 Trevor Burrus. I'm Matthew Feeney. Trevor Burrus. Joining us today is Peter Van Doren. He's a senior fellow at the Cato Institute and the editor of Regulation Magazine. Welcome to Free Thoughts Again, Peter. Peter Van Doren. Thanks for having me. Trevor Burrus. I think this is your fifth time on the show. Peter Van Doren. Currently I'm on the top of the hit list. Trevor Burrus. That would be the most of any guest. Today we're going to be talking about kind of environmentalism and how it intersects with public policy and science. So the first question is sort of the big question I'm going to be discussing today which is why are environmental policy conflicts so intractable? Peter Van Doren. That's, as with all or many intellectual thinking, that's not how I thought about this when I first tackled the problem and instead I was puzzled by the following stylized facts, which is if you're libertarian or if you're market oriented, I found it puzzling that science was invoked by both sides of the political spectrum in policy conflicts but it had little to do with anything in markets. So the following, so think about whole foods. Think about organic lettuce or organic anything. If you're libertarian, should you have to justify your preferences as being based on something that is scientifically true, so for example, does it matter to the owners of whole foods whether or not anything they sell actually improves health or life expectancy or anything else that the customers imagine such consumption does? The answer is no, nor do the consumers think that it is true but do they have to show studies to the owners of whole foods that if they take fish oil or if they eat organic lettuce or if they can see the picture of the guy who raises the eggs that they consume, do they have to show evidence from a scientific journal that that has been shown in a clinical trial or by econometric methods that that consumption does something good for the person who consumes it? So there's another way of saying that is to say that whole foods existence is not justified by whether or not it's scientific claims are correct. If you're a free market type, at least generally speaking, its existence is not justified by whether or not it's correct about its scientific claims. And in fact, not only that, there's a fair amount of scientific evidence that the health effects of so-called natural medicines or the homeopathic remedies, non-Western medicine, whatever, that there's no, that there's a surprising lack of evidence that those things actually matter for anything. But it doesn't stop people from buying them. It doesn't stop producers from producing them. It doesn't stop anybody from making gains to trade. So even though right-of-center people may be dubious of certain claims about the consumption of organic produce or meat or whatever, it doesn't stop those transactions from occurring. And left-of-center people who may, and I'm using stereotypical correlations that may or may not be true, but if left-of-center people believe these things and they have a market that provides them, they don't have to provide any evidence that in fact that is true. It's the same for psychics, right, or tarot card readers or all those people. And certainly in a neoclassical economics framework, economists just start with preferences. We don't start with, we don't say you need scientific evidence that X works before you can buy it. Well, no, that's like, that's just not, it doesn't come up. In contrast, in public sector debate, both sides, both the left and the right, invoke science when it's convenient for whatever they want as the appropriate adjudicator of whether one's preferences, and here's where I'm going after sort of economic and or libertarian thought, I want to argue, isn't it weird that right-of-center people say preferences can be served by market forces and can flourish in market settings, but once you enter the policy arena, we now want to make sure that what you're asking the public sector to do has scientific basis and both sides do this in different realms. Left-of-center people invoke sound science when they want to talk about climate change because they argue and believe that something called science and scientists are on their side, whatever, and we can discuss what all these words mean. But right-of-center folks in the same, in the environmental policy arena, also invoke sound science when it comes to conventional air pollution, and they argue that there are many, many studies that show that long-term exposure to X, and you feel like particulates or SO2 or whatever does not, that is, we're in a laffer-curve way of thinking about things. We're beyond the point of marginal, we're in the point of diminishing marginal returns, if you will, in ozone and particulate matter and SO2 reductions. We've cleaned up our act enough and we're now reducing things to the point that the gains in health, whatever they are, are very hard to find and, footnote, aren't worth it. They exceed the cost per life saved, maybe, and it's like, hmm, isn't that so? Both sides want to invoke something called science as the priesthood that adjudicates whether your preferences are legitimate or not. Whereas, again, if you're libertarian, it's not clear to me that, let's say, I just want the environment to be cleaner, just like I want, can't you just want the environment to be cleaner? Does that mean you're not libertarian? Well, no, it's just a preference. So should one have to scientifically justify one's preferences? I think most of us would say, no, well, no, I mean, strangely, we're schizophrenic. We sort of invoke it in the public sector, and there are parts of Cato that talk about sound science all the time. And today I want to talk about why I'm not sure that's the right way to think about things. And whereas in the private