Lifestyle Economics Blog

Does nanny know best?

Last night, I spoke by video link to Australia's 'Nanny State Enquiry'. These were my opening remarks...

My hope is that the enquiry will do at least two things. Firstly, look at how much money the government is giving to special interest groups. Secondly, carry out a cost-benefit analysis to see if the slew of nanny state policies introduced in Australia in recent years has been worth the time, money and effort.

Looking specifically at the so-called ‘public health’ movement, which is the source of most lifestyle regulation, there are two essential points to make. The first is that it has nothing to do with healthcare or medicine, rather it is a political movement for wowsers and the government has no business funding it.

The second is that the ‘public health’ lobby demands government intervention in markets which are functionally perfectly well and, by trying to stop people doing what they want to do, they inevitably impose unnecessary costs on society. Any cost-benefit analysis of nanny state would find more costs than benefits if it was carried out correctly, which is to say if it counted pleasure and enjoyment as benefits.

To elaborate on my first point, ‘public health’ can do useful things. There are times when individuals can only secure health benefits for themselves by working collectively through government. Clean water, vaccinations, environmental pollution and speed limits are all examples of this. If I want to avoid being in a drink-driving accident, it is not enough for me not to drink-drive, everybody else must do the same. Similarly, it is not enough for me to vaccinate myself against TB, I need herd immunity. Those are legitimate public health goals.

The situation with drinking, vaping, smoking, fast food and fizzy drinks is totally different. If I don’t want to eat at McDonalds, I don’t need the government to make it more expensive, I just don’t eat there. If I don’t want to use e-cigarettes, then I don’t use them. I don’t need the government to ban them. These are private lifestyle choices which are, by definition, not public. The choice is mine, the risk is mine, the benefits are mine and if I come to harm, that is my problem, not anybody else’s.

The ‘public health’ lobby is, therefore, getting involved with issues that are none of its business. It differs from medicine in three important ways. Firstly, you have to qualify as a doctor to practise medicine. Most of the people in ‘public health’ are not doctors, they are social scientists, humanities graduates or simply concerned citizens. Secondly, in medicine you need the patient’s consent. The public has never consented to be treated by so-called public health professionals. Thirdly, in medicine the patient is ill. What you get in the world of 'public health' is people who are perfectly healthy being ‘treated’ without their consent by people who are essentially practising medicine without a licence.

The current generation of ‘public health’ campaigners has little or nothing to do with medicine or healthcare. It is simply a collection of wowsers trying to tell people how to live their lives. Meddlesome people have always existed and they have a right to their opinion, but the government should not be funding them.  

With regards to costs and benefits, economists tend to believe that government intervention is only necessary when the market has failed, and that any intervention in a functioning market will make things worse. There is no market failure in the areas that the ‘public health’ lobby most often pokes its nose into. The fact that a product carries an element of risk is not in itself evidence of a market failure, nor is the fact that some people might find an activity immoral or disagreeable a market failure.

The main market failures to look for are negative externalities, consumer ignorance, consumer irrationality and monopoly. These are all largely absent when it comes to drinking, smoking, vaping and eating. There is strong competition within each of these industries, there is widespread awareness of any risks, the risks are largely confined to the individual, and there is no evidence that consumers are particularly irrational.

In other words, the lifestyle choices people make before the nanny state gets involved are the choices they want to make. They are the choices that give them maximum benefit. After the nanny state gets involved, they are forced to either settle for their second or third choice, or to pay more and get less benefit from their preferred choice.

Paternalistic legislation ramps up the costs and shrinks the benefits. The ‘public health’ lobby get around this in a very simple way - they pretend that there are no benefits to be had from the things of which they disapprove. They claim that people don’t actually enjoy smoking or vaping, or don’t enjoy getting drunk.

If you ignore the pleasure and enjoyment people get from these activities then you can always make it look as if nanny state legislation has a net benefit. This, however, requires you to ignore the whole point of why people do these things in the first place. Only a blinkered fanatic would do that.

There are many other costs associated with wowserism in addition to making the lives of individuals more miserable. There are costs to businesses from over-regulation, paternalistic taxation clobbers the poor, there are costs to society when black markets spring up, and there are costs to health when the government acts on bad advice, such as forcing cyclists to wear helmets and banning e-cigarettes. But even without the unintended consequences of ‘public health’ legislation, the intended consequence of stopping people doing what they want to do is enough for us to know it would fail any serious cost-benefit analysis.


You can the view the entire morning's session here.


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