Saturday, June 23, 2007

IN DEFENSE OF SECOND HAND SMOKE

I haven’t read through Todd Shelly’s entire piece on second hand smoke - "Second Hand Smoke: Defense of the Indefensible" - but I got the gist of it skimming through his article published in Hawaii Reporter.

Second hand smoking is dangerous as is drinking, and as such, some restrictions are appropriate. As an opponent of the smoking ban, I support restrictions, rules and regulations; I just don’t agree with applying them with the broad hand of government.

Take Mr. Shelly’s free speech scenario for example. I don’t believe it’s safe to yell ‘FIRE’ in a crowded theater, but we don’t need a law to remedy this situation. First of all, it’s not in the best interest of the theater owner to allow patrons to his property to cry 'wolf'. It would be bad for his business and his profits if his customers were continuously scared out of his theater under false alarms. The owner could sue the perpetrator for injury to his business or his customers. What if the owner was involved in the act, you ask? Then customers can sue the owner for harm they didn’t anticipate or expect from watching a movie.

In my free speech example, we see two important concepts at play here. First is the notion of property rights. The theater owner has the right to set the rules, regulations and restrictions necessary to provide a safe environment for his customers; it’s his property.

The second is the concept of contract. Buying a ticket implies agreement to follow the rules set by the property owner, and the government is obliged to enforce this contract in favor of the theater owner should someone break his rules and yell ‘FIRE’. Buying a ticket also implies that the owner is obliged to give his customers what they paid for: their entertainment. If there are risks to their safety then such risks should be made known, otherwise any interruption to patrons receiving their entertainment is grounds for a refund or a lawsuit in case of injury.

Looking at the case of smoking, if you don’t like it on your property then prohibit it or regulate it as you see fit. If you allow smoking on your property then make the risks explicit to both your customers and your employees before they come onto your property or you hire them. People want to pay for a place to smoke and socialize, and the effects of smoking is a risk they take onto themselves as this is still a free country I hope.

It is fine for the government to ban smoking on property it owns because it owns it. The sidewalks, the roads, public schools and state and federal workplaces. But when it comes to private property, our pursuit of reducing the hazards of second hand smoke should respect our individual property rights and contracts if we are to pursue a good cause and preserve our freedom at the same time.

I am very grateful to people like Mr. Shelly who sacrifice the time and effort to make us aware of the hazards of such problems like smoking. However, we should never sacrifice our liberties in order to impose good and healthy behaviors on our fellow countrymen. It takes real leadership to get people to want to do what you want them to do than it is to pass a law that forces them.

Sunday, June 03, 2007

DOLLAR CIRCULATION THEORY

One of the most popular justifications for erecting trade barriers against foreign competitors and increasing the minimum wage by the force of law is the popular misconception that keeping dollars circulated in the local economy benefits our people. At the surface level, we correctly observe that a dollar can go from the canneries to the cannery worker to the bus driver to the grocery store and then maybe back to cannery (thus completing the theoretical circulation). Below the surface, which is often ignored, is why the dollar goes from cannery to the worker to bus driver and then to grocery store in the first place.

For example, you can consider my workplace as its own tiny country with the CEO as the president, the board of director/stockholders as the legislators, and the employees as the people. A tuna sandwich at our marketplace is about $7 and that’s with a small bag of chips. Down the street at the “foreign country” of Seven Elevens are a tuna sandwich and a medium size bag of chips for less than $4.

Now if the dollar circulation theory works for a country, then it makes sense that it should also work for a company. Well, according to dollar circulation theorists, it benefits me for my company to restrict my lunch money to their more expensive tuna sandwich of $7 instead of Seven Elevens’ $4 combo. That’s supposed to be because the $3 difference goes back to company to pay other employees, stockholders, the CEO and then benefit me in some way that I’m expected to understand but don’t.

With minimum wage increases, workers getting paid more through the force of law will create the much-alluded-to multiplier effect, where a 50 cent increase in wages leads to 50 cent increases in spending elsewhere in the local economy. But that only works as long as the employer stays in town. When and if the employer determines that leaving is more beneficial, much like I would in choosing the Seven Elevens’ tuna sandwich over my own company’s, then what we would have is the multiplier effect of destruction as previous spending disappears.

Dollar circulation theorists simply look at the paper trail without paying any attention to the reasons behind it. A dollar goes from the cannery to the worker to the bus driver to the grocery store because every single participant believes they’re getting a better deal by passing it along then by holding on to it.

Whether it’s restricting trade or forcing up wages, we’re all worse off in the pursuit of the mighty dollar circulation as some logical goal.