Bob Hayes Online

Drug reimportation is a hot idea these days.  It doesn’t work.  Here’s why.

Say you are a textbook publisher.  You have a line of college textbooks that you produce.  This is a complex and expensive process; you hire high-level scientists and academics to write the books, editors to fix their dreadful writing, fact-checkers to make sure it doesn’t say “e=mc³“, artists to create the thousands of diagrams and charts and pictures.  You pay for printing and warehousing and distributing.  You pay IT companies big bucks to maintain your catalog and run your online order system.  In short, every textbook represents quite a large investment of resources on your part.

You sell these books for $65 apiece to university bookstores across America.  You make decent money; some years you lose a little, most years you make a nice profit.  All is well.

Then one day you get a call from a university in Australia.  They’ve heard about your line of textbooks, which it turns out are better than the textbooks that they can print in Australia.  The university wants to buy books from you.  Hooray, you think.  Now, the problem arises that the Aussies don’t have as much money sloshing around their public university system as we do.  There’s no way, in fact, that they can afford to spend $65 per book.  They can give you $30 per book, no more than that.  You talk things over with your accounting folks, and they tell you:  good news.  It turns out that the marginal cost of producing another textbook and shipping it to Australia is $27.50.  Selling books to Australia won’t make you a fortune, but it will improve your bottom line somewhat without hurting your core business.  Everybody wins, and so the freighters loaded with copies of “Sociology And You” start steaming for Perth.

Until one day you come into your office and on your computer screen there appears a web ad offering copies of “Sociology And You” for $45.  You click on the ad, and it’s a company in Australia that is buying the books from you wholesale, and then reselling them to American college students over the Internet retail. 

Is this a problem?  Well, it’s not much of a problem if these folks are moving 10 books a week.  It’s a huge problem if they’re selling 10,000 copies a day.  As you’re preparing to address this problem, you turn on the TV and hear presidential candidates saying that the high cost of textbooks in America is an outrage, and that what we need to do is reimport these books from Australia, where they’re cheap.

But they’re only cheap in Australia because you are selling them to Australia as a marginal, peripheral business.  The main market for your product is the one subsidizing all the fixed costs of book production; those Aussie dollars are just a little bit of icing on the cake. 

So what happens if the government follows through on its promise of cheap textbooks for everyone?  Well, they pass a law making it legal and easy to reimport these books directly without tiresome Internet runarounds.  Eager wholesalers line up to make a fortune on this book bonanza…only to discover that there aren’t any books available from Australia.  Why are there no books available from Australia?

Because you, not being a complete idiot, have stopped selling Australia textbooks for $30 apiece.  Every book you sold to Australia would end up costing you a sale here in the US, and the US sales are where you make your margin.  Since the Australian sales are jettisonable from the point of view of your core business, you jettison them to save what’s important, the U.S. market. 

Drug reimportation works the same way.  The issues about safety and provenance are purely side issues.  The core of the problem is an economic question:  what does it cost to get this particular product?  It may be that the price is different in one place than another.  Price differentials do create a potential for arbitrage, but they don’t create a reality that the lower price is somehow the right price, or that everyone can get the lower price.  Attempts by government to get the lower price for everyone will simply end up removing the lower price option for the people who had it before.

All drug reimportation laws can do is hurt the availability of American pharmaceuticals in other countries.  You won’t sell textbooks to Australia when those textbooks are destroying your profit center in America; Pfizer isn’t going to sell drugs to Canada if the Canadian drugs are going to destroy their profits here.  It’s as simple as that.

An acquaintance of mine asked me why I was so knee-jerk in my opposition to government regulation.  Upon reflection, I decided that it was because knee-jerk anti-regulationism is the rational position.

Regulation is an evil in and of itself. It may be a required evil, under a certain circumstance. For example, it is a good thing that we have homicide laws. But we are engaging in a trade-off:  we accept the costs of that regulation (including the promotion of moral decrepitude intrinsic to externalizing the regulation instead of expecting everyone to carry “thou shalt not kill” as an internal moral requirement) because of the anticipated higher cost of not having such a regulation (family vendettas, mass slaughter, blood in the streets).

