Well, kind of. Different drinks have duty at different rates. White Lightning – that mainstay of park-bench drinking – is taxed differently to wine.

Linking different types of drinks to different drinking habits is a difficult one, of course – and riddled with stereotypes – but it’s not a *completely* pie-in-the-sky approach.

I think this ‘illiberal’ approach of taxing all regardless is defined as liberal because it is believed to be the only alternative to the proposition of making those who cause the expensive (ab)use of social services such as the police, the NHS, etc to pay individually for those services. That would be truly illiberal.

It would be interesting to see some more creative suggestions of taxing on the basis of mode of consumption, although this would lead to accusations of social engineering I suspect… (of course all social policy is social engineering, so that discussion is a bit of a red herring in my view).

A really enjoyable piece – all I will say at this early juncture is that I suspect the blanket approach (to tax imposition) says more about the difficulties associated with devising and implementing a complex collection system (not impossible in theory, of course) rather than any grand ideology?

For example, it will be interesting to hear commentators views on how drinkers should be assigned to each category (or categories) – would there be scope for various forms of ‘self assessment’, say, or would an ‘expert’ have the job of devising differentiating criteria?

I wonder if when this is debated in Parliament anyone will mention the anti-social antics of the Bullingdon Club (smashing up restaurants etc)? maybe a punishing tax on champers is necessary? I personally recommend a bottle of Lambrini and a soda stream anyway.

Any genuine libertarians would be opposed to any alcohol taxes. Anybody haring themselves through alcohol should be forced to pay for their own treatment (and the treatment of anybody they harm).

“it is believed to be the only alternative to the proposition of making those who cause the expensive (ab)use of social services such as the police, the NHS, etc to pay individually for those services. That would be truly illiberal. ”

Why is it illiberal to force people to pay for the consequences of their actions? If I glass someone in the face why should innocent Mr taxpayer be forced to fund his treatment?

“further demonstration of the sociological ignorance of Tim Worstall et al, whose approach to the issue is at best naive and at worst dangerous and actually illiberal.

This to social and health policy issues is generally to examine matters from the perspective of examining what the externalities of certain market transactions are, and then ensure the externalities are priced and paid for via a pigou tax. ”

Straw Man alert!

Tim Worstall didn’t actually say anything at all about Pigou Taxes.

What Tim Worstall did say is that while we should of course look at the costs of booze we should also look at the benefits of it. And then gave an outline of a method of getting at least an estimate of the cash value of those benefits which we could lay against the cash value of those costs as calculated by NICE.

But if you want to go off and refute points I didn’t make, well, good luck to you.

It’s actually amusing how the bloggertarians consider the latter (minimum pricing) completely illiberal, but the former (tax) totally legitimate, and I can only guess that it’s because the former is proposed in economics textbooks whereas the latter is advocated by people who don’t generally work in the city stealing our pensions.

As an aside, a minimum price for alcohol is illegal under European competition law, and is thus impossible to introduce without leaving the EU.

As a further aside, economists who write textbooks don’t tend to work in the City.

[5] “Anybody harming themselves through alcohol should be forced to pay for their own treatment (and the treatment of anybody they harm)”.

Do you extend this principle to every other patient group whose behaviour adversely affects their own health (reckless drivers, smokers, sexually acquired infections, overeaters, etc) or do you single out drinkers for exceptional treatment?

Oh, and, umm, Pigou Taxes. Pigou being the founder of welfare economics, he’s hardly a libertarian figure. And in fact most libertarians reject the idea on Hayek’s point about socialist (or economic) calculation problems.

So to add to the straw man we’ve even got an ad hominem fail.

I note that the only “acceptable” example given, involves a few glasses of wine at a social event after a business conference.

How very posh.

Why don’t we go all the way and ban all drinks apart from wine and ban anyone that would ever dream of drinking anything other than a £10 bottle of shiraz, from purchasing alcohol. That’ll teach the cider-drinking underclass to behave themselves.

11 – surely drinking ’till you puke on a stag do, and getting drunk at a music festival, are also examples of acceptable drinking?

Well, the stagging is debatable I guess.

