24 June 2008

EU's Common Agricultural Policy exposed

I was recently linked to by "CAP Health Check" a blog that seeks to present as much information as it can about the European Union's dastardly Common Agricultural Policy (you know the policy of food sovereignty and food security that Sue Kedgley effectively has been endorsing). It seeks greater accountability and transparency about expenditure on EU farm subsidies. As someone paying for these (as well as a national from a country suffering from them), I'm rather keen to see it.

A sister site is Farmsubsidy which has some fascinating data, including google mapping the address where farm subsidies are received (so far only Sweden is complete). Go here, focus on Stockholm to see how many farm owners seem to be based in the downtown Stockholm - clearly struggling village producers. A similar map of the UK would have to include Clarence House London, as the Prince of Wales receives taxpayer subsidies for his farms. Nice. It shows the pony clubs in Denmark that receive over 255m Euro in subsidies. Ireland is the biggest per capita net recipient of farm subsidies, Luxembourg the biggest net per capita loser. However per farm the biggest recipient is Denmark, the lowest Malta (average UK farm gets more than the average French farm, because the latter are small and inefficient).

The UK gets 4.3 billion yes billion Euro in agricultural subsidies, but contributes 5.6 billion to the EU to fund agricultural subsidies, so is a net loser. What this means is that the average British taxpayer is paying 22 euros a year to subsidise farms outside the UK. The average UK farm gets around 12,000 euros a year, not bad really. 49% of the UK subsidies go to the top 10% of farms. 295 recipients get an average of over £500,000 a year in subsidies!! The biggest bludger last year was J & T F McFarlane getting around £552 000 (appears to be a Scottish beef farm).

Nice piece of work collecting data, and listing all those who make a living partly out of the theft of taxes from the rest of us through Brussels.

Survey on political blogging

Other blogs have linked to it, so pardon me if you've seen it before.
University of Auckland MA (Pols) student Andrew Cushen is conducting an online survey about political blogging, with the survey here for those who wish to complete it. It is professional and I wish Andrew the best as the results could be very interesting. Particularly as it is election year it would be interesting to see the footprint of those reading political blogs.
So go on, help a student do something new and interesting.

Democracy in South Africa more vigorous under apartheid?

So says Helen Suzman according to the Daily Telegraph, for many years the lone voice against apartheid in South Africa's white-only Parliament. Mrs Suzman is now 86. Her claims against the South African government include:

- "Debate is almost non-existent and no one is apparently accountable to anybody apart from their political party bosses. It is bad news for democracy in this country. Even though we didn't have a free press under apartheid, the government of that day seemed to be very much more accountable in parliament"

-"The poor in this country have not benefited at all from the ANC. This government spends 'like a drunken sailor'. Instead of investing in projects to give people jobs, they spend millions buying weapons and private jets, and sending gifts to Haiti."

-On Zimbabwe "Mugabe has destroyed that country while South Africa has stood by and done nothing. The way Mugabe was feted at the inauguration last month was an embarrassing disgrace. But it served well to illustrate very clearly Mbeki's point of view....Don't think for a moment that Mbeki is not anti-white - he is, most definitely. His speeches all have anti-white themes and he continues to convince everyone that there are two types of South African - the poor black and the rich white"

- "For all my criticisms of the current system, it doesn't mean that I would like to return to the old one. I don't think we will ever go the way of Zimbabwe, but people are entitled to be concerned."

The Helen Suzman Foundation is one of the best sources of excellent comment on affairs in southern Africa, certainly it beats the mainstream international media which by and large continues to fawn at the feet of the ANC. This statement on its website tells much:

"The Helen Suzman Foundation supports and promotes liberal democratic policies and ideals in the South African political situation. Views such as these are very similar to those held by liberals in Europe and certain countries in the East, where liberals are non-racial in their views, support free enterprise and are generally sympathetic to individualism, although their views on, and support for, welfare policies vary both within countries and between countries.

As we understand it, in the United States of America, however, the way in which "liberals" are defined differs from the South African and European definition. Liberals in the United States include many people who hold "progressive" views in the sense that they are less sympathetic to free enterprise and individualism and more consistently supportive of public welfare. In Europe and South Africa such people are very likely to regard themselves as "social democrats" or socialists, which are less familiar categories in the United States.

American visitors to this website should bear these differences in mind when reading about The Helen Suzman Foundation and its mission."

$13846 per passenger

According to the NZ Herald that's what Auckland ratepayers (and taxpayers) have already paid for each person expected to use the new trial daily Helensville to Auckland commuter train service. It will be an extension of a single service and carry 65 passengers a day, in addition to those it will pick up on the Waitakere to Auckland section (which would have run anyway).

However, that without a single passenger having been moved, that was just to build the platforms to take the trains. It will be another $400,000 a year in operating costs for the service, around $26 per day per commuter. So you better hope the fare would be that, but you can be sure it wont be. ARC's leftwing Chairman Mike Lee said "he would be most surprised if the Helensville service did not follow the trend of every other recent improvement to the rail network, in becoming over-subscribed very quickly." Well, if you give people something they have only had to pay part of the costs for, that's quite possible. However if you can charge the passengers $35 a day for the privilege (which would cover opex and recover the capital costs), then it will make sense.

