Afternoon roundup

The worthies, on a long-overdue closing of the browser tabs:

• Colby Cosh explains to Canadians something Kiwis have known for some time: the Party commanding the confidence of the house gets the Prime Ministership. And that might not be the largest party in Parliament. 


• New Zealand's judges keep bringing the administration of justice into disrepute. 


• Attempts to stop people from renting their houses to tourists on AirBnB. If cities just let people build more housing, none of this would be any kind of issue. 


• Agriculture emission pricing gets punted to post-election. It would have been heroic for Hipkins to hit this while milk prices are tanking.  


• ACT proposes weakening the medical licensing cartel. 


• The government adds a pile of cost-increasing conditions for receipt of film subsidies. It may have the laudable effect of reducing demand for film subsidies. Or, perhaps down the track, lead to higher subsidies to offset the cost imposed by stuff like carbon footprint audits. 

Afternoon roundup

A closing of some the browser tabs brings a few worthies:

• Roland Fryer Was Railroaded
• Brian Easton on the perils of ignoring economics
• Pay for defection. It raises the cost of attacking. 
• The Canadians get stuck with a copyright term extension. Cosh is excellent here. Why does the Canadian government figure it can ignore the dairy provisions in trade agreements but bound by dumb copyright stuff?
• The extortion attempt continues. [Me on this, previously]
• Ontario's Housing Affordability Taskforce report from February has a lot of good stuff. I'll need to read through it more carefully. Looks like Ford won't be implementing it but there are ideas worth thinking through for NZ. 
• Superb BusinessDesk piece on the cost of building infrastructure in NZ. I wish Auckland could outsource both construction and all of the approvals for its transport/infrastructure projects to whoever sorts that out in Seoul. 
• Liberal Education
• Ages back, Hess & Orphanides found that discretionary wars were more likely for first term Presidents presiding over poor economic conditions. Simple little model. Re-election depends on demonstrating competence, two margins for demonstrating it, if you've failed at the one worth the punt on the other. Ashani Amarasinghe has a forthcoming piece at J. Pub that's far more extensive. Lots of governments aim to distract from domestic turmoil. But it doesn't work all that well.

Afternoon roundup

The tabs... there are so many of them.

A few notes on the closing of the tabs.

• Tyler Cowen is excellent on herd immunity. Those who urge us not to worry about the virus used to claim that herd immunity would kick in and the virus would burn itself out. Now they tell us not to worry because the death rate has dropped. But herd immunity was supposed to stop case numbers from rising. And even places with lotsa Covid aren't there yet - other than perhaps at San Quenton. 
• Sam Bowman has a neoliberal agenda for the 2020s: YIMBYism, support for immigration, and carbon pricing (he says carbon taxes, but if you've already got an ETS, that'll do the job). Neoliberalism is a bit of a political swear word. Oliver Hartwich goes through the history of the term - the actual neoliberals were more 'third way' types. Whether the term should be buried or reclaimed is a bit of an open question. 
• Steve Ambler and Nick Rowe on NGDPLT.
• Freedom of speech doesn't encourage terrorism. It reduces it. Here's Eskildsen and Bjørnskov in Political Studies. Why? They suggest "(1) more freedom of expression makes it easier for the police and intelligence agencies to gather information on potential terrorists and targets, and (2) freedom of expression works as an outlet for displeased citizens through which they can openly express their discontent instead of resorting to terror."
• Chris Bishop and Phil Twyford had an excellent panel discussion, hosted by Warren and Mahoney, in which they went through urban and transport policy. This kind of thing makes you really appreciate what we've got in NZ. 
• Get yourself a city councillor with a digger. It helps.
• Support for immigration improves, albeit on a bit of a tough to interpret question. If folks recently said that the amount of immigration should increase, are they thinking about policy as it was before Covid, or are they thinking about current border restrictions?
• Helen Clark comes out in support of the euthanasia bill. I agree with her. 
• Superb piece from Colby Cosh on tax and legal cannabis in Canada. It isn't enough just to look at the tax take on cannabis. Is it a complement or a substitute to alcohol or tobacco? What are the general equilibrium effects? 
• Every supporter of circular economies and zero waste should support this initiative.
• Can you build a new tech hub? It's harder than it sounds.
• Razib Khan on Brahmin Privilege
• Keas are awesome
• Arthur Grimes on getting targets back into government.

