics, Humour — Tags: , , — Nicholas @ 03:00

Alex Tabarrok summarizes a suggestion from Matt Levine on how to improve the rules for accredited investors:

Matt Levine has an excellent piece on accredited investor rules and his alternative:

  • Anyone can also invest in any other dumb investment; you just have to go to the local office of the SEC and get a Certificate of Dumb Investment. (Anyone who sells dumb non-approved investments without requiring this certificate from buyers goes to prison.)
  • To get that certificate, you sign a form. The form is one page with a lot of white space. It says in very large letters: “I want to buy a dumb investment. I understand that the person selling it will almost certainly steal all my money and that I would almost certainly be better off just buying index funds, but I want to do this dumb thing, anyway. I agree that I will never, under any circumstances, complain to anyone when this investment inevitably goes wrong. I understand that violating this agreement is a felony.”
  • Then you take the form to an SEC employee, who slaps you hard across the face and says “Really???” And if you reply “Yes, really,” then she gives you the certificate.
  • Then you bring the certificate to the seller and you can buy whatever dumb thing he is selling.

September 13, 2018

Mind Your Business Ep. 2: Aceable in the Hole

Filed under: Business, Technology, USA — Tags: , , , , — Nicholas @ 04:00

Foundation for Economic Education
Published on 11 Sep 2018

Believe it or not, parallel parking is not an impossible task. Meet Blake Garrett, the entrepreneur who is using VR to teach people how to drive, without actually getting behind the wheel.
____________
Produced & Directed by Michael Angelo Zervos
Executive Produced by Sean W. Malone
Hosted by Andrew Heaton
Original Music by Ben B. Goss
Featuring Blake Garrett

September 5, 2018

Mind Your Business Ep. 1: Breaking the Mold

Filed under: Business, Environment, Food, Health — Tags: , , — Nicholas @ 04:00

Foundation for Economic Education
Published on 4 Sep 2018

Join host Andrew Heaton as we profile the stories of interesting entrepreneurs from around the country for FEE’s newest series, Mind Your Business.

In this episode, we’ll meet Jeremy Umansky. He’s a chef with a true passion for unusual food and his unique brand of cuisine is making a big splash in the culinary world.

September 3, 2018

QotD: “Market failure”

Filed under: Economics, Government, Humour, Quotations — Tags: — Nicholas @ 01:00

It is not too much of an exaggeration to say that markets are considered to fail if and whenever they fail at achieving some ideal, while governments are considered to succeed if and whenever they succeed at achieving anything other than utter chaos and calamity.

Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2016-11-04.

August 30, 2018

“This is simply drivel. And it’s the standard Green Party phantasm written out again”

Filed under: Bureaucracy, Economics, Environment, Government — Tags: , , , , — Nicholas @ 05:00

Tim Worstall is not impressed with a new study out of Finland which recommends that the United Nations become much more involved in organizing and directing the lives of everyone on the planet … for our own good, of course:

We’ve another of those pieces of environmental drivel on offer to us. Here it’s the considered opinions of some Finnish knownothings on what is necessary to achieve the UN’s Sustainable Development Goals. The basis of which is that we should all prepare to be rather poorer. No, not because the Earth is running out of stuff to make us richer but because our Finnish knownothings are recommending that the UN take charge of things and forcibly make us poorer.

This is perhaps not the correct manner of running the global economy.

[…]

That’s all entirely drivel, of course. Capitalism doesn’t depend upon cheap fossil fuels nor even cheap energy. It’s just an economic system in which we have private property. Including the value added belonging to the people who own the property which adds the value. That’s really all it is too. Profit belongs to the people providing the capital – this is definitional by the way. For that’s what we define profit as, that part of the returns from an activity which go to those who provide the capital.

There is absolutely nothing at all which requires that energy, or any natural resource, be of any particular price nor level of price. All we are saying when we recommend capitalism is that the system seems to work better when those who make a profit get to keep it. Our economic definition of profit being when value of output is greater than the costs of inputs. Who gets those profits is definitional about capitalism. Any and every economic system is trying to produce profits. Because any and every economic system is trying to add value to inputs, trying to create value.

[…]

There’s a remarkable lack of reasoning as to why international trade needs to be limited or regulated. If we’re facing more expensive energy then we should be doing more of it, not less. But then perhaps those doing bio- and physics don’t know that Adam Smith pointed out we’d do better getting the wine from Bourdeaux rather than growing the grapes in Scotland. Or even that David Ricardo launched an entire subset of economics with his observation that trade uses fewer resources than non-trade. I mean, it is possible that they’re just ignorant of the most basic points here, isn’t it?