sector context, we would never ask anyone to justify their preferences to be scientifically justified. So I want to explore where I think all this comes from and provide what I think is an economic explanation of why environmental policy conflict is so intractable and talk about the role of science in that, and then talk about the Coase theorem in economics as a way to give us insight about what this conflict is about. But isn't it the fact that when we're talking about environmentalism, externalities are sort of central to a lot of these conversations? So if I think I have good scientific basis for buying fresh fruit and vegetables, and someone else thinks, I have good scientific evidence that I should buy ice cream and pizza and just eat that, I can go about saying, well, I'm going to continue buying fruit and vegetable and you can do what you want because it's not hurting me. But the difference, I think, when you're talking about environmentalism is, well, it does matter if the factory is polluting and if the person running the factory doesn't think that it's actually polluting. So there seem to be externalities at play here. And do you think that science should play a role in determining how damaging these kind of externalities are? Well, let me separate those two questions and say they're different. You've hit on something that's very important, which is the key to market provision of things and why we don't require and why we don't even think it's culturally legitimate to ask people to have a scientific basis for the purchase of whatever weird thing they want to purchase is that your purchase of something, even if I find it disgusting, it doesn't rise to the level of conflict because that's why we have the term private goods, private consumption. We have cultural stigma attached to people who are too nosy about other people's stuff. And although those walls are decreasing with urbanization. But... Well, generally, you need some sort of reason to be able to take over someone's choices that it has to do with some sort of... Right. Matthew's point reminded me of there is, I think, the fruit durian. Are you familiar with the fruit? The fruit durian? Yeah, it's called durian. It's the smelliest fruit on the planet and there are laws about not being able to eat that. It's like the gooey center of a melon. It's a Southeast Asian thing, but you need the smell to be able to interfere with someone's basic choice of what fruit they want to eat, whether it's not scientifically or not. So both of you have hit upon an important difference that is joint consumption, public goods. The trying to figure out what level of and what kind of public consumption to have requires conflict adjudication between people that doesn't exist with private goods. And you point out if the factory is consuming its... What it thinks is the appropriate level of environmental amenities, which is not many, the neighborhood disagrees, then how are we going to... What do we do about that conflict? But again, an economist would say, right, and here's where the Coase theorem comes in and things like that, which is, let's talk about property rights, who has the right to what, and then when do rights interfere, and then if we disagree, can I buy out your right to do whatever it is you think you have the right to do? And the insight of Coase was that if there are markets for trading in nastiness, then it doesn't matter who has the right to impose something on somebody else. What matters is that that right exists, that it exists, that it is recognized as legally tradable, and that then the trading can begin. And if you don't like something, you can buy out someone's right to do whatever it is they're doing that you don't like. Well, let's review that just for those who have not listened. We have some other episodes with you where we talked about the Coase theorem, but for people who have not listened to those episodes, and we'll put those links in the show notes, but to use an analogy of two neighbors or with either loud music or runoff from someone's yard or something like this where you have an externality, the idea here is that they can bargain, and it doesn't matter who has the right initially that they can bargain about, this is how much it's worth it to me to play loud music, and I'll pay you and everyone's happy, it doesn't matter. It doesn't matter who actually has the right to play loud music. That's basically Coase's point, correct? That if rights exist and they're easily tradable and the initial assignment of rights is not such a large portion of one's wealth portfolio that the demand for and or the supply of that right alters one's willingness to pay that as long as the thing in question is at the margin and not it doesn't change everything, then it doesn't matter who owns the initial rights for the eventual efficient equilibrium, how much noxious whatever is present once we come to a final bargain. All that matters is that if you have rights, you are wealthier than if you don't have rights, i.e. payments flow from the person who doesn't have rights to the person who does have rights or in the alternative it flows the other way around, but in the end the same amount of odor of melancholy or sparks in the air or music you don't like or whatever that's publicly consumed in the environment, that equilibrium outcome of stuff is identical. That's the strong version of the Coase theorem. Again, it's not a claim, it's not a positive claim about how the world really works, it's rather a logical exercise so that if the real world doesn't seem to be that way, you then can infer that you must be violating one of the assumptions of the Coase theorem and therefore instructs you as to what's going on. Let me give you an example of where sound science that were initial rights didn't matter and the eventual