My city seems to get a disproportionate number of hen nights – lots of flesh, lots of booze, lots of wings and pointy ears and banners and mild sexual harassment, relatively little vomit. Probably more or less acceptable too.

“The recent discussion on the minimum price for alcohol has proven to be hilarious for a further demonstration of the sociological ignorance of Tim Worstall”

Where’s the ad-hom or straw man in that statement? It’s a perfectly reasonable observation, not an argument.

The traditional way of calculating pigou taxes simply adds up the costs of all types of alcohol consumption (policing town centres, hospital costs, social workers and care costs, rehab costs etc) and uses this to calculate an appropriate per unit level of alcohol tax. Ironically this is very similar logic to those advocating a minimum price of alcohol, they’ve simply calculated the social costs and worked out what the minimum price should be based on this calculation.

But pigou taxes go to the public purse, don’t they? Where does the revenue from minimum pricing go?

And this is the Liberal approach! Punishing everyone for the actions of the few?

LOL

The real tragedy of this is that such an approach has actually made the situation worse.

It seems to me the liberal approach would be to interfere only with those who unlawfully interfere with others (e.g. fighting in the high street) – it’s odd that banning, taxing or minimum pricing and suchlike are the first resort as opposed to enforcement of the law.

@11 – I noticed that! Well, I suppose the value judgements are subjective…

I’d add:

5. People who drink because it’s one way of temporarily escaping the crushing despair of 21st century Britain.

Why not consider the cause as well as the effect?

“Do you extend this principle to every other patient group whose behaviour adversely affects their own health (reckless drivers, smokers, sexually acquired infections, overeaters, etc)”

Hey, don’t forget the joggers!

Like Tim I am surprised to discover that the other thread was about Pigou. You would have thought that someone would have mentioned him or his taxes wouldn’t you?

“The real tragedy of recent years has been the decline of the traditional pub, and its replacement by cheap supermarket booze.”

This is an increasingly commonly expressed idea and I think it needs some modifcation. What has happened is that pub cutlure has declined and been replaced with a very wide variety of alternatives, including a lot of consumption at home. This is because people have got richer and have more choices. Homes are much more comfortable and the source of lots more entertainment. Clubs, music venues, spectator sports, art galleries etc have also all become more plentiful and accessible. It is true that reckless binging on cheap booze is part of the list, but it is not a simple replacement of one for the other. The loss of the pub is sad for those of us who like them, but there are real benefits in the cultural change too.

The traditional way of calculating pigou taxes simply adds up the costs of all types of alcohol consumption (policing town centres, hospital costs, social workers and care costs, rehab costs etc) and uses this to calculate an appropriate per unit level of alcohol tax. Ironically this is very similar logic to those advocating a minimum price of alcohol, they’ve simply calculated the social costs and worked out what the minimum price should be based on this calculation.

Not similar at all.

Those advocating a minimum price for alcohol are medical pressure groups and fake charities operating on the ASH model. They are meddlers- people who think they know what is best for us and are prepared to compel us, through legislation, to bend to their will.

Alcohol Concern, for example, is funded by taxpayers money through the Department of Health and its only role is to lobby government for ever more restrictive legislation and feed scare stories into the media to prepare the ground.

We pay these tossers over £1m so that the government can be lobbied to set minimum pricing.

Why?

’1. People having a few glasses of wine in the evening at a social event following a business conference
2. Lads on a stag do drinking until they puke
3. Somebody getting drunk at a music festival.
4. A mother spending all day getting drunk on cheap supermarket booze (and as a result neglecting her children).’

I don’t think I could have asked for a clearer example of how beer feet maps onto class prejudice.

Feck: ‘beer fear’, obviously.

’1. People having a 4. A mother spending all day getting drunk on cheap supermarket booze (and as a result neglecting her children).’

I mean, REALLY? This, on a ‘liberal’ site? Where to even begin unpicking the snobbery and misogyny on this one?

Tim Rand “Straw Man alert!”

Priceless. there is always a straw man alert when ever Tim Rand and his mate Time Jerk come on here.

Not quite everyone… They’ll have to prise my mash paddle from my cold, dead hands.

‘1. People having a 4. A mother spending all day getting drunk on cheap supermarket booze (and as a result neglecting her children).’