Sport and competition for the market

Colby Cosh's latest column would be great fodder for grad classes in Industrial Organisation.

We can think about sporting competition in a few ways. The obvious one is competition within the market. Teams compete against each other to be the best within the league's set of rules.

There's also a weak form of competition against other sports in the overall market for attention. Leagues adjust their rules to maximise profits across the set of teams; if the game isn't fun to watch, people will watch something else. So if the competitive balance gets out of whack, the league might use salary caps or entry drafts to make the game more competitive.

But there doesn't seem to be much competition for the market within a sport. If you want to watch professional hockey in North America, there's the NHL and its set of rules. If you want to watch professional basketball, there's the NBA and its set of rules. Canada and the US run different rules for gridiron football: CFL versus NFL, but it isn't like you can choose one over the other if you want to go out and see a game one day. The city you're in says which league you get to watch.

So we get to Colby's rather fun question. All the leagues have evolved to a stable form of the game with about 30 teams in each league and no interesting rule variants. Baseball gets a designated hitter rule in the American league but not the National league, and that's about it. Why isn't there more competition for the market?

Here's Cosh (go read the whole thing!):

In these league structures as we have come to accept them, teams become local monopolies, with little natural incentive to care for or experiment with their sport. Major league baseball was once the senior level of a healthy, commercially successful universe of ballplaying; now, “baseball” exists mostly to serve a televised spectacle that is 30 businesses in large metropolitan areas. All other play of the game above (or even at) the amateur level is defined by its relationship to those businesses. And this is more or less equally true of the other sports.

Which might be fine if it didn’t have other terrible effects. But the One True Business Model makes all the pro sports extremely conservative and incestuous. And each league is wedded to a single, all-prevailing rule set; even the vestigial divide in baseball that gave one “league” the designated hitter would no longer be tolerated.

Any new idea in rules or playing conditions must either be rejected or accepted wholesale after limited experimentation. (The “minor leagues” in the big four sports are suffered to exist partly for the purpose of trying out new rules, but this only emphasizes their status as subject principalities.) This, in turn, leads to endless tinkering inflicted on every fan simultaneously: witness the strife in American football over how to police pass interference, or the torment all sports have suffered over use of instant replay in officiating.

If you are a fan nostalgic for the game of basketball as it was played before the three-point line existed, or for hockey before the shootout, you have nowhere to turn. But it could be worse: you could be a player whose relevant skills are rendered obsolete by some singular, irreversible change in the rules and corresponding strategic imperatives. What are you going to do, go play in the other NFL?

The worst of it is that even as these cartels stagger toward a perceived single optimum of entertainment value, they can struggle, with equal difficulty, to let go of traditional axioms that are dragging them down. Major league baseball’s increasing transformation into a contest of strikeouts and home runs, with roughly 12 relief pitchers appearing in every game, is the obvious example.

I love all four of these games, but watching them is ever more like visiting a nice relative in an intolerable and dangerous neighbourhood. And, actually, I think there is a great long-term commercial reward for the first one of these major leagues to start seriously reconsidering its own monolithic structure. The most obvious candidate is the National Basketball Association, whose brilliant commissioner, Adam Silver, has put forward a proposal to interrupt the 82-game NBA regular season with a winter tournament.

This isn’t the orgy of destruction for which I long; I prefer to imagine a total anarchistic dissolution whose extreme limits even I cannot see. (What if there were no permanent teams, and everyone in baseball or basketball were a free agent every year? What if the L.A. Dodgers-Kings-Chargers-Lakers were one club that had to play all four sports in a calendar year with a strict 50-man roster?) But at least, dear God, Adam Silver is thinking about the future; he is thinking about attacking the unexamined, boring premises of his game/sport/cartel, which include “having a single ‘regular season’ that is a prelude to a single playoff tournament.”

If we contrast to New Zealand, cricket gives us three forms of the game. Some prefer 20/20, some prefer ODI, and the best people prefer a proper Test. International teams face all three forms of the game. Rugby takes a different tack, with different teams playing rugby union and rugby league, and not much player cross-over between forms.