So what IS the cost of drugs?

The NZ Herald is reporting a study conducted called the Drug Harm Index. It reports it was "designed by economists to help police decide where drugs do the most harm and enable them to use resources more efficiently."

On the face of it the report claims a $1.3 billion "social" cost for drugs. That, of course raises some big issues:

- How many of those costs are costs of prohibition? If prohibition ended, how many would go up, how many would go down or disappear?
- How many of these costs could be born by those using if the incentives were in place to do so? These wouldn't be "social" costs, they would be internalised. Indeed how many of these costs ARE internal?
- What are the benefits? People spend money on drugs not for nothing, but because they gain value in it. The value is not dissimilar to the value from drinking, eating a dessert, sex or the like. You see people take drugs because they feel good isn't it missing part of the equation to ignore that?

Now I don't think that long term drug use is a particular clever thing to do. It can be highly destructive and damaging, much as consistently high levels of alcohol consumption can be too. However, it is important to consider drugs dispassionately. It's not me to judge what another adult ingests, as long as it doesn't harm anyone else. So let's look at least at some points reported:

- "373,310 people used cannabis, but only 17 per cent of these were frequent users". It may suggest that the bulk of users are getting about their life reasonably well. At least no worse than the regular drinker. However if we enforced the law strictly, that would be equal to the population of Christchurch being in prison. That's what winning the war on drugs would mean.

- "Nearly 23,000 people used crystal methamphetamine (36 per cent of them often)" compared with 81,890 using MDMA and 38,890 using cocaine. Suggests the "P epidemic" isn't quite that, although it is undoubtedly the most destructive of the drugs listed.

- Drug use is related to absences at work, which is hardly surprising. However, this IS a matter between the user and the employer, and if the employer has the legal right to dismiss someone for excessive absences then the issue can be addressed. However, you wouldn't arrest a drug user purely for not turning up at work enough would you?

- 16% of the prison population is occupied by "drug related crimes", although it is unclear whether this is drug crimes per se. $108.7 million per annum to keep them there. However, this isn't a cost of drug use - it is a cost of drug prohibition. Add the $374 million court, community sentence and home detention costs also to drug prohibition, not drug use.

- 2292 patients admitted to hospital for drug related reasons, costing $6.76 million p.a. Hardly noticeable in a health budget of $11 billion p.a. The Ministry of Health says that the annual cost of alcohol related hospitalisations is $74 million p.a. Of course, if drug users had to pay for hospital costs it wouldn't be a social cost anymore.

- 1920 drug related deaths (including associated with homicide and road accidents). That statistic itself sounds like a wide catchment. Does it include people murdered in the criminalised drug sector? Curiously ALAC's website claims in 2000 that 1040 deaths were attributable to alcohol, but 980 were PREVENTED by alcohol, although the deaths were more likely to be premature and the deaths avoided older (presumably the preventive effect of red wine on heart disease and the like). Back to drugs, how many drug related deaths could have been avoided had it been easy to present information on safer use of MDMA and other drugs, for example? How many drug related deaths could have been avoided had drugs not been "fortified" by a range of substances to make them "go a bit further" for dealers - a consequence of prohibition.

- "While stimulants contributed 41 per cent of the total costs, figures showed that in 2006, police and Customs seized 33,480kg of cannabis compared with only 155kg of stimulants." It demonstrates the law enforcement agencies concentrate on the high volume easy catches, not the low volumes harder drugs. What does that say about incentives to target "catching people" rather than harm?

So the story is mixed. Yes drugs undoubtedly cost in productivity, and cost more in less tangible ways socially as their misuse can be highly destructive to motivation, character and attitude to life. However, is that a reason to lock up 1578 people? Are their wider education, cultural and philosophical reasons why this happens?

Yes drugs send people to hospital, but at a fraction of the rate of alcohol. We also don't know whether drugs have any positive health effect - some cancer patients report cannabis soothing their pain. We also don't know what other positive effects they have on people, relieving stress for example. Yes there are sceptics, but I'd like to see someone dispassionately investigating this. The cost of drugs is only half of the equation, what value are there on the benefits? I don't have any idea whether this would be smaller or larger than the costs, but surely we should ask both before coming to a conclusion.

Finally, the cost of the criminal justice system is not a cost of drug use, it is the cost of drug prohibition. That is also worthy of a study. The cost of prohibition includes all of those imprisonment and court costs, and Police costs. It also includes the higher price users pay, and an element of the health costs by reducing quality. Finally, if a cost of drug use is reduced productivity, a cost of prohibition is the cost to individuals of being incarcerated and forever having a drug conviction in their records. The cost in time can be calculated, the cost in lost earnings over life, and reduced opportunities to travel. The benefits would be worth calculating too - what do we save from prohibition?

Now none of this is about developing an economists answer to a question of individual freedom, but it is useful in identifying the consequences of policies and getting some order of magnitude. It is telling in itself that the health costs of drug use are quite low.