I mean, REALLY? This, on a ‘liberal’ site? Where to even begin unpicking the snobbery and misogyny on this one?

How so Shatterface? The article discusses the many different social settings in which alcohol is drunk, of which this mother is one of many possible examples. No-one is suggesting she is representative of all women, all working class mothers, everyone who buys supermarket booze, or any other grouping. Merely that she exists. Or is it sexist to say so?

The argument is basically “a uniform tax (or minimum price bla bla bla) is worse than a targeted tax, therefore it is illiberal and bad.”

The premise is true I suppose: if we knew which kinds of alcohol consumption were most harmful and had a good way to do it, then it would be better to tax these more than other less harmful kinds.

However we obviously don’t have the knowledge or tax mechanisms to have a targeted tax, so it is hard to see how talking about it is relevant, especially to the current argument. The question is whether a uniform tax is better than the status quo, not whether it beats some impossible fantasy. Quite possibly it would be better, even if it harmed some innocent good drinkers. In any case I didn’t find any reasons why not in this article.

[21] a bit unfair, Shatterface unless bloggers prefer to aspire to the relatively language neutral phrases of formal researches?

In this paper children of alcoholics are referred to as ‘CoA’
http://www.ncbi.nlm.nih.gov/pubmed/11095045?dopt=Abstract

These researchers found, “in families with maternal alcoholism daughters had higher internalising and depression scores than sons, and in families with paternal alcoholism, sons had higher internalising and depression scores than daughters. The CoA also had a significantly greater risk of scoring above the 95th percentile on internalising behaviour, depression symptoms and socially deviant behaviour”.

It has also been claimed “In primarily Euro-American samples, parental alcoholism has been associated with a variety of negative outcomes for children and adolescents, including problematic behavior. Native-American Indians, in addition to high rates of alcoholism and alcohol-related mortality, have the highest prevalence of a positive family history for alcoholism of all ethnic groups in the United States” – it is noted that “a positive family history of alcoholism is one of the most consistent and powerful predictors of a person’s risk for developing this disorder”.
http://www.ncbi.nlm.nih.gov/pubmed/10656189

“The traditional way of calculating pigou taxes simply adds up the costs of all types of alcohol consumption (policing town centres, hospital costs, social workers and care costs, rehab costs etc) and uses this to calculate an appropriate per unit level of alcohol tax. Ironically this is very similar logic to those advocating a minimum price of alcohol, they’ve simply calculated the social costs and worked out what the minimum price should be based on this calculation.”

Wait a minute. Under minimum pricing, how does the cash get from higher alcohol costs to the police, the hospitals and social workers? The answer, I think, is usually it doesn’t. It stays in Tesco’s coffers. This is why the EU commission usually steps on attempts at minimum pricing: it doesn’t internalise the externalities at all. It just allows companies to co-ordinate an anti-competitive price increase.

Taxes on alcohol, at least in theory, go to paying for the public services that alcohol consumption adds costs too. They are not so much more liberal, as more effective and less obviously rent-seeking.

“However we obviously don’t have the knowledge or tax mechanisms to have a targeted tax, so it is hard to see how talking about it is relevant, especially to the current argument. ”

Tsk! Don’t be so defeatist!

Bring the ID Cards in (that product of an ever so liberal lefty govt), insist that you must show ID to be able to buy booze.

Each and every year you must report for drinking and liver and socio economic tests. The results will be coded upon your ID card which you must use each and every time you purchase or are given alcohol (all waiters and bartenders will have a card swiper for example).

If you are that upper middle class couple having some wine after a business meeting then obviously you’ll be charged a lower tax rate than teh chav scum downing the cooking sherry in a slum.

Hey, we could even have booze locks that can only be opened by an ID card on every bottle and can!

And please don’t say this wouldn’t be a liberal solution. Ever so liberal Greens like Caroline Lucas are arguing that we should have to do exactly this whenever we use any carbon…..

“Taxes on alcohol, at least in theory, go to paying for the public services that alcohol consumption adds costs too. They are not so much more liberal, as more effective and less obviously rent-seeking.”

Hurrah! Some economics at last!

