We posted recently criticising the method in which the Law Commission has decided to approach its revamp of alcohol regulation. In the comments there was some vociferous criticism of the BERL report on which the Law Commissions relied for its estimates of the harm of alcohol usage. We were also lucky enough to have a personal reply from the author of the report, explaining why BERL did things the way that they did. I thought this would be a good time to clear up any confusion about where I stand on the issue.
I think the Law Commission is approaching law-making the wrong way if it seeks to minimise the harm from alcohol usage. I think that law should seek to maximise welfare rather than minimise harm. However, they have been very explicit about the approach that they have taken and I would not accuse them of being deceptive or misleading in the way they’ve presented their ideas.
I have no problem with the fact that BERL’s report did not include the benefits of drinking. That was outside of the scope of the work that they were commissioned to do and there is no reason why they would consider it. Developers of the law should consider the benefits, but that is not BERL’s job.
BERL have also been criticised by Paul Walker and Eric Crampton for not clarifying the scope of their report. While I was initially sympathetic to this criticism, I have since thought better of that stance. I don’t feel that BERL’s report has been misrepresented and commenting on the following work of the Law Commission is unnecessary.
Regarding the content of BERL’s report, Adrian has generously taken the time in his comment to clarify what they did and his comment’s well worth reading. He points out that a lot of the costs of drinking are not internalised due to transaction and monitoring costs. For example, being drunk at work might ideally be reflected in your pay, but in reality the costs of changing pay and monitoring that sort of impairment often outweigh the benefits. In that sort of situation, the cost is not internalised and is a net social cost.
He also elucidates BERL’s approach to addiction. Essentially they reject the idea of alcohol addiction being a rational choice. I think it’s fair to say that there’s still dispute amongst academics about how addiction should be modelled. However, once BERL chose to model addiction as sub-optimal behaviour, there are costs to society and to the drinker from their drinking. As I understand Adrian’s reply, these costs from ‘harmful’ drinking make up the majority of the costs outlined in BERL’s report.
If we believe that there are net costs to drinkers and those around them as a result of their addictive behaviour then there is likely to be a place for government intervention. What that intervention might be I’ll leave to discuss another time.
Hopefully this clarifies my earlier post: the issue is the Law Commission’s use of the report, not the report itself.