The UK smoking ban: can paternalism be justified?

Every day I tell my toddler off for doing something he shouldn't.

He has no idea why playing with plug sockets are bad but light switches are ok, or why running off into the middle of the road is bad but running around the garden is fine. He just needs to do what I say as I am his Dad and I know better than him, it is for his own good.

At some point, he will grow up and be able to decide for himself that playing with plug sockets is fine due to the UKs impenetrable socket design, or that running off into the middle of the road is not all its cracked up to be.

When society imposes restrictions on freedom we call it paternalism, and most of the time we react like my toddler: having a massive tantrum and moaning about it in the comments section under unrelated Daily Telegraph op-eds. 

The UK's smoking ban policy, which will ban all tobacco products for my son and anyone else born after 2009, has invariably had similar reactions. But I think it is perhaps the most interesting piece of legislation in my lifetime.

Tobacco is a drug that is perhaps unlike any other. It is a mild stimulant like caffeine, but extremely addictive like heroin. It has one of the biggest negative health impacts of anything that we currently do and has a huge weight of evidence behind this fact. Not even injecting plutonium can come close. It is a kin to snorting asbestos. But it also has relatively few negative externalities as a result of fire retardant furniture and not being allowed to smoke indoors.

The argument of whether we should ban something is difficult. If people understand the risks, why should we ban it if it is their choice? Especially if there are hardly any negative externalities. Crossing the road is dangerous but we still allow people to doit.

One argument is cost: smoking costs the taxpayer more than the revenue it brings in due to cancer treatment etc. But if people do not smoke and get cancer, they will still die and get something else which costs money. Although figuring out the cost to the economy is a bit more complex than this, a lot of the figures you see about how much smoking "costs" society doesn't take this into account. 

The best argument for banning smoking

I have a lot of childhood friends who smoke. Every single one of them said to me when they started they would quit when they were older. Some of them did, most of them didn't. Nearly all of them are trying to quit, have tried to quit and couldn't, or have moved on to vaping (more of that later). 

All of them regret ever having started. And this, I think, is the killer argument for a smoking ban that makes it not such a simple debate about informed decision making but it also raises an interesting question. Does regretting something mean you shouldn't have done it? This sounds kind of odd as that is the kind of definition of regret, right?

So lets say you start smoking when you are young and at some point, when you are older, you start to regret it. But at some point leading up to this you presumably enjoyed smoking. Does the fact that you regret it now, a bad feeling, outweigh all those positive feelings you got when you were younger?

I am no philosopher, but as an economist we often use rudimentary utilitarianism to think about decision making. If you could quantify all these feelings and add up all the positive ones and negative bad feelings, what would the overall outcome be? It is not so obvious.

However, when we choose to start smoking, even if we knew we would regret it with 100% certainty we may still start smoking because we discount the future. That is, we care what happens to us in the near future at a higher level than the distant (something which also comes up in climate change debates).

But even then, why do so many people think they will be able to give up? Perhaps people are overconfident or naïve? Or they simply do not know what being addicted to something is like, or how good they will be at overcoming addiction? 

Either way, it is extremely difficult to make the argument that people make informed choices when so many people end up regretting the choice they have made.

Banning smoking incrementally is not the same as banning smoking 

The most interesting thing about this new law is the fact that it only applies to people born after 2009.

If were to ban tobacco for everyone, it would be very different. Those addicted to tobacco would have great difficulty seeing their supply cut short. Also, and this is important, some people genuinely do enjoy smoking and have no regrets. They would suffer the most with an outright ban. 

Under the proposed legislation, all those born after 2009 do lose out on the the right to find out out if they enjoy smoking.

Where it gets a bit conceptually complicated is that the biggest losers of this generation are those that would have ended up smoking and have no regrets.

But as it is impossible to know ex ante who these people are, and given that the expected value (the most likely outcome) is that those who end up smoking will regret it, you can argue this generation will benefit from the ban on average.