“How so Shatterface? The article discusses the many different social settings in which alcohol is drunk”

Shatterface can speak for him/her self but why not characterise the social settings differently? For example:

1. People sitting at home ater aday of manual labour watching football and drinking huge amounts of cheap supermarket alcohol until they all end up having a sing song
2. Business men and women after a conference drinking five star brandy until they puke.
3. Somebody getting drunk at an opera recital.
4. A mother spending all day getting drunk on chateauneauf du pape (and as a result neglecting her children).

Shatterface 19-21: Well said. If the choice is between a flat tax on alcohol, and some sort of plan to make sure that your drinking is acceptable to the upper-middle-class men of power and charge you extra if it’s not, then flat tax every time.

Possibly if the mother in 4 wasn’t the designated demon of political rhetoric, she’d not need to drink so much just to get through the day.

#24 I’m afraid Shatterface is correct. The misogyny…it was specifically a mother. Presumably she was at home looking after the kids because she was chained to the sink. The snobbery…because all the examples of “bad” behaviour were people having drinks considered lesser than the sort of refined drinks one may find at a “social gathering” or a “business conference”. There are plenty of people who happen to like drinking beer, cider, or even (dare I say it) alcopops, without having to get so drunk they can’t remember what they were doing. And those people that DO get that drunk, aren’t merely the lower classes who don’t know any better and aren’t “refined” enough to be wine drinkers.

It really is a case of total, snivelling, snobbery and indeed, what such views are doing on a Liberal site, I have no idea.

“Do you extend this principle to every other patient group whose behaviour adversely affects their own health (reckless drivers, smokers, sexually acquired infections, overeaters, etc) or do you single out drinkers for exceptional treatment?”

I do indeed extend the principle to others.

I would also suggest that if booze duty currently covers the cost of alcohol’s negatives then there’s no justification for an extra tax.

Oh, I know it’s the Fail, and it wasn’t actually the mother (at least not directly) but according to this report – a ‘profoundly drunk’ woman who killed a friend’s baby by feeding him a frankfurter sausage after being warned he would choke has today been jailed for manslaughter.
http://www.dailymail.co.uk/news/article-1283996/Woman-killed-friends-baby-feeding-sausage–warned-choke–jailed.html

But why on earth did the mother take off to the shops, or why was the father fast asleep while a crazy woman was left to force-feed a 9 month old with undigestible food stuff?

Judge Anthony King said: ‘on the day in question you had drunk copious quantities of vodka and were profoundly drunk’ – yet when the baby started to choke (because he was too young to chew the meat), Rekeic left him, instead of helping, and went and got herself a beer.

The mind simply boggles at the Jeremy Kyle dimension’s of some people’s lives?

I’ve just read the unedited version at Planeshift’s gaff, which includes the sentence “I enjoy getting drunk on the weekend at live music gigs and rock clubs. In over 14 years of going to these places I have only ever seen one fight”.

So I would politely suggest that claim that PS is some sort of armagnac-sipping ponce sticking it to the stinking lower classes, does not even come close to standing up.

Spot on Shatterface!

@johnmeredith:
“What has happened is that pub cutlure has declined and been replaced with a very wide variety of alternatives, including a lot of consumption at home. This is because people have got richer and have more choices.”

This culture didn’t change in a vacuum. Supermarkets started using alcohol as a loss leader, while pubs were treated as property speculations not centres of a community.

Any proposed solution to this apparent problem has to deal with supermarkets’ power. And any debate is going to end up muddied by their lobbyists and PR firms, as happened up here last year.

Larry/35: It’s not really whether it was the original writing or the editing process that left this piece with a very classist and sexist slant, as the decision that it was after both writing and editing a suitable piece for publishing despite still having that.

And the original also has text such as “Yet the chav meat market down the road”, which was also cut here, so it’s not a case of it being given an unfortunate tone by careless editing.

“the real tragedy of recent years has been the decline of the traditional pub, and its replacement by cheap supermarket booze. A place where alcohol was enjoyed in a sociable manner, created social capital, and was an asset to numerous communities has been replaced by a form of consumption that is solitary and harmful.”

