Catallaxy Files

polymathic pontification, bleeding heart economic rationalism and liberal secularist contrarianism

email: jasonsoon AT



  • Jason Soon
  • Heath Gibson
  • Jack Strocchi
  • Andrew Norton
  • Sarah Strasser
  • Teresa Fels


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    Saturday, June 01, 2002
    Tort reform is not the answer - pick on lawyers for other reasons
    My Managing Director has yet another go at the 'public liability insurance crisis'. Gist of it - economists have known for years that liability insurance is prone to a volatile cycle of under pricing followed by over-correction, the US has been through this whole brouhaha before, and though all this may be cold comfort for particularly less well-resourced insurance buyers it *doesn't* mean that forcing accident victims to accept lower payouts than what they're entitled to will make things better:

    If the real problem is that particular users do not have the financial capacity to handle the liability insurance cycle, then transparent, short-term subsidies to these groups may be preferable to implicit and permanent subsidies to insurance companies (through capping of compensation claims).

    These subsidies come at the expense of tort victims and taxpayers, who are forced to take on some of the health costs of claimants in tortfeasors' stead Consideration could also be given to greater facilitation of joint buying by these groups to reduce transaction costs and other actuarial-related costs for insurers.

    Obviously, there may be room for careful changes aimed at improving the workings of tort law - specific areas such as contributory negligence may be in need of greater clarification.

    But this is no area for quick fixes and knee-jerk responses, based on haphazard and often superficial analysis. "Sentence first, verdict afterwards" may be fine for Alice in Wonderland, but applied to public policy it invariably and deservedly ends in tears.
    Simon Crean is no Tony Blair
    Gareth Parker had a post a while ago extolling the virtues of fresh, non-ideological thinking among a rare group of Laborites like Latham who were prepared to look at market-based approaches where they had a chance of working. Though I thought he went a bit too far in condemning all political philosophy as useless, he did have a point. In the Autumn issue of Policy, Gary Sturgess has a fantastic article about how far Tony Blair has gone in junking stupid preconceptions in favour of innovative new approaches to constructing and funding infrastructure - hell, Tony Blair makes even timid John Howard look like a Laborite:

    Under the leadership of Prime Minister Tony Blair, the Labour Party in Britain continues to rewrite the textbooks on social democratic politics. Nowhere is this more apparent than in its approach to the private provision of public services: privatisation and outsourcing are eschewed, but public-private partnerships (PPPs) are everywhere.

    Sturgess documents examples of these PPPs being encouraged in transport, defence services, roads, and even health and education:

    A number of different approaches to private provision have been pursued in the education sector, not all of them successfully. The most radical has been the former Education Secretary's policy of bringing in private sector firms to turn around failing local education authorities (which provide education support services similar to a regional office of the Department of Education). It is still early days and the results thus far are mixed. But not only is the new Education Secretary proceeding with this policy, she has also extended it to failing schools and is proposing to change the law to open the door to voluntary PPPs by successful local education authorities. The Education Ministers have actively encouraged private firms to develop expertise in education services and commit themselves to the market.

    Even some unions are starting to get used to the idea:

    One of the consequences of a decade or more of privatisation and outsourcing in the UK is that some of the public sector unions have found themselves representing workers who have transferred to the private sector. And in internal union debates, some delegates have been prepared to speak up on behalf of private provision and challenge those who repeat the old mantra of `public good, private bad'. But it would be wrong to make too much of this—there are still a number of public sector unions that find the concept of private provision deeply offensive, and there continues to be significant disquiet on the backbench.
    Better late than never:
    Andrew Dodge has a series of posts on libertarianism and heavy metal which he alerted me to a while ago when his permalinks were functioning, though unfortunately they don't seem to be at the moment, when I have finally gotten around to responding to his mail. Go to his blog and check them out anyway.
    The Devine truth
    Miranda Devine writes in to say I have misrepresented her views in a previous post:

    Pleased to see I'm getting mentions on your blog.

    However...When it comes to my drug court column you write:"However I am not exactly sure how this justifies treating drug taking or even drug dealing *as an offence* more harshly."