And so the fun fodder for an IO seminar: Why do we get three forms of cricket within the same league where each team needs to be able to play all three; two forms of rugby played by different teams where there are often franchises of both leagues in the same city (Wellington has both the Lions and the Hurricanes); but, only one form of professional-grade sport in the North American leagues? Is it really plausible that the North American professional leagues have really evolved to the best-possible forms of the game?

I like the thought-experiment of the 50-man combined LA Dodgers-Kings-Chargers-Lakers.

Afternoon roundup

Posting has been light as other deadlines press. But I have accumulated too many browser tabs. Here are some worthies:

• Colby Cosh on the case for using prices to reduce carbon emissions. 

  Is there really absolutely nothing you can do, even if you’re quite lower-middle-class, to create energy savings in your life? You never go to the fried chicken place across town instead of the one on the next block? Are you sure you need to own a pickup for one home reno project or a bit of landscaping every three years? Have you even looked into smart thermostats or checked your window seals? Invested in a Snuggie? Taken the old incandescent Christmas lights off the hot tub?
  
  The real problem is that you can’t ask these questions — even hypothetically, or even just to point out that every single household might ask hundreds of them — without sounding like an obnoxious schoolmaster. A carbon tax is social engineering — it is just an optimum, consciously designed, maximally market-friendly way of going about it. Any economist will add the implied caveat that all taxes are social engineering, and other taxes are engineering society in dumb or bad ways. A “carbon tax” is meant, for better or worse, to discourage the emission of free carbon. “Income tax,” which discourages honest work, starts to look pretty ridiculous when you follow the logic just a few inches further. But those are always the hardest inches to cross in the face of a policy novelty.



• Pattrick Smellie reminds us how New Zealand's ban on Taranaki oil exploration can wind up increasing emissions globally:

  The oil and gas ban is proving to be a two-edged sword politically, particularly since no matter how often Woods denies it, the evidence is strong that the ban is more likely to increase than decrease global emissions of greenhouse gases.
  
  Especially questionable has been her claim that the vast quantities of methanol currently made from natural gas in New Zealand won't end up being produced in China, using higher-emitting coal because of China's emissions trading scheme.
  
  As climate change policy expert Christina Hood told the Environmental Defence Society's recent business and climate change conference in Auckland, the Chinese ETS is not really an ETS yet and currently only applies to the electricity sector.

  Our submission on the ban is here.


• Former NZ Ambassador to Beijing John McKinnon's speech on New Zealand's relationship with China is excellent. Recommended reading.

  China is also now, what is was only potentially in 1972, a great power. The fabric of international society is woven by the ability of the international rule of law to constrain the interests of large powers such as China. This means that New Zealand, as a country which invests in and benefits from the international rule of law, has expectations of China, as it does of other great powers. That they will comport themselves appropriately, especially towards those who have less power than themselves. That is the true mark of greatness. It is pleasing to see how China has responded to these expectations, such as through its policies on climate change, and its championing of the multilateral trading system. New Zealand, along with many other countries, will be represented at China’s international import expo, to be held in Shanghai in November, and marking the 40th anniversary of reform and opening up. There are many areas where New Zealand welcomes China’s voice and can and does work with it in international forums.



• Susan St John is entirely correct about the need to better sort out residence issues with NZ Superannuation. The government is currently considering legislation that would require people to be resident longer in New Zealand to have access to the New Zealand Superannuation scheme. St John reminds us that we also need better treatment of the private retirement plans of those who bring their 401(k) with them to New Zealand.


• New Zealand's copyright industry is trying on a push for extending the duration of copyright and messing with our current ISP notification regime for infringement; I don't wish them luck.


• Net migration has slowed. This shouldn't be surprising. Migrants are only somewhat sticky; a lot of them leave a few years after arriving. That means that net migration figures will always look stronger than they should during upswings in inbound numbers, and weaker than they should during downturns in inbound numbers. Current year net migration is a function of current year inflows and lagged departures from prior year inflows. Net migration was always going to flatten off unless inbound figures continued to grow. As soon as inbound figures level off, then the outflows from prior year waves catch up. I'd be surprised if the anti-migrant tone of the last election campaign, combined with increased restrictions on those here without a residence visa (can't buy a house), hadn't amplified this.


