Vice Squad
Sunday, February 25, 2007
S&M and Consent

A trial in Brooklyn is coming to a close for a man facing federal charges of obscenity, sex trafficking, and forced labor. The man operates a BDSM website. The charges arose when one of his former "slaves" went to the FBI after he refused to remove photos of her from the site. The stories of her treatment at his hands during their master/slave relationship are not for the squeamish.

Consent is always tricky in sexual relations, but the fact that a pose of non-consensuality is part of the point in some dominance/submissive relationships complicates matters considerably. In terms of public policy, I think that for particularly painful or harmful behaviors, substantial evidence of consent could be required. And I think that it would also be OK to require periodic verifiable consent or consent to specific practices, so that an initial signal of consent does not unintentionally provide carte-blanche. But these are tough issues.


Wednesday, February 21, 2007
Economies of Scope

Is it an iPod FM-transmitter, or is it an alcohol breathalyzer? It's an iPod FM-transmitter and an alcohol breathalyzer! And for $79 (more in California), it could be yours if you act fast.

Vice Squad has noted the appeal of a device that allows drivers to be (fairly) sure that they are not over the legal limit. The transmitter/breathalyzer apparently can provide this assurance, though it might not tell you how much above the legal limit (.08 BAC in the US) you are, as the top reading is .12.

Thanks to Radley at The Agitator for the pointer.

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Tuesday, February 20, 2007
US Supreme Court on punitive damages in Philip Morris v. Williams

Earlier today, in a 5-4 decision, the US Supreme Court set aside a $79.5 million punitive damages determination that a jury in Oregon awarded to a smoker's widow in a case against Philip Morris. The court returned the case, or rather the determination of the award, to the Oregon Supreme Court that earlier upheld it. You can read about this case and today's decision here and here, for example. The Supreme Court majority's reasoning seemed to be confused and confusing, as was pointed out by the dissenters. Justice Ginsburg, with whom Justice Scalia and Justice Thomas joined, used rather strong language in her dissent (e.g., "The Court's order is ... all the more inexplicable..." and "The answer slips from my grasp"). Other dissenters seemed similarly amazed at the majority's opinion. I do not think, however, that I am qualified to judge the details of legal reasoning. What surprised me was how far this reasoning seemed to be from anything that economists have to say about punitive damages.

I do not have much time tonight and so my explanations are going to be rather sketchy. (I might write more about this later though.)

A typical economics argument is that social efficiency (defined roughly as maximization of social wealth) requires that damage awards in tort cases be equal to the damage caused by the tortfeaser. This way, the potential injurers would have the incentives to take the socially efficient amount of precaution. Making damages too high (low) would result in too much (little) precaution. All that sounds reasonable -- but why then do we have punitive damages? There is no settled view on this issue. David Friedman in his book Law's Order (starting on p. 207) lists several potential reasons. (This book is available on the web in its entirety, so you can read the details at the address above.) Here is a rundown on his list and its (non-)applicability to today's decision (the italics below are quotes from Friedman):

1. Punitive damages do not exist. What are misinterpreted as punitive damages are simply damages for hard-to-measure injuries. This clearly doesn't work as $79.5 million is obviously much greater than any reasonable valuation of the smoker's injuries.

2. Punitive damages serve to express public condemnation. This might very well be the case, but it has nothing to do with economic analysis of law.

3. Punitive damages are a probability multiplier to compensate for the chance that a tortfeasor may never be sued or the victim may be unable to win his case. Personally, I like this explanation (although Friedman has reservations about it). For example, this particular case was about one smoker, but chances are that many other Oregonians were in a similar situation and were similarly harmed by Philip Morris. Since those other smokers haven't (and presumably won't) sue, punitive damages are imposed on Philip Morris to match its costs with social costs. This sounds reasonable to me, but this reasoning was expressly rejected by the Supreme Court (because, the argument goes, it violates due process).

4. Punitive damages are a way of playing it safe if damage is hard to measure but efficient offenses are unlikely. As with #1, it is hard to imagine injuries to one person being almost $80 million, so this cannot be "playing it safe" and erring on the high side. This is clearly above and beyond any reasonable measure of compensation for injury to one person.

5. When we correctly take account of the costs of litigation in calculating efficient danages, it turns out that more deterrable torts should be punished more severely than less deterrable torts relative to the damage they do. Punitive damages are for a class of particularly deterrable torts. This is a tricky argument, but it boils down to saying that we might award punitive damages when the supply of offenses is rather elastic (i.e., very responsive to the size of the damage award) because that would reduce the number of such offenses and reduce litigation costs, so that the inefficiency of a very large damage award (due to making potential injurers take too much precaution) is balanced by lower litigation costs. Again, hard to imagine litigation costs of the size that would need to be balanced by an $80 million damage payment.