    That is not what I am talking about. it is not what the drug court is about. The drug court does not deal with people arrested for drug use or dealing, as you seem to think. It deals with people who commit serious crimes,repeat offenders, like the serial home burglar, who happen to also be addicts (surprise surprise) and get sent to the drug court program instead of going to jail. that way they are free to continue committing more crime while going pretending to get rehabbed. All paid for by the very people whose
    houses are being burgled. This helps no one except the bands of social workers and criminologists who make a living from such lunatic schemes. It DOESN'T WORK
    and is a WASTE of MONEY and, worse, it keeps the crims on the streets.

    I'm afraid she's right. I was using her article as a "hook" to launch another attack on drug prohibition and was thrown off by her reference to harm minimisation which I interpret as taking a threapeutic rather than criminal law approach to drug use and failed to properly check the context of the Drug Court policy she was really writing about, though she did link it to 'harm minimisation'. My apologies.
    More on Telstra
    Reader Michael Miller has a few queries on my posting on Telstra and structural separation:

    I guess my first question to you (as I am unaware of the answer) is with regards to the ownership of the overseas telcos that you refer to in your argument. Were they in the situation that Telstra is currently in with 51% government ownership and 49% public ownership?

    Telstra's current ownership is what I believe to be at the root of a number of problems that the telco is facing at the moment. How does one please the Government who has a responsibility to the people to provide reliable and affordable telecommunications while also pleasing the shareholders who want pretty much one thing only, profits? The current problems with regards to pair gains and RIMs are I believe caused by the current ownership.

    Due to the Universal Service Obligation, a product of the Government ownership, Telstra is forced to provide infrastructure within a certain amount of time. The result of private ownership however, is that this infrastructure is provided with a series of cost-cutting measures that in the long term may greatly damage Australian telecommunications.

    I believe this is one of the reasons we may have to look at compulsory separation, simply because of the mess that part-government part-shareholder ownership has created within Telstra.

    Another reason that the telecommunications market in Australia is a world away from foreign markets is the tyranny of distance that our poor country suffers. The economics of setting up a true competitor to Telstra, that is, a competitor who relies on Telstra for nothing at all, are very different from overseas examples.

    In America or Europe, for example, it may be a matter of 500 kilometres or less between major geographical points in terms of infrastructure and markets. Take this then to Australia, where the next major centre can be 1500km or more.

    Look at the east coast of Australia for example, the primary markets here being Brisbane, Sydney and Melbourne. None of these cities are terribly close to each other so to set up a telco that services these markets alone is a big job. Take this example to a national level and you would find Adelaide and Perth, perhaps Darwin, as the only major markets in Australia that would have even a chance of being profitable.

    So how on earth, without the Government backing that Telstra had to set up its national infrastructure, is another national competitor supposed to service anything but a few select markets?

    True it is that Australia has less potential for infrastructure-based competition than other countries. So there will be very few competitors (with the exception of Optus perhaps) that will not be totaly reliant on Telstra's local network unless alternative forms of delivery of telco services (like through electricity poles, etc) take off. However that is exactly why we have an access regime whereby competitors can have access to Telstra's network to provide their own value-added telco services at a reasonable price which is essentially a regulated price set by the ACCC. It can be easily observed that other infrastructure-based industries which have already undergone structural separation (e.g. electricity) nonetheless have an access regime - nothing can get away from the fact there may continue to be a public interest in regulation of 'bottlenecks' in infrastructure industries to ensure that the bottleneck owner does not collect monopoly rents (the bottleneck in telco being the local networks).

    The main economic argument put for structural separation is partly that we can do away with this problem of ensuring the bottleneck owner doesn't charge unreasonable prices because when it is government-owned and no longer part of a refurbished Telstra then the government will do what is in the public interest and make appropriate investments and price properly. Now the problem with this argument is that if you don't trust the government (or rather the ACCC) to regulate the botteneck owner in telco properly (just as it does in other infrastructure industries) -then why do you trust the government to own and operate the local network and make appropriate investments? Surely regulated competition with private ownership combines the best of both worlds by harnessing private incentives for investment while 'capturing' some of its fruits for the public good, and is a less information-intensive task? *If* we were starting from scratch and *if* the government were setting up a regulatory agency solely to regulate the private bottleneck owner in telco then there might be a compelling case for avoiding all these once-off tasks and saying that it is in fact *less* demanding of governments to just nationalise the damn thing rather than regulate it but in fact the regulator already performs these access pricing tasks in other industries and has gained the experience and expertise in doing so.