Cheers to that – destroyed by middle class wanker health control freaks who didn’t like pubs anyway but hated the fact that a lot of (shock horror) smokers did. If you like a sociable drink you now have a choice of a chav meat market or some lame cafe/bar full of pretentious middle class wankers eating stir fried organic tofu. Bring back real pubs.

@ 14 “It seems to me the liberal approach would be to interfere only with those who unlawfully interfere with others (e.g. fighting in the high street) – it’s odd that banning, taxing or minimum pricing and suchlike are the first resort as opposed to enforcement of the law.”

Exactly. The problem of “binge drinking” is not an alcohol problem – people have been binge drinking for centuries, it’s that the laws to control the negative consequences are not enforced. It’s a typical approach of the last government, rather than target the irresponsible and the feckless, just re-define the problem to include almost everyone (more than two pints of beer in a sitting is now classified as a binge) and use that to justify an ever more authoritarian tax and control regime.

The point being made in the article is perfectly clear, and not remotely classist or sexist. It is to do with how some ways of alcohol are dangerous and damaging, others are beneficial, but the law makes no distinction between them. It is an utterly uncontroversial observation, but because it is partly illustrated with a female example, suddenly it’s as if it was arguing that all women are drunken untrustworthy sluts.

Anyone familiar with the author’s writing will know that planeshift does not hold classist or sexist opinions, full-stop. Neverthelss, I can just about understand how you might object to the tone, if you were a delicate flower logging onto the internet for the first time ever. But to keep banging on about it once the point has already been explained, as if “chav meat-market” is some sort bigoted outrage rather a perfectly accurate way to describe a horrible nightclub, just strikes me as censorious hypersensitivity for its own sake.

[41] seconded!!

‘How so Shatterface? The article discusses the many different social settings in which alcohol is drunk, of which this mother is one of many possible examples. ‘

Okay, try this alternative then: ‘Why should all people who listen to loud music be treated the same? A company director listening to Wagner after an industrious day in the boardroom is clearly not the same as some parka wearing gangsta blaring rap from his windows’.

Different social settings, yes – but you might legitimately suspect some racist prejudice at play.

“Anyone familiar with the author’s writing will know that planeshift does not hold classist or sexist opinions, full-stop.”

Oh Agreed!

We can have classist and sexist comments from those whose hearts are pure. This is well known. Come on peeps, when Sunny talks about racial differentiation, about racial preference, because we already know he’s on the side of the Angels this is just fine!

But let one of them, of “them”, you know, the naughty peeps, use exactly the same words, my, the effronery of it!

For they are evil and could only be using our language, our distinctions, for evil reasons.

No?
Sid and Bea Webb thought that the lumpen proletariat should be prevented from having children. So did Shaw.

But they’re on our side, so different from those horrible eugenicists who went off to be Nazis.

Oh Yes!

Have been finding myself agreeing with Shatterface a fair bit over the last few comment threads here, which I’m sure will scare him. The choice of examples was unfortunate to say the least (though I suspect the author meant getting drunk at a music festival as a harmless/positive example of drinking, so I’d rule that one out).

#41 – just because someone is generally opposed to class snobbery & sexism doesn’t mean they will never exhibit it, and it should be opposed even if it’s an ally exhibiting it.

I can’t support the general point of the article – the natural logic would see alcoholics paying the NHS for liver transplants etc. Universality may not be a liberal principle according to this article but where they’re opposed I’ll take universalisty any day.

I do think there are attractions to a minimum pricing system, but the main benefits are associated with refocussing drinking on pubs rather than in the home by reducing the price differential between the two. However, as Tim J points out, it’s difficult to get round EU competition law on the issue.

On a similar note re consumption, and purely anecodally of my experience in several UK cities and discussions with various club owners – 24 hour licensing has changed the consumption of alcohol in bars and clubs for the worse.

Before 24 hour drinking, pubs and bars would close at 11 and those that wanted to carry on drinking would be forced to go to a club where the focus was not always drinking, but dancing, live music etc. Now people just stay in pubs drinking, quality music nights have stopped running and many of the venues that hosted them with stages and dancefloors have either closed or remodelled themselves to contain more bar space, more seating and generally less focus on the music.