outcome was the same and it was a policy struggle and no one commissioned Cato or Brookings or anyone else to find out what science said was the right initial allocation. Before the current digital cell phone system there was a duopoly in every city so very early cell phone technology was expensive and bulky and there were only two franchises per city, two. The rights, believe it or not, the rights to those franchises in each city were given away by the FCC in a lottery. They're about the electromagnetic spectrum rights, is what you're saying, some portion of the spectrum. There were two right, there were two franchise frequency rights per city pre-1990 and the rights to those were given away in a lottery run by the FCC and anyone could participate. I mean anyone, so people read the Federal Register and then they had everybody send in little postcards or whatever. So like Mrs. Ann Mabel from Des Moines, Iowa could participate. Just like the Powerball. Exactly and some non-telecom entities won initial rights. To the FCC, to these duopoly cell phone franchise rights in major cities. But no one then invoked sound science to say that oh my god that will cause, that will alter the fate of human history and we won't have cell phones because we've just given the rights to operation of this thing to someone who doesn't know how to operate a cell phone company. The people who won, who weren't companies, you know what they did? Sold them. They sold them to the companies. So that's an example of the Coase theorem working where government decided initial rights randomly and then allowed transfers and the market worked and we had cell phones. One person was wealthier and the telecom company was poorer and there's some rent seeking that goes on to try to rig these initial, well now we have auctions and now there's sometimes there's little set aside. So there's a little politics left but basically now we just have cell phone auctions and people bid and grandmas don't win the bids. It's just not worth their time to try to, right? So contrast that with anything in the environment like should we drill in ANWAR or should we whatever? Should we have a CO2 tax or not? Or any of these conflicts? Now notice there are conflicts. Most people don't realize they're actually about the initial allocation of rights to do stuff. And I think, and here's where the positive part of my talk comes in. This is Peter's explanation of why conflict or across policy venues. The venues that has the most intractable conflicts are those that where some aspect of the coast theorem is violated. And the one thing that I think is violated in the environmental area is that the participants believe that whoever gets initial rights then won't trade them. Well I can imagine a lot of environmentalists at this point in this discussion thinking, well no amount of willing donations to some sort of environmentalist fund will ever be able to compete with BP or ExxonMobil. If they discover oil in a beautiful part of a rainforest, they're worth billions of dollars. No amount of environmentally friendly ten dollar donations are going to add up to compete with outbidding rights to that area. So what's the response here? You're right. I mean, well what you've discovered is that the good student always figures everything out before I say what it is. And the public, we're back to joint. So the whatever deal, so remember the Trevor's initial discussion of the coast theorem was a two person discussion. There are no public good characteristics to the bargain if only two parties are involved. If many parties are involved then we have the classic, so the cozy and bargain in that context itself has enormous public good characteristics. If you didn't contribute to the fund for the purchase of the rights from the entity that you wanted to purchase the rights from, if you didn't contribute but the bargain still took place because lots of other people gave to a crowdfunding source and raised money to buy out the Koch brothers or whatever. If all of that took place and you didn't contribute, you could still enjoy whatever benefits ensued from the bargain without paying. And since everyone in equilibrium- It's the non-exclusion element. I mean, even for now there are benefits of like just knowing, I mean, it's there. Aside from clean air, which you could have real benefits from. But now people think- But you can exclude whatever benefits arise from any true changes in exposure that make your health better if it's intentional or no environmental damages from CO2. If you don't participate in, as Matt said, if you don't give to the fund, but the fund still raises enough money to buy out some refineries rights to produce fossil fuels, you still benefit from that bargain and that's the free-riding problem. So what I'm trying to do here is hone, make everyone much more precise about what it is that we need to think about an environmental policy, which is, hmm, so we just need to have a more robust market for the trading of stuff. But recognize that even if that exists, only those with intense preferences who are willing to pay and hope that others benefit and they don't mind. In other words, they want the world to change so much that they're willing to pay even though they know they're righters. But notice the same thing is true now. Think of political contributions. So the fight that could be an explicit rights trading regime in a Peter world, instead of directly having a regime in which strong environmentalists and strong pro-pollution people, if I could describe them in that, in effect use their extensive wealth to buy out the rights of the other that they don't like. Instead, they all now contribute to political campaigns to have the same struggle. Yeah, I think hearing this. Even though the benefits that Tom Strayer, is that his name on the