    As I've argued before the real additional complication involved in a private bottleneck owner competing in what economists call a 'downstream' market, that is, in a market that uses the bottleneck as an input into production, is that there may be a 'conflict of interest' problem. Think of Telstra's 'downstream' division as another firm - the conflict of interest problem is that it would prefer to give its downstream firm a 'better deal' than its competitors who are dependent on the bottleneck - but does regulation of the bottleneck taking into account this 'conflict of interest' problem become so much more costly and difficult to do that it is worth the loss of synergies from structural separation? Merely saying that there is a conflict of interest isn't dispositive of the issue - the conflict of interest may make the regulatory cost higher in telco than in other infrastructure industies and the regulator may need correspondingly more powers - well, it *does* have more powers.

    Incidentally it is also worth noting that Telstra has been arguing for a long time that there could be *more* infrastructure based competition and incentives to invest in alternative forms of delivery if firms weren't able to 'cheap ride' on infrastructure. Telstra has been arguing that in fact regulated prices may have been too low in the past, thus discouraging such investments. Optus in its submissions says that there has been no such disincentive effect. These arguments seem to cut both ways both for my argument and Michael's. It is really still an open question whether there is a 'cheap riding' problem and if this were resolved, there could be stronger incentives to develop new forms of delivery that might lessen dependence on Telstra's network. Pointing to the lack of such investments currently is circular if the pattern is caused by the under-priced access that Telstra is complaining about. These matters await resolution from more comprehensive study of pricing methods, a subject I claim no expertise in.

    Addendum: Michael's point about the potential conflict of interest between government as shareholder ans government as regulator is well taken. However strictly speaking it is the ACCC and the Australian Communications Authority which are regulators. If the government actually behaved like a private shareholder *when it is wearing its shareholder hat* there might even be less of a problem because the current mixed status of Telstra means there are inherent constraints to its ability to behave as a risk-taking enterprise given it is still partly the taxpayer that foots the bill if anything goes wrong. More problematic is that the government might try to maximise shareholder price by loosening regulations that are appropriate but given that Fels is basically his own man and the degree of public scrutiny this is unlikely. If the social gains from regulated competition with full private ownership are superior to the current set-up then there is, contrary to what many think, no good reason why government should try to maximise proceeds in selling off assets. The sooner the rest of Telstra is sold off, the better.

    Thursday, May 30, 2002
    France: new breeding ground for anti-semitism and worse
    This article tells us how bad it is among the Muslim immigrants in France (can Greg Barns say 'scape goat' one more time?):

    The Jewish attacks—it should be plain by now—are the work of the Muslim minority in France. These neighbourhoods are becoming single-race areas, inhabited by North African immigrants and their second- and third-generation descendants. They are zones of drug-dealing, political apathy, unemployment (which stands over 35 percent in such places), and violence. Hence law-enforcement agents, mayors, and politicians refer to the most violent among them as zones de non-droit ("lawless areas"), where even the police won’t go, except maybe in daylight hours to remove a body...

    The "Arab" suicide bomber who blew up a truck full of explosives in front of a synagogue in Tunisia on April 11, killing a dozen German tourists and six others, was a Franco-Tunisian named Nizar Nawar. His family lives in Lyons, where his uncle, too, was arrested in connection with the attack. September 11 saw West Bank-style rejoicing incidents in some Arab neighbourhoods. On September 2 in the town of Beziers, a hoodlum named Safir Bghouia attacked a group of police with a shoulder-held rocket launcher, machine-gunned the local police constabulary, and executed the town’s deputy mayor, before he himself was shot dead the next day, dressed in white and howling that he was a "son of Allah."

    But the French don't escape a caning either:

    Taguieff’s claim is that the two pillars of the new antisemitism are anti-Zionism and Holocaust denial. He’s right, but this requires some explaining.