• Some folks are complaining that Christchurch might have 'too many' houses now. What a terrible problem to have! We should be thanking Selwyn and Waimakiriri for allowing growth and solving Christchurch's post-quake housing crisis. And for those who don't like the sprawling suburbs - perhaps the Crown could consider selling off some of its downtown land holdings using a descending bid auction to find out what the value of that land really is. It's felt like unwillingness to realise losses against inflated downtown land values has been a hold-up there, but I'm not close enough to it to really know.

Naming things after politicians

Colby Cosh writes on the perils of naming things after politicians in a world in which standards change. 

I didn't know that Ontario has 10 schools named after Sir John A MacDonald. 

You should read the whole thing, but I enjoyed this snippet:

I personally think it would be terrific if we stopped naming things other than pub toilets and landfills after politicians, but maybe that’s just me. A politician’s contribution to the world is never certain, never too safe from appropriate revision or justified dissent. To me, it seems less deferential and creepy to honour artists, scholars, and innovators who definitely added to the happiness or knowledge of humanity, and especially if they did it in a way that went mostly uncompensated.

I would certainly name any number of schools after Walter Chell, the man who mixed the first Caesar, before I would name one after a prime minister. Sadly, naming schools after bartenders is not the usual rule where I live. But we follow another pretty reasonable one: we typically name new public schools after highly regarded schoolteachers.

Kreskin Cosh

Well, Colby Cosh called this one before it happened, didn't he?

Cosh from last week:

The point is not that Bismarck [subject of many assassination attempts] was particularly hated, although he was. The point is that this period of European (and American) history was crawling with young, often solitary male terrorists, most of whom showed signs of mental disorder when caught and tried, and most of whom were attached to some prevailing utopian cause. They tended to be anarchists, nationalists or socialists, but the distinctions are not always clear, and were not thought particularly important. The 19th-century mind identified these young men as congenital conspirators. It emphasized what they had in common: social maladjustment, mania, an overwhelming sense of mission and, usually, a prior record of minor crimes.

From the Sydney Morning Herald on yesterday's hostage incident:

Manny Conditsis, a Sydney lawyer who represented Monis last year when he was charged with being accessory to the murder of ex-wife Noleen Hayson Pal, told ABC News that Monis was an isolated figure and "damaged goods".

"His ideology is just so strong and so powerful that it clouds his vision for common sense and objectiveness," Mr Conditsis said.

...
"Knowing he was on bail for very serious offences, knowing that while he was in custody some terrible things happened to him, I thought he may consider that he's got nothing to lose," he said.

"Hence participating in something as desperate and outrageous as this."

Monis had an extensive criminal history, which included being charged with 50 allegations of indecent and sexual assault. He had also been engaged in a protracted battle to overturn his conviction for sending offensive letters to the families of dead Australian soldiers between 2007 and 2009. 

BK Drinkwater also claims, ex post, to have gotten it right:

I don't like tweeting about crises as they're happening, so here's what I held back yesterday: "This sounds all Attica Attica to me".
— BK Drinkwater (@BKDrinkwater) December 15, 2014

One potential lesson from the whole thing?

Our mental health services r chronically under funded & offer more value for money than the GCSB or SIS, as well as helping ppl b free
— Paul McMahon (@McMahon4SH) December 15, 2014

I could support shifting funds from spying over to mental health support. I doubt it would have helped in this case, as Monis looks to be somebody who really should have stayed in prison for a very long time. But it does seem a better general-purpose technology. This image sticks with me:

Costs to the Economy, and the counterfactual

When it comes to mental illness, the incremental loss “to the economy” of diminished human productivity is only relevant to policy to the degree that it could be corrected at no compensating expense. Otherwise, cost claims amount to the difference in earnings between ourselves and hypothetical, perfectly rational gods. The irony of mental health advocates waving the $50 billion figure around is that they explicitly want to increase it by pouring more money into public mental-health programs. Give them $100 billion more and they would quickly be using that in their argument for the next $100 billion.