They’ve also not grasped that good life and economic growth part at all. No one actually producing economic growth – defined, as always, as an increase in the value being produced – does so in order to produce economic growth. They do it in pursuit of their definition of the good life. Economic growth is simply the aggregate of all those people trying to make their own lives better, their pursuit of that good life. The inverse is also true. If we leave people alone to pursue their own versions of the good life then economic growth is what we get. Our bio-p types seem unaware of the laissez faire argument. That we all get richer faster if left alone to our own visions of life?

Now, if this was just a few blokes in the Far North muttering to themselves among the trees of future toilet roll this wouldn’t matter. But this is serious advice to the United Nations? It’s about to become art of how world governance works? Dear God Above, what have any of us one to deserve this?

Try this for example:

    A key problem with carbon pricing has been that states, federations, or unions have not implemented it on a sufficiently high level, fearing industrial leakage to less environmentally-regulated countries. For this reason, many economists and politicians hope for global carbon pricing. But if we return to the four examples above, energy, transport, food, and housing, we can see that it would be highly unlikely that even global carbon pricing would guide economic activity in the right direction – at least with sufficient speed and breadth. As a policy tool, carbon pricing lacks the crucial element of coordinating a diverse set of economic actors toward a common goal. Individual actors would have an incentive to decrease carbon emissions, but they would still compete through their own business logics; there would be nothing to ensure that any one business logic would support the transition to sustainability on a systemic level.

Everyone on the planet economises on their carbon emissions because emissions are now more expensive. This does not work to coordinate everyones’ actions about carbon emissions? These people never have considered the role of the price system in coordinating human activities, have they? Not heard a single beanie about Hayek, the Pretence of Knowledge and all that?

Britain “forgets” to regulate e-cigarettes, youth smoking drops substantially

Filed under: Britain, Business, Health — Tags: , , , — Nicholas @ 03:00

Last month, Matt Ridley sang the praises of the regulators who didn’t regulate:

A selection of e-cigarettes
Photo by Ecig Click via Wikimedia Commons.

Britain is the world leader in vaping. More people use ecigarettes in the UK than in any other European country. It’s more officially encouraged than in the United States and more socially acceptable than in Australia, where it’s still banned. There is a thriving sector here of vape manufacturers, retailers, exporters, even researchers; there are 1,700 independent vape shops on Britain’s streets. It’s an entrepreneurial phenomenon and a billion-pound industry.

The British vaping revolution dismays some people, who see it as a return to social acceptability for something that looks like smoking with unknown risks. Yet here, more than anywhere in the world, the government disagrees. Public Health England says that vaping is 95% safer than smoking and the vast majority of people who vape are smokers who are partly or wholly quitting cigarettes. The Royal College of Physicians agrees: “The public can be reassured that ecigarettes are much safer than smoking.”

Lots of doctors are now recommending vaping as a way of quitting smoking. It is because of vaping that Britain now has the second lowest percentage of people who smoke in the European Union. The youth smoking rate in the UK has fallen from 26% to 19% in only six years.

How did this happen here? It’s partly the fault of the advertising executive Rory Sutherland; he is the Walter Raleigh of this revolution. In 2010, he walked into an office in Admiralty Arch to see an old friend, David Halpern, head of David Cameron’s new “nudge unit”, formally known as the Behavioural Insights Team. Sutherland pulled out an electronic cigarette he had bought online, and inhaled. By then, several countries including Australia, Brazil and Saudi Arabia had already banned the sale of electronic cigarettes — usually at the behest of tobacco interests or public-health pressure groups. California had passed a bill banning them, though Arnold Schwarzenegger, then the governor, had vetoed it. It looked inevitable that Britain would follow suit.

“I was a very early convert,” Sutherland tells me now. “Partly because I was a longtime ex-smoker myself who found them much better than constant relapses; I was also interested in the placebo effect they offered by mimicking the act of smoking. But I was almost equally fascinated by the psychology of the people who instinctively wanted to ban them.”

Halpern took notice. He knew the theory of “harm reduction” — that it is more effective to give somebody the lesser of two evils than insist unrealistically on immediate abstinence. So he asked his nudge team to get digging. Over coffee at No 10, he was surprised to learn that even the anti-smoking group Ash was leaning in favour of ecigarettes. So when public-health nannies started calling for them to be banned, Halpern made sure the government resisted.

In his book Inside the Nudge Unit, Halpern wrote: “We looked hard at the evidence and made a call: we minuted the PM and urged that the UK should move against banning e-cigs. Indeed, we went further. We argued we should deliberately seek to make e-cigs widely available, and to use regulation not to ban them but to improve their quality and reliability.”

H/T to Rafe Champion for the link.

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