    The first infuriates the French because they are largely anti-Zionist, to the extent that the word can be used to mean antipathetic to Israel’s interests and sympathetic to those of its enemies. The French sympathise with the Palestinians over Israel by the widest margin in Europe, 36-19. What’s more, the Middle East conflict has become an absolute obsession among the left-wing intelligentsia, of the sort you’d have to sit in a Socialist party hang-out in Strasbourg on a Friday night to believe.

    Doesn’t the citizen of a free country have a right to back whatever side he wants in a foreign war? Of course he does. That’s not Taguieff’s target. What he is talking about is "mythic anti-Zionism," which treats Zionism as absolute evil, against which only absolute warfare can be raised. In this understanding, Zionism constitutes not just racism but the ne plus ultra of racism.

    This is a vision that the French—particularly given the French left’s obsession with race, and their history of romantic attachments to Third World guerrillas—are in danger of embracing. The philosopher Alain Finkielkraut notes that, in France, "support for the Palestinian cause is not shaken but reinforced by the indiscriminate violence of Palestinians." In particular danger of embracing this Manichaean view of the Arab-Israel conflict are those who support Third-Worldism, neo-communism, and neo-leftism, whom Taguieff lumps together as the "anti-globalisation movement."

    ABC bias on the Middle East
    It's one thing to whinge about media bias re your favourite causes and another to sit down and document them and name examples. The excellent Review of the Australia/Israel and Jewish Affairs Council does exactly that.
    Euthanasia wars - why Tim Blair and Miranda Devine are closet Marxists

    In a posting on poor Mrs Crick Tory Blair writes

    ACCORDING to the latest reports, alleged cancer sufferer Nancy Crick knew she didn't have cancer, and was repeatedly informed of this by medical specialists.

    Her family knew she didn't have cancer, and warned Crick that she was being exploited by euthanasia activists.

    Euthanasia promoter Dr Philip Nitschke knew Crick did not have cancer.

    Today, Miranda Devine, in a column attacking euthanasia activists writes:

    In her final days, according to the obituary on her Web site, "media and police harassment, as well as deeply offensive messages from opponents of what she stood for, the right to end her life in the presence of her family and friends, had become a source of distress to her". The obituary was posted by Exit Australia.

    "I said to her one day: `Mum, they are using you'," her son Wayne told The Courier-Mail. "And she said: `Yes, I know, but I'm using them'. She was happy to support their cause."

    Maybe Nancy Crick did die happy. But that doesn't make the cause she died for right.

    How do we reconcile the two narratives? Was Mrs Crick 'exploited' or not? It surely doesn't sound so from Devine's column, yet even Devine seems to think there is a case against euthanasia while recognising that Mrs Crick was probably in full command of her faculties when she decided to leave this world. So get your story straight for one thing. Has Tim Blair become a Marxist? What the hell does 'exploited' mean in this context? It seemed that Mrs Crick knew she was in remission all along but couldn't bear the suffering. Whose business is it? What crime was committed? Devine seems to think that euthanasia is about State-sanctioned killing:

    But poor Crick has not died in vain, for she has unmasked the true motives of the right-to-die lobby. Now they are trying to justify their big mistake by redefining the English language, saying you are "terminally ill" if you are suffering enough. You may as well define life as a "terminal illness", since everyone dies eventually.

    And why stop there? The utilitarian approach to life could extend to 75-year-olds with dodgy hips. Or with impatient heirs. Or people without any friends. Or who are depressed. Or maybe fat people. Or people who pick their noses. Once you allow the state to end a life according to its quality, the potential is endless

    Straw man alert! Straw man alert!
    How does allowing people of sound mind to in effect sign a contract that would request the State *not* to do something (i.e. punish those who assist them with suicide)constitute the end of civilisation as we know it? What on earth does this have to do with the State actually killing people? According to this careless use of language, when A contracts with B to buy apples from B, it is really the State that is buying apples from B. I realise there is a sort of twisted logic to this way of using words but the implications of this logic are not exactly consistent with the positions that Devine and Blair expound elsewhere. According to this logic, it is *really* the State that is maximising shareholder profits when companies made up of individuals make profits by pursuing opportunities - so what the State giveth, the State taketh away. Now, if Blair and Devine were at least holding the same opinions as Jack Robertson they would at least have the virtue of consistency ...