pro-environmental? Tim or Tom. And then people on our side for the opposite point of view, whatever world they create with their political contributions, you and I get to enjoy without, I've never contributed to a political campaign, but I get to enjoy or not like whatever world is created by that political fight. And so I'm, again, the economist in me says that libertarians instead of having this proxy political fight over what is a distributional wealth matter, just have rights exist and have them traded even for public goods. Because the freed rider problem exists. But I mean, if you take it seriously, I don't know why there are any political contributions. Right? In what way? Because... I thought you just explained why there would be political contributions. No. Because they can't... In other words... Oh, because everyone can free ride. They're very wealthy people supporting both the left and the right. But only sizable political contributions. I mean, a lot of people can free ride on sizable political contributions. So there'd be... I can free ride on Bernie Sanders. So if Bernie Sanders wins, I will consume whatever policy outcomes he creates even though I have not given to his campaign. But when you said you didn't know why there are any political contributions, I mean, on one level I thought we explained... In a very econ public goods oriented way of looking at the world, it's not clear why people give to things where the enjoyment of the benefits cannot be restricted to those who are giving. Well, let me rephrase this. Maybe I'm misunderstanding, but... So one thing I took from the question that Matthew asked about the fear of what would happen if the oil people were allowed to just drill wherever, is that one way you can interpret this is one of the reasons why environmentalists that are perhaps want to move something from a market question to a political question is basically because they think they'll lose the market question. Well, they think if... The following. Jerry Taylor and I once wrote an op-ed about why not give Anwar to the Sierra Club? Yeah. Give it. Just... But they own it. They have property rights to the Alaska National Wildlife Refuge. Why do the... Why do people on the right say, oh my God, that would be just horrible. Don't do that, Peter and Jerry, you're crazy. We got lots of hate mail on this. We said, that means you think they won't ever trade off any initial ownership of anything they view as sacred for any amount of money at all. Then flip it. Make them choose, basically. And flip it, which is let's have... Oil companies have property rights to Anwar. And if people are that serious... I mean, ignoring the public goods problems that we're talking about, couldn't you start the social media chatterboxes saying, let's buy out the evil doers who own... The Kickstarter. Whatever. Crowdsourcing to raise money. And if a small contribution from enough people, Bernie Sanders style, can raise a lot of money, right? If everyone kicks in. But you're right. Both sides think... Well, at least the environmentalists who might have politicized this first, I mean, in some way, I guess the initial allocation was, but they think that they would lose. Right. And so, then they choose a different method of distribution that they think they have more influence over than a pure market distribution, be the political method of distribution. And then they give contributions because they think they can influence that more than being able to buy it out. Even though to Matt's point, both politics and raising money to buy out rights, both of those have public good characteristics. That's all I... They're free writers, as you're saying. One for the can be. Non-participants consume whatever outcome happens regardless of whether they gave or not. So is this... It does seem like environmentalists in particular speak about... I mean, it kind of kind of upset economists. They speak as if things have unlimited value and that they don't want to participate in any sort of trading because the act of trading commodifies the world and all these things like this, which is just aggravating from an economic standpoint and then they're really just using political power to try and advance their purposes. How much they want to participate in politics is their own trade-off. You say, look, how much do you really like, Antoine? You've never been, you're never going. Wouldn't you sell off some of the rights for money so you could do... You could create an endowment for environmental causes as opposed to having no money and just a mission. There is one... The Audubon Society did own... There were private wildlife bird refuges. Refugees. It's not refugees. That's it. Wildlife areas in Louisiana. We will look up the correct pronunciation afterwards. They owned... There were privately owned bird and wildlife environmental provision and they then also quietly sold drilling rights to natural gas producers in Louisiana. Well, once right-of-center people exposed this apostasy, they shut it down. Which is very unfortunate. You thought I might say that they were willing to sell, publicized because of the outrage of their primary core supporters. They found that economic-style trade-offs, a whole lot of money for a little bit of our land in return for money, the major constituents of the Audubon Society were outraged by this and shut it down. So that does not bode well for my dream of... Let's explicitly have trading of public good emission rights and let things fall where they may. Well, so I'm glad that you brought up birds because before this podcast I was thinking about environmentalists particularly concerned about this particular species and of course species move. So whales and birds migrate thousands of miles and I do hear sometimes that these sort of questions have to be answered internationally