A Change In ECON 3020 Students (Not Required)

I have been asking students to solicit questions for a Quodlibet every Spring since 2009. I have copies of every question and answer that are searchable.

Prior to that, I also asked students to do this in 2002-3. At that point, this was a smaller class offered every semester, but I'm not sure when I started, or if I still have copies of all of those. So I'm using the best of my recollection, and what I could find, for that.

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I spotted something unusual in the Quodlibet this semester.  

I am not picking on these students, but I think it might represent a worthwhile change in attitudes towards the world that's worth noting.

Anyway, two students asked question that used variations on the word "ban". (And, in going through them just now, I also saw that BS's post is about banning, but doesn't use the word).

The questions are fine. They reflect current events and discussions in the media.

But I went back and searched, and no one has ever used a variation on "ban" in this format before. Ever.

To me, this makes me think that banning things is part of the zeitgeist in a way that it never was before.

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To be clear, neither student suggested that we ban anything. 

But, they did ask questions about political discussions to ban things.

So I think it's useful to think about what the economics are of a political decision to ban something.

• Governments ban lots of things. Some of those bans are really serious and work (e.g., it's just about impossible to obtain physical copies of certain books published in Germany in the 1930s that support Nazi policies), and some are not so serious and don't work well (e.g., the speed limit on the interstate). So there's definitely a matter of degree involved.
• Governments make bans work by going through the enforcement, judicial, legal, incarceration, financial (fines), tax, and moral suasion dimensions. In some, but not all of these, it uses its "monopoly on legal physical violence".
• Going back to the works of Becker and Ehrlich, there are two components traded off along to these dimensions: probability of getting caught, and amount of punishment when caught.
• All of this can be viewed as increasing costs to suppliers (shifting supply up and to the left), and increasing costs to demanders (shifting demand down and to the left). Both of these can be thought of as excise taxes, as covered in principles of micro. Always keep in mind that the government would enforce a ban by labeling those costs as falling on one of those two groups, but that the economics means that the incidence falls primarily on the more inelastic of the two groups.
• Imposing those costs on demanders and suppliers has costs to the government too. It's not always clear that they are willing to pay the costs needed to enforce the bans they already have in place.
  
• It is hard to know in practice if the demand or supply in a particular market intersects the axes or not. We draw them as straight line, but that's a convenience. They may be asymptotic to one or both axes. This means that a ban may never eliminate some things.
• Both demanders and suppliers have an interest in avoiding government imposed costs. Avoiding costs incurs more costs (commonly called "shoe leather costs" or transactions costs). But, there's a tradeoff: if the cost of avoidance is cheaper than the cost of getting caught, then an otherwise law abiding person will choose to break the law.
• A common justification for government action is that not doing something has costs too, and that the tradeoff may favor enforcement costs.
• There are also costs associated with banning something, not ponying up the money to make the ban work, and the resultant arbitrary enforcement. 
• Some people are control freaks. To them, banning may sound like a good idea.
  

So here's some questions to ask yourself the next time you hear about a proposal to ban something.

• Do you know what the costs of doing nothing are? Does anyone? Are they even asking? In particular, beware if the costs are labeled with emotional trigger words like "huge", "threat", "red", "black", "alert", or "existential".
• Does it seem like the suppliers or demanders being targeted are part of a group with less power? Can they vote (foreigners and corporations can't)?
  
• Absolutely keep in mind that the old are most likely to vote, the young can't vote at all yet, and the unborn in the future have no vote whatsoever.
• Who would benefit in another market from a ban in this market?
• Does the government seem interested in committing to the full enforcement costs?

There are other questions, but this leads me to some implications for the zeitgeist:

• Increased interest in banning may be related to overstatement of the costs of the not banning. Does this seem more common to you?
• Increased interest in banning may be related to understatement of the costs of enforcing bans. Does this seem more common to you?
• Increased interest in banning may be related to cost reductions in production that make things that might be banned more readily available. Does this seem more common to you?
• Increased interest in banning may be related to increased utility on the part of demanders for things that might be banned. Does this seem more common to you?
• Increased interest in banning may also reflect that demanders simply have more money to spend, and are buying more of everything. Does this seem more common to you?
• Increased interest in banning may also reflect increased uptake in the enforcement sectors of people with control issues. Does this seem more common to you?

Towards the end of the long series of posts riffing on what J.W. Mason wrote about progressives and the "Biden stimulus package" I noted that there seems to be a strong movement, particularly amongst Democrats, to be aprecautionary (i.e, to flout the precautionary principle). Perhaps this is another example.