    This is the problem with conservatives. Conservatives have never really believed in individualism and freedom of choice. So they don't want the State to own phone companies but they want it to own our bodies. Conservatives are only good at defending economic freedom, and at times they aren't even very good at doing that. More later, but for now read my previous post.

    Monday, May 27, 2002
    A passion for hyperbole
    The at times sensible Greg Barns goes into standard-Cassandra-automatic-drive in a recent co-authored op-ed once again comparing Australia and the rest of the world to pre-Nazi Germany. Some highlights (or should I say 'howlers') from his 'analysis':

    The far right misfits of the European political stage, the assassinated Dutch extremist politician Pim Fortuyn and France's Jean-Marie Le Pen, have claimed their first scalp. According to British media reports last week, the British Prime Minister, Tony Blair, reacted to Fortuyn's party's electoral success by talking tough on asylum seekers ...

    This caving in to the far right must be resisted if we are to prevent the liberal democratic world from collapsing into a cesspool of hatred and resentment and an inevitable end to the great achievement of the 18th century "Enlightenment" - the universality of human rights ...

    The diatribes of Le Pen, Fortuyn and Italy's Silvio Berlusconi against Muslims are as morally repugnant and dangerous as Hitler's violent anti-Semitism. Scapegoating and treatment of human beings as somehow inferior (as in not wanting "that type of person here") are totally incompatible with democracy and they breed state-sanctioned violence ..

    Australia and Europe need thousands of Mandelas who stand firm behind the universality of human rights.

    As I've said countless times anyone who cannot distinguish between Fortuyn's critique of cultural practices and religious beliefs (whether wrong headed or not is beside the point) from the virulent racism of Adolf Hitler is not qualified to discuss European politics or history or multiculturalism. It's funny that Barns refers to the Enlightenment. I love the Enlightenment too, Barnsey, but I fear that Leftist cultural relativism have done more to undermine it than anything ever said by xenophobes. See for instance this excellent dissection of the Left and how it has undermined Enlightenment values.

    Barns' hyperbole is a prime example - what is Islam but a system of thought and cultural practices surrounding this system of thought? I'm sure proponents of the Enlightenment would have no problem with the criticism of secular systems of thought such as liberalism and socialism. In fact, as proponents of the Enlightenment we should welcome such criticism - criticism is the means by which knowledge progresses. So why should a *religion* of all things be immune from such criticism? What heinous crime did Fortuyn commit to be compared to Hitler other than an excess of hyperbole in his criticism? And if excess of hyperbole is the problem, then perhaps Barns and his co-author should be looking at themselves.

    Sunday, May 26, 2002
    Breaking up is hard to do
    Can a reasonable case for breaking up Telstra be made? Yes it can. I am prepared to admit that the evidence for the costs and benefits of this policy for promoting sustainable competition in the telco sector is perhaps less clear than in other policy debates. Has
    Linday Tanner made a reasonable case for such a policy in his Labor Party discussion paper? 'Fraid not.

    Why pray tell, do we need to split up Telstra to ensure that people have 'equitable access to the latest in telecommunications services'? Telstra is already subject to various service obligations which are vigilantly enforced as this piece by former Minister in the Keating Labor government Gary Johns argues. I'm not convinced that current obligations are insufficiently enforced but if they are then please explain why we need to go to the lengths of cannibalising a major telco company when surely a more efficient alternative is to toughen current standards. Same goes with laws against anti-competitive conduct - as I explained in a previous post, the competitive conduct regime and access regime currently in place in telco is tougher than for other industries which have similar characteristics.

    Do we need to split up Telstra because enforcing tougher standards (assuming for the sake of argument that they are needed) is a less cost effective way of dealing with anti-competitive problems than a structural solution? Well, the US experience doesn't suggest so. For instance, look at what Pennsylvania's Public Utility Commission had to say about whether splitting up Verizone meant less work for regulators. If anything the once-off administrative costs of effecting a proper split can be quite substantial and it can be quite a messy procedural exercise especially given the increased use of new fangled technologies. Surely you don't want to do things the wrong way and wreak havoc for the development of proper technical compatbilities.