Other times it’s a bit more of a gray area. Is it a good thing to restrict business activity through anti-trust laws? There are arguments to be made on both sides. Whichever side you come down on, there’s still a trade-off being made.

And then there’s the vast area of regulation which are simply a favored group’s use of state power to impose their preferences on others, with no compelling rationale. There is no objective reason to prefer dense-pack housing to sprawled-out housing; some people would prefer to live in dense pack and others would prefer to live in inexpensive tract homes. If environmentalists grab control of the reins of the state they can make developing the latter impossible through regulation, and that kind of regulation is intrinsically evil.  If developers grab control, they can shift the cost of developing infrastructure onto the city; that is also evil.

The essence of the conflict between personal freedom and socialism: if there is no socialism, then people can be largely free to do whatever they want without their fellow citizens, in the person of the state, getting all hincty about it. No skin off my nose if you want to skydive in a hurricane.

There’s no getting around this; he who pays the piper, calls the tune.

When should drugs be illegal?

Truly hardcore libertarians would say never; everything should be legal, there should never be any legal controls on pretty much anything that doesn’t directly kill people, there’s nothing wrong with a crack house next to a school, etc.

I’ve gotten pretty close to that position myself, at times. It has a lot of intellectual appeal, but of course that appeal fades when one sees actual crack houses near actual schools, and the effects on the kids who go to those schools.

I divide drugs and other pharmaceutical substances into three categories, and of course all right-thinking people agree with me. (About the three categories, not necessarily about which drugs go where. That’s a question for the political process to determine.)

Category One: Drugs which are so incredibly and obviously destructive that the state should probably step in, if the populace wants it to, and devote police resources to trying to stamp them out. I would put heroin, amphetamines, and crack cocaine into this category.

Category Two: Drugs that some people have very destructive relationships with, that other people are able to handle reasonably well, and that some people can completely take or leave with impunity. I would put alcohol, pot, tobacco, quaaludes, prescription downers, and most “recreational” drugs into this category.

Category Three: Drugs that most everyone can handle reasonably well, and that hardly anyone has a major life-threatening problem with. I put caffeine, chocolate, and other “food” drugs in this category.

With Category Three drugs, there is never any justification for state intervention. Suck down all the Jolt Colas you want. Have some more M&Ms.

With Category One drugs, if the populace agrees that a drug is that destructive, then there should be a full-fledged civil-rights-infringing, door-breaking-down, drug-interdiction-boat “War On Drugs” for those substances.

With Category Two drugs, such state intervention is incredibly dumb. But at the same time, there is that population of people for whom the particular drug in question really is highly problematic. The pothead who is never not high (with all the concomitant lovely lifestyle issues that this tends to correlate with); the wino living in the gutter because she can’t get off the sauce long enough to get a shower and a job; the five-pack-a-day smoker committing suicide on the installment plan.

As a libertarian, I don’t think it’s the state’s business to force these people into making better lifestyle choices. However, as a humanitarian, I think it is legitimate for the state to help these people make better lifestyle choices if they want it to.

I propose a voluntary prohibition on certain substances. If you know that you’re an alcoholic, you can go register with the state, and the state will harshly penalize anyone who sells you liquor. When you show your ID at the liquor store or the restaurant or the bar, the computer flashes the big “No” sign, and the clerk politely but firmly reminds you that you’re not allowed to drink. The grocery store checkout lady tells you sorry, ma’am, you’re on the do-not-sell-cigarettes list. Pot and other Category Two drugs being legalized, the same thing happens for those substances. You can revoke your banned status during an open disenrollment period held periodically, to prevent people in the throes of withdrawal from slipping back in a moment of weakness.

I think it is a legitimate use of state power to help police people who are asking to be policed. This system would avoid the wasteful foolishness of productive, otherwise law-abiding members of society going to jail for smoking a joint once in a while. At the same time, it would let the people with serious drug problems who want to change get tough-love type support from the government. As an added bonus, private charities could use the no-sell registries to more strongly enforce their own policies - “of course you can stay in our homeless shelter, friend - but we don’t permit you to drink, and you will have to go on the no-drinking register for us to be able to help you.”

Comments and suggestions are welcome.