6. Punitive damages are designed to deter strategic torts. (Strategic torts are torts that are meant to affect the behavior of others in the future such as, for example, beating up your rival for the favors of a girl. Your goal might be not only to punish this particular rival but to deter others from competing with you for girls in the future.) This explanation does not seem to be applicable to this case at all.

In short, today's Supreme Court decision seems to run counter to any economic view of punitive damages. Not the end of the world, of course -- but perhaps such decisions make it more difficult to convince students of the relevance of the economic analysis of law.

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Europe v. US Drug Arrests, 2003

It is a happy coincidence that 5 major European countries -- Britain, France, Germany, Italy, and Spain -- in combination, have about the same population as the US: around 300 million people. In 2003, the US arrested some 1,678,192 people for "drug abuse violations." Reported drug law offenses for 2003 in the 5 European countries: about 719,000.

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Monday, February 19, 2007
Sobering Results of the Finnish Alcohol Tax Cut

The EU decided that individuals could carry as much alcohol as they wanted across internal borders, as long as the alcohol was intended for their personal use. When this regulation became binding upon Finland at the beginning of 2004, it provided a relatively easy channel for Finns to legally avoid their very high domestic alcohol taxes while continuing to drink. The high-tax regime was slated to be put under further pressure in May, 2004, when Estonia, easily accessible from Helsinki and with very low cost alcohol, would join the EU. So Finnish authorities took a pre-emptive move, lowering their own alcohol taxes on March 1, 2004.

Alcohol sales from the Finnish state retail monopoly subsequently went up, though not enough to compensate (in terms of tax revenue) for the lowered rates. But did cheaper alcohol lead to any problems in Finland?

It looks now as if the answer is yes. The March issue of Addiction contains a study by Anna Koski et al. that finds that:
...the alcohol tax cuts had a significant and abrupt impact on the number of alcohol-positive deaths. The estimated effect was approximately eight additional alcohol-positive deaths per week starting from March 2004, which is a 17% increase compared with the weekly average of 2003. This result is completely in line with the fact that there was a sharp increase in the domestic alcohol sales after this date, suggesting that the increase in alcohol consumption has led to more sudden deaths. Removing restrictions on traveller's allowances had no effect, nor did Estonia joining the EU, although it has to be noted that the three measures occurred relatively closely in time, and therefore it is possible that the impact of the tax cuts might tend to obscure other changes.
Furthermore, there was an 11 percent increase between 2003 and 2004 in the number of drunks arrested. Wow.

One year after the tax decrease, Vice Squad noted that alcohol consumption had increased in Finland.

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Self-Experimentation by an Attorney General

You know those alcohol-detecting ankle bracelets that can monitor and report how much you have been drinking? Do you think that they really work? Well, I don't know if they work, and neither did the Attorney General of South Dakota. So he wore an ankle bracelet for three days, and somehow convinced three of his staffers to wear bracelets, too. Then he testified about his experience to a legislative commitee, revealing some details about the life of an Attorney General in the process:

The first day, he said, he had a couple of beers with dinner and "then I went home and made a bowl of popcorn and had a substantial glass of wine and watched the ballgame."

His blood-alcohol content gradually rose to 0.06, which is under the legal limit for operating a motor vehicle, but would be too much for a wearer in a zero-tolerance program.

After three days, he said, "The bracelet is sophisticated. It works as advertised, and it accurately reflected exactly how much alcohol I had to drink and when I had it to drink.''
His testimony apparently was compelling, as his request for funds to buy the bracelets was approved unanimously by the South Dakota House.

Tyler Cowen at Marginal Revolution touts self-experimentation and Seth Robert's analysis of the technique. Does the Attorney General of South Dakota read Marginal Revolution?

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Friday, February 16, 2007
The Blunt Ban

A friend of Vice Squad writes in to let us know that the Bluegrass State refuses to be left behind in the race to ban the alcohol vaporizer. But he also brings to our attention the ridiculously sweeping anti-paraphernalia law that recently went into effect in Philadelphia. Nicknamed the "Blunt Ban," the ordinance bans the sale by convenience stores of tobacco-related products that could also be used for consuming some illegal drug apparently called "marijuana" (perhaps it's a Philly thing, like cheese steaks). The ban, adopted unanimously by the Solons of the City Council in December, covers cigarette papers, blunts, cigars sold singly, and matches. (OK, I made up the matches part.)