The debate then become how much of the loss in the right of you finding out if you end up one of those who does not regret smoking outweighs the expected benefits of the ban for most people.

What about vaping?

If you ask most people about vaping, they think it is just as bad as smoking. This is a total failure in public health and is likely to cost countless lives. There is no such evidence that it is anywhere near as dangerous.

An interesting question here is why people think vaping is as dangerous as smoking? My hunch is as follows: smoking is putting chemicals into your body, vaping is also putting chemicals into your body in a similar way, ergo it is just as bad. I doubt people think nicotine patches are as bad as vaping, for example.

But when you tell people that vaping is not as bad as smoking, the response is there is a lot of uncertainty and no long-term studies on vaping. But you could make the exact same argument about the covid vaccine, yet the vast majority of people took it. What is going on here? 

What I will say is that selling something as highly addictive to kids is extremely wrong, even if it is not bad for their health. Perhaps if the UK state wasn't so weak at enforcing existing laws - you know, by actually prosecuting vaping shops that sell to kids - then they would not have to do things like banning flavoured vapes.

Summing up

I know some people have looked at the practicality of imposing the ban (what about tourists who smoke?) but these feel a bit cheemsy to me. 

I do take the point that there will be a black market for tobacco and that it will have negative effects such a fuelling crime. However, I can't see this having a particularly large effect, especially as there is already a black market for tobacco as it is.

I am not 100% sure whether this law is the right thing to do, but I certainly would not want my son to smoke. Other than that, he can pretty much do what he likes. 

Surge Pricing, Wendy's and Fairness.

The burger chain Wendy's has been in trouble over plans to introduce surge pricing. This is when prices adjust to meet demand, so you may end up paying more for your burger and fries during busy periods. 

Surge pricing, alternatively know as dynamic pricing or price gouging, is a form of price discrimination and takes on various forms. Brian Albrecht does an excellent job of covering what it is. I would suggest you read his blog, even if you think you know what surge pricing is.

However, what I want to talk about it is why exactly people think surge pricing is unfair.

In some ways, we don't mind price discrimination if it benefits us. Happy hours in bars for instance or when you get an off-peak train tickets. However, I am not sure people view this the same as price gouging. These prices are upfront and transparent.

I think the situation most people view as price gouging is when you go into a store expecting a certain price, and suddenly they are much higher. This is especially the case if you made a special trip to the store on assumption of paying that price.* If prices become unpredictable, it would likely have a negative effect on demand for your product anyway (this is similar to the brand loyalty argument of why firms do not price gouge).

Alternatively, if you go into a store and see a huge queue, you might still be annoyed, but you are not going to start ranting about this being grossly unfair like you would if the store was price gouging.

On the face of it, waiting in line, and price gouging are not so dissimilar. Those that have a greater desire for the good are more willing to wait in line or pay a higher price. Even though waiting in line still incurs a cost (time is, in fact, money) I think there is a difference. 

Waiting in line is seen as the great leveller. It doesn't matter how rich you are, you still have to wait in line (although it does favour those that are time rich e.g. pensioners). So paying a high price for busier periods may not reflect your need for the good, but your ability to pay. 

From here, you could go down the rabbit hole over the efficacy of surge pricing but ultimately, most people simply think surge pricing is unfair (even after you have explained the logic).

A taxi driver could theoretically charge someone a lot of money if they were dying and needed to go to the hospital. But most people think this is asshole behaviour. As a society we want to discourage asshole behaviour for a variety of reasons. It is why people reject offers they feel are unfair in the ultimatum game even if this means turning down free money.

In economics, what we deem as fair or not can be viewed as a preference and preferences are what determines demand.

So the simple reason companies do not offer surge pricing is because it is not profitable for them to do so.

Getting annoyed with people that think surge pricing is unfair is like getting annoyed with people for preferring apples over oranges.

* Perhaps this is why people don't get annoyed at Uber so much as you can just simply check the app on your phone and potentially make other travel arrangements if the price is too high.