    Of course the ongoing costs of such a split are another issue. Surely we should be learning from overseas experience? Take for instance the summary of a recent study of this very issue published in the Yale Journal on Regulation:

    In this Article, we analyze, and reject as unpersuasive, the putative benefits of mandatory structural separation. Such regulatory intervention is unnecessary to prevent discrimination against unaffiliated retailers of telecommunications services. Nor would mandatory structural separation lower wholesale discounts or increase the CLECs' market share. Plausible hypotheses for the CLECs' problems do not require the assumption of anticompetitive behavior by the ILECs.

    Apart from producing no discernable benefits to consumers, mandatory structural separation would entail a substantial social cost in terms of forgone coordination of investment and production and forgone economies of scope. Moreover, mandatory structural separation would harm consumer welfare and reduce resources for investment by facilitating an anticompetitive strategy by the ILECs' largest rivals to raise the ILECs' costs of providing local telecommunications services. Policy makers should reject proposals for mandatory structural separation of the ILECs.

    Extrapolating from the study to Australia, the implication is that If separation is enforced then the loss of the efficiencies discussed above represent a loss to society not just to Telstra. So the issue remains - what magnitude of additional pro-competitive benefit do the likes of Tanner expect to get from the split and why does he think it can't be achieved through less costly means which might better avoid jeopardising efficient investments in building up telco infrastructure?

    What's Miranda been smoking?
    Alas, the Devine Miranda, whom I usually have kind words for, seems to have gotten her logic mixed up in a recent piece on how to deal with drug users and drug dealers. She starts off by arguing that the 'Thai way' of jailing drug users and minor drug dealers in harsh conditions might be better than the harm minimisatoon approach:

    Judging by the reformed figure of Lyle Doniger as he arrived at Sydney Airport last week, maybe what every junkie drug dealer needs is a stretch in a Thai prison. Pardoned by the King of Thailand, six years into a 50-year sentence for heroin trafficking, Doniger said he was drug-free.

    She backs up her argument by comparing the Thai approach against the recent Drug Court approach adopted in NSW:

    Doniger's seeming success story is not something NSW harm minimisation advocates will want to hear. Instead, they want to focus on the alleged success of the NSW Drug Court, a three-year attempt at "therapeutic jurisprudence". The idea is that rather than sending them to jail, drug-addicted criminals are diverted into a program of supervised drug rehabilitation for at least 12 months, mostly while living freely in the community and subjected to weekly or monthly home visits and drug testing two to three times a week.

    Devine notes some major flaws with the Drug Court approach - among them the fact that lots of the participants have been rather recalcitrant in their attitudes to lawbreaking and has cost the community plenty:

    Drug Court people rated slightly higher than the control group on break, enter and steal (average 0.15 charges in 365 days compared with 0.09) and motor vehicle theft.

    The report says the only statistically significant difference was for fraud (0.05 compared with 0.01), in which, again, it was the Drug Court people committing most offences.

    Yet in the media release issued by bureau director Don Weatherburn on February 28, no mention was made of fraud. The only offences mentioned were the two offences in which the Drug Court people did better than the control group: shop stealing and drug offences.

    Note, however, that the statistics are a point of dispute between Devine and the Bureau of Crime Statistics. However to give the benefit of the doubt to Devine, let's assume her interpretation is correct. What then? What implication does this have for preferring the 'Thai' approach to the harm minimisation approach?

    She argues that regardless of the statistics, the Drug Court approach allows for major loopholes for criminals who are not really drug addicts to pass off as drug addicts in order to get reduced sentences. For instance:

    In one case last year, police spent months investigating a "highly professional and organised" criminal syndicate suspected of committing large-scale burglaries from warehouses over a six-year period, netting at least $4 million of goods.

    X, a prime member of the group, was arrested by police several times and charged with offences including aggravated break, enter and steal, stolen goods in custody, stealing cars, breaching bail and many driving offences.

    But when X came to court he claimed he was drug-dependent and was referred to the Drug Court. Police who had observed X during hundreds of hours of surveillance had not seen any sign of drug addiction. The prosecutor told the court X was not an addict and there was no link between his criminal activities and drug-taking.