Wait a minute. Under minimum pricing, how does the cash get from higher alcohol costs to the police, the hospitals and social workers? The answer, I think, is usually it doesn’t. It stays in Tesco’s coffers.

Nitpick: it doesn’t go to Tesco, it goes to the manufacturers. Apart from that, what you say is true.

What Tim Worstall did say is that while we should of course look at the costs of booze we should also look at the benefits of it. And then gave an outline of a method of getting at least an estimate of the cash value of those benefits which we could lay against the cash value of those costs as calculated by NICE.

Look at the man go! Defying Hayek and CALCULUMULATING economic costs and benefits!

Ahem.

Anyway: do you by any chance have a citation for what you said in that last thread about the social benefits being greater than the social costs?

“Anyway: do you by any chance have a citation for what you said in that last thread about the social benefits being greater than the social costs?”

Nope….that was rather the point of my ranting. That no one does provide a measure of the social benefits so here is a method that could/should be used.

Much of the rest of the thread was people saying “but that’s a ridiculous method” and me saying (as in panto) “Oh no it isn’t”.

Well to be more accurate, Tim, most of that thread was people pointing out you were begging the question, and you replying with “no I’m not, because it’s true”.

Which would be rather embarrasing coming from anyone less than an economic genius, obviously.

Neil, I know you enjoyed making that allegation but can we actually try and get something constructive from you on the point perhaps?

Let’s start right from the beginning.

1) There are both direct and societal costs from booze. We all agree on that.

2) There are also some benefits from booze. People do choose to booze, after all. So, what we’d like to find is some method of working out what that/those benefits are.

So far there’s no begging the question, is there? I’ve not assumed anything which I have to prove (*petitio principii*, the posh name for begging the question).

Excellent, OK, if you disagree with the way I’ve tried to answer 2) would you like to come up with your own method of trying to estimate that?

I can think of a number of ways: there’s no benefit to boozing at all. Perhaps because it’s all an imaginary product of a patriarchal and capitalist society. Perhaps because as soon as someone has the merest sip of the demon rum they are an addict, hooked for life.

I’m not sure you’ll get that far with those arguments in our own society (although very similar ones are used in a swathe of others: “it’s sinful” being common in many Moslem ones).

Or is that in fact the question you think I’m begging? That there could be any benefits to booze?

Do let me know will you?

For I’m really struggling herer to understand your point. Is it that

1) There are no benefits to booze and thus we cannot measure such benefits

or

2) There are benefits to booze but Worstall is a poopy head for the method he uses to estimate them?

If 1 then could you explain why people do seem to like to booze if there are no benefits and if 2, well, what method would you use to estimate that benefit?

Why is it consistently overlooked, that a minimum price does not make drinks that are already that price cost more? So it would only hit the cheapest, nastiest booze and leave more sophisticated stuff affordable for those who buy it.

There are also some benefits from booze. People do choose to booze, after all.

Heh, “choose to booze”. Nice phrase.

Anyway those aren’t the benefits you’re looking for. Personal benefits from consumption are already taken into account by the market. When considering externalities, in this case positive ones, you want the social benefits.

Nope….that was rather the point of my ranting. That no one does provide a measure of the social benefits so here is a method that could/should be used.

Ok, so presumably you have evidence that they only take into account the social costs and not the benefits at all?

“Personal benefits from consumption are already taken into account by the market.”

Err, yes, so therefore we can take market prices as reflecting in some manner those personal benefits? And the aggregation of personal benefits (just as the aggregation of personal costs, such as early death etc, becomes a social cost) will be a social benefit.

“Ok, so presumably you have evidence that they only take into account the social costs and not the benefits at all?”

Yes. Here are two reports done using the same model. University of Sheffield’s “York Group”.

http://www.ias.org.uk/resources/publications/alcoholalert/alert201001/scotland2007.pdf

http://www.scotland.gov.uk/Resource/Doc/285795/0087053.pdf

Agreed, they’re not the same report. But it’s the same researchers, using their same models, reporting to the Scottish Govt instead of NICE.

And there is no mention anywhere in either of them that there are personal benefits to drinking, personal benefits which when aggregated should be considered social benefits to be offset against the social costs.