Colby Cosh on measures of the social cost of mental illness. He's entirely right. While productivity costs seem plausible, they're only really relevant where there's something that can cost-effectively be done about it. The counterfactual isn't a magic wand that makes everybody happy and productive; rather, it's a costly ongoing process with uncertain likelihood of success. As Cosh then puts it, "We treat the mentally ill in the name of hope, not GDP."

The problem of the counterfactual is bigger than that though. In most of these kinds of studies, we take as counterfactual somebody with average characteristics and outcomes. But if all that matters is GDP, that's hardly the correct counterfactual. What's the social cost of not getting exactly the right amount of education? The counterfactual there would be people who chose the income-maximising level of education given their underlying characteristics. What's the social cost of taking more than the amount of annual leave necessary for GDP maximization? Define things with a workaholic as counterfactual. I'd bet you could get a horrible and horribly large social cost figure by measuring the "social cost of those elderly who fail to commit suicide immediately upon retiring". The counterfactual savings in health care costs and pension benefits are enormous.

And Cosh gets it:

The real problem is what we mean by “lost productivity.” What is being postulated here is a sad, spiritually afflicted populace whose “economy” could be bigger if absolutely everyone were well enough to work to their full capacity. We all sacrifice some part of “the economy” to personal happiness or to the well-being of our families and loved ones. Probably we all sacrifice some to personal pathologies, whether or not they could be characterized as mental illnesses. Is being somewhat lazy a mental illness? How about having an IQ of 88? “Costs to the economy” are, in this sense, hard to take seriously: human imperfections defy accounting.

Exactly. If we go down this line, why aren't we looking at the social costs of "being somewhat lazy"?

Previously (a few of the many many prior posts here...):

• Social costs of healthy
• Obesity costs
• Adding up the costs
• The Cost of Cost Studies
• Can't kill a bad stat
• Do costs matter (revisited)
• The costs of everything: a continuing series

Efficient taxes

Sinclair Davidson spoke against efficient taxes at this year's Mont Pelerin meetings. My summary of that portion of his talk: you want the duck to squawk when it's being plucked lest the bird be completely denuded. If we take a leviathan model of taxation rather than a public interest model, then high excess burden can be a plus rather than a minus.

Colby Cosh writes in favour of Georgist land taxes. A tax based on the unimproved value of land would be about as efficient as can be achieved. But as I suggested here last year, switching from income to land tax is a risky game. It's politically easy to reinstitute punitive tax rates on higher income cohorts. Unless this kind of tax switch is accompanied by credible long term cuts to overall spending, the size of government is likely to creep up.

If I could push a button that would flip our current tax structure to a pure Georgist land tax, with a guarantee that the move wouldn't affect the overall size of government, I'd push the button. As is, I'd prefer to snip the wires to keep others from pushing the button.

On the awesomeness of Rush

Colby Cosh explains all.

It’s disorienting for a Rush fan—someone who was patronizing and defending them when it wasn’t just not cool, but the opposite of cool—to watch the bien-pensants struggle to cram them into the canon in the year 2010. Especially since it’s been twenty years since their finest work, and arguably more like thirty.

I started university at almost the exact moment Nirvana broke, and I still remember exactly where I was standing the first time I saw Kurt Cobain on the cover of a guitar magazine. I don’t play, but for years I’d been devouring the rhetoric of high-performance musical gear and modal theory as a fan, incapable of appreciating it as anything but a species of foreign-language poetry. In that world, the members of Rush were (and are) senior deities. It was instantly clear to me that Cobain, who had duct tape on his guitar neck and probably thought the Mixolydian was a brand of food processor, was going to annihilate the universe we had known. This was a lot like being Michael Corleone in Godfather II and watching that Cuban guerrilla blow himself and the cops to smithereens. “Uh-oh.”