that a skeptic might think of the Vandoren solution as impractical because how could property rights be allocated among whale pods and flocks of birds and things like that. So if I want to save the whales, how does Peter Vandoren help me? Well, there are ITQ. There are fishing quota rights regimes but they are run by nations but these nations Iceland in particular has the most famous they have 200-mile zones but that's for fish that are catchable not for fish that are no that are deemed to have what's the right word characteristics as humans value so much that there's that there's strong normative shunning if you will if you like dolphins or something like that. Sealed killings by native Canadians and also Japanese whale hunts. Being cute is a very good adaptation in that regard because jellyfish don't get a lot of supporters but dolphins. No more insects. Yeah, no more insects for that matter. But I'm not surprised that we shouldn't so the but yes, Matt's right that is certain things that transcend nation states then create then you need the UN to have but again, no one wants to have the right amount of whales and then kill the right. No one's talking. I mean it's just so but for commercial fish there are nation state regimes with where biologists determine the quote optimal harvest each year given what they think they know about reproduction rates and sustainability and then those fishing rights are owned by people and then they can be sold in secondary markets and then once the catch is once you taken your catch then the fishing stops and the race to the commons is ended and overfishing ends and things. So certainly regulation my journal has published many articles on fishing transferable quota regimes and how they do and don't work. The United States is rather backwards in that regard. Iceland is the primary. Your last comment made me think well wouldn't fisherman know a thing or two about overfishing and allowing fish to reproduce so or are fishermen just particularly short-sighted? Well it's not that there's a comm. It's that take as much as you can. New England cod fishery is not of if you think that through voluntary normative behavior within a small community that could restrain the fishing to equal reproduction possibilities the data don't seem to support that. The cod are gone and they've appealed politically to when Barney Frank that was his district he represented the Fall River fishermen and he was always trying to make sure they weren't hemmed in by these kinds of schemes that I've describing and then finally it all just played out and now they're no more they're gone. I wanted to go back to the science question because we're talking about why and when should science enter public policy debates. So I'm so here's again a positive claim by me so I've asserted that what I observe is that science is invoked as an adjudicating thing in those policy conflicts where I think the parties believe that initial allocation of rights as you've said determines the eventual outcome and they and thus instead of having an explicit discussion about the distribution of wealth and who ought to have it and why instead have a science discussion which is a backdoor way to not talk about wealth and outcomes. A different way of saying so maybe we're saying the same thing but I've always thought that especially when it comes to environmental preferences that you have a very interesting problem of throughout the world preferences will butt heads. Someone will say I like tigers this much and I like tigers as a beautiful thing running through the forest and someone else as I like tigers as rugs on my floor and then the question of how do you adjudicate these disputes now one thing that we often do in public policy debates is we try to make other people's preferences our own in some way we try to say or try to change their preferences to our own and so we try and say well because on one level if you just say tigers are cool and that's like saying red's my favorite color and so you say well that doesn't really work so I need something more than tigers are cool if I want only if I'm the only person on the planet who thinks tigers are cool so I'm trying to fight against the whole rest of the world and people are killing tigers for rugs I'm the only one who thinks they're as cool as they do but I don't have that much money to actually pay or get people to be convinced to preserve the tigers so even if I try to put my money where my mouth is I can't save the tigers so my next thing is to try and change their preferences for tigers like this is how important tigers are they're not they're not just cool animals they're really important to biodiversity they're the whole world will suffer if there's a problem because they're the apex predator and there will be a problem in the food chain so other things that you care about will be undercut unless we protect tigers and now and so and my next goal if I can't act as myself in the market is to act politically and then override try and override all their preferences in some way and that's where the science can come in well it's a change from tigers are cool to tigers are really important and here's my science for why that is are we saying the same thing about the initial property rights it's it's 500 years ago kings and queens had had wizards and priests that wizards really or whatever I mean Peter is the smartest person I know so he tells me wizards existed I want to go back to that they had they had entities to whom they asked advice and expertise about when to go to war and when to do X and when to do Y and we invoked God as a reason so elites need things to get masses to go along with whatever it is they want to do and in my view science has become an opaque thing that most people don't really know how it works it's important it was