They’re quite clear in their opeinings: they are looking to measure “the costs” of drinking, not do a cost benefit analysis. Which is why there is no discussion of benefits.

Why is it consistently overlooked, that a minimum price does not make drinks that are already that price cost more? So it would only hit the cheapest, nastiest booze and leave more sophisticated stuff affordable for those who buy it.

But that’s one of the reasons it is so pernicious.

People buy White Lightning not because they prefer the taste to malt whisky but because that is the only kind of alcoholic drink they can afford. Minimum pricing will make drinking dramatically more expensive for them.

It is a shabby attack on the poorest in society.

@54

Agreed.

“Ok, so presumably you have evidence that they only take into account the social costs and not the benefits at all?”

Dunno why my earlier comment hasn’t come through.

Yes, University of Sheffiled reports. For NICE, Scots Govt , all of them, are about the costs of drinking, not the benefits.

OK, one proviso there, they do take into account lower heart disease rates as a result of booze. But absolutely nothing at all about why people actually drink: because they enjoy it.

But absolutely nothing at all about why people actually drink: because they enjoy it.

I’ll say it again: those benefits are irrelevant when it comes to calculating the positive externalities of alcohol. Yes, people tend to enjoy what they drink, but that is not an externality, since it is not EXTERNAL to the market transaction. Externalities are about the effect on third-parties who weren’t involved in the transaction.

So if that is all that’s missing from reports on this, then there is nothing to moan about.

“So if that is all that’s missing from reports on this, then there is nothing to moan about.”

Yes, there is still something wrong. Because what’s being brought forward is only the costs of booze. And yet people are presuming to take decisions based purely on the cost of booze.

In order to be able to take decisions we also need to measure the benefits of booze.

And, as I’ve desperately been trying to point out, the market price paid for booze is a reasonable starting point for attempting to measure such benefits. For such benefits must at least be as much as is paid otherwise the transactions won’t take place.

Saying that we must raise the price of alcolhol by only looking at the costs is like making decisions on windmills by looking at the benefits (no CO2!) but not taking account of the costs (expensive electricity!).

You can’t take decisions unless you weigh costs against benefits.

Alright, OK, you can, but you’ll end up taking some bloody stupid ones that way.

OMG! An example where a woman is shown in a bad light? And that too on a liberal site?? Call the SWAT team, this is serious shit!

Also, I take responsibility for taking out the paragraph where planeshift says he enjoys going to concerts and getting drunk etc, because I thought people might actually debate the topic being raised.

Sunny/60: You don’t think that an example that directly uses the stereotypes of the working-class single mum (if she has a partner, why aren’t they also looking after the kids?) so commonly used by politicians (especially on the right) isn’t problematic?

Like those politicians, the article doesn’t really consider – having brought this woman up for the purposes of saying “clearly a bad sort of drinking” and arguing that an alcohol policy should stop her drinking specifically rather than also discouraging the “good” “social drinkers” – is that it ignores the reasons she might be drinking in the first place, and ignores that stopping her drinking by increasing alcohol prices won’t solve any of the problems that she’s facing.

How about we switch to a different problematic example from the article that doesn’t have a woman doing the drinking, if that helps make it clear?

“A member of CAMRA who enjoys real ales pays exactly the same taxes on his beer as a drunken bastard who beats his family up.”

Presumably, a member of CAMRA who gets drunk on real ale and then commits domestic violence would be taxed somewhere between the two? I find it unlikely that following some sort of nice respectable pursuit such as drinking real ale and joining CAMRA has much material correlation with propensity towards domestic violence, and indeed even if our hypothetical abuser might get less abusive towards his family if the government enforced sobriety on him, it’s unlikely that he would stop entirely.

Again, it’s the same sort of stereotypes about what a respectable upstanding member of society looks like.

@47 – there’s no way the supermarkets would pass on the excess income from minimum pricing to the manufacturers – they would be far more likely to use it to subsidise more expensive drinks products.

And for any tax increase to be effective, producers, wholesalers and retailers would have to be forced to pass it on in full – legislation which would also prevent airlines from undermining the aims of green taxes by offering ‘tax-free’ flights.

so commonly used by politicians (especially on the right) isn’t problematic?