But the last revolutionary flowering of romanticism in pop music ended up being the best possible thing for Rush’s reputation. Intellectuality and musicianship were purged from the radio, but this left the generations that followed hungry for a little classicism, a little ambition and ironic pretension. (How else do you account for Mellon Collie and the Infinite Sadness?) Grunge provided an opportunity, as punk had before, for separating the wheat from the chaff—annihilating acts that had truly been predicated on nothing but hairstyles and codpieces, and allowing reconsideration and critical filtering of arena rock, metal, and prog that might have been burdened with excessive pompousness and trippy kozmik imagery, but still possessed enduring value. (You don’t want to hear my lecture on how Iron Maiden has introduced more teenagers to literature than anybody in Britain not named J.K. Rowling.)

Granted, I’m not actually sure that “classicism vs. romanticism” is the best metaphor for thinking about the tension between artfulness and sincerity in popular music. The three-chords-and-the-truth types are arguably the real classicists, self-restrained as they are by a musical version of the Aristotelian unities. But self-imposed limitations have been part of the fun of listening to Rush, too. It’s not really natural for a band to insist on doing what Rush has: being a three-piece outfit that will, as an inflexible rule, only make music in the studio that it can eventually replicate without additional help on stage.

I wasn't aware that there was a time when Rush was the opposite of cool. Is it possible?

Cosh's whole article is excellent: there's good reason he's now on the Arts and Letters Daily blogroll.

Previously: Rush, Red Barchetta, and the anticipating of Peltzman's seminal article on offsetting behaviour...

Colby is annoyed

Colby Cosh is annoyed with a typical healthist report in Alberta noting the social costs of traffic accidents. Of course a world without traffic accidents would be preferable if we could simply wish it so at zero cost. But in the real world, we're typically trading safety against other goals like getting places in reasonable time. The latter has benefits, and if we base policy solely on the goal of harm minimization, we do violence to optimization.

Some day there needs to be a report on the harms of harm reports that reckon the costs of X against a counterfactual of costlessly avoiding X. The public hear the numbers, assume that they've accounted for benefits forgone, and public opinion shifts towards greater regulation.

Peak Everything

Denis Dutton today reminds me of the Tierney bet with Matthew Simmons, which ought to pay off in Tierney's favour by the end of the year. Simmons reckoned peak oil meant a fair odds line on 2010 average daily oil prices, inflation adjusted, of $200 per barrel. Barring the complete meltdown of the US dollar, that's not going to happen, and even in that case, a fair bit of the price rise would be knocked back by inflation adjustment. And so Tierney will be $10,000 richer come year end...Happy New Year!

Colby Cosh weighs in on Peak Everything in a beautiful post that tries to find an element that hasn't peaked:

How about peak lithium? Surely not… wait, yep, there’s a peak lithium guy. Helium? C’mon, helium makes up a quarter of the goddamn universe! Sorry, peaked. Phosphorus too. You may be under the impression that we’re all swimming around in a sea of nitrogen but turns out that’s peaked. And you may be certain thatlong-passed, purely local peaks of many resources represent rehearsals for more intractable global limits, and cannot possibly just mean that the Republic of So-and-So found better things to do than mining arsenic. Pretty much everything’s peaking, all at once. Very soon now we’ll all be scurrying like ants across an eight-thousand-mile celestial object that looks suspiciously like an apple core.

If you haven't already subscribed to his RSS feed, hit the link and do it now...

Ban the cheques

Colby Cosh says ban the cheques. Putting party logos on federal government cheques for community projects ... very distasteful.

The fact is that our system of government allows MPs on the side that has the confidence of the House to engage in feudalism. This is the only appropriate term for a structure whereby communities and organizations are encouraged to display fealty to a person, and subsequently receive reciprocal benefits directly from his hand. It has been a feature of every Canadian government, whether Liberal or Conservative, and I suppose there might even be some things to say in its favour. It is certainly what the vassals expect; it is, at root, the feudal instinct that makes voters ask what their MP has done for them lately, or why the government isn't "doing something" to help a particular region or industrial sector.

I'd previously commented on the story here.

Morning roundup

• Mankiw's syllabus for his freshman seminar at Harvard. Caplan's Myth of the Rational Voter is on the list.


• Jeremy Clarkson on the horrors of the Canadian health care system


• One reason salaries differ across academic disciplines: supply and demand. Here's the view from inside a philosophy search committee. Economics isn't all that different except that the number of applicants is smaller and your department's top picks are likely to have competing offers.