the courses that they didn't do well in in high school or college and so if following two stories which is environmentalist tries to raise money to buy out the rights of fossil fuel producers to produce story number two scientists say as you said we are doomed if we don't stop this wow those are two different narratives same result my right the econ way sounds slimy and weird and we don't like them and why should we have to buy out blah blah blah and I'm saying in the FCC auction it was pretty weird who got the rights but we didn't no one said let's invoke science to say grandma shouldn't have initial allocation of telecom rights and therefore we shouldn't have to buy her out so I'm just struck as an observer that we have these different normative moral criteria about what is or isn't slimy depending on the policy venue and I'm intrigued by that then my normative prescription is I think we could lower the temperature and I also think this misuses I think science has nothing not nothing but it is a necessary input but never a sufficient input to any policy question of any kind in the end everything is costs and benefits it's well that's still why are we doing no I mean science is I am if we continue to emit in this way life expectancy will go down by three years is that a how do I want to think about that well if whatever I'm doing is really so think of smoking to many people smoking makes no sense to smokers now some smokers regret right but many smokers say I'm going to reduce my life expectancy but I actually get something out of this or it's worth it so the demographics the David Bowie's death and then other rock I mean it looks like the worst thing the worst occupation to go to if I'm a parent what don't you want your kids to do rock star rock and roll it's better to burn out than fade away it's better to burn out than fade away but you see what I'm saying so talk about the thing that reduces life expectancy the most if I read the newspaper correctly lately it's not anything it's everything that stereotypical movies about the 50s and 60 the parent the blackboard jungle the movies were right this is going to lower your life expectancy by a lot okay no one invokes I mean you see what I'm saying which is so I think the answer to everything because I'm hyper econ-oriented is to have rights for everything and to have trading for everything including things that have public good aspects to them and then the conflicts direct IE we are fighting over what collective outcome we are enjoying and that's not do it through politics let's in effect try to see how much everyone can raise to have what kind of environment and so I want the right to make the planet dirtier as well as cleaner and then let have people put their money where their mouth is and the diversion of all this money into pot to having political fights as an indirect way to create our future which is what level of pollution do you really want I just find odd and frustrating what's your take on what I sometimes call the the ignorance narrative which is people who are pro-environment will often say because you've discussed preferences is that people can't make a accurate decision about their preferences because ignorant if someone says well look people don't know what high fructose corn syrup really does to them people don't know what smoking cigarettes really does to them if I was able perhaps the legislation to inform people then we could maybe have a discussion but the fact is that people are ignorant and don't know enough to make the right choices um it's not it's a good I mean I I could go into a rant but I won't it I should take I mean I feel free no no no you are correct that that it is a common comment then we're back to we're back to science having to adjudicate what one's preferences are and actually let me give you I'm thinking on the fly here kip fiscusi right is is doctor risk he spent his entire life his dissertation was about risk is he's the guy he's the Vanderbilt he's he was at Harvard law school and now he's the professor of everything at Vanderbilt and he has spent his entire life he's the person who created what we now call the cost per life saved metric and literature that follows we've talked about that and podcast so I won't basically he infers from risky job data how much people need to be paid to accept known risks and then infers from that what how much the government should spend on publicly provided risk prevention ranging from guardrails IE very cost effective to certain kinds of OSHA things in the workplace where we reduce exposure to things that really probably don't change life expectancy IE cost per life saved of billions of dollars so you end up with this number which is it looks like from market data that people value a statistical life at somewhere between 8 to 10 million dollars so Viscusi is then interviewed we know from epidemiological data what the life reduction is for smokers we know it's somewhere in the order of 4 to 6 years then Viscusi has interviewed smokers what do you think what's the consequence of your behavior the average estimate from smokers is 20 years so they really like cigarettes is what we can pursue well yes so we've had what since 1964 my entire lifetime I've been exposed to smoking public service so we're now down to a population of smokers that is rather residual and clearly they are intensely into it because there's social negatives to do it and all that and yet they still do it so when they're interviewed by people like Viscusi that's what they come up with they think the consequences of their behavior are actually much more destructive than they are and this is on average there's a huge variance so some smokers die of 50 and some smoke and my wife's uncle was 84 and smoking in the hospital and he smoked since he was 16 I mean it doesn't imply