    However I am not exactly sure how this justifies treating drug taking or even drug dealing *as an offence* more harshly.To be sure, there are lots of genuine criminals out there who deal in or take drugs who also commit other crimes and they should be punished with the full force of the law - for their non-drug crimes. And the point is well taken that the Drug Court as it is currently designed is full of loopholes which are 'gamed' by criminals without a drug problem to get reduced sentences. I'd agree with Devine but from a completely different perspective that the Drug Court approach is inadequate, but if the Drug Court approach is the only politically feasible harm minimisation approach then let's make an effort to patch up those loopholes - these loopholes have nothing to do with the validity of the principle that drug use should not be treated as a real crime - everyone agrees that real crimes like robbery, murder, assault , rape and fraud should be properly punished.

    Indeed the very point of her article is that the inferior performance of the Drug Court has nothing to do with treating drug users less harshly and everything to do with its abuse by genuine criminals!

    And what of criminals under the Drug Court who still commit more crimes than other criminals? Well, let's recognise that part of the reason for that is that if these people are drug users and drug prohibition pushes up the price of drugs. This leads many people to crime and it also leads many people by necessity into dealing with criminal channels - drug prohibition is criminogenic, not drug use per se (though there may be exceptions for particular drugs like crack cocaine which have nasty immediate psychological side effects). Devine would argue that I'm missing the point because the very incidence of drug use itself is undesirable and we should be doing all we can to minimise drug use. I would argue that she is missing the point - if we wanted to minimise drug use and if the advocates of prohibition were serious that the objective is to minimise drug use then we have all the means to do that - simply make drug use a capital offence.

    No, I would contend that the purpose of a proper drug policy is to minimise harm to individual welfare, and that drug users' welfare should be equally considered in such a policy. The tradeoff is that we can opt for discouraging drug use only at the price of increased crime in society and significant harm to drug users (such as overdoses and being forced to associate with criminals to satisfy their consumption needs) and other perverse effects or we can accept that there is always going to be drug use and be prepared to accept its existence while minimising the complications involved. I would agree that the Drug Court is an inadequate solution to the drug problem - and we should seriously be looking at drug legalisation - a free market solution. Let me refer you to a piece on this very issue written some time ago by my boss and reproduce some selected extracts from it.

    On the harms caused by various drugs and the extent to which they are directly attributable to pharmacological properties:

    The main causes of heroin-related death are its use in combination with other drugs, the presence of impurities, and unpredictable potency. These are very largely due to the black market conditions in which heroin is traded. Similar considerations apply to cocaine and ecstasy. Dealers do have some financial incentive to take care of their clientele. But these incentives are weaker than they would be in a legitimate market subject to legal remedies, all the more so as dealers - faced with the risk of detection and imprisonment - likely discount the future very heavily indeed.

    Prohibition inflates the prices of illicit drugs substantially above production costs because the 'street'price must take into account not only retailers' expenditure of resources, but also substantial imprisonment risks. Thus, the import prices of heroin and cocaine are only about 10-15% of retail prices. This price inflation has two deadly effects.

    First, drug users inject to get more value for money- injection gives a bigger 'hit' than other consumption methods. This syringe culture adds to the health hazards of drug use. European statistics show that that the mortality rate for people who inject heroin is two to four times as high as that for non-injectors, mainly because of the danger of contracting HIV or hepatitis from dirty needles. Issuing free syringes in registered injecting rooms can mitigate this problem.

    Second, more potent drugs drive out less potent ones. This is because suppliers can reduce the risks and costs of distribution by dealing in and encouraging the consumption of more concentrated and therefore less easily detectable drugs. That is why, for instance, opium has been replaced in the market by heroin and why crack cocaine was developed ...

    As far as direct, pharmacological impacts on behaviour are concerned, the drug most implicated is a legal one - alcohol. In 1998, less than 2% of people engaged in verbal abuse and less than 1% in physical abuse, property damage or theft under the influence of all drugs other than alcohol. The equivalent figures for alcohol were 9% and 2% respectively.