It’s problematic if it’s part of a regular trend or there is an implication that it’s a widespread problem. In this case it is one isolated example. It’s like saying if someone mentions a terrorist might be Muslim, then we’re suddenly The Sun.

In this case it is one isolated example

On this particular site, it might be an isolated example (it isn’t the first time posts here have been criticised for unfortunately discriminatory choices of wording, but yes, the vast majority are not). On the other hand, in politics in general, there is a definite trend of which this forms a small part.

To take a much more serious “recent isolated incident” as an example, it’s not really a defence for Punch Taverns to say that most of their pubs don’t discriminate, because the relevant context is not “pubs that they own” but “business premises that discriminate against LGBT people”

It’s like saying if someone mentions a terrorist might be Muslim

I think this case is more like, for a discussion of terrorism, picking a somewhat stereotypical Muslim to be the “example terrorist”. The difference in wording between the two might be quite narrow, but the difference in effect is larger.

Sigh. Tim Worstall, you’re still not making any sense.

And, as I’ve desperately been trying to point out, the market price paid for booze is a reasonable starting point for attempting to measure such benefits. For such benefits must at least be as much as is paid otherwise the transactions won’t take place.

Look there are benefits to alcohol. We are both agreed on that point. But the market price paid for booze measures the INDIVIDUAL benefits. It does not take into the the SOCIAL benefits of booze, things that benefit third parties otherwise known as its positive externalities. Look, I’ll even quote Wikipedia (usual hazard warnings apply):

In economics, an externality (or transaction spillover) is a cost or benefit, not transmitted through prices, incurred by a party who did not agree to the action causing the cost or benefit. A benefit in this case is called a positive externality or external benefit, while a cost is called a negative externality or external cost.

Now I’ll try doing it in equation form to make it even clearer to you:

1. Cost/Benefit of alcohol = Benefits to those involved in market transaction (A) – Costs to those involved in market transaction (B) + Benefits to third parties (C) – Costs to third parties (D)

Also:

2. Cost/Benefit of alcohol = Market price + Externalities

Since by the definition of externality, externalities are not a part of the market price.

3. But A – B = market price (approximately)

Therefore by comparing the two equations:

4. C – D = Externalities

Therefore:

5. Externalities from alcohol = Benefits to third parties (C) – Costs to third parties (D)

To use the correct terminology:

C = Positive externalities
D = Negative externalities

Now, the government/economists/health experts/bloggers/whoever want to work out the externalities from alcohol for whatever reason. How do they do this?

Well they use equation 5. They add up the costs to people not involved in the transaction, and take this from the benefits to these people.

Has NICE, say, done this? As far as I can tell, yes, Nice has done this.

There’s no need for NICE to take into account benefits to those who drink alcohol, since that is already taken account for by the market price, and so aren’t an externalities.

But N ICE isn’t just counting the externalites…the costs to people other than those involved in hte market transactions. It’s also lumping in the costs (in shortened life spans etc) to those taking part in hte market transactions and consuming.

Well that wasn’t your original point (which was that NICE wasn’t taking into account the individual benefits), so I’m glad we’ve got past that.

But anyway, if NICE is doing what you say they’re doing, then that of course is wrong.

But that seems like a rather elementary mistake for a health economist to make.

“Straw Man alert!

Tim Worstall didn’t actually say anything at all about Pigou Taxes.”

Sorry, weekend of drinking so late reply (irony….)

Tim, I think it is fair to say that you are an advocate of pigou taxes to deal with externalities, particularly with regards to things like Carbon emissions. You’ve written in favour of them enough that I think its reasonable to say that. My point is that advocates of a minimum price come from a similar perspective in the sense they are using pricing strategy to solve social problems. Yes it isn’t quite the same, but it’s from the same school of thought that says we deal with social costs/externalities of certain forms of consumption through manipulating the pricing system/market mechanism.

My point was both minimum prices and pigou taxes penalises the responsible/social drinker, as it ignores the fact that many of the costs are about as much the social setting and sociology of drinking as it they are about individual consumption per-unit.