that anywhere near the population average but big variance so if there's a at least an anecdotal policy venue where the claim that people involved don't understand how dangerous the thing is that we need to protect them from if anything they seem to be overly concerned whenever I hear this I think these people seem to imagine that people have a goal to live a zero risk life and the fact is that people like smoking and like eating the occasional donut and like playing dangerous sports and all the rest of it and that even fully you know even fully informed people can make a bad decision well subjectively my judgment would be that bad decisions we did have a I ran an article in regulation several years ago on not externalities but internalities the internalities of smoking I'm going to guess at this one treating future selves as different people that you're putting costs on that you're not familiar with about what that future self is that's because that's super philosophical and it's nifty and I like that Peter's nodding Jonathan Gruber, the health economist at MIT the famous Obama calculated that the appropriate tax on cigarettes was a dollar I'm going to I can't remember a dollar a cigarette that would make sense right yeah much much pretty high very high or was it a dollar no it has to be a dollar a cigarette I have to go back and look at the article there's twenty bucks a pack maybe we'll put that in and we had Gruber and then we had response by Viscusi and then we had Tom Fiery who was trained in philosophy the managing editor of regulation respond about what Matt's saying and Trevor which is the younger self that's risk-taking and then people of my age who are saying oh when I was young I was stupid so with the older self want to impose on the younger self some wisdom that younger self didn't exhibit and then Tom wrote about which is truer should older selves have any rights over younger selves even the same person yeah and that's outside of my league but that does get us into the question which this would be a different podcast and we have actually done an episode on this with Bill Glatt as a philosopher on libertarian paternalism but I think that we're getting very close to this not to open up a huge back of worms as we've come to the end here but basically one of the science things and maybe this tells us a lot about actually where public policy is now new paternalism which is now to tell you that your preferences are wrong because I have now sort of scientific explanations for why your preferences are wrong and saying that everyone says they want to quit and they don't actually quit so therefore we infer that they really do want to quit even though revealed preferences say that they're not quitting so now we're going to do things to them to engineer their choices to make sure that they quit smoking or eating cheeseburgers or exercise more or donate their organs or all these sort of things that seems also like an element of science in this that could be useful for public policymaking and so early because I'm so into economics what you the reason I sort of huffed initially at Matt's question was because everything in my bones say you you start with people's preferences now behavioral economics of course is is the whole raison d'etat the French word right the whole guts of behavioral economics is exactly what Matt said which is it looks like in the variety of settings venues whatever that people don't seem to know what's good for them they can't maximize the financial markets they think they are dealing with risk but they don't have life insurance they just make bad investments so let's help them out smarter people need to help them out whatever that is and so people like me say oh man no that's just we don't do that but it's not a good we need to deal with that in a whole other discussion but it is true Peter sitting here in this chair visibly quakes when you ask him about anything that says there may be preferences aren't the real preferences which I do too and so it does seem very paternalistic but I have to admit that the anomalies that the behaviorists have discovered I have to admit exist as a positive scientist I can't say oh wow savings rates are really high no they're not so just as I say nothing comes from science I think nothing comes from behavioral economics in the following sense there's no policy therefore which is for savings therefore what well then we need separate normative discussion about whether changing the default condition of a 401k sign up which I mean basically in the hallway if you ask me is there anything wrong with making people automatically sign up for saving and then they have to opt out if they don't is there any horrible mischief in that and the answer is no probably not that's okay but something else yes we'll have to we'll book right now our future episode with Peter Vandoren about behavioral economics but to wrap up this episode and finish up on the environmental question what's the takeaway here do you think well I just the so my messages is that whenever one hears sound science being invoked I want you to realize that that to me indicates the possibility of large gains to trade when one when a side says my study show what you want to impose on me is way too expensive relative to what it's worth Peter says haha then it doesn't then okay then buy them out whenever someone says they've got scientific studies on their side you just open up your checkbook and you say if you imposed your regulations on me because of your sound science it would cost me a gazillion can I pay you anything less than a gazillion to go away and be happy that's what that's the bottom line I want people to think of from from our talk today free thoughts is produced by Evan Banks and Mark McDaniel to learn more find us on the web at www.libertarianism.org