• Mexico and Argentina decriminalize minor drug possession, Washington shrugs. Pragmatic reason usually given against decriminalization or legalization is that the US would slap down a trade embargo. Red herring.

  Canadians who have argued that the adoption of a harm-reduction approach here would jeopardize our trade relationship with the United States can therefore pipe down for the foreseeable future. Unfortunately, we greet the occasion with a law-and-order he-man Conservative government in place -- one which, whatever its virtues when it comes to crimes that have victims, is full of people like Peter van Loan, Rob Nicholson and Tony Clement, and plenty of others who are about as likely to give birth to a muskox on the steps of Parliament as they are to support rational drug policy. From that standpoint, our timing sorta stinks.

Smoking, fiscal externalities, and harm minimization

Colby Cosh points me to still more examples of very bad analysis of the costs of drugs: in this case, smoking. The Canadian study seems to have tried to tally up the costs to government of tobacco, but didn't note that smokers' deaths reduce government pension costs and avoid the health system having to deal with the other ways they would otherwise have died (as we all do, eventually).

Two things worth noting.

First, Kip Viscusi and others have found that when the costs are tallied correctly, smokers save the government money: they die earlier of cheaper diseases.

Based on surveys of smokers in the United States and Spain, for instance, he demonstrates that smokers actually overestimate the dangers of smoking, indicating that they are well aware of the risks involved in their choice to smoke. And while smoking does increase medical costs to the states, Viscusi finds that these costs are more than financially balanced by the premature mortality of smokers, which reduces their demands on state pension and health programs, so that, on average, smoking either pays for itself or generates revenues for the states.

Second, it's unclear whether these "cost the health system money" effects really are inefficiencies. They're called fiscal externalities, and are of pretty dubious status regardless of the direction of the sign. If we take Buchanan and Stubblebine's (1962) categorization of pecuniary and technological externalities, fiscal externalities don't get to count as the kind that cause inefficiencies. In the Buchanan-Stubblebine framework, pecuniary externalities affect others via the budget constraint while technological externalities enter directly via the utility function: only the latter has efficiency consequences. In short, under that view, we should be no more worried about inefficiency caused by somebody smoking more and costing the health system money than we should be worried about inefficiency caused by somebody bidding against you at a house auction.

Even if you want to count fiscal externalities as technological, it's well-neigh impossible to tell where to stop. If the existence of a public health system induces me to smoke more than I otherwise would, imposing costs on you, the taxpayer, it will also have effects on all kinds of other things I might choose to do. Folks will take on more risks on many margins and will invest less in avoiding health costs. At what point does the State get to tell us we're forbidden from risky sexual practices because of the costs of STDs on the health care system? As Edgar Browning so nicely showed us, the full set of taxes and subsidies that would eliminate all of the incentive effects inherent in the public health system would have an incidence similar to an actuarily-fair private health insurance premium, but with massive transactions costs.

Finally, Reason points me to an FDA campaign against electric cigarettes, which deliver nicotine vapor to smokers. While these electronic delivery mechanisms are far safer than regular cigarettes, the anti-tobbac folks worry that they'll prove the gateway into regular tobacco for non-smokers. Or, at least that would be the rational version of the argument. Arguments against harm-minimization devices of this sort often seem more akin to the Pope's reaction to a campaign promoting masturbation over pre-marital sex. Consider the position of the anti-tobbac lobby here in New Zealand with respect to chewing tobacco, or snus, which here is banned.

Snus is an addictive tobacco product that contains nicotine. The risk of developing cancer is far less among snus users than it is among smokers. However, it cannot be said that snus is an entirely safe product nor can it be claimed that it has been proven to be an effective cessation aid for smokers who want to quit. ...Rather than deregulating the use of oral tobacco in New Zealand more substantial health gains are to be had from the regulation of all tobacco products.

In other words, even though it could well improve health outcomes for smokers, it's still tobacco, and tobacco is evil, and suffer not tobacco to live among you.

It's an empirical question around elasticities on the extensive and intensive margins, but I'd be extremely surprised if either electronic cigarettes or chewing tobacco proved net harm increasing. It's a shame that the onus isn't on the pro-ban folks to prove harm.