Two facts, not really open to debate by anyone dwelling this side of the moon.

One, the U.S. economy is the largest in the world.  And not the largest in a my-bigger-brother kind of way; largest in a twice-your-size beat you into the dirt kind of way.  About twice the size of China.  (And China has what, five times the population?  Meaning we’re tenfold in productivity per capita.)  China may catch us someday..perhaps.  There’s no certainty of it.

Two, the military budget of the United States, is always going to be a certain chunk of the Federal budget.  Maybe liberal hippie presidents like Carter will whittle away at it; a Reagan will come along and fix the damage and then some.  But it will always be there, always some solid percentage of our Federal effort.

The conflation of these facts provides a common ground for conservatives and liberals.

Liberals want to curb the American hyperpower.  They want us - let’s be fair - to be a strong voice among many other strong voices.  They don’t want us defeated, just maybe humbled some - maybe in a place where we listened to France about as much as France listens to us.

Conservatives want the United States government to back the hell off of being the 1,000 ton leviathan state.  We don’t want the states to pick up a whole lot of the slack, either.  (Maybe towns could do more.)  If we’re not getting that, well, then the leviathan state is going to do the kinds of things WE want it to do.  Kill communists, knock off unprofitable dictators, make the world safe for McDonalds, that sort of thing. 

We can both get our way.  If we reduce the Federal government to, say, 30% of its current size, and cap that as a maximum - and agree to keep that size as a fixed portion of our national revenues barring things like a World War II - then both parties get their wish. 

Liberals get their chastened hyperpower by default.  Conservatives get a strongly-defended nation without substantial global reach, and a major shift in power to local communities - one of our core ideals.  Everybody wins (except for the millions of people who would get dumped out of Federal assistance programs of one variety or another).

This doesn’t have to break the war on terror.  Any such shift is going to take decades; plenty of time to send terrorists for a visit with God.  Hopefully, the other powers of the world will step up, and build their own strong regional militaries; if they don’t, well, then we get to be the hyperpower again by default.

It’s a win-win.  True, the liberals have to give up their dream of welfare statism - but if their own beliefs about the origins of the terror war are true, then they’ll be buying peace and prosperity for the entire world. 

All it will cost them is freedom for us.

People on the low end of the economic totem pole - the Sears clerks, the delivery boys, the Mexicans working hard in the factories for $5 an hour - any worker on the mucky end of the stick - should probably be thought of as ready to revolt at any time if not for two mitigating factors. Those factors would be a) the reasonably-often-satisfied hope that step-on-the-ladder economic progress would come for those who work hard, and b) the expectation that the brilliant or the lucky could jump to the top. We might encapsulate these promises as “functionality” and “freedom” - the system will work for you if you work for it, and if you can get ahead on your own hook, God bless ya.

Since I think the first amendment means what it says, I think that there should be no limitations of any kind on contributions to political parties, movements, or candidates. If George Soros wants to give Barack Obama $10 million, or $100 million, why shouldn’t he be able to?

The existing teaching industry is not effectively mediated by market forces. Guilds (in the forms of unions) and government (in the form of certification requirements) act as a barrier to entry, preventing genuine market competition from working its happy magic. Any additional allocation of resources to education simply flows to the rent-seekers who control access (in this case the teacher’s unions and their political causes) rather than to the end users. Thus the spiraling spending on education, with absolutely zero correlation to performance. Under the current regime, if you add more teachers, regardless of competence, the net amount of education will not increase. The rent-seekers have no motivation to provide good performance; good performance does not justify them in asking for more resources for their tiny empires.

This may be changing. The colleges of education have become so openly rotten that even legislatures can’t bear the stench. New teacher certification tests are getting acceptance - anyone with a degree can take the test and if they pass, be certified to teach.

This is totally healthy and will be a boon to schools. It’s a difficult slog for a smart person to sit through a graduate program in education - it’s pablum, and bogus pablum at that. If these tests catch on, we could be seeing a much higher caliber of person entering the world of public school teaching.

Weapon systems are, in the end, about one of two things:

1) Creating a capability for your side, or extending a capability that already exists;

or

2) Removing or degrading a capability that the other side has.

It is possible for a weapon system to fill multiple slots in this capabilities analysis; submarines, for example, create a capability of sudden surprise strikes, while also degrading the enemy’s capability to send surface shipping without military escort. 

We can currently remove any dictator in the world by invading his country, marching to and encircling his capitol, and smashing his military to flinders - then it’s just a matter of finding the spider hole.  However, this form of combat is very intensive in terms of logistical deployments, in terms of straining alliances and diplomatic relations with other countries, in terms of time expended, and in terms of human lives lost.  If the only goal of the war in Iraq had been to capture or kill Saddam Hussein, we could have done that - but it would have cost a couple hundred American and who knows how many thousand Iraqi lives.

Bunker-busters create a powerful capability for US forces.  They will permit us to remove enemy leadership - bypassing his conventional military - without having to engage in ground combat.  They permit us to strike rapidly, without a costly and vulnerable military build-up.  They permit us to strike unilaterally, without begging the permission of neighboring countries to use their territory for staging.

They also remove a powerful enemy capability, albeit not one that is purely military.  Right now, tyrants like North Korean’s Kim Jong Il have the ability to hide behind their civilians.  We could eliminate him in a week, after the necessary deployments; the cost would be horrific.  Five or six South Korean or Japanese cities A-bombed during the lengthy buildup, thousands of American and South Korean soldiers killed in huge battles - it would not be pretty.  It wouldn’t be pretty to drop a bunker-buster on him, either, but it would be a lot better for Seoul and Tokyo.

More important than the use of such a weapon is the credible threat of its use.  Right now, Kim Jong Il knows that we cannot remove him without unacceptably high collateral casualties, and so his diplomatic position is accordingly intransigent.  With buster-bunkers in our arsenal, however, and a President who has shown that he will not flinch from military action, Kim’s ability to bluster and stonewall are massively reduced. 

In short, nuclear buster-bunker bombs add powerful capabilities to our arsenal, and greatly degrade the ability of our enemies to defy us.  There is no reason not to avidly pursue their development.

This is a big and messy issue for many people (it’s small and clear-cut only for a few on either side). Proponents of homogamy are right when they say that the rational arguments against gay marriage are lame. That’s largely because this is not a primarily rational debate. It’s an emotional discussion largely (but not entirely) centered on the question of whether American society is going to normalize homosexuality, or whether it will merely be tolerated. (Happily, the kill-them-all contingent, while it exists, is out of the debate.)

Marriage is a shorthand for normalization. State recognition of marriages is a shorthand for social acceptance thereof. I think that part of the intolerance for the anti-marriage position stems from people’s membership in communities where homosexuality is already normalized and already socially accepted; people living in liberal urban centers don’t seen that there any costs imposed on Iowa by adopting the values of New York, because those costs have already been paid where they live. (Kind of like millionaires lecturing Wal-Mart clerks about the importance of putting aside 30% of their paycheck for retirement.)

The argument for the civil right of marriage, as being indisputably obvious, fails. It fails because (most of) the people advancing it acknowledge that the state may limit marriages for other reasons (age, consanguinity); they merely wish to move the goalposts to put “gender” in the irrelevant column. That then is not an indisputably obvious civil rights claim that everyone has the right to marry anyone; it’s one that has to be mediated and decided by society.

Which then moves us to the question of who should make this determination. Should it be the voters directly, their legislative representatives, the state governments, the federal legislature, the media, Ralph Nader, the judiciary, or what? That’s what the FMA was really about; it’s one side’s argument that the state judiciary should not be allowed to make this decision, born out of fear that they are about to (probably true, as far as I can see.)

I would prefer to see the judiciary bow out. Gay marriage is something that should come to pass, if it comes to pass, because a significant and permanent majority of people want it to happen, and go to the trouble of pressuring their legislatures to enact it.

Otherwise it will turn out to be abortion all over again - judicial fiat overriding democratic debate, and creating a permanently festering wound in the body politic. Since it is clear that the judiciary will NOT bow out, then I favor tying their hands. The FMA was a bad idea, because it took power away from the states; jurisdiction stripping leaves power in the state legislatures (and the populace, in states with the referendum) while cutting the courts out of the equation.