Vice Squad has noted in the past the impetus for such farsighted legislation. Once a substance is deemed to be evil, then there is no obvious stopping point in measures taken to combat it. Those who use the evil substance can be imprisoned. Those who fail to inform on those who use the evil substance can be imprisoned. Those who sell goods that can be used to consume the evil substance can be imprisoned....

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Wednesday, February 14, 2007
Valentine's Day Attempted Repression

Looks like the annual attempt by some Hindu and Muslim groups to coerce others away from celebrating Valentine's Day hasn't had much success this year, at least in India. Police and rain played spoilers to the anti-festivity festivities.

Meanwhile, a Valentine's Day protest was scheduled for noon today in San Francisco, in opposition to higher fees for California state's medical marijuana id cards.

Two years ago in Vice Squad...

Three years ago in Vice Squad...

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Sunday, February 11, 2007
Alcohol Inhalers

Vice Squad tends to be of the mind that there should be legal means available for adults to engage in vice, though those means can be rather constricted. The world (and the US) tends to be less tolerant of adult vice. One of the recent examples is the fate of the alcohol inhaler, a newish device that allows you to consume alcohol without drinking it (or taking it intravenously, for that matter). The machine mixes about half a shot of alcohol with some oxygen, allowing you to inhale the alcohol in about 20 minutes. This is surely one of the least attractive ways to consume alcohol. Nevertheless, despite any demonstration of additional harm relative to imbibed alcohol, jurisdictions have rushed to prohibit the alcohol vaporizer. Wikipedia claims 17 states have already protected the children by enacting a ban. Soon to be 18, perhaps, as South Carolina hopes to join the ban-fest.

Vice Squad first noted the alcohol inhaler on April 4, 2004. A few months later, Suffolk County, New York, became the first US jurisdiction to ban the inhaler, following a spate of no deaths or injuries from alcohol inhalation.

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Friday, February 09, 2007
Cheaper by the Twelve-Pack? Not in Finland

The Finnish Parliament has adopted some new controls on alcohol labelling and marketing, including a measure prohibiting volume discounts. It cannot be cheaper, on a per-beer basis, to buy a 12-pack than to buy a single beer, and Finnish restaurants cannot sell bottles of wine more cheaply than the equivalent per-glass price. It is possible that this new law will serve to reduce the price of a glass of wine in restaurants, of course.

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Tracing Alcohol Consumed By Teens

For decades now, identifying serial numbers have been required for all firearms manufactured in (or imported into) the US. Guns recovered after their use in a crime can then be traced back to the store which originally sold them. These traces (which do not represent a random sample of all crime guns) indicate that some firearms dealers are the initial sellers for a disproportionately large number of the traced crime guns. Regulatory scrutiny can be directed at such sellers, to ensure that they are not knowingly supplying criminals.

This general idea is now being applied to underage drinking in Scotland, according to this article in the New Statesman:
As part of a pilot scheme launched on 29 January, alcopops, fizzy wine and other drinks popular with teenagers are being branded with a number specific to their place of sale.

Police in Ayrshire plan to use the codes to trace shopkeepers and adults supplying drink to under-18s.
Some 100 sellers have signed up for the voluntary program, which could be be extended and made mandatory if the trial is deemed a success.

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Wednesday, February 07, 2007
Antigua-US Internet Gambling Dispute Rolls On

´╗┐Back in 2005, the US largely won its internet gambling dispute with the two-major-island nation of Antigua and Barbuda. The part of the decision that favored Antigua concerned internet betting on horse racing. This is permitted in some US states, and furthermore, a federal US law explicitly makes such activity legal in states that license horse racing. But the US still wants to prevent Antigua-based internet wagering sites from being able to legally offer betting on horse races to US-based customers, and has been stalling the seemingly required adjustment in US laws. So Antigua has gone back to the WTO with a complaint that the US has not complied with the 2005 decision. Now it looks as if Antigua will win this round (again, in a sense); furthermore, the EU is an interested bystander in the proceedings.

Precisely what the EU interest is is uncertain, however. Surely EU-based internet gambling sites would appreciate fully legal access to US gamblers. On the other hand, internally, the EU faces exactly the same conundrum of protectionist internet gambling policies by individual nations. ´╗┐Some EU member states allow their residents to bet on sports, even over the internet, though only via an in-state monopoly provider. Countries also place controls on the advertising of foreign gambling services, while simultaneously aggressively promoting their own national lotteries. Both of these practices are likely to contravene EU rules, and are under challenge.

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