TVHE

On Saturday I had an article in the Dom ranting about how harm minimisation was a dumb goal – as there are benefits from the consumption of drugs.  This argument has been on the internet a million times (see these two searches for example), so there is no need to rehash it here.

Originally, the article was a little different.  It was a direct attack on the paternalism implicit in the policy making associated with the anti-drug crusade and the policy target of minimising harm.  Fundamentally, this is a critique of what the Law Commission has done – they are an independent body that should critique how the law differs from the target of policy (which they do well IMO) AND critique where policy differs from its practical aim (something they haven’t done).  Often the implementation of laws differs from policy because the policy is bad!

The last three paragraphs from this far more libertarian style article were:

However, why as a society are we determined to stop people hurting themselves?  Part of life is learning to take responsibility when your own choices and actions hurt you – having a government act in a paternalistic way to stop this, and make it harder for people to learn about individual responsibility, seems dangerous to me.

Even if we do have sufficiently little faith in our fellow man, and believe that the government should act like our parents, is this type of policy intervention equivalent to good parenting?  A good parent will set some boundaries, but also give a child the opportunity to learn from their mistakes, and will be there to help if things go wrong – only a bad parent would focus only on potential harm and ignore any benefit to the child when setting boundaries.  In this sense, even the most paternalistic people must agree that solely focusing on harms from any action is a poor way to ensure that we have the happiest society possible.

Ultimately, I’m of the opinion that a truly civilised society must be based on compassion, not control – it should be based on people’s happiness and freedom, not the desire of some policy wonks to create their ideal world.

Comments and criticism of this view welcome.

Update: Relevant points from Eric Crampton (Uni of Canterbury/Offsetting Behaviour) and Luke Malpass (Centre for Independent Studies).

Or so says a report released by Institute of Public Affairs (IPA) in Melbourne.

Aparantly they surveyed some literature showing that prices acutually rose in the years following cartel presecution in the states (disclaimer: I’ve only read a description of this report somewhere else!).

Seams to be a classic case of correlation vs causation to me, but as mentioned above I haven’t actually read the paper. The author is an economist who is the head of the “Deregulation” unit……

I work (if you can call it that…) for an organisation that uses a suite of Microsoft applications. In addition to Windows XP it runs MS Office. For the ability to do this, a licensing fee, probably quite sizeable (I don’t know though) is paid to Microsoft.

Now, it was pointed out to me that an open source alternative, “Open Office” is compatible with MS Office, and has most all of the same functionality. There would have to be some retraining, however, to ensure that everyone could use it correctly.

It was put to me that my organisation could save quite substantial sums (even after the cost of retraining for its use) from changing to this alternative, and that there would be very few costs to the change.

I searched for reasons why this person was wrong:

• We work collaboratively with a lot of other organisations, and need to be using the same software. But apparently they are completely compatible.
• The support that microsoft offers means it is much safer to use MS office. I can’t recall the response, but apparently this isn’t a big deal.
• People just won’t retrain and will insist on using MS Office because it is what we know. My friend scoffed with contempt.

Why do we all pay so much to use Microsoft intellectual property? I have my suspicions why, but would like to hear from others.

Yesterday I said that I thought the Bank’s speech on bringing down the price level was ridiculous. Not only is asking for a decline in prices a strange thing for a central bank to do, the mentioning of “oil companies” was slightly off the mark – given that they have slashed prices in the face of falling crude oil (although to be fair the Bank was just asking them to keep going – it was the Dom Post that exaggerated it – or maybe I was being generous!).

Now I am going to defend it.

Read more…

The Commerce Commission appears to have found an unusual source of anti-competitive behaviour: schools forcing parents to use a monopoly supplier of school uniforms. Apparently schools often accept payments from clothing manufacturers in exchange for exclusive rights to sell the school’s uniform. Then the manufacturers extract large rents from their monopoly position by charging high prices to parents.

The Commerce Commission is concerned about the monopoly position that the manufacturers have but, recognising the convenience of a single contractor, recommends that the schools use a tender process to ensure value for the parents. Read more…

I saw the new Bond flick, ‘Quantum of Solace’, over the weekend and I was amazed at how progressive it is. No longer does our alpha-male hero wreak destruction upon villains with moon bases, bent on world domination. His latest homicidal rampage is to prevent a new terror: oligopoly pricing. Read more…

For those of you who don’t subscribe to the Commerce Commission’s media releases, they have just announced that they are investigating mobile termination rates. (Reasons here). In simple terms, the termination rate is what vodafone charges telecom every time a telecom customer calls a vodafone customer and vice-versa. The CC has decided that the rates are probably too high so they have launched an investigation.

What is particularly interesting is that they are including Fixed to mobile (FTM) as well as Mobile to mobile (MTM) in this investigation. This is interesting because they already investigated FTM back in 2004 (see the ridiculous amount of submissions that occur ed during that investigation here). So pretty much everything is on the plate this time round. It will be interesting to see what happens:)

Agnitio

For those of you don’t read stuff.co.nz while they should be working, there are some really interesting tidbits on the latest article about the Warehouse pahsing out the extra concept.

It expected an annualised pre-tax improvement in trading earnings of about $9 million.

i.e. the extra concept has been hemorrhaging money!

Mr Morrice said it was the failure of the hoped-for halo effect – where grocery shoppers also bought general merchandise – that was the main reason for Extra’s dumping.

This has been Matt’s pet topic during this saga (posts here and here). The killer for the halo effect, and the reason why I’ve always believed the Extra concept would fail unless a supermarket owned the warehouse is summed up nicely by Tony Carter from Foodstuffs

“Clearly they did not have the scale”

and Mary Smith of Auckland

“I don’t come here that often. I find their prices expensive compared to the other supermarkets.”

Agnitio

One of the longer takeover sagas appears to have ended with the warehouse having announced its decision to end the warehouse extra format. This will effectively clear the way for either of the big two supermarkets to take over the warehouse. This is because the commerce commission is of the opinion that the warehouse would be a “maverick”. No-one really agrees on what this means so I won’t try and explain it, but given the ambiguity of the term it’s interesting the commission became so fixated on it.

For those of you who don’t know how competition law works you compare the factual of the merger going through with the counter factual of the merger not happening. With the warehouse extra no longer existing going forward, therefore emrger will not eliminate the “third player” from the grocery market and ehnce competition in the grocery market will be no different in the factual then in the counter factual.

Two things to look out for concerning this are

• The Commission’s response
  They really don’t want this merger to happen

• Whether or not the supermarket that takes over the warehouse rolls out extra in the future.
  We discussed on the blog before that we (at least I) think competition would actually be increased if one of the supermarkets is able to roll out the extra format.

Watch this space!

Agnitio