    On the main beneficiaries of prohibition and the violence it promotes:

    The law enforcement activity associated with prohibition is a substantial entry barrier into the market for supply of drugs. Well-resourced criminal organisations with the necessary economies of scale are the best placed and most motivated to surmount this barrier. Similarly, during the period of alcohol prohibition in the US, alcohol was supplied by the likes of Al Capone. This black market setting then affects the manner in which contractual and property rights disputes have to be settled: if Philip Morris and RJ Reynolds have a falling out, they go to Court; in the drug world, matters are handled privately, often violently. The substantial economic rents involved in the sale of hard drugs (a 40% pure kilo of heroin in the US is worth as much as a Rolls Royce) makes the stakes particularly high.

    And finally on the tradeoff that must be faced:

    Most of the costs illicit drugs now impose on users and the community could be reduced by a more permissive attitude - for instance by allowing for the regulated supply (either through registered private suppliers or government clinics) of currently illicit drugs at prices which undercut existing criminal suppliers. The greater the degree of 'legalisation' in this sense, the more social costs will fall towards solely those associated with the intrinsic pharmacological properties of illicit drugs. For 'hard' drugs, notably heroin, these costs are not negligible. But for most other illicit drugs, the costs of alcohol and tobacco use (to the user as well as the community) are substantially higher.

    However, any degree of 'legalisation' will inevitably mean an increase in the number of drug users. Thus, though the implied costs per user will be lower, they will have a higher incidence.
    On Mrs Crick and euthanasia: Tim Blair has been making much mileage out of the fact that the elderly Nancy Crick who who recently took her own life surrounded by euthanasia activists did not have cancer. However as Blair notes in his post, the reason she took her own life was because she may have been mis-diagnosed with cancer. Obviously a lamentable state of affairs, but there are already laws against malpractice. So is he saying that we should have laws against euthanasia because people might be misdiagnosed by incompetent physicians and subsequently commit suicide or obtain assistance in committing suicide? Assume that Mrs Crick were perfectly capable of committing suicide herself without any help from euthanasia supporters or anyone else - and she obtains a misdiagnosis to the effect that her cancer was serious and would continue indefinitely. How would a law against euthanasia prevent such a suicide?

    On the other hand if assisted suicide were a legal option much like 'switching off the machine' is` then there would be at least the greater chance of appropriate safeguards against any misdiagnosis or negligence in such circumstances - most importantly because of self interest on the part of doctors who would be afraid of incurring lawsuits by relatives who thought such procedures were authorised wrongly (presumably such incentives are present in the case of decisions to 'turn off the machine'). And what about greedy relatives who want to end the treatment? Well, doctors have reputations and standing to protect. Euthanasia committed secretly because of its illegal status has no such checks and balances based on rational self-interest. Like in the case of 'switching off the machine' there would presumably be an effort to ensure between the two private parties (the doctor and the patient) that the patient was properly informed and was in the right frame of mind before the doctor would give public sanction to the patient's choice, whatever it might be.

    Ultimately the slippery slope arguments against euthanasia are not credible because as demonstrated above, the incentives under the current system based on euthanasia performed secretly by doctors are not better or are probably worse in terms of the objective of ensuring that the patient is of sound mind and can make an informed choice.

    Thus the crux of the issue is not over the slippery slope but whether you believe that people of sound mind in possession of appropriate information about the probability of the condition being terminal are entitled to make the choice to end their lives - and if they are physically incapable of doing so, delegate that choice to an interested party. I would contend that even if medical knowledge is itself permeated by uncertainty such that one can never be absolutely sure that the condition is terminal or not, as long as the patient is of sound mind it is up to that individual to decide whether he or she is willing to gamble with the odds of a prolonged, excruciating treatment - or the alternative. Probabilistically death surrounds us everyday and every moment - in crossing the street, in taking a plane, and we necessarily act on limited information in making our choices. The choice of taking one's life is no different in principle - and it is important to realise that once the slippery slope is discredited one can only be against euthanasia if one is against the rights of individuals to take their own life, which means the rights of individuals to be sovereign over their own bodies.

    The State does not own our bodies, the people in favour of excruciating death for the sake of symbolism about the value of life do not, and the frigging Vatican certainly does not (don't they have pedophile priests to worry about?) - and if I'm in my right mind they can bloody well piss off from my death bed when my time comes, whatever I decide to do.




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