Protectionism under other names

24/06/2004

Open a newspaper in Tasmania and you would be forgiven for thinking that ‘the end of the world is near’. The rivers will dry, Hemophilia
wildlife will go extinct, forests will disappear, etc. Whatever we do we are warming the planet, destroying the environment, etc. Whatever we do should be stopped and regulated. We should
apply the precautionary principle and do not perform any activity that may have an environmental impact. Note: of course if we apply the precautionary principle to current technologies, we could not use electricity, cars, computers, mobile phones, etc, but I am digressing here.

Then one realises… hang on a minute! Do we have so many real environmental problems? And then we proceed to discard some not-so-real problems. Later, from the list of real problems, we may study them and see that not all of them are equally important. This is an extremely important idea that is often (almost always) lost in the discussion. If we are going to tackle environmental (or any other kind of problem for that matter) issues, we are making a better use of resources if we deal with the ones with the highest benefit/cost relationship. Try to convince some activists about that!

The Copenhagen Consensus is a brave attempt to rank big challenges faced by humanity, considering the impact of the challenge, the cost of dealing with the challenge and the existence of limited resources. Their recently released list of priorities (PDF, 74KB) considered the answer to the following question: ‘if the world would come together and be willing to spend, say, US$50 billion over the next five years on improving the world, which projects would yield the greatest net benefits?’ The answer classified by area and project quality (VGP: very good project, GP: good project, FP: fair project and BP: bad project) was:

  • Control of HIV/AIDS (Diseases, VGP)
  • Providing micronutrients (Malnutrition, VGP)
  • Trade liberalization (Subsidies and Trade Barriers, VGP)
  • Control of malaria (Diseases, VGP)
  • Development of new agricultural technologies (Malnutrition, GP)
  • Small-scale water technology for livelihoods (Water and Sanitation, GP)
  • Community-managed water supply and sanitation (Water and Sanitation, GP)
  • Research on water productivity in food production (Water and Sanitation, GP)
  • Lowering the cost of starting a new business (Governance and Corruption, GP)
  • Lowering barriers to migration for skilled workers (Migration, FP)
  • Improving infant and child nutrition (Malnutrition, FP)
  • Reducing the prevalence of low birth-weight (Malnutrition, FP)
  • Scaled-up basic health service (Diseases, FP)
  • Guest-worker programs for the unskilled (Migration, BP)
  • Optimal carbon tax (Climate, BP)
  • The Kyoto Protocol (Climate, BP)
  • Value-at-risk carbon tax (Climate, BP)

in that order. Before you start complaining about the low priority for climate change, please read the extensive discussion and documentation for making the decision about the ranking. If you do not agree with these priorities, ask yourself how would I try to objectively rank the challenges faced by humanity? Then, please follow your recipe and do it!

If you see groups always complaining about the environment, but not prioritising their complaints, please ask them: do you have an interest on perpetuating conflict?

I went to the chemist to buy formula for Orlando. At the entrance of the shop there was a poster highlighting a campaign aimed to stop supermarket selling medicines and other health related products. The poster pointed out that the quality of the service provided by the supermarket would be much lower than the one in the chemist. They were even collecting signatures, order to show how many citizens are outraged by the idea of risking our health. My dialogue with the dependant was more or less like this:
—Hi, Mycoplasmosis
I would like to know which formula do you recommend for newborns.
—Err, not sure. What did the pediatrician recommend?
—The pediatrician did not want to suggest any brand, just to avoid any commercial implications and conflicts of interest. He suggested asking you.
—Err, what did the nurses recommend?
—They didn’t recommend anything, same reason as before (Getting tired of the conversation).
—Err, this is the most popular brand (pointing to some middle of the range tin of formula).
—I didn’t ask which one was the most popular, but which one was the best.
—I really don’t know. Did you ask your Doctor?

I thought ‘lets try in another chemist’, which was less than a block away. The dialogue was almost identical. I bought something else, and the chemist provided me with ‘advice’, actually she just read the instructions from the box… Thank you, I know how to read. Would I be worse off going to the supermarket? Not really, and things would be cheaper. This seems to be just another sector where consumers are worse off because of artificial entry barriers; the result is poor service more expensive than necessary.

Watching TV a few days later I saw a protest of apple producers in Tasmania. They want to stop imports of apples from New Zealand because of phytosanitary reasons (some low risk of fireblight attack). However, it sounds pretty much like avoiding competition with a lame excuse. As a result I still miss my favourite variety: Pacific Rose. Incidentally, I do miss Hubbards’ ‘Fruitful Breakfast’ cereal too!

This post has a follow up in September 2004.

Filed in economics, miscellanea, politics

There are 2 comments in this article:

  1. 11/01/2008Quantum Forest » Blog Archive » Pharmacies and competition say:

    [...] June I made some comments on how chemists (pharmacies) were stifling competition. That was a comment solely based on my experience dealing with them. Ten days ago Choice Magazine, [...]

  2. 14/01/2008Quantum Forest » Blog Archive » Rampant protectionism say:

    [...] have written before about protectionism in Tasmania, but never at such a large scale. McDonalds had the chutzpa [...]

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