Monday, 12 May 2008

Three 'Policy Challenges'

In my guest-blogging capacity over at the Devil's Kitchen, I wrote a rather opinionated post about a new publication (PDF) put out earlier in the month by a centre-left think-tank, the Social Market Foundation.

This document details three areas in which, supposedly, only "climate change deniers" and "extreme libertarians"(!) dispute that individuals should change their behaviour*. Unsurprisingly, the authors recommend that Government should aim to bring about such behavioural change through interventionist policy.

Those three areas are climate change (duh), obesity, and increasing savings.

Climate change, as regular readers of QT and/or the Kitchen are probably aware, is the authoritarian's best friend.
Never mind that the great global warming debate is far from being settled one way or the other**.
Never mind that the Stern Report, which the SMF document cites as backing for their proposal that intervention is needed***, actually indicates that CO2 taxation should if anything be reduced.
And certainly never mind that the Government is calling on individuals to change their behaviour in the name of climate change while at the same time going ahead with the building of a third runway at Heathrow Airport.

As for obesity, the advocates of interventionism don't seem to sure whether they're advancing an argument based on 'protecting individuals from themselves' or 'protecting society from irresponsible individuals'. I consider the first to represent indefensible paternalism, so let's instead take a closer look at the second...

Now, it is true to say that increased levels of obesity bear a significant cost to the NHS. However, as Daniel Engber (science writer for Slate magazine) points out, it is also true that obese people have shorter lifespans. This observation may fall into the category of 'ideologically incorrect' to point out. However, if advocates of interventionist policy persist in advancing cost-based arguments for those policies, they should be prepared to have same rebutted. Since this isn't taken into account when scare statistics such as "obesity costs the nation more than £3 billion a year" are produced, all of these statistics should be taken with a pinch of salt (but not too much!)

Finally, savings. "...People are not saving enough for an adequate income in retirement and the state will be unable to afford to support them at the living standards to which they are accustomed"+. Surely this is a clear case in which interventionism, in the form of automatic enrolment in a suitable pension scheme, is to the benefit of all.

The Government, in the Pensions Bill introduced last autumn, has proposed automatic enrolment in a pension scheme to which employers must contribute for all employees earning more than a (low) threshold. However, the proposals do provide the employee with the choice to opt-out of the pension, meaning that the scheme is not actually compulsory, but instead relies on inertia to achieve its desired aim of increasing levels of saving for retirement.

It's not as though this proposal is without its attendant problems. It has been predicted that employers who take on a lot of short-term and/or part-time workers, particularly in the leisure and retail sectors, will be affected by the administrative costs associated with the 'personal accounts' provided for by the Bill. At the same time, this proposal cannot reasonably be said to represent unacceptable coercion.

* Page 17, 'Creatures of Habit? The Art of Behavioural Change'
** The SMF document's only source other than the Stern Report is an Ipsos MORI survey measuring "public awareness" of climate change that found 82% of respondents to be "concerned". Er, so, I guess all this interventionism isn't needed, then.
*** Page 16, '
Creatures of Habit? The Art of Behavioural Change'
+ Page 15, 'Creatures of Habit? The Art of Behavioural Change'


Anonymous said...

Interesting that you leave pensions out of your indictment- they are the biggest of the three areas of spending. Furthermore I'd argue that pensions definitely need to change- many people in receipt of them are perfectly capable of working and furthermore this has all sorts of warping effects on people's incentives- against having children for example or making provision for the future. It strikes me that this is the common plight of libertarians- you are very good at talking about what you would cut at the margins, but you need to cut health, education or pensions in order to really get a substantial fraction